Supreme Court of the United States

“ As noted earlier, a defining characteristic of modern spending legislation is the imposition of obligations on States that accept federal funds. Understanding a State’s breach of such obligations as akin to violating rights secured by federal law is incompatible with this Court’s anticommandeering doctrine. Under this bedrock constitutional principle, Congress generally cannot directly regulate the States or require them to implement federal programs. ”

“ Only the former sort of legislation, which imposes obligations on regulated parties with the force of law, directly secures by law the rights corresponding to those obligations. By contrast, an exercise of Congress’ spending power, whether it comes from the so-called Spending Clause or elsewhere in the Constitution, is no more than a disposition of funds. As such, a conditional exercise of the spending power is nothing more than a contractual offer ”

“ This contractual understanding of conditional spending legislation is much more than a mere analogy; it is the only possible explanation for why such legislation is not an unconstitutional direct regulation of the States. To deny or downplay this principle is to seek to have it both ways. Much spending legislation conditions States’ receipt of federal funds on their undertaking obligations with respect to third parties. For such legislation to survive a federalism challenge, it must not directly impose obligations on the States with the force of federal law. ”

“ The spending power is the power to spend only. Any duties imposed by regulatory legislation, and any correlative rights secured by law, must find their source in one of Congress’ enumerated powers or the legislative powers of the States. ”

“ Indeed, the anticoercion rule supplements those doctrines through its recognition of the practical realities of Congress’ modern spending power: Because the Federal Government’s overwhelming fiscal resources enable it to create “gun to the head” situations in which there is no practical possibility of opting out, the rule prevents the Government from purchasing the States’ regulatory powers to implement federal goals that it cannot attain through its own more limited powers. ”

“ The upshot, for HHC, is that “Spending Clause statutes do not give rise to privately enforceable rights under Section 1983” because contracts were not “generally” enforceable by third-party beneficiaries at common law. Id., at 11, 13. On this basis alone, HHC thus, in effect, urges us to reject decades of precedent, and to rewrite §1983’s plain text to read “laws (unless those laws rest on the Spending Power) .”
Two well-established principles, applied here, suffice to reject HHC’s invitation to reimagine Congress’s handiwork (and our precedent interpreting it) . ”

“ Thus, to defend these spending programs in the first half of the 20th century, the Government relied on the long-settled understanding that the power to spend carries with it no sovereign legislative power to create rights and duties. ”

“ Monroe proceeded to carefully distinguish the spending power from Congress’ authority to impose obligations and duties: “ [T] he use or application of the money after it is raised is a power altogether of a different character” from Congress’ enumerated regulatory powers such as the taxing power; “ [i] t imposes no burden on the people, nor can it act on them in a sense to take power from the States.” Id., at 164.
Applying this understanding of the spending power to the question of internal improvements, Monroe explained that Congress could only “appropriate the money necessary to make them.” ”

“ There is a considerable difference between preserving existing remedies for conduct that happens to violate other laws and providing a one-stop remedy for the precise provisions in a statute. See Alexander, 532 U. S., at 289–290. The latter interpretation runs against a century of holdings that a statute “ ‘cannot be held to destroy itself’ ” through a saving clause. ”

“ The Federal Nursing Home Reform Act (FNHRA or Act) ensures that nursing homes that receive Medicaid funding respect and protect their residents’ health, safety, and dignity. Provisions of the FNHRA refer to rights of nursing-home residents to be free from unnecessary physical or chemical restraints and to be discharged or transferred only when certain preconditions are satisfied. This case is about these particular provisions and whether nursing-home residents can seek to vindicate those FNHRA rights in court. ”

“ We have used many terms and concepts to describe the necessary discordance between §1983 and a rights-conferring statute’s remedial scheme: “ ‘incompatible,’ ” “ ‘inconsistent,’ ” and “thwar [t] ” are examples. Id., at 252–255. In all events, the question is whether the design of the enforcement scheme in the rights-conferring statute is inconsistent with enforcement under §1983, such that a court must infer that “Congress did not intend” to make available the “ [§1983] remedy for [these] newly created right [s] .” ”

“ As in Butler, the Federal Government defended a federal statute—here, the Social Security Act—by representing that conditions on the grant of federal funds “are not regulatory” in nature and are thus within the spending power. ”

“ As relevant here, §1983 provides that
“ [e] very person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.” ”

“ In other words, “if Congress wishes to create new rights enforceable under §1983, it must do so in clear and unambiguous terms.” Id., at 290. Because the standard demands “no less and no more than what is required for Congress to create new rights enforceable under an implied private right of action,” I also agree that there is no room for “a multifactor balancing test to pick and choose which federal requirements may be enforced by §1983 and which may not.” Id., at 286, 290 (emphasis added) (rejecting the standard articulated in Blessing v. Freestone, 520 U. S. 329, 340–341 (1997) ) . ”

“ Congress’ spending power cannot secure rights by law.
IV
The contractual nature of spending conditions was taken as a given until the second half of the 20th century, when individuals first began to bring §1983 suits premised on violations of conditions contained within spending statutes (usually, the Social Security Act) . From the enactment of §1983’s predecessor statute in 1871 to the Court’s decision in Thiboutot in 1980, this Court had never held that §1983 was available to redress any and all violations of federal legislation. ”

“ The implicit-preclusion inquiry looks to “the statute creating the right” and any “ ‘comprehensive enforcement scheme’ ” Congress has created in the statute “ ‘that is incompatible with individual enforcement under §1983.’ ” Rancho Palos Verdes, 544 U. S., at 120 (emphasis added) . It does not invite speculation about ostensible marketplace realities that appear nowhere in the statute’s text or relevant context. The relevant FNHRA provisions speak in neutral terms that do not distinguish between private and public nursing homes. ”

“ In his second term, President Monroe set forth the fullest exposition of the understanding that the spending power involved no regulatory authority. In 1822, Congress passed a bill to establish a system of internal improvements, asserting the “power to establish turnpikes with gates and tolls, and to enforce the collection of tolls by [federal] penalties.” ”

“ The FNHRA also establishes a detailed administrative scheme for government inspections of nursing facilities. §1396r (g) . “Surveys” (in the statute’s parlance) must be conducted to detect nursing homes that are falling short of the FNHRA’s minimum standards, and state and federal officials must periodically file certifications, based on these surveys, regarding nursing-home compliance, see §1396r (g) (1) (A) . In addition, the statute authorizes government actors to sanction and correct noncompliant facilities, or, if appropriate, exclude them from the Medicaid program entirely. ”

“ Given the profound consequences of spending conditions for the Nation’s governance and the fundamental shift that they have wrought in our federalist system, a sound understanding of their constitutional basis and permissible legal effects is essential. ”

“ Hamilton, for example, made clear that the spending power did not “imply a power to do whatever else should appear to Congress conducive to the general welfare.” Report on the Subject of Manufactures 37 (1791) . As he further elaborated, “ [a] power to appropriate money [does] not carry a power to do any other thing, not authorized in the Constitution, either expressly or by fair implication.” Ibid. Instead, any regulatory authority had to be tethered to some independent regulatory power. ”

“ See, e.g., id., at 121 (“ [T] he existence of a more restrictive private remedy [in the statute itself] for statutory violations has been the dividing line between those cases in which we have held that an action would lie under §1983 and those in which we have held that it would not”) . Nor has HHC otherwise demonstrated that enforcement via §1983 would thwart the operation of the administrative remedial scheme in any respect.
HHC’s argument that we need look no further than the detail of the FNHRA’s enforcement mechanisms to find conclusive evidence of implicit preclusion is unpersuasive. ”

“ Abrams, 544 U. S. 113, 121 (2005) (express cause of action “is ordinarily an indication that Congress did not intend to leave open a more expansive remedy under §1983”) . When the statutory cause of action restricts available remedies or imposes procedural hurdles to obtaining relief, the inference is even stronger. ”

“ The term “other Property” may “comprehen [d] personal property no less than real,” and “personal property includes money, as well as financial assets of all kinds.” Engdahl, 18 Seattle U. L. Rev., at 250 (emphasis deleted) . ”

“ Because Monroe understood “that Congress do [es] not possess this power [and] the States individually can not grant it,” he agreed with Madison and Hamilton that the “power can be granted only by an amendment to the Constitution.” Id., at 143.
To explain his veto, President Monroe sent Congress an extensive report entitled “Views of the President of the United States on the Subject of Internal Improvements.” ”

“ The United States says that, because private entities owned most nursing homes when the FNHRA was enacted in 1987 (as they do now) , the FNHRA is a rare bird for implicit-preclusion purposes. In the United States’ view, because Congress knew that most nursing homes could not be subject to suit under §1983 anyway, see, e.g., Polk County v. Dodson, 454 U. S. 312, 317–319 (1981) , the FNHRA’s remedial scheme “necessarily reflects Congress’s judgment that these administrative enforcement mechanisms appropriately protect the rights the statute confers,” Brief for United States as Amicus Curiae 31. ”

“ National Sea Clammers Assn., 453 U. S. 1, 20 (1981) (statutory “remedial devices” that are “sufficiently comprehensive ... may suffice” to show implicit preclusion) . But when a particular comprehensive remedial scheme discharges the defendant’s burden, it does so because the application of ordinary interpretive tools reveals incompatibility, i.e., it demonstrates that “Congress intended [that] statute’s remedial scheme to be the ‘exclusive avenue through which a plaintiff may assert [his] claims.’ ” Fitzgerald, 555 U. S., at 252. ”

“ The FNHRA provisions at issue in this case, like the rest of the Act, stem from a longstanding national commitment to provide safe and dignified care for the elderly. Since as early as the Social Security Act of 1935, federal law has aimed in myriad ways to promote nursing homes that provide quality services. Yet, concerns about the poor condition of such facilities persisted even after Congress enacted the 1965 Medicare and Medicaid Acts, [9] partly due to widespread noncompliance with existing federal and state laws. ”

“ It reasons that (1) any private party suing to enforce an obligation between Federal and State Governments that a Spending Clause statute creates is, essentially, a “third-party beneficiary” (by which HHC means beneficiaries of rights created in any such statute) ; and (2) under common-law contract principles extant at the time that Congress enacted §1983, third-party beneficiaries were “generally” barred from suing to enforce contract obligations ”

“ We see no such sign, much less a license for us to construct and impute congressional intent that the FNHRA does not embody.
The difficulty for HHC and the United States is that implicit preclusion, in this context, requires something in the statute that shows that permitting §1983 to operate would “thwar [t] Congress’ intent” in crafting the FNHRA. Fitzgerald, 555 U. S., at 253. We see nothing in the FNHRA that even hints at Congress’s intent in this regard ”