Recent Supreme Court Medicaid Case Does Not Change the Law

The Constitution has no “Spending Clause,” strictly speaking. Instead, we usually trace Congress’s spending power to Article I, section eight, clause one, which gives Congress the “Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States.” Unlike other enumerated powers, this provision does not expressly endow Congress with the power to regulate conduct. Nor does it include “the power to issue direct orders to the governments of the States.” Murphy v. National Collegiate Athletic Assn., 584 U. S. 453, 471 (2018).

As the Court observed in United States v. Butler, the meaning of Article I’s “general welfare” language provoked fierce debate right from the start. 297 U. S. 1, 65-67 (1936). At one extreme, Gouverneur Morris thought it authorized Congress to tax, spend, and regulate broadly in pursuit of the “general Welfare.” D. Schwartz, Mr. Madison’s War on the General Welfare Clause, 56 U. C. D. L. Rev. 887, 915 (2022). Alexander Hamilton took a more modest view. He thought the language gave Congress the power to raise and “appropriate money” for “objects” of “General” (as opposed to “local”) importance. Report on the Subject of Manufactures (Dec. 5, 1791), in 10 Papers of Alexander Hamilton 230, 303-304 (H. Syrett ed. 1966) (emphasis deleted). But he denied that those powers included as well “a power to do whatever else should appear to Congress conducive to the General Welfare.” Ibid. James Madison advanced a narrower position still. As he saw it, the language authorized Congress to spend money only in support of its other enumerated powers. A. LaCroix, The Interbellum Constitution: Federalism in the Long Founding Moment, 67 Stan. L. Rev. 397, 407 (2015) (LaCroix).

Over time, Hamilton’s view gained ground. So, for example, as Justice Story saw it, Congress may raise and “appropriat[e]. . . money” to advance the “general welfare.” 3 J. Story, Commentaries on the Constitution of the United States §1269, p. 150 (1833). But nothing in Article I, section eight, clause one endows Congress with a power to regulate, for if it did, the “enumeration of specific powers” elsewhere in Article I would be rendered largely pointless, and the Nation would trade a limited federal government for “an unlimited” one. 2 id., §§904, 906, pp. 367, 369; see also Butler, 297 U. S., at 66 (Justice Story’s “reading . . . is the correct one”); J. Monroe, Message From the President of the United States 32-33 (1822); E. Corwin, The Spending Power of Congress—Apropos the Maternity Act, 36 Harv. L. Rev. 548, 564-566 (1923).

Consistent with this understanding, early courts described federal grants not as commands but as contracts. Consider, for example, how this Court approached a dispute concerning the first major federal highway. The Cumberland Road once supplied a vital link between the East Coast and the old Northwest. LaCroix 420. Starting in the 1830s, the federal government gradually transferred control of the road to several States. J. Young, A Political and Constitutional Study of the Cumberland Road 78-98 (1902). One transfer to Ohio came with a condition: The State could not charge tolls on wagons carrying federal property. Id., at 96-98. When a disagreement arose about the scope of that toll exemption, this Court looked to “the expectations of the parties,” a familiar feature of contract law, to resolve it. Neil, Moore & Co. v. Ohio, 3 How. 720, 741 (1845). In doing so, the Court emphasized that it was enforcing requirements “well known” to the parties when the “compact was made.” Ibid.; see also McGee v. Mathis, 4 Wall. 143, 155 (1866) (“It is not doubted that the grant by the United States to the State upon conditions, and the acceptance of the grant by the State, constituted a contract”).

At the same time, the Court recognized that agreements between state and federal governments are not exactly the same as contracts “between individuals.” Searight v. Stokes, 3 How. 151, 167 (1845). In many respects, the Court suggested, federal-state agreements are really more like treaties “between two sovereignties.” See Neil, Moore & Co., 3 How., at 742. And, while treaties may seek to benefit the citizens of the compacting nations, they generally do not confer individually enforceable rights against a sovereign, but “depen[d ] for the enforcement of [their] provisions on. . . the governments which are parties to” them. Head Money Cases, 112 U. S. 580, 598 (1884).^[2] Adapting this logic to the context of federal grants, the Court concluded that, as a rule, “Congress alone has the power to enforce” the conditions it attaches to its grants. Emigrant Co. v. County of Adams, 100 U. S. 61, 69 (1879); see also Mills County v. Railroad Cos., 107 U. S. 557, 566 (1883).

Take Pennhurst. There, private plaintiffs sought to sue the Commonwealth of Pennsylvania for failing to fulfill the terms of a federal healthcare grant. 451 U. S., at 6. In assessing whether the suit could proceed, the Court began by observing that “legislation enacted pursuant to the spending power is much in the nature of a contract: in return for federal funds, the States agree to comply with federally imposed conditions.” Id., at 17. And the “typical remedy for state noncompliance” with a federal grant’s conditions is an “action by the Federal Government to terminate funds to the State.” Id., at 28. Given these principles, the Court reasoned, whether a private party may sue to enforce the terms of a federal grant depends on “whether the State voluntarily and knowingly” consented to answer private claims as part of its bargain with the federal government. Id., at 17. And to satisfy this standard, the Court held, a plaintiff must show, at a minimum, that Congress alerted the State in advance, “clear[ly]” and “unambiguously,” that responding to private enforcement suits was a condition of its offer. Ibid.^[4]

In Gonzaga, the Court restated these principles and explored how they interact with §1983. Spending-power legislation, the Court explained, cannot provide the basis for a §1983 enforcement suit unless Congress “speaks with a clear voice, and manifests an unambiguous intent to confer individual rights.” 536 U. S., at 280 (alteration and internal quotation marks omitted). Only that kind of “unmistakable” notice, the Court said, suffices to alert grantees that they might be subject “to private suits . . . whenever they fail to comply with a federal funding condition.” Id., at 286-287, and n. 5 (internal quotation marks omitted). And, the Court concluded, because the statute at issue before it did not clearly and unambiguously confer a “right to support a cause of action under §1983,” the plaintiff’s suit could not proceed. Id., at 283, 290.^[5]

Just two Terms ago, we reaffirmed these points. In Talevski, the Court faced another private §1983 suit alleging that recipients of federal funding had violated grant conditions. To decide whether the plaintiffs could proceed, we turned to Gonzaga, recognizing that it “sets forth our established method” for analyzing suits like that. Talevski, 599 U. S., at 183. In doing so, we reiterated that the relevant “[s]tatutory provisions must unambiguously confer individual federal rights” before a §1983 claim might proceed. Id., at 180. That standard, we emphasized, is a “demanding bar” and a “significant hurdle” that will be cleared only in the “atypical case.” Id., at 180, 183-184. And, applying that test, we found the statutes in question satisfied it precisely because they “expressly” employed the sort of clear and unambiguous “rights-creating language” Gonzaga demands. 599 U. S., at 184, 186 (internal quotation marks omitted).

Admittedly, this Court briefly experimented with a different approach….

They should not. Gonzaga “reject[ed]” any reading of our prior cases that would “permit anything short of an unambiguously conferred right to support a cause of action brought under §1983.” 536 U. S., at 283. Armstrong “repudiate[d]” any other approach. 575 U. S., at 330, n. And Talevski reaffirmed that “Gonzaga sets forth our established method” for determining whether a spending-power statute confers individual rights. 599 U. S., at 183.

Section 1983 permits private plaintiffs to sue for violations of federal spending-power statutes only in “atypical” situations, Talevski, 599 U. S., at 183, where the provision in question “clear[ly]” and “unambiguous[ly]” confers an individual “right,” Gonzaga, 536 U. S., at 290. Section 1396a(a)(23)(A) is not such a statute. Because the Fourth Circuit concluded otherwise, its judgment is reversed and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.