Hawaii's Basic Health Program for COFA Residents Does Not Violate Equal Protection

NO. 11-15132
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCIJIT
TONY KORAB, et al.,
Plaintiffs - Appellees
1•
PATRICIA McMANAMAN, in her official capacity as Director of the
State of Hawai ‘i, Department of Human Services and
KENNETH FINK, in his official capacity as State of Hawai’i, Department of
Human Services, Med-QUEST Division Administrator,
Defendants — Appellants
On Appeal From the Interlocutory Order Granting a Preliminary Injunction of the
United States District Court for the District of Hawai’i
Case No. D.C. No. 1:1 0-cv-00483-JMS-KSC
BRIEF OF APPELLANTS
DAVID M. LOUIE
Attorney General
State ofHawaii
HEIDI M. RIAN
LEE ANN N.M. BREWER
JOHN F. MOLAY
Deputy Attorneys General
Department of the Attorney General
465 South King Street, Room 200
Honolulu, Hawaii 96813
(808) 587-3050
Attorneysfor Defendant- Appellants
Case: 11-15132 06/20/2011 Page: 1 of 127 ID: 7791851 DktEntry: 9

TABLE OF CONTENTS
INTRODUCTION.
JURISDICTIONAL STATEMENT 4
STATEMENT OF ISSUES PRESENTED FOR REVIEW 5
STANDARD OF REVIEW 6
STATEMENT OF CASE 6
STATEMENT OF FACTS 8
A. COFA Residents Used to be Eligible for Federal Medicaid 8
B. The Welfare Reform Act Limited COFA Residents’ Access to Federal
and State Public Benefits 9
C. Since the Welfare Reform Act, the Department Provided Medicaid-
Like State-Funded Medical Assistance Benefits to COFA Residents,
but Not to Citizens 12
D. The Department Reduced the State-Funded Alien-Only Medical
Assistance Benefit that Was Available to COFA Residents by
Implementing Basic Health Hawai’i 15
E. Applying Strict Scrutiny, the District Court Preliminarily Enjoined the
Department from Implementing Basic Health Hawai’i 16
SUMMARY OF THE ARGUMENT 18
ARGUMENT 19
A. Basic Health Hawai ‘i Does Not Violate the Equal Protection Clause
Because It Does Not Discriminate Against Aliens 19
1. Providing Aliens Who Are Barred from Federal Medicaid with
State-Funded Alien-Only Benefits Is Not a Classification Based
on Alienage 20
2. The Past Receipt of State-Funded Alien-Only Medical
Assistance Benefits is Irrelevant to Determining Whether
Reduction of Those Benefits Discriminates Against Aliens 28
1

B. Even If Basic Health Hawai’i Discriminates Against Aliens, Rational
Basis Review Applies 29
1. The Federal Government May Discriminate Against Aliens in
Federal Benefit Programs Under Rational Basis Review 30
2. The State’s Actions in Following a Uniform Rule Established
by Congress Respecting Aliens Will Be Subject to Rational
Basis Review 33
3. The State’s Implementation of Basic Health Hawai’i Satisfies
Rational Basis Review 44
4. Only When the State Classifies Based on Alienage Within a
Program Will Strict Scrutiny Apply 46
C. The Rational Basis Test Also Applies Because the Federal
Government Established a Uniform Rule Relating to COFA
Residents’ Conditions of Entry Under the Compacts 50
CONCLUSION 56
CERTIFICATE OF COMPLIANCE 58
STATEMENT OF RELATED CASES 59
GLOSSARY 60
ADDENDUM
11

TABLE OF AUTHORITIES
CASES
Aleman v. Glickman,
217F.3d 1191 (9thCir. 2000) 21
Aliessa v. Novello,
96 N.Y.2d 418, 754 N.E.2d 1085 (Ct. App. 2001) 25,26,36,41
Ball v. Rodgers,
492 F.3d 1094 (9th Cir. 2007) 8
Bernal v. Fainter,
467 U.S. 216 (1984) 46
Children’s Hosp. & Health Ctr. v. Belshe,
188 F.3d 1090 (9th Cir. 1999) 8
City of Chicago v. Shalala,
189 F.3d 598 (7th Cir. 1999) 32
Dep’t of Health Servs. v. Sec’y of Health & Human Servs.,
823 F.2d 323 (9th Cir. 1987) 8
Doe v. Comm’r of Transitional Assistance,
773 N.E.2d 404 (Mass. 2002) 21,22,29,31
Ehrlich v. Perez,
908 A.2d 1220 (Md. 2006) 21, 40
Examining Bd. of Engineers, Architects & Surveyors v. Flores de Otero,
426 U.S. 572 (1976) 46
F.S. Royster Guano Co. v. Virginia,
253 U.S. 412 (1920) 20
FCC v. Beach Communications, Inc.,
508 U.S. 307 (1993) 45
1

Graham v. Richardson,
403 U.S. 365 (1971) 20, 33,47,48,49
Guerrero v. Clinton,
157 F.3d 1190 (1998) 51,53
Heller v. Doe,
509 U.S. 312 (1993) 45
Hong Pham v. Starkowski,
16 A.3d 635 (Conn. 2011) 9,21,24,25,29,38,39,40
Hong Pham v. Starkowski,
2009 WL 5698062 (Conn. Super. 2009) 38
In re Griffiths,
413U.S.717(1973) 46
K & A Radiologic Technology Services, Inc. v. Comm’r of the Dept. of Health,
189 F.3d 273 (2d Cir. 1999) 8
Khrapunskiy v. Doar,
12N.Y.3d 478, 909 N.E.2d 70 (2009) 21,26,27,28,41
Lewis v. Thompson,
252 F.3d 567 (2d Cir. 2001) 31
Mathews v. Diaz,
426 U.S. 67(1976) 30,31
Nyguist v. Mauclet,
432 U.S. 1(1977) 21,46
Paige v. California,
102 F.3d 1035 (9th Cir. 1996) 4
Plyler v. Doe,
457 U.S. 202 (1982) 20,34,43
11

Soskin v. Reinertson,
353 F.3d 1242 (10th Cir. 2004) 21, 22, 23, 31, 33, 35, 45-46
Southwest Voter Registration Education Project v. Shelley,
344 F.3d 914 (9th Cir. 2003) 6
Spry v. Thompson,
487 F.3d 1272 (9th Cir. 2007) 8
Sudomir v. McMahon,
767 F.2d 1456 (9th Cir. 1985) 32, 34, 41,42,43, 44
Takahashi v. Fish and Game Comrn’n.,
334 U.S. 410 (1948) 21,46-47
Tigner v. Texas,
310 U.S. 141 (1940) 20
CONSTITUTIONAL PROVISIONS
U.S. Const. amend. XIV, § 1 20
FEDERAL STATUTES
28 U.S.C. § 1292(a)(1) 4
28 U.S.C. § 1331 4
28U.S.C.1343 4
28 U.S.C. § 2107(a) 4
8 U.S.C. § 1101(a)(15) 11,55
8 U.S.C. § 1601 9
8 U.S.C. § 1601(2) 54
8 U.S.C. § 160 1(4) 45, 46
8 U.S.C. § 1601(7) 37
111

8 U.S.C. § 1611(a). 1,10,11,49
8U.S.C. 1611(b) .10
8 U.S.C. § 1612(b) . 23
8U.S.C.16l3 10
8 U.S.C. § 1622 36
8 U.S.C. § 1622(a) 10,11
8 U.S.C. § 1622(b) 10
8U.S.C.1624 36
8 U.S.C. § 1641(b) 10,11
8 U.S.C. § 1641(c) 10
P.L. 104-193, August 22, 1996, title IV 9
FEDERAL RULES
Fed. R. App. P. 4(a)(1) 4
Fed. R. App. P. 43(c)(2) 1
COMPACTS OF Fiun AssocIATIoN
P.L. 99-239, January 14, 1986, 99 Stat. 1770 1
P.L. 99-658, November 14, 1986, 100 Stat. 3672 (Palau Compact) 1-2
Palau Compact, sec. 14 1(a) 11, 55
Palau Compact, sec. 2 11(d) 52
P.L. 108-188, December 17, 2003, 117 Stat. 2720 (2003 Compact) 2
2003 Compact, sec. 103(f) 52-53
2003 Compact, sec. 103(h) 53
iv

2003 Compact, sec. 104(e). 50
2003 Compact, sec. 104(e)(1) 50
2003 Compact, sec. L04(e)(3) 51
2003 Compact, sec. 104(e)(6) 53
2003 Compact, sec. 104(e)(7) 53
2003 Compact, sec. 141(a) 11, 55
2003 Compact, sec. 141(c) 55
2003 Compact, sec. 141(d) 11
2003 Compact, sec. 141(f) 55
2003 Compact, sec. 141(f)(1) 50
2003 Compact, sec. 141(h) 55
2003 Compact, sec. 177 53
2003 Compact, sec. 211(a) 52
2003 Compact, sec. 21 1(a)(2) 52
V

INTRODUCTION
This case addresses the question whether the State of Hawai ‘i is
constitutionally required to replace — entirely at its own expense -- federal
Medicaid benefits that were taken away from certain aliens byfederal law. The
answer is “no.’
Historically, federal Medicaid was available to aliens legally residing in the
United States. However, in 1996 Congress barred “nonqualified aliens” from
eligibility for federal public benefits such as Medicaid. Under the Welfare Reform
Act of 1996, only United States citizens and certain “qualified aliens” are eligible
for federal public benefits. 8 U.S.C. § 1611(a).
Plaintiffs1 in this case are citizens of island nations with a Compact of Free
Association (COFA) with the United States2 who reside in Hawai’i (COFA
1Parties. The named Plaintiffs-Appellees are Tony Korab, Tojio Clanton and
Keben Enoch. CRIER 1 (compi.). They are together referred to as Plaintiffs.
The defendants are Patricia McManaman, in her official capacity as Director of the
State of Hawai ‘i Department of Human Services, and Kenneth Fink, in his official
capacity as State of Hawai’i Department of Human Services, Med-QUEST
Division Administrator. Defendant McManaman is substituted for former DHS
Director Lillian B. Koller, pursuant to Fed. R. App. P. 43(c)(2). Defendants
McManaman and Fink are together referred to as the “State” or the “Department.”
2
The United States entered into Compacts of Free Association with the Republic
of the Marshall Islands (RMI), the Federated States of Micronesia (FSM), and the
Republic of Palau. See Compact of Free Association Act of 1985, P.L. 99-239,
January 14, 1986, 99 Stat. 1770; Compact of Free Association between the
Government of the United States of America and the Government of Palau, P.L.
1

Residents). COFA Residents are nonimmigrants, which are nonqualified aliens
under the Welfare Reform Act, and were therefore made ineligible for federal
Medicaid benefits. CR/ER3 24 at 3 ¶7 (stip. facts).
In response to the Welfare Reform Act, the State could have simply stopped
providing COFA Residents with federal Medicaid benefits — and provided COFA
Residents with nothing — without itself discriminating against aliens. Instead,
rather than leaving the COFA Residents without medical benefits, the State of
Hawai ‘i, through its Department of Human Services (Department), chose to
voluntarily provide COFA Residents with state-funded medical assistance benefits
that were equivalent to the benefits that were available to citizens and certain
qualified aliens under the federal Medicaid program.4 This separate state public
99-658, November 14, 1986, 100 Stat. 3672 (the Palau Compact). These countries
are collectively referred to as the “Freely Associated States.” The Compact with
the RMI and the FSM was renegotiated and amended in 2003. See Compact of
Free Association Amendments of 2003, P.L. 108-188, December 17, 2003, 117
Stat. 2720 (the 2003 Compact). The Palau Compact and the 2003 Compact are
collectively referred to herein as “the Compacts.”
Citations. CR refers to the Clerk’s Record and the docket number. ER
refers to the excerpts of record. Citations to large documents with multiple parts
are given with the part number, as listed on the district court’s docket. For
example, CR 13-3 refers to part 3 of document 13. Page numbers reflect the
docket page numbers, except for the Complaint (CRIER 1), which reflects the page
numbers as noted on the original document.
For purposes of this opening brief, the term “citizens” generally refers to U.S.
citizens and certain qualified aliens who, under the Welfare Reform Act, are
eligible for federal public benefits and federal means-tested public benefits.
2

benefit was only for COFI4 Residents who were ineligible for federal Medicaid, to
lessen the impact of the federal government’s discrimination.
In 2010, facing unprecedented budget deficits, the Department reduced the
level of state-funded benefits provided to COFA Residents by implementing a new
state-funded medical assistance program, called Basic Health Hawai’i, that
provided less benefits than federal Medicaid. Basic Health Hawai’i similarly
covered only aliens who, as a result of the Welfare Reform Act, were ineligible for
federal Medicaid. The State did not provide citizens who were ineligible for
Medicaid with any state-funded benefit.
The district court issued a preliminary injunction, finding that the State
discriminated against COFA Residents by providing them with a state-funded
alien-only medical assistance benefit that was less than the federal Medicaid
benefit available to citizens, in violation of the COFA Residents’ right to equal
protection.
There is no equal protection violation by the State where thefederal
government grants only citizens eligibility for federal Medicaid, and the State, in
an attempt to partially make up for the federal discrimination, voluntarily provides
COFA Residents eligibility for a separate, state-funded medical assistance program
for aliens only. The State does not discriminate against aliens when it gives COFA
Residents Basic Health Hawai ‘i benefits not provided at all to citizens. And
3

although the Basic Health Hawai ‘i benefits provided by Hawai ‘i do not match the
federal Medicaid benefits provided citizens, this different treatment for aliens
stems wholly from an act of Congress excluding COFA Residents from federal
Medicaid. Equalprotection does not require the State to replace, at its own
expense, that which thefederal government took away. It does not require the
Department to maintain an optional, state-funded benefit for aliens only at levels
equivalent to those offered to citizens through federal Medicaid. Accordingly, the
district court’s order for preliminary injunction should be reversed.
JURISDICTIONAL STATEMENT
District Court. The district court had jurisdiction over this case pursuant to
28 U.S.C. § 1331 and 1343. On December 13, 2010, the district court granted
Plaintiff’s motion for preliminary injunction. CR/ER 42 (inj. order).
This Court. This court has jurisdiction to consider an appeal from an
interlocutory order granting a preliminary injunction without a showing of
irreparable harm. 28 U.S.C. § 1292(a)(i); see Paige v. California, 102 F.3d 1035,
1038 (9th Cir. 1996) (involving appeal from grant of preliminary injunction).
Timeliness ofAppeal. An appeal from a district court must be filed within
30 days of the judgment or order appealed from. 28 U.S.C. § 2107(a); Fed. R.
App. P. 4(a)(1). The district court entered its preliminary injunction order on
4

December 13, 2010. CRIER 42. Defendants timely appealed that order on January
10,2011. CR/ER47.
STATEMENT OF ISSUES PRESENTED FOR REVIEW
The issue on appeal in this case is whether the district court erred in ruling
that Hawai ‘i violates the Equal Protection clause when it creates a programjustfor
aliens to lessen the discriminatory impact of thefederal government’s Medicaid
alienage discrimination, simply because its state-funded program doesn’t
completely make up for the federal government’s Medicaid program
discrimination.
The district court ruled on this constitutional question in two orders: the
order denying the Department’s motion to dismiss, which concluded that strict
scrutiny standard of review applied, and the order granting Plaintiffs’ motion for
preliminary injunction, which contained no analysis of the standard of review, but
incorporated the court’s earlier finding of strict scrutiny. ER/CR 30 (dismiss
order) and ER/CR 42 (inj. order).
Pertinent statutes that are not quoted verbatim in this brief and pertinent
portions of the Compacts of Free Association are attached as an Addendum to this
brief.
5

STANDARD OF REVIEW
“We review the district court’s decision to grant or deny a preliminary
injunction for abuse of discretion.” Southwest Voter Registration Education
Project v. Shelley, 344 F.3d 914, 918 (9th Cir. 2003) (citation omitted). “The
district courts interpretation of the underlying legal principles, however, is subject
to de novo review and a district court abuses its discretion when it makes an error
of law.” Id. (citation omitted).
STATEMENT OF CASE
This case raises the question whether the State may voluntarily provide
COFA Residents -- who are barred byfederal law from receiving federal public
benefits such as Medicaid -- with a state-funded alien-only benefit (not available to
citizens) that is less than the benefits available to citizens underfederal Medicaid,
without violating their right to equal protection under the Fourteenth Amendment
of the United States Constitution. It isfederal law that bars the aliens from
receiving the higher federal Medicaid benefits. The State could have done nothing,
but instead voluntarily chose to provide alien COFA Residents with some state
funded benefits to mitigate some of the impact of thefederal Medicaid
discrimination.
6

Plaintiffs, who are COFA Residents, filed a class action lawsuit against the
Department in August 2010. CRIER 1 (complaint). Plaintiffs set forth three
causes of action, for violation of (1) the equal protection clause of the fourteenth
amendment of the U.S. Constitution, (2) the Americans with Disabilities Act, and
(3) article I, sections 2 and 5 of the Constitution of the State of Hawai’i. Id. at 18-
21. Plaintiffs dropped their State constitutional claim. CR/ER 10-1 at 1, n. 1
(prelirn. inj. mtn.) (“Plaintiffs intend to dismiss their claim premised on the
Constitution of the State of Hawai’i.”) Plaintiffs sought declaratory and injunctive
relief. CR/ER 1 at 21-22 (complaint).
In September 2010, the Department filed a Motion to Dismiss and Plaintiffs
filed a Motioi for Preliminary Injunction.6 CR 8, 10. The parties stipulated that
the action be certified and maintained as a class action pursuant to FRCP 23(a), as
to the COFA Residents only, with the named Plaintiffs as class representatives.
CR/ER 37 (stip. re class).
The complaint also asserted claims on behalf of permanent resident aliens who
have resided in the United States for less than five years (New Residents), but there
was no named Plaintiff representing the class of New Residents. Plaintiffs
withdrew their request for interim injunctive relief relating to the New Residents,
without prejudice. CR/ER 32 (notice of withdrawal of inj. relief).
6
Per Circuit Rule 30-1.5, the memoranda of law filed in support of these motions
have not been included in the excerpts of record, except those specific portions of
the memoranda that may otherwise be required under Circuit Rule 30-1.
7

The district court denied the Department’s Motion to Dismiss by Order on
November 10, 2010, and granted Plaintiffs’ Motion for Preliminary Injunction on
December 13, 2010, both as to COFA Residents only. CRIER 30 (dismiss order),
42 (inj. order).
STATEMENT OF FACTS
A. COFA Residents Used to be Eligiblefor Federal Medicaid
The Medicaid program is “a cooperative federal-state program that directs
federal funding to states to assist them in providing medical assistance to low-
income individuals.” Ball v. Rodgers, 492 F.3d 1094, 1098 (9th Cir. 2007)
(citation and quotation marks omitted). “A state is not required to participate in
Medicaid, but once it chooses to do so, it must create a plan that conforms to the
requirements of the Medicaid statute and the federal Medicaid regulations.” Dep’t
of Health Servs. v. Sec’y of Health & Human Servs., 823 F.2d 323, 325 (9th Cir.
1987). In return for its conformity with federal requirements, participating state
governments get substantial reimbursement from the federal government to
subsidize the cost of the program. Spry v. Thompson, 487 F.3d 1272, 1273 (9th
Cir. 2007); Children’s Hosp. & Health Ctr. v. Belshe, 188 F.3d 1090, 1093 (9th
Cir. 1999); K & A Radiologic Technology Services, Inc. v. Comm’r of the Dept. of
Health, 189 F.3d 273, 277 (2d Cir. 1999). The Department is authorized by State
statute to “[a]dminister the medical assistance programs for eligible public welfare
8

and other medically needy individuals.. . and assuring compliance with federal
requirements to maximize federal financial participation.” Haw. Rev. Stat. § 346-
14(7).
Before August 1996, COFA Residents were eligible for federal Medicaid
benefits because the eligibility rules for the federal Medicaid program did not
discriminate in any way against lawfully-admitted alien residents, including COFA
Residents. CR/ER 37 at 3 (stip. re class).
B. The Welfare Reform Act Limited COFA Residents’ Access to Federal and
State Public Benefits
In August 1996, Congress enacted the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996, P.L. 104-193, August 22, 1996, title IV,
codified at 8 U.S.C. § 1601 et seq. (Welfare Reform Act), which imposed
limitations on the availability of Medicaid benefits to aliens. “Congress included
several statements regarding national immigration policy indicating that Congress
favored self-sufficiency by immigrants, immigrants were applying for and
receiving public assistance at greater rates and, through the Welfare Reform Act,
Congress intended to discourage immigrants from relying on publicly funded
assistance.” Hong Pham v. Starkowski, 16 A.3d 635 (Conn. 2011) (hereinafter
Hong Pham 2011), citing 8 U.S.C. § 1601.
The Welfare Reform Act created two classes of aliens. The first, “qualified
aliens,” generally includes aliens lawfully admitted to the United States for
9

permanent residence and those admitted pursuant to certain statutes.7 8 U.S.C. §
1641(b). Subject to certain exceptions, qualified aliens are not eligible for any
Federal means-tested public benefit, such as Medicaid, for a period of five years
after the alien’s date of entry into the United States (the five year rule). 8 U.S.C. §
1613.
Any alien who does not meet the definition of a qualified alien is a
nonqualified alien. 8 U.S.C. § 1641(b). “Nonimmigrants” do not meet the
definition of a qualified alien and are, therefore, nonqualified aliens. With certain
exceptions, all nonqualified aliens are ineligible for federal public benefits,
including federal Medicaid. 8 U.S.C. § 1611(a) and (b).
If a State has a state benefit program, then it must include certain groups of
aliens, and may include others. 8 U.S.C. § 1622(a) (“a State is authorized to
determine the eligibility for any State public benefits” of qualified aliens,
nonimmigrants and parolees for state public benefits); 8 U.S.C. § 1622(b) (listing
categories of aliens that “shall be eligible for any State public benefits.”)
COFA Residents who enter the United States under the Compacts are
admitted to work and establish residence as a “nonimmigrant” without regard to
Qualified aliens include legal permanent residents, refugees, asylees, certain
parolees, aliens whose deportation is being withheld, aliens granted conditional
entry, Cuban or Haitian entrants, and certain battered aliens. 8 U.S.C. § 164 1(b)
and (c).
10

provisions of the Immigration and Nationality Act (INA) relating to labor
certification and nonimmigrant visas. 2003 Compact, sec. 141(a) and (d); see,
also, Palau Compact sec. 14 1(a). A nonimmigrant alien is a person admitted to
the United States for a temporary period of time and for a specific purpose, as set
forth in the INA. 8 U.S.C. § 1 lOl(a)(15) (defining the term “nonimmigrants” to
include representatives of foreign governments, foreign students, tourists, and
others). The Department of Homeland Security has confirmed that citizens of the
Freely Associated States “may reside, work and study in the United States, but they
are not ‘lawful permanent residents.” CRIER 13-5 and 13-6 at 3 (fed. Fact Sheets
re COFA Res. immig. status).
COFA Residents, as nonimmigrants, are nonqualified aliens, and thus are
not eligible for federal Medicaid benefits under the Welfare Reform Act. 8 U.S.C.
§ 1611(a); see 8 U.S.C. § 1641(b). COFA Residents are not among the categories
of aliens that must be provided with state public benefits, therefore the State is not
required to provide state-funded benefits, although it may provide them if it so
chooses. 8 U.S.C. § 1622(a).
11

C. Since the Welfare Reform Act, the Department Provided Medicaid-Like
State-Funded Medical Assistance Benefits to COFA Residents, but Not to
Citizens
In order to fully understand Plaintiffs’ claims in this case, it is necessary to
describe the structure of Hawai’i’s federal Medicaid and state-funded medical
assistance programs.
Hawai ‘i’s federal Medicaid program is operated pursuant to a waiver
approved by the federal government under section 1115 of the Social Security Act
(the waiver). CR/ER 29 at 3 ¶10 (stip. re coy, for COFA Res.). Originally
approved in 1993, the waiver authorized the Department to provide Medicaid
benefits through a managed care program, known as QUEST, to Medicaid
enrollees who were covered under Medicaid’s various coverage categories for
children and parents, and through fee-for-service8 for other Medicaid-eligible
individuals who were aged, blind or disabled (ABD). CR/ER 13-7 at 1 ¶11 (2008
waiver). The Department also received authority to cover certain groups (with
federal funding) who were not otherwise eligible for Medicaid, known as
“demonstration-eligibles” because they are made eligible for coverage pursuant to
the section 1115 demonstration project. Id. at 5-6. The principal non-Medicaid
group eligible for QUEST coverage is non-disabled, childless adults with income
8
Fee-for-service (FFS) is a payment mechanism in which a health care provider is
paid for each individual service rendered to a patient.
12

below the federal poverty level. j Under the terms of the waiver, non-disabled
childless adults were subject to an enrollment cap. j at 8-9 ¶24.
In 1993, federal law did not bar legally resident aliens from eligibility for
federal Medicaid. Therefore, federal Medicaid benefits, including QUEST, were
available to COFA Residents who were otherwise eligible for Medicaid, and non-
disabled childless adult COFA Residents were subject to the QUEST enrollment
cap.
Over time, the waiver was amended to allow the Department to implement
QUEST-Net, a program to provide full Medicaid benefits to children and less
comprehensive benefits to adults who previously had QUEST coverage but lost
eligibility because they had too much income or assets to qualify for Medicaid.
CR/ER 37 at 4 ¶IV. QUEST-ACE (QUEST Adult Coverage Expansion) was
added to cover nondisabled childless adults who cannot be enrolled in QUEST due
to the enrollment cap. IcL at 4-5 ¶IV. And most recently, QUEST Expanded
Access (QExA) provided ABD individuals with Medicaid benefits through
managed care, similar to QUEST, with the addition of institutional and home-and
community-based long term care benefits. CR/ER 13-8 at 1, 6-7 (2013 waiver);
CR/ER 29 at 3 ¶8 (stip. re coy, for COFA Res.).
Because the Welfare Reform Act denied COFA Residents eligibility for
federal Medicaid, the terms of Hawai’i’s 1115 waiver state that the demonstration
13

eligibles for QUEST, QUEST-Net, QUEST-ACE and QExA “specifically excludes
unqualified aliens, including aliens from the Compact of Free Association
countries.” CR/ER 13-7 at 17 ¶50(c) (2008 waiver), 13-9 at 8 ¶60(c) (2013
waiver). Therefore, although the waiver does provide federal funding for some
groups not otherwise eligible for Medicaid, the terms of the waiver make clear that
there is no federal funding available for nonqualified aliens, including COFA
Residents. In short, federal law -- specifically, the Welfare Reform Act -- barred
COFA Residents from any federal Medicaid eligibility.
But rather than simply doing nothing, which was the State’s prerogative, the
State voluntarily chose to continue providing COFA Residents with the same level
of medical assistance benefits that they would have received from the federal
Medicaid program if they were U.S. citizens. CR/ER 29 at 2 ¶1 (stip. re coy, for
COFA Res.). At that time the Department did not adopt administrative rules to
create a state-funded medical assistance program. at 2 ¶2. COFA Residents
who met the income and asset eligibility requirements for Hawai ‘i’s federal
Medicaid program received the same benefits as those provided to citizens under
the Medicaid fee-for-service, QUEST, QUEST-Net, QUEST-ACE and/or QExA
programs, thus creating a “de facto” state-funded medical assistance program.
at 2 ¶93, 5. Although the services received by COFA Residents were identical to
those received by citizens under federal Medicaid programs, referred to as the “Old
14

Programs” in the lawsuit, CRIER 37 at 3-4 (stip. re class), they were not receiving
federal Medicaid, but receiving state-funded medical assistance. State-funded
medical assistance was not, and is not, available to citizens or qualified aliens
who are eligibleforfederal public benefits.
D. The Department Reduced the State-Funded Alien-Only Medical
Assistance Benefit that Was Available to COFA Residents by
Implementing Basic Health Hawai’i
In the face of a serious fiscal crisis, the Department implemented Basic
Health Hawai’i (BHH) on July 1, 2010, a limited state-funded medical assistance
program for COFA Residents and qualified aliens who have resided in the United
States for less than five years (New Residents). BHH generally provides less
comprehensive annual benefits than those offered to citizens through the federal
Medicaid program (implemented via Hawai’i’s QUEST and QExA Medicaid
managed care programs), as follows: 12 outpatient physician visits, 6 mental
health visits, 10 inpatient hospital days, 10 inpatient physician visits, and 4
prescription drugs per month.9 CRIER 10-14 at 1 (BHH flyer), CR/ER 24 at 4-5
9[9f14-18 (slip, facts). Eligible COFA Residents receive emergency medical care
services, emergency dental services, and renal dialysis. CR/ER 10-14 at 1 (BHH
flyer).
The BHH benefit package is similar to the QUEST-ACE and QUEST-Net
programs for Medicaid-eligible individuals, but the QUEST-ACE and QUEST-Net
programs do not include prescription drugs. CR/ER 13-8 at 24 (2013 waiver).
15

The named plaintiffs, Tony Korab, Tojio Clanton, and Keben Enoch, are
citizens of the Republic of the Marshall Islands, and are therefore COFA
Residents. CR/ER 1 at 4915, & 5 ¶9 (complaint); CR/ER 24 at 3 ¶4 (stip. facts).
Before July 2010, Plaintiffs Korab and Clanton received state-funded
medical assistance that was equivalent tofederal QExA Medicaid managed care
benefits for ABD citizens. CRIER 1 at 4 ¶6, 6 ¶10 (complaint)’0. Effective July
2010, Korab and Clanton were disenrolled from QExA and enrolled into BHH by
the Department. Id. at 5-6 ¶91 7, 11.
Plaintiff Enoch had no health coverage since September 2009. CRIER 38 at
291911-3 (stip. re Enoch). In June 2010, Enoch applied for, and was denied, federal
Medicaid benefits by the Department because of his alien status, and was not
automatically enrolled into BHH because he did not meet the requirements for
automatic enrollment. Id. at 2-3 ¶915 & 8.
E. Applying Strict Scrutiny, the District Court Preliminarily Enjoined the
Departmentfrom Implementing Basic Health Hawai ‘i
The district court assumed that the provision of a state-funded medical
assistance benefit for aliens only that was more limited than thefederal Medicaid
Old Programs available to citizens was state discrimination based on alienage.
10
The State disagrees with Plaintiffs’ characterization of QUEST Expanded
Access (QExA) as a “state program.” $ CRIER 1 at 4916 (complaint) Plaintiffs
Korab and Clanton were receiving state-funded medical assistance equivalent in
benefits to the federal QExA benefits that are available to citizens.
16

Therefore, the court determined that strict scrutiny applied, and held that the
Plaintiff COFA Residents were likely to prevail on their claim that the Department
violated their right to equal protection by providing them with limited state-funded
benefits for aliens only, even though their exclusion from the more generous Old
Programs was required by thefederal Welfare Reform Act. CR/ER 42 at 11; 30 at
28 (inj. order & dismiss order).
The district court went on to hold that the Department must “mirror the
federal eligibility requirements for Medicaid in creating BHH.” CR/ER 30 at 30
(dismiss order). In other words, the district court ruled that the Department is
constitutionally required to set up a state-only-funded program that completely
“fills the void” created by thefederal Welfare Reform Act’s discrimination against
aliens.
Pursuant to the Injunction Order, the Department has reinstated the benefits
that the COFA Residents were receiving as of June 1, 2010, and is processing
applications from COFA Residents for medical assistance without regard to
citizenship. Therefore, under the injunction, a COFA Resident who meets all
eligibility requirements, other than citizenship, may apply for and receive state
funded medical assistance that is equivalent to federal Medicaid benefits available
to a similarly situated U.S. citizen.
17

SUMMARY OF THE ARGUMENT
The district court erred in holding that the State may not reduce the level of
state-funded medical assistance benefits provided only to aliens who are barred
from federal Medicaid by the Welfare Reform Act, while continuing to provide
citizens with federal Medicaid, without violating Plaintiffs’ right to equal
protection.
In evaluating claims involving equal protection, the court must first establish
whether there is a discriminatory classification. The State’s implementation of
BHH does not discriminate against aliens, because it does not benefit citizens as
opposed to aliens. Because there is no discrimination by the State (any
discrimination is by Congress through the Welfare Reform Act), it was not
necessary for the district court to determine which standard of review applies.
But even if BHH is found to classify on the basis of alienage because it
covers only aliens that are ineligible for federal Medicaid, while citizens continue
to receive federal Medicaid benefits, then rational basis — and not strict scrutiny —
should apply. The State’s actions are consistent with the “uniform rules”
established by both the Welfare Reform Act and the Compacts, warranting rational
basis review. The uniform immigration policy established by Congress is
undermined by a finding that states must provide state-funded medical assistance
18

benefits to replace the federal Medicaid benefits that were taken away under the
Welfare Reform Act.
Ultimately, equalprotection does not require the State to replace or
maintain, at its own expense, federal Medicaid benefits that Congress took away.
Therefore, the district court erred in finding discrimination by the State when it
implemented BHH and applying strict scrutiny standard of review, which
established Plaintiffs’ likelihood of success on the merits. Accordingly, the
district court’s grant of Plaintiffs’ Motion for Preliminary Injunction is in error,
and should be reversed.
ARGUMENT
A. Basic Health Hawai ‘i Does Not Violate the Equal Protection Clause
Because It Does Not Discriminate Against Aliens
The district court ruled that the Department discriminated against COFA
Residents based on alienage because citizens and certain aliens are eligible to
participate in federal Medicaid, while COFA Residents — who are ineligible for
federal Medicaid — are only eligible for BHH, a limited state-funded medical
assistance program for aliens only. CR/ER 30 at 27-28 (dismiss order).
Benefits received by nonqualified aliens, such as COFA Residents, under
BHH, a state-funded benefit for aliens only, cannot be compared to the benefits
available to citizens under the federal Medicaid program. The cases relied upon by
the district court involved discrimination against aliens relative to citizens in the
19

same State program. Here, thefederal government created the discrimination, and
the State gratuitously mitigated part of that discrimination by creating a state-
funded aliens only program. But the district court ruled that the state was
constitutionally required to be even more generous and tofully mitigate the federal
government’s discrimination. The district court erred in finding that the State
discriminated against aliens and, on that basis, applying strict scrutiny review.
1. Providing Aliens Who Are Barredfrom Federal Medicaid with State-
Funded Alien-Only Benefits Is Not a Classification Based on
Alienage.
The Fourteenth Amendment provides that “[nb state. . . shall deny to any
person within its jurisdiction the equal protection of the laws.” U.S. Const. amend.
XIV, § 1. The word “person” in this context includes “lawfully admitted resident
aliens as well as citizens of the United States.” Graham v. Richardson, 403 U.S.
365, 371 (1971)). While equal protection directs that “all persons similarly
circumstanced shall be treated alike,” Plyler v. Doe, 457 U.S. 202, 216 (1982)
(quoting F.S. Royster Guano Co. v. Virginia, 253 U.S. 412, 415 (1920)), “[t]he
Constitution does not require things which are different in fact or opinion to be
treated in law as though they were the same.” RI. quoting Tigner v. Texas, 310 U.S.
141, 147 (1940). “Under traditional equal protection principles, a State retains
broad discretion to classify as long as its classification has a reasonable basis [i.e.
rational basis review].” Graham, 403 U.S. at 371 (citations omitted). However,
20

“classifications based on alienage, like those based on nationality or race, are
inherently suspect and subject to close judicial scrutiny” [i.e. strict scrutiny). Içi at
372; Nyquist v. Mauclet, 432 U.S. 1, 7 (1977); Takahashi v. Fish and Game
Comm’n., 334 U.S. 410, 420 (1948).
“In resolving [an) equal protection challenge, [the court) must first
determine what classification has been created” by the legal provision in question.
Aleman v. Glickman, 217 F.3d 1191, 1195 (9th Cir. 2000). Only then does the
court determine which level of scrutiny to apply. Here, the district court found that
the Department is making a classification based on alienage because citizens are
eligible for federal Medicaid, while COFA Residents are only eligible for a state-
funded alien-only program that provides less benefits than federal Medicaid.
CR/ER 30 at 1718 (dismiss order). This finding is without merit.
The equal protection clause does not “require the state to treat individuals in
a manner similar to how others are treated in a different program governed by a
different government.” Hong Pham 2011, 16 A.3d at 650, citing to Doe v. Comm’r
of Transitional Assistance, 773 N.E.2d 404, 411, 414 (Mass. 2002) ; Soskin v.
Reinertson, 353 F.3d 1242, 1255 (10th
Cir. 2004); Khrapunskiy v. Doar, 12 N.Y.3d
478, 488-89, 909 N.E.2d 70, 76-77 (2009).”
‘
But cf. Ehrlich v. Perez, 908 A.2d 1220, 1243-44 (Md. 2006) (invalidating
state’s decision to eliminate funding for program benefitting only aliens when
21

In Massachusetts created an alien-only cash assistance program for
qualified aliens who were made ineligible for federal Temporary Assistance for
Needy Families (TANF) assistance by the Welfare Reform Act’s five year rule, but
imposed a durational state residency requirement. Doe, 773 N.E.2d at 407. Thus,
some qualified aliens who were made ineligible for federal TANF could not
qualify for the alien-only state benefit program. The court held that the statutory
limitation was not discriminatory because
the Massachusetts Legislature was not required to establish the
supplemental program. It is also undisputed that the supplemental
program provides no benefits for citizens, and that the only persons
eligible for its benefits are qualified aliens. It is therefore apparent
that the supplemental program itself does not discriminate against
aliens and in favor of citizens.
Id. at 411. The same reasoning applies here, where the entirely optional
BHH program provides no benefits for citizens, and the only persons eligible for
its benefits are aliens. Therefore, like the alien-only cash assistance program in
Doe, BHH does not discriminate against aliens and in favor of citizens.
Similarly, in Soskin, the Tenth Circuit addressed Colorado’s discretionary
election to terminating Medicaid benefits of aliens who would be eligible to
participate in Colorado’s federal Medicaid program. S Soskin, 353 F.3d at 1243.
Federal Medicaid law requires the states to cover qualified aliens who are
neitherparty contested issue of whether decision discriminated on basis of
alienage.)
22

otherwise eligible for assistance in their state Medicaid program (including
meeting the five year rule, if applicable), but affords the states the option to define
additional groups of lawfully-admitted aliens as being eligible to participate in the
federal program. Id. at 1246, citing 8 U.S.C. § 16 12(b). colorado initially elected
to cover a more expansive group of eligible aliens, but then, faced with a budget
crunch, cut back to the mandatory group of qualified aliens. Although the federal
Medicaid program serves both eligible citizens and eligible aliens, the option to
serve additional aliens only applied to, and only benefited, aliens. Under these
circumstances, Soskin followed Doe and ruled that, “[a] state’s exercise of the
federal option to include fewer aliens in its alien-only program, then, should not be
treated as discrimination against aliens as compared to citizens. That aspect of the
discrimination is Congress’s doing. “ Soskin, 353 F.3d at 1255-56. The reasoning
of Doe and Soskin regarding the absence of State discriminatory treatment between
aliens and citizens in a limitation to a program that serves only aliens fully applies
to the facts of this case, and requires the district court’s order to be reversed. Any
discrimination suffered by plaintiffs here is Congress ‘s doing, through its federal
Medicaid alien restrictions. Hawai’i could have done nothing for the excluded
aliens, as it was free to do. Instead, Hawai’i gratuitously mitigated at least some
of thefederal discrimination by providing a limited program for aliens only.
23

Rather than discriminating against aliens, Hawai ‘i’s state-only-funded program was
helping aliens.
Directly on point is the recent Connecticut Supreme Court decision in Hong
Pham 2011, which upheld the elimination of Connecticut’s State Medical
Assistance for Noncitizens Program (the program) that provided medical coverage
exclusively to certain qualified aliens who were barred from federal Medicaid.
Hong Pham 2011, 16A.3d at 635. In Hong Pham 2011,
[the State] defendant argues that [the elimination of the program] does
not discriminate against aliens in favor of. . . citizens because only
aliens, and not citizens, ever were eligible for [the program]. The
defendant further contends that the trial court improperly looked
beyond the state-funded program at issue and improperly compared
the treatment of the class members. . . with the federal government’s
treatment of individuals under the separatefederal Medicaid program.
The defendant maintains that, because the state does not have to
remediate the effects of the federal Welfare Reform Act, the equal
protection clause does not require the states to ‘fill the gap’ in
coverage for the class members that the federal government had
created under the Welfare Reform Act. The defendant further argues
that, because the equal protection clause does not require the state to
provide its residents with coverage under [the alien medical program],
the substantial elimination of that program cannot violate the equal
protection clause. . . . We agree with the defendant.
We conclude that, in substantially eliminating [the program],
the state did not draw a classification on the basis ofalienage
because that program does not benefit citizens as opposed to aliens.
To draw a classtfication on the basis ofalienage, the state statute in
question typically must afford some benefit to citizens but deny that
benefit to at least some aliens because oftheir status as noncitizens.
at 646 (bold emphasis added).
24

Because only aliens, and not citizens, ever have benefitedfrom
[the program], and because no citizens presently receive assistance
under the program, the state is not.. . treating aliens disparately as
compared to citizens.
j at 648-649 (bold emphasis added). The Connecticut Supreme Court in Hong
Pham 2011 and the Massachusetts Supreme court in Doe agree that the State does
not classify based on alienage when aliens are eligible for an alien-only state
benefit that is not equivalent to the federal benefit available to citizens. Likewise,
BHH does not classify based on alienage since it is a state benefit for aliens only.
The district court disregarded Soskin and Doe, and instead relied upon
Aliessa v. Novello, 96 N.Y.2d 418, 754 N.E.2d 1085 (Ct. App. 2001), which
“applied strict scrutiny to a New York statute that terminated state-funded
Medicaid benefits for certain non-qualified aliens, but maintained benefits for other
aliens.”12 CR/ER 30 at 20 (dismiss order), citing Aliessa, 754 N.E.2d at 1092 (sic).
The district court’s reliance upon Aliessa is misplaced.
In addition to a federally subsidized Medicaid program, the state of New
York also had a State Medicaid program, funded entirely by the state, which
provided benefits to certain categories of individuals who are not otherwise eligible
for federal Medicaid, including legal aliens and citizens. Aliessa, 96 N.Y.2d at
12
The district court’s characterization of the case is incomplete, as Aliessa made a
distinction between aliens and citizens, not just between classes of aliens. Aliessa,
96 N.Y.2d at 423-424, 754 N.E.2d at 1089-90 (“New York had long provided State
Medicaid to needy recipients without distinguishing between legal aliens and
citizens. It ceased to do so ... after Congress enacted the [Welfare Reform Act].”).
25

424, 754 N.E.2d at 1089-90. Pursuant to the Welfare Reform Act, New York
excluded alien plaintiffs (which included qualified aliens and non-qualified aliens)
from the State Medicaid program, but did not exclude citizens. Id. at 427, 754
N.E.2d at 1091-92. Therefore, the court in Aliessa correctly ruled that plaintiffs
were discriminated against on the basis of alienage in violation of the equal
protection clause because the state was depriving aliens of a state benefit that the
state provided to citizens. Id. at 424, 436, 754 N.E.2d. at 1089-90, 1098.
Unlike the state of New York in Aliessa, the Department in this case did not
deprive COFA Residents of a state benefit that the state provided to citizens. The
discrimination that occurred in Aliessa did not occur here. Citizens are eligible for
the federal Medicaid program, but they were never eligible for the de facto state-
funded medical assistance program following the Welfare Reform Act, nor the
state-funded BHH program.
In fact, the New York Court of Appeals itself distinguished Aliessa in a
subsequent decision. $ Khrapunskiy, 12 N.Y.3d 478, 909 N.E.2d 70.
Khrapunskiy involved a claim by legal aliens who were barred from participating
in the federal Supplemental Security Income (SSI) program, which provided cash
payments to certain categories of needy individuals along with additional payments
funded by the state of New York (ASP) (collectively SSI/ASP). Id. at 482—83, 909
N.E.2d at 72-73. The plaintiffs were barred from receiving SSI benefits by the
26

Welfare Reform Act’ s five year rule, and were barred from receiving the ASP
payments by virtue of state law because of their ineligibility under the SSI
program. Id. Plaintiffs were, however, eligible for a “safety net assistance”
program which provided significantly less cash payments than that provided to
citizens through SSIIASP. Id., at 483, 909 N.E.2d at 73.
Like the COFA Residents, the plaintiffs in Khrapunskiy claimed that the
state violated their equal protection rights because they were provided less state-
funded benefits than similarly situated citizens who remained eligible for the
federal-state SSJJASP benefits, and claimed that the state must provide them with
benefits equivalent to that received by citizens under SSI/ASP. Id. at 483-484, 909
N.E.2d at 73.
However, the court in Khrapunskiy held that the state was under no
obligation to provide, under the state-funded SNA program, the same level of
coverage that citizens received under the federal-state SSJJASP program,
distinguishing its earlier decision in Aliessa, which involved a state-funded
program “which provided benefits to citizens but excluded assistance to aliens.” jç1
at 488-489, 909 N.E.2d at 76-77. The court determined that “strict scrutiny is to be
invoked only where a challenged law can be said to create classifications along
suspect lines. . . . Because the State did not create a program of benefits which
excluded plaintiffs, levels of scrutiny are inapplicable and there is no basis for an
27

equal protection challenge.” j at 487, 909 N.E.2d at 76. Because this case is
analogous to the facts of Khrapunskiy, not Aliessa, in that only aliens, and not
citizens, are eligible for BHH, the district court erred in finding that the State
discriminated against aliens.
2. The Past Receipt ofState-Funded Alien-Only Medical Assistance
Benefits is Irrelevant to Determining Whether Reduction of Those
Benefits Discriminates Against Aliens
The lower court observes that the Department has “treated COFA Residents
the same as citizens and other qualified aliens by allowing them access to the same
programs, with the only difference being that COFA Residents’ participation was
funded through State dollars only,” and that the Department is “only now
[singling] out COFA Residents for lesser benefits than are provided to citizens and
other classes of aliens.” CR/ER 30 at 17-18 (dismiss order). On that basis, the
district court said “the issue is not whether a state must create a benefits program
for certain groups of individuals where no program exists, but rather where a
program involving state funding already exists, whether a state may then exclude
certain groups from that program based on alienage.” Id. at 28.
Thus, when the State subsequently reduced those voluntary benefits for
aliens, the District Court saw that as state discrimination against aliens. But logic,
and caselaw, says that cannot be right. Because the State could have
constitutionally done nothing in the face of the federally-mandated discrimination
28

against aliens in the federal Medicaid program, the State surely must be able to
first voluntarily create a matching state-only-funded program for federally
excluded aliens out of its generosity, and then reduce it, or even eliminate it, later
on. To rule otherwise is to burn into law the injustice that “no good deed goes
unpunished.” See Hong Pham 2011, 16 A.3d at 661. (“If the equal protection
clause did not require the state to enact [a state-funded medical assistance program
for aliens only in the first placel, then the state’s decision to eliminate that program
or to reduce its scope does not violate the constitutional rights of those formerly
eligible for assistance under the program because the provision of public assistance
does not establish a right to continue receiving assistance.”) To so hold would
create a perverse incentive to states to never provide optional state-funded
assistance to aliens only, because once given it could never be reduced or taken
away. See Doe, 773 N.E. 2d at 414. (“In concluding that a rational basis standard
of review applies, we have also considered the context in which the supplemental
program was enacted [including] . . . the potential harm to those families if the
Legislature could only choose to create an all-or-nothing program as a remedy to
their disqualification from federally funded programs.”)
B. Even IfBasic Health Hawai’i Discriminates Against Aliens, Rational
Basis Review Applies
For the reasons given above, the State did not discriminate against aliens in
favor of citizens at all. Instead, it generously made up for part of the federal
29

government’s discrimination, by creating a BHH program only for aliens such as
the COFA Residents.
But if this Court were to somehow find the State’s failure to fully make up
for Congress’s discrimination to be discrimination by the State, the district court
wrongly held that “the Defendants’ determination that COFA Residents should no
longer receive the same benefits as citizens and other aliens is subject to strict
scrutiny.” CR/ER 30 at 24 (dismiss order). Instead, rational basis review should
apply.
1. The Federal Government May Discriminate Against Aliens in Federal
Benefit Programs Under Rational Basis Review
The Supreme Court held that thefederal government may treat aliens
differently from citizens in a federal benefit program so long as the classification
satisfies rational basis review. Mathews v. Diaz, 426 U.S. 67, 82-83 (1976). In
that case, the Court upheld Congress’s decision to “condition an alien’s eligibility
for participation in [Medicare]’3 on continuous residence in the United States for a
five-year period and admission for permanent residence.” j at 69. The Court
emphasized Congress’s broad constitutional power over naturalization and
immigration and noted that “the responsibility for regulating the relationship
between the United States and our alien visitors has been committed to the political
13
Medicare is a federal medical insurance program established under the Social
Security Act. Mathews, 426 U.S. at 69-70.
30

branches of the Federal Government.” Id. at 80-81. Therefore, the Court applied
rational basis review and held that “it is unquestionably reasonable for Congress to
make an alien’s eligibility [for federal Medicare benefits) depend on both the
character and the duration of his residence.” Id. at 82-83.
Following Mathews, lower courts have uniformly applied rational basis
review to uphold federal statutes that exclude certain aliens from various state-
administered federal public benefit programs, such as Medicaid, as follows:
• Soskin, 353 F.3d at 1255 (state administration of Medicaid, finding that “the
decision to have separate programs for aliens and citizens is a Congressional
choice, subject only to rational-basis review.”);
• Doe, 773 N.E.2d at 414 (state administration of TANF (Temporary
Assistance for Needy Families), recognizing that when “citizens are eligible
to receive benefits from a different [federal) program on conditions less
restrictive than those imposed on qualified aliens [in a separate state
program, this) is a direct result of the enactment of uniform Federal policies,
subject. . . to a separate rational basis review.”);
• Lewis v. Thompson, 252 F.3d 567, 583-84 (2d Cir. 2001) (state
administered pre-natal Medicaid benefits, upholding under rational basis
review Welfare Reform Act restrictions on alien eligibility based on Welfare
Reform Act’s stated purpose of removing incentive for illegal immigration
provided by the availability of public benefits, and observing that “every
31

court of appeals to consider the [Welfare Reform) Act’s deprivation of other
government benefits to unqualified aliens has found the denial to survive
rational basis scrutiny,” (citations omitted);
• City of Chicago v. Shalala, 189 F.3d 598, 604-05 (7th Cir. 1999)
(supplemental social security income and food stamps, finding that “for
purposes of equal protection analysis, Congress’s interest in regulating the
relationship between our alien visitors and the national government ought
not to be defined in such narrow terms as to preclude application of the
rational basis test in a case such as the present one involving eligibility for
government benefits”);
• Sudomir v. McMahon, 767 F.2d 1456, 1465-66 (9th Cir. 1985) (in a state-
administered AFDC (Aid to Families with Dependent Children) program,
applying a pre-Welfare Reform Act federal statutory limitation, the Sudomir
court disagreed with alien appellants that “a state’s refusal to adopt more
liberal eligibility standards is a matter of state, not federal, policy” requiring
strict scrutiny, because “[tjo so hold would amount to compelling the states
to adopt each and every more generous classification which, on its face, is
not irrational.”).
Thus, thefederal Welfare Reform Act provisions that exclude COFA
Residents from receiving state-administered federal Medicaid benefits are clearly
constitutional.
32

2. The State ‘s Actions in Following a Uniform Rule Established by
Congress Respecting Aliens Will Be Subject to Rational Basis Review
While Congress’s authority to make classifications based on alienage is
clear, the court in Graham recognized in dicta that Congress may not authorize the
state’s discriminatory treatment so as to reduce the applicable standard of review.
See Graham, 403 U.S. at 382 (“... Congress does not have the power to authorize
the individual States to violate the Equal Protection Clause.”)’4 This is because
“[a] congressional enactment construed so as to permit state legislatures to adopt
divergent laws on the subject of citizenship requirements forfederally supported
welfare programs would appear to contravene this explicit constitutional
requirement of uniformity” given Congress’s constitutional authority under Art. I,
§ 8, ci. 4 “[t]o establish an uniform Rule of Naturalization . . .“. Id. The
proposition that Congress does not have the power to authorize the individual
states to violate the Equal Protection Clause, however, “is almost tautological,”
and the real question is “not whether Congress can authorize such a constitutional
violation,” but whether there is a violation “when Congress has expressed its will,”
given Congress’s plenary authority over immigration. Soskin, 353 F.3d at 1254,
(quoting Graham, 403 U.S. at 382.) Furthermore, “[wjhen Congress exercises
14
This is clearly dicta because Congress did not authorize any state discriminatory
treatment of aliens in Arizona’s federal benefit program or in Pennsylvania’s state
benefit program.
33

these powers to legislate with regard to aliens, the proper standard of judicial
review is rational-basis review. That is the lesson of Mathews.” Id. at 1255.
Thus, if the State simply follows the federal mandate -- here, by not affording
federal Medicaid benefits to COFA Residents -- which itself is justified by a
rational basis, the State has not violated the Equal Protection clause. See Plyler,
457 U.S. at 219 n. 19 (“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, follows the federal direction.”).
Given the federal government’s plenary authority to “establish a uniform
Rule of Naturalization,” the district court recognized the “seemingly clear line
between state action that is subject to strict scrutiny on the one hand, and federal
action that is subject to rational basis review on the other,” and found that “where
Congress has established a uniform rule regarding alienage for the states to follow,
the state’s action infollowing Congress ‘s mandate is subject to rational basis
review.” CR/ER 30 at 14-16 (dismiss order), citing Plyler, 457 U.S. at 219, n. 19,
Sudomir, 767 F.2d at 1464-66. Thus, the State’s not providingfederal Medicaid
benefits to COFA Residents is subject to rational basis review, which is easily
satisfied here, as explained earlier.
The inquiry then turns to the separate question of the State’s action in not
fully making up for the federal government’s discrimination by providing a state
34

funded alien-only BHH program, whose benefits are less than those provided
citizens under thefederal Medicaid program. The district court went astray in
finding that the Welfare Reform Act “does not establish a uniform rule that would
subject BHH to rational basis review because the [Welfare Reform Act] does not
require that Defendants provide lesser benefits to COFA Residents than it does to
those qualified under the [federal] Old Programs.” CRIER 30 at 24 (dismiss
order).
Although it is true that the Welfare Reform Act does not prohibit Hawai’i
from voluntarily making up for Congress’s discrimination against COFA
Residents, that is beside the point. Hawai’i is not responsible for Congress’s
discrimination against COFA Residents, and Congress did not instruct Hawai’i to
do anything to make up for Congress’s discrimination. Hawai’i surely could have
done nothing in response to Congress’s discrimination. Instead, it voluntarily made
up for part of Congress’s discrimination by providing state-funded medical
assistance, which was not available to citizens. A state does not discriminate
against aliens when, in response to the federal discrimination, it then voluntarily
provides state-funded benefits only to aliens who are excluded from federal
Medicaid due to the Welfare Reform Act. Any discrimination was Congress’s
doing. Soskin, 353 F.3d at 1255-56. Because BHH did not discriminate against
aliens and in favor of citizens, the State’s action in not completely making up for
35

Congress’s discrimination is constitutional, and not subject to any standard of
review. See infra p. 24.
The district court determined that BHH classifies individuals based on
alienage — “citizens and qualified residents receive benefits under the [federal] Old
Programs, while COFA Residents are eligible for BHH only,” CR/ER 30 at 17
(dismiss order), reasoning that the Welfare Reform Act’s grant of discretion to the
states “to determine for itself the extent to which it will discriminate against legal
aliens for State Medicaid eligibility” violated the uniformity requirement because it
allowed different states to do different things. at 20-21, citing Aliessa, 96
N.Y.2d at 433, 435. Of course, the fundamental flaw in the district court’s analysis
is its assumption that the State - as opposed to the federal government -- is
discriminating at all against aliens, as explained above. But even if we assume,
arguendo, that the State is discriminating against aliens by not fully making up for
Congress’s discrimination, the rational basis test is the appropriate standard, not
strict scrutiny.
The uniform rule does not require a total lack of discretion on the part of the
state. Certain groups of qualified aliens “shall be” eligible for state public benefits,
8 U.S.C. § 1622, but the State may include others. 8 U.S.C. § 1624. Further, “a
State that chooses to follow the Federal classification in determining the eligibility
of such aliens for public assistance shall be considered to have chosen the least
36

restrictive means available for achieving the compelling governmental interest of
assuring that aliens be self-reliant in accordance with national immigration policy.”
8 U.S.C. § 1601(7).
Therefore, this grant of discretion to the states with respect to state benefits
is not unconstitutional provided the states do not discriminate against aliens in the
provision of those state benefits. As already noted, there is no discrimination by
the State of Hawai’i because it is not providing a benefit to citizens that it
withholds from aliens. Hawai’i providesfederal Medicaid to citizens, and state-
funded medical assistance to only aliens.
The District Court concludes that the broad grant of discretion in the
Welfare Reform Act “creates neither a federal classification nor a uniform federal
policy because the states can do as they please regarding these individuals — under
the [Welfare Reform Act], states may provides these individuals with no benefits,
some benefits, or the same benefits provided to citizens and qualified aliens.”
CR/ER 30 at 23. The logical extension of the District Court’s characterization of
the “uniform rule” is that the state’s choice to exercise its discretion under the
Welfare Reform Act and not provide any state-funded medical assistance must be
subject to strict scrutiny. Therefore, every state would, in essence, be required to
fill the gap created by the Welfare Reform Act and provide — entirely at the State’s
37

expense — benefits equivalent to the federal benefits that aliens lost under the
Welfare Reform Act.
The district court discounted the decisions in Soskin and Doe, which found
the Colorado and Massachusetts laws in question subject to rational basis review,
and credited Hong Pham v. Starkowski, 2009 WL 5698062 (Conn. Super. 2009)
(“Hong Pham 2009,” a lower state court ruling), Ehrlich, and Aliessa, which held
that the Welfare Reform Act prescribes no uniform rule and the state law in
question terminating or denying benefits to legal aliens was subject to strict
scrutiny. CR/ER 30 at 18-19 (dismiss order).
The district court’s reliance on the latter three cases is without basis. Hong
Pham 2009 was recently overturned by a unanimous Connecticut Supreme Court,
which not only rejected strict scrutiny, but found no state discrimination at all. See
Hong Pham 2011, 16 A.3d at 646. The Connecticut legislature enacted statutes
that effectively terminated certain state-funded medical assistance for needy legal
immigrants who were barred from federal Medicaid by the Welfare Reform Act’s
five year rule. at 637. The Connecticut Supreme court in Hong Pham 2011
held that the state “did not draw a classification based on alienage because [the
state-funded medical assistance] program does not benefit citizens as opposed to
aliens. To draw a classification on the basis of alienage, the state statute in
question must afford some benefit to citizens but deny that benefit to at least some
38

aliens because of their status as noncitizens.” Id. at 646. Like BHH in this case,
the state medical assistance program in Connecticut “provides assistance only to
aliens who are barred by the federal government from participating in federal
Medicaid,” and never provided benefits to citizens because citizens were never
eligible for the program. at 648.
The Hong Pham 2011 court reasoned that
if any state establishes a program to benefit only aliens, any attempt to
eliminate or reduce the benefit provided only to aliens under that
program would [under plaintiffs’ incorrect view] be subject to strict
scrutiny review simply because such action necessarily will harm only
aliens, regardless of how aliens are treated as compared to citizens.
This argument, then, is more akin to a [baseless] due process
argument, i.e., that once the state has provided assistance to a certain
class, it is forever barred from eliminating or diminishing that
assistance.
Id. at648 n. 23.
The plaintiffs in this case similarly argue, and the district court agreed, that
the prior provision of a state-funded medical assistance benefit only for aliens
requires that the reduction of that benefit — which necessarily affects only aliens —
is a classification based on alienage that is subject to strict scrutiny review. CR/ER
30 at 28 (dismiss order). The Connecticut Supreme Court’decision in Hong Pham
2011 is well-reasoned and persuasive, and this honorable court would do well to
follow its analysis.
39

The district court’s reliance on Ehrlich is also misplaced. Following
enactment of the Welfare Reform Act, the court of appeals of Maryland considered
Maryland’s creation of a separate alien-only state medical assistance program for
aliens who became ineligible for federal Medicaid as a result of the federal five
year rule. Ehrlich, 908 A.2d at 1227. As a result of budget constraints, Maryland
eliminated funding for the program, effectively eliminating assistance that was
previously afforded to the plaintiffs. IcJ., at 1227-28. “The defendants in Ehrlich
did not contest the plaintiffs’ claims on the issue ofdiscrimination but, instead,
focused exclusively on the appropriate level ofjudicial scrutiny.” Hong Pham
2011, 16 A.3d at 652, citing Ehrlich, 908 A.2d at 1230-32.
The Connecticut Supreme Court in Hong Pham 2011 found Ehrlich to be
unpersuasive because that case did not address the issue of discrimination,
specifically the issue of “whether the decision to eliminate funding for the alien-
only program discriminated against aliens in favor of citizens who received
coverage under federal Medicaid.” j This court should likewise discount the
Maryland Court of Appeals’ decision in Ehrlich, which was rooted in Maryland’s
failure to contest the critical issue.
Finally, as noted above, the state of New York in Aliessa discriminated
against aliens in favor of citizens within a wholly state-funded and state controlled
public assistance program, and did not involve the treatment of aliens under a
40

state-funded alien-only program. Aliessa, 96 N.Y.2d at 424, 754 N.E.2d at 1089-
90, fn. 3. Therefore, any discussion of the uniform rule in Aliessa cannot be
extended to this case, in which the COFA Residents are eligible for a state-funded
alien-only program. Moreover, the district court’s reliance on Aliessa is
questionable given that the New York Court of Appeals itself distinguished Aliessa
on that very point in a subsequent decision. $. Khrapunskiy, 12 N.Y.3d 478, 488,
909 N.E.2d 70, 76-77 (distinguishing Aliessa because in Aliessa the state-funded
program provided benefits to citizens but excluded assistance to aliens).
The district court relies on the Ninth Circuit’s opinion in Sudomir for the
proposition that the uniformity requirement is met where the federal government
dictates “both what the states may or may not do” regarding the classification of
aliens in state programs. CR/ER 30 at 22 (dismiss order). The district court reads
the court’s decision in Sudomir too broadly.
Sudomir involved the Aid to Families with Dependent Children (AFDC)
program, a federal-state program established by Congress to furnish financial
assistance to certain needy families with dependent children. Sudomir, 767 F.2d at
1457. With certain qualifications, only citizens, permanent resident aliens, and
aliens “otherwise permanently residing in the United States under color of law” are
eligible for AFDC benefits. The issue in Sudomir hinged on whether plaintiffs,
aliens illegally present in the U.S. whose deportation proceedings were stayed
41

pending action on their applications for asylum, were permanently residing in the
country under color of law. j.ç1 at 1459. The Secretary of the U.S. Department of
Health and Human Services (the Secretary) denied plaintiffs’ applications for
AFDC benefits on the basis that an application for asylum does not “confer any
status or right to reside in the United States permanently” and, therefore, asylum
applicants are not permanently residing under color of law. Id. at 1460.
Concluding that the Secretary’s construction of the statute was permissible,
the Sudomir court found that California had “employed both a federal
classification and a uniform policy regarding the appropriate treatment of a
particular subclass of aliens,” which was subject to rational basis review. i at
1466. This was because the state was required to follow federal eligibility
restrictions for the federal-state AFDC program. Likewise, the State of Hawai ‘i is
required to follow federal eligibility restrictions for its federal-state Medicaid
program. Clearly, rational basis review applies to the State’s exclusion of COFA
Residents from its Medicaid program.
The district court extended the holding in Sudomir to apply to a state public
benefit such as BHH, stating that the AFDC statute in Sudomir dictates particular
state action as to aliens for state public benefits, unlike the Welfare Reform Act in
this case. CRIER 30 at 23 (dismiss order). This is incorrect. The AFDC benefits
are not a state public benefit, but are a federal public benefit, and therefore the
42

issue of whether the AFDC statute dictated particular state action as to aliens for
state public benefits was not before the Sudomir court. j at 1457.
Sudomir is instructive, however, in recognizing that states may not employ
“the federal classification ‘for its own discriminatory policy.” Sudomir, 767 F.2d
at 1466, quoting Plyler, 457 U.S. at 226.
In Plyler, the Supreme Court held that a Texas statute withholding state
funds from local school districts for the education of illegal alien children and
authorizing the school districts to deny enrollment to such children, violated their
right to equal protection. Plyler, 457 U.S. at 224-230. Once again, Plyer is
distinguishable because in Plyler certain aliens (illegal ones) were excluded from
the public schools, while citizen children were eligible to attend public school. (In
Hawai’i, citizens are not eligible for BHH.) The court in Plyler did not find
Congressional intent to withhold basic education from the children of illegal aliens,
and therefore it was the state’s choice — with nofederal direction — to bar alien
children from the same state benefit that was made available to citizens. Id. at
226.
Whether a policy is discriminatory must be determined by looking at how
aliens are treated relative to citizens in the same program. There is no State
discrimination when the state creates a limited state-funded benefit for COFA
Residents that is not available at all to citizens. Therefore, even if the Department
43

had followed the federal classification under the Welfare Reform Act and
eliminated the Medicaid-like state-funded medical assistance benefits for COFA
Residents, rather than just reduced them, the Department would not be employing
the federal classification for its own “discriminatory policy.’ For the State, in
creating BHH for certain aliens, is not discriminating against aliens in favor of
citizens at all.
Notably, the court in Sudomir disagreed with the plaintiffs in that case, who
argued that nothing prevents a state from adopting more liberal eligibility standards
than the federal standards as long as the benefits are fully state-funded, and that the
state’s refusal to adopt more liberal eligibility standards is a matter of state, not
federal, policy, and therefore subject to strict or intermediate scrutiny. Sudomir,
767 F.2d at 1465 (citations omitted); see CR/ER 16 at 11 (P1. Reply to Opp. to
Mtn. for Prelim. Inj.). “To so hold would amount to compelling the states to adopt
each and every more generous classification which, on its face, is not irrational.”
Id. at 1466. Consequently, if any standard of review is to apply, rational basis, not
strict scrutiny, is the appropriate standard.
3. The State ‘s Implementation ofBasic Health Hawai ‘i Satisfies Rational
Basis Review
Again assuming, arguendo, that BHH discriminates against aliens,
Defendants’ decision to provide nonqualified aliens with less benefits than the
federal Medicaid program provides to those who are eligible for it satisfies rational
44

basis review. “[R]ational-basis review in equal protection analysis is not a license
for courts to judge the wisdom, fairness, or logic” of government choices. Heller
v. Doe, 509 U.S. 312, 319 (1993). Therefore, the state’s decision to provide health
benefits to nonqualified aliens through BHH must be upheld “if there is a rational
relationship between the disparity of treatment and some legitimate governmental
purpose.” jçj. at 320.
Furthermore, a State “that creates these categories need not actually
articulate at any time the purpose or rationale supporting its classification.” Id.
(quotation omitted). Rather, a classification “must be upheld against equal
protection challenge if there is any reasonably conceivable state of facts that could
provide a rational basis for the classification.” FCC v. Beach Communications,
Inc., 508 U.S. 307, 313 (1993). The state “has no obligation to produce evidence
to sustain the rationality of a statutory classification”; “[t]he burden is on
[Plaintiffs] to negative every conceivable basis which might support it.” Heller,
509 U.S. at 320.
Although it was under no legal obligation to do so, Hawai’i chose to use
state funds to provide health benefits to COFA Residents through BHH. While not
as comprehensive as the full Medicaid package, it is not illegitimate for the State,
in making this determination, to take into account its current budget situation,
given Congress’s goal in the Welfare Reform Act that “individual aliens not
burden the public benefits system.” 8 U.S.C. § 1601(4); see also Soskin, 353 F.3d
45

at 1255 (“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. § 1601(4). This
may be bad policy, but it is Congressional policy; and we review it only to
determine whether it is rational.”). The state’s decision to transfer COFA
Residents to BHH was rationally related to these legitimate state and federal
governmental interests. Therefore, the state has satisfied rational basis review and
has not violated Plaintiffs’ rights under the Equal Protection Clause.
4. Only When the State Classifies Based on Alienage Within a Prograin
Will Strict Scrutiny Apply
The district court cites to several cases for the proposition that “in general,
state classifications based on alienage are subject to strict scrutiny.” CR/ER 30 at
10-11 (dismiss order). However, each of those cases involved situations where the
state denied aliens access to a program or benefit that the state made available to
citizens under the same statutes: Bernal v. Fainter, 467 U.S. 216 (1984)
(certification for notaries public), Nyciuist v. Mauclet, 432 U.S. 1 (eligibility for
college scholarships), Examining Bd. of Engineers, Architects & Surveyors v.
Flores de Otero, 426 U.S. 572 (1976) (civil engineering licensure), In re Griffiths,
413 U.S. 717 (1973) (qualification to take the bar examination), Takahashi v. Fish
46

& Game Comm’n., 334 U.S. 410 (1948) (issuance of fishing licenses), and
Graham, 403 U.S. 365 (state and federal welfare benefits). CR/ER 30 at 10-1 1
(dismiss order).
In each case, at least certain groups of aliens were discriminated against in
comparison to how citizens were treated under the same statute. None of these
cases involved treatment of aliens in an alien-only state program that differed from
treatment of citizens in a separate federal program. Therefore, none of these cases
support the district court’s conclusion that the State’s “implementation of the
[federal] Old Programs and BHH classify individuals based on alienage.” CR/ER
30 at 27 (dismiss order). The federal Old Programs discriminated against aliens,
but the State did not; instead it mitigated part of the federal government’s
discrimination.
The district court relied heavily on the U.S. Supreme Court’s Graham case,
even though the facts of Graham are clearly distinguishable, since the states in
Graham treated aliens differently from citizens within the same program. The
Graham case was decided in 1971, before enactment of the Welfare Reform Act, at
which time there was no federal prohibition on the receipt of federal or state public
benefits by aliens. Graham resolved a consolidated appeal of two cases in which
legal aliens challenged welfare programs in Arizona and Pennsylvania on equal
protection grounds. Graham, 403 U.S. at 366-69. Arizna limited eligibility for
47

federally funded categorical assistance benefits for persons who were disabled, in
need of old-age assistance, or blind, to U.S. citizens and persons who had resided
in the U.S. for at least 15 years. Id. at 366-67. Pennsylvania limited eligibility for
a state-funded welfare program to residents who were U.S. citizens or who had
filed a declaration of intention to become citizens. Id. at 368. The Supreme Court
observed that “the Arizona and Pennsylvania statutes in question create two classes
of needy persons, indistinguishable except with respect to whether they are or are
not citizens of this country.” Id. at 371. Consequently, the Court reviewed these
classifications under strict scrutiny and concluded “a state statute that denies
welfare benefits to resident aliens and one that denies them to aliens who have not
resided in the United States for a specified number of years violate (sic) the Equal
Protection Clause.” RI. at 376.
Although Arizona’s program was a federal public benefit, and
Pennsylvania’s was a state public benefit, the common thread between the two was
that each program was also available to citizens. Accordingly, the Arizona and
Pennsylvania statutes granted a welfare benefit to citizens, but not to some or all
aliens. Id.,at37l.
Before the Welfare Reform Act, there was no directive from the federal
government to restrict public benefits to aliens. Therefore, it was Arizona and
Pennsylvania, and not the federal government, which imposed more restrictive
48

eligibility requirements on aliens than they did on citizens who were applying for
the same general assistance programs.’5 The state of Hawai’i, on the other hand,
does not treat aliens less favorably than citizens. Rather, it was Congress that did
so through the Welfare Reform Act: citizens and certain qualified aliens are
eligible for federal Medicaid, and nonqualified aliens are not eligible for federal
Medicaid. 8 U.S.C. § 1611. Hawai’i actually voluntarily helps aliens through
BHH, a program not available to citizens.
Therefore, the district court misconstrues Graham’s general admonition that
“a state statute that denies welfare benefits to resident aliens and one that denies
them to aliens who have not resided in the United States for a specified number of
years violate the Equal Protection clause.” CR/ER 30 at 12 (dismiss order),
quoting Graham, 403 U.S. at 376. As noted above, Graham involved statutes that
denied benefits to aliens while at the same time providing benefits to citizens. The
district court’s extension of this holding to apply to BHH -- a state program that
provides benefits only to aliens — is in error.
15
Pennsylvania’s discrimination against aliens in its state-funded general
assistance program would, even post-Welfare Reform Act, violate equal
protection.
49

C. The Rational Basis Test Also Applies Because the Federal Government
Established a Uniform Rule Relating to COFA Residents’ Conditions of
Entry Under the Compacts
As will be demonstrated below, the federal government, in designing the
Compacts, set forth a de facto uniform policy of encouraging self-sufficiency of
COFA Residents and not involuntarily burdening states with having to provide
public benefits to COFA Residents. Hawai’i’ s decision, therefore, to provide
COFA Residents with BHH, but not all of the benefits Congress provided to
citizens under Federal Medicaid, was consistent with this uniform federal policy,
and is thus reviewable under the rational basis test.
This Court must take into consideration the restrictions and conditions of
entry into the United States imposed on COFA Residents by Congress through the
Compacts. Significantly, Congress did not intend for the Compacts to result in any
adverse economic impact to affected jurisdictions,’6 including Hawai’i. , 2003
Compact, sec. 104(e). In fact, the 2003 Compact expressly states that a COFA
Resident “who cannot show that he or she has sufficient means of support in the
United States, is deportable.” 2003 Compact, sec. 141(0(1). Given this clear
federal mandate, federal policy under the 2003 Compact is inconsistent with the
notion that States may be forced, against their will, to provide the full complement
16
The “affected jurisdictions” under the Compacts include the state of Hawai ‘i,
Guam, American Samoa, and the Commonwealth of the Northern Marianas
Islands. CR/ER 24 at 3, ¶8; 2003 Compact, sec. 104(e)(1).
50

of healthcare benefits that the federal Medicaid program provides for citizens.
Hawai’i’s decision to provide limited health benefits to COFA Residents is thus
consistent with the uniform federal policy with respect to COFA Residents of not
involuntarily burdening the States with having to support COFA Residents.
Nevertheless, the state of Hawai ‘i spends in excess of $100 million on
services rendered to or on behalf of COFA Residents each year, $40 million on
health care alone through state-funded medical assistance. CR/ER 13-3 at 6 ¶9115
& 17 (Fink dec.). Plaintiffs argue that the federal government pays the State of
Hawai’i to provide health care to the COFA Residents, and that Hawai’i may “seek
additional funds for reimbursement to its health care and other institutions as a
result of increased demands related to public services provided to COFA
Residents.” CR/ER 10-1 at 29-30. This is not true.17
The Compacts provide for “Compact impact” assistance of $30 million
annually to the affected jurisdictions. 2003 Compact, sec. 104(e)(3). The State
currently receives about $11.2 million of that amount, which is only a small
In fact, the Ninth Circuit Court of Appeals ordered a case brought by Guam and
Hawai ‘i challenging the sufficiency of reports to be submitted by the Director of
the Department of the Interior to Congress regarding the impact of the Compacts
on the affected jurisdictions be dismissed on remand, because “[a]lthough the
governments’ complaint alleges that the Director’ s failure to submit complete
reports deprived them of ‘the benefit of the statutory commitment to act
sympathetically and to expeditiously redress the adverse consequences from
implementation of the Compact,’ the governments recognize that they lack
standing to contest the absence of appropriations. . .“. Guerrero v. Clinton, 157
F.3d 1190, 1194 (1998).
51

fraction of the cost of providing state-funded services, including but not limited to
health care, to COFA Residents. CR/ER 13-3 at 6 ¶16 (Fink dec.). The Compacts
also include grant assistance that is provided directly to the Freely Associated
States -_ not to Hawai’i -- to address, among other things, health care in those
countries, “with priorities in the education and health care sectors.” 2003
Compact, sec. 211(a); see, also, Palau Compact sec. 211(d) (grant of $631,000
annually for fifteen years ... for health and medical programs). Specifically, this
grant assistance is made “to support and improve the delivery of preventive,
curative and environmental care and develop the human, financial, and material
resources necessary for the [FSM and RMI] to perform these services.” 2003
Compact, sec. 2ll(a)(2).
Other than the grant assistance noted above, the Palau Compact contains no
provision for health care services to its citizens within the United States. The 2003
Compact, on the other hand, has several specific, but limited, health care
provisions, addressing health care to citizens of the Freely Associated States in
their home countries and the United States, but none address the provision of state
or federal public benefits such as Medicaid.’8 Moreover, the State has no
18
The specific health care provisions in the 2003 Compact are as follows:
• The RMI government may request that the United States “continue to
provide special medical care and logistical support thereto for the remaining
members of the population of Rongelap and Utrik who were exposed to
52

enforceable right to obtain any additional funding under the Compacts.
Guerrero, 157 F.3d at 1194. Therefore, the only logical reading of the Compacts is
that COFA Residents are granted leave to work and reside in the United States,
with limited provision in the Compacts of health services in the Freely Associated
States and through federal Department of Defense facilities. One stated intent of
the Compacts is to not have “adverse consequences” to the State. Forcing Hawai’i
radiation resulting from the 1954 United States thermo-nuclear “Bravo” test
...“. 2003 Compact, sec. 103(f);
• The Four Atoll Health Care Program limits services provided by the United
States Public Health Service or any other United States agency pursuant to
the separate agreement between the United States and the RMI to peoples of
the Bikini, Enewetak, Rongelap, and Utrik Atolls. S.., 2003 Compact, sec.
103(h). The separate agreement was “for the just and adequate settlement of
all such claims which have arisen in regard to the Marshall Islands and its
citizens .. . for the continued administration by the Government of the United
States of direct radiation related medical surveillance and treatment
programs.” 2003 Compact, sec. 177 (emphasis added).
• Authorization for appropriations for health care reimbursement to “health
care institutions in the affected jurisdictions for costs resulting from the
migration of citizens of the RMI, FSM and Palau to the affected
jurisdictions” as a result of the Compacts, as amended. 2003 Compact, sec.
104(e)(6) (emphasis added). These appropriations are directed to private
health care institutions, and not to the State of Hawai ‘i.
• Department of Defense medical facilities are to be made available on a
limited basis “for use by citizens of the FSM and the RMI who are properly
referred to the facilities by government authorities responsible for provision
of medical services in the FSM, RMI, Palau and the affected jurisdictions.”
2003 Compact, sec. 104(e)(7)(A). The services of the National Health
Service Corps are made “available to the residents of the [FSM] and the
[RMI] to the same extent and for so long as such services are authorized to
be provided to persons residing in any other areas within or outside the
United States.” 2003 Compact, sec. 104(e)(7)(B)
53

to provide even more benefits to COFA Residents in the form of increased
healthcare obligations plainly violates the federal policy of the Compacts to not
involuntarily burden the States.
Moreover, the federal policy to not involuntarily burden states with COFA
Residents public assistance obligations is made clear not only under the Compacts,
but also under the Welfare Reform Act. Congress stated in that Act that the
immigration policy of the United States is that “aliens within the Nation’s borders
not depend on public resources to meet their needs, but rather rely on their own
capabilities and the resources of their families, their sponsors, and private
organizations, and ... the availability of public benefits not constitute an incentive
for immigration to the United States.” 8 U.S.C. § 1601(2). By requiring
“sufficient means of support in the United States,” the 2003 Compact is consistent
with Congressional intent under the Welfare Reform Act, which eliminated COFA
Resident’s eligibility for federal public assistance benefits. Again, forcing
Hawai ‘i to provide even more benefits to COFA Residents completely undermines
this federal policy. Hawai ‘i’s decision to act consistently with that federal policy
can thus only be reviewed for, at most, a rational basis.
The Compacts are also consistent with Congressional intent under
immigration law. A COFA Resident entering under the Compact is admitted to the
United States as a noninmiigrant, with only the labor certification and non
54

immigrant visa requirements of the INA disregarded. 2003 Compact and Palau
Compact, sec. 141(a). Nonimniigrants are, as a general matter, individuals who
are in the United States temporarily and would not be eligible for medical
assistance benefits. See 8 U.S.C. § I 101(a)(15) (listing classes of nonimniigrant
aliens).’9
In sum, because any ruling forcing Hawai ‘i to provide even more public
health assistance to COFA Residents would violate the uniform federal policy --
explicit in both the Compacts and the Welfare Reform Act -- that the states not be
19
Plaintiffs deny that COFA Residents may enter the United States either
under the Compacts or through normal immigration channels. CR/ER 16 at 7, n. 5
(P1. Reply to Opp. to Mtn. for Prelim. Inj.). This is not true. Admission under the
Compacts is optional, not mandatory. The INA expressly applies, with limited
exceptions, to any person admitted or seeking admission to the United States under
the Compact. 2003 Compact. sec. 141(f). And the 2003 Compact provides that
citizens of the Freely Associated States “may be admitted to, lawfully engage in
occupations, and establish residence as a nonimmigrant in the United States ...“.
2003 Compact, sec. 141(a).
Admission to the United States under the Compact does not confer on a
COFA Resident the right to establish the residence necessary for naturalization
under the INA. See, 2003 Compact, sec. 14 1(h). However, the option to enter the
United States freely under the Compact “shall not prevent a citizen of the [Freely
Associated States] from otherwise acquiring such rights or lawful permanent
resident alien status in the United States.”. 2003 Compact, sec. 14 1(c) Therefore,
individuals who exercise the option to enter into the United States under the
Compact subject themselves to the terms and conditions set forth in the Compact,
and are precluded from enjoying the benefits of permanent resident alien or
naturalized citizen status. However, individuals from the Freely Associated States
who acquire permanent resident alien status in the United States would, after five
years, be eligible for federal public benefits to the same extent as citizens and other
qualified aliens.
55

involuntarily burdened by COFA Residents, Hawai ‘i’s decision to provide only
some health assistance to COFA Residents is at most reviewable for a rational
basis.
CONCLUSION
Hawai’i has not discriminated against aliens at all, as it has not created a
program that benefits citizens at the expense of aliens. Instead, faced with
federally mandated discrimination against aliens, rather than simply doing nothing
as was its prerogative, the State voluntarily and gratuitously chose to mitigate the
federal government’s discrimination by creating a program for aliens only. This is
not discrimination by Hawai’i at all, and thus no equal protection scrutiny is
warranted.
But even if one assumes, arguendo, that Hawai’i’s decision not to completely
make up for Congress’s discrimination is discrimination by Hawai’i, that decision
must be reviewed under the rational basis test, as the uniform federal policy that
can be derived from federal law is that Congress did not intend states to be
involuntarily burdened by having to provide public assistance benefits to COFA
Residents. Because Hawai ‘i acts rationally in not subjecting itself to the financial
burdens Congress never intended to force upon any State, plaintiffs’ equal
protection challenge must be rejected.
56

Accordingly, the State respectfully requests that the district court’s order
granting plaintiffs’ motion for preliminary injunction be REVERSED.
DATED: Honolulu, Hawai’i, June 20, 2011.
STATE OF HAWAI’I
DAVID LOUIE
Attorney General
State of Hawai ‘i
Is! Lee Ann N.M. Brewer
LEE-ANN N.M. BREWER
JOHN F. MOLAY
Attorney for Defendants-Appellants
Patricia McManaman and Kenneth Fink
57

CERTIFICATE OF COMPLIANCE
This brief complies with the type-volume limitation of Fed. R. App. P.
32(a)(7)(B) because this brief contains 13,861 words, excluding the parts of the
brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii).
This brief complies with the typeface requirements of Fed. R. App. P.
32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because this
brief has been prepared in a proportionally spaced typeface using Microsoft Word,
Times New Roman, 14 point.
DATED: Honolulu, Hawai’i, June 20, 2011.
STATE OF HAWAI’I
DAVID LOUIE
Attorney General
State of Hawai’i
/s/ Lee Ann N.M. Brewer
HEIDI M. RIAN
LEE-ANN N.M. BREWER
JOHN F. MOLAY
Attorneys for Defendants-Appellants
Patricia McManaman and Kenneth Fink
58

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