Case: 19-10874 Document: 00516454595 Page: 1 Date Filed: 08/31/2022
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
FILED
August 31, 2022
No. 19-10874 Lyle W. Cayce
Clerk
Barbara Harrison, by her next friend and guardian, Marguerite
Harrison,
Plaintiff—Appellee,
versus
Cecile Erwin Young, in her official capacity as the Executive
Commissioner, Texas Health and Human Services Commission,
Defendant—Appellant.
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:19-CV-01116
Before King, Jones, and Costa, Circuit Judges.
Gregg Costa, Circuit Judge:
This dispute is about whether Texas must provide around-the-clock
nursing services to a disabled individual even though the expense of doing so
exceeds the cost cap in the state’s Medicaid program. Plaintiff contends that
the Americans with Disabilities Act and Rehabilitation Act require this
service because the alternative of institutionalization would amount to
discrimination. The district court issued a preliminary injunction requiring
Texas to provide the nursing services. Although we conclude that the district
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court has jurisdiction to hear this suit under Ex parte Young, we vacate the
injunction and remand for the district court to make additional findings.
I
Barbara Harrison suffers from cerebral palsy, epilepsy, obstructive
sleep apnea, severe dysphagia, gastrostomy tube dependence, scoliosis, and
substantial intellectual disabilities. Because of those conditions, Harrison
needs intensive medical care. The Texas Health and Human Service
Commission (HHSC)—of which defendant Cecile Erin Young is now
Commissioner 1—pays for Harrison to receive that care from Berry Family
Services, a community-based care center near Dallas.
Until Harrison’s health deteriorated in early 2018, her care was
funded through a Medicaid program that states can adopt to provide home- and community-based care for persons with disabilities who would otherwise
require institutionalization. 42 U.S.C. § 1396n(c)(1). This is called a
“waiver” program because approval of such a plan by the federal Centers for
Medicare and Medicaid waives a number of Medicaid requirements, such as
the requirements that a plan be available throughout the state and that a
single standard be used for financial eligibility. Id. § 1396n(c)(3) (referring to
42 U.S.C. §§ 1396a(a)(1), (a)(10)(C)(i)(III)). As with other Medicaid
programs, the source of these funds includes a mix of federal and state
dollars.
Such waiver plans are aimed at promoting “cost-effectiveness and
efficiency.” Id. § 1396n(b). To ensure those goals, a state must certify that
the average per-person cost of providing home and community care through
the waiver program does not exceed the average cost of providing that care
1Courtney Phillips was Commissioner when the suit was litigated in district court
and when the appeal was filed.
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in an institution. Id. § 1396n(c)(2)(D). Texas’s waiver program thus
provides home- and community-based care only if the annual cost of care is
less than approximately $170,000. 40 Tex. Admin. Code § 9.155(a)(3)
(2016).
To cover expenses that would surpass the limit in the waiver plan,
HHSC may use general state revenues. If HHSC chooses not to use those
funds for a patient whose cost of home care exceeds the cap,
institutionalization is the only remaining option for government-funded care.
Indeed, one of the prerequisites for using general revenue for home care is a
determination that “there is no other available living arrangement in which
the person’s health and safety can be protected at that time, as evidenced by:
(i) an assessment conducted by clinical staff of the commission; and (ii)
supporting documentation, including the person’s medical and service
records.” General Appropriations Act, 85th Leg., R.S., art. II, §
23(b).
In April 2018, Harrison’s worsening health required additional care
that exceeded the cap in the waiver program. Her primary care physician
concluded that she faces a substantial risk of death if a nurse does not attend
to her constantly. Harrison proposed a plan that included around-the-clock
nursing care at an annual cost of approximately $330,000—well in excess of
the $170,000 cap for the community-based service program. To make up the
difference, Harrison requested that the HHSC use general revenue funds.
The agency denied Harrison’s request, concluding that her needs could be
met in a state facility based on the opinion of a doctor who reviewed
Harrison’s medical records and visited her. But HHSC approved Harrison
for eight hours of daily nurse care in the community care center where she
has been residing since 2017.
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Harrison’s guardian sought administrative review. 2 The Medicaid
hearing officer decided that Harrison was ineligible to receive the home- and
community-based service program funds because the cost of her proposed
plan exceeded the $170,000 cap. The parties, though, had not disputed that
cost issue. Harrison had asked the officer to review HHSC’s refusal to dip
into the general revenues. The agency argued that there is no administrative
review of that discretionary decision. The hearing officer was silent on the
disputed issue, not addressing HHSC’s refusal to use general revenue.
Harrison’s guardian then brought this suit, alleging that the HHSC
Commissioner discriminated against Harrison because of her disability,
violating the Americans with Disabilities Act and the Rehabilitation Act. The
complaint also asserts a section 1983 claim alleging that depriving Harrison
of the general revenue funds without a hearing violates due process. The
plaintiff asked the district court to enter a preliminary injunction ordering the
Commissioner to maintain 24/7 nurse care until a Medicaid fair-hearing
officer resolves whether HHSC should use general revenue funds to pay for
her community care and whether her care complies with the ADA.
The district court issued the requested injunction. The
Commissioner appeals.
II
We first address whether the district court had jurisdiction. The
Eleventh Amendment generally bars private individuals from suing states in
federal court. 3 Bd. of Trs. of the Univ. of Ala. v. Garrett, 531 U.S. 356, 363
2 Harrison’s guardian had filed a federal suit in 2018 that was soon dismissed after
HHSC agreed to provide 24-hour nurse care pending the administrative hearing.
3 That sovereign immunity can, however, be waived or abrogated. In a footnote in
her brief, Harrison argues that Texas waived sovereign immunity for suits under section
504 of the Rehabilitation Act, one of the two disability-discrimination statutes at issue here.
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(2001). There is, however, an important exception when a plaintiff seeks
injunctive relief to enjoin ongoing violations of federal law. Va. Off. for Prot.
& Advoc. v. Stewart, 563 U.S. 247, 254–56 (2011); Ex parte Young, 209 U.S
123, 156 (1908). A state official violating federal law can be sued for
prospective relief. Verizon Md., Inc. v. Pub. Serv. Comm’n of Md.,
535 U.S.
635, 645 (2002).
Does Ex parte Young allow this suit being brought against another state
official named Young? The general dividing line is between impermissible
suits seeking remedies for past violations of federal law and permissible suits
seeking prospective relief to prevent ongoing violations. A request for
injunctive relief does not automatically put a suit on the Ex parte Young side
of the line. The key is not the type of relief sought but whether the remedy
is preventing ongoing violations of federal law as opposed to past ones.
Edelman v. Jordan, 415 U.S. 651, 664 (1974) (contrasting the permissible
prospective relief granted in Young with the impermissible retrospective
relief sought in Edelman). A state employee fired because of her disability
could not obtain an award of “equitable restitution” requiring the state
official to pay her for lost wages.
Id. at 668 (concluding that such a remedy is
“in practical effect indistinguishable in many aspects from an award of
damages against the State”); see also Garrett,
531 U.S. at 374 (holding that the
Eleventh Amendment bars suits for damages under Title I of the ADA). But
such an employee could sue the state seeking reinstatement. See Nelson v.
Univ. of Tex. at Dallas,
535 F.3d 318, 322 (5th Cir. 2008) (“[R]einstatement
See Miller v. Tex. Tech Univ. Health Scis. Ctr.,
421 F.3d 342, 352 (5th Cir. 2005) (en banc)
(holding that a state waives sovereign immunity from claims arising under section 504 by
accepting the relevant federal financial assistance). The Commissioner responds that
Harrison did not raise this argument in district court. We need not decide whether
Harrison forfeited this argument given our conclusion that the suit seeks prospective relief
under Ex parte Young.
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[is] an acceptable form of prospective relief that may be sought through Ex
parte Young”).
A prospective remedy like reinstatement will, of course, have some
effect on the state treasury. The reinstated worker will have to be paid going
forward. But that impact on the fisc does not take the suit outside Young’s
ambit. Ex parte Young itself had an “effect on the States’s revenues, since
the state law which the Attorney General was enjoined from enforcing
provided substantial monetary penalties against railroads which did not
conform to its provisions.” Edelman, 415 U.S. at 667. Much bigger drains
on state funds resulted from a number of Supreme Court cases, brought
under Young, that required future payment of welfare benefits.
Id. (citing
Graham v. Richardson,
403 U.S. 365 (1971); Goldberg v. Kelly,
397 U.S. 254
(1970)); see also Milliken v. Bradley,
433 U.S. 267, 288−90 (1977) (holding that
the Eleventh Amendment did not bar an injunction to eliminate a segregated
school system and share ongoing educational costs among defendants).
Closer to home, we allowed a suit for injunctive relief against a previous
HHSC Commissioner for allegedly denying access to the same Medicaid
program at issue here. McCarthy ex rel. Travis v. Hawkins,
381 F.3d 407, 414
(5th Cir. 2004). These cases show that even when substantial sums are at
stake, “an ancillary effect on the state treasury is a permissible and often an
inevitable consequence of the principle announced in Ex parte Young.”
Edelman,
415 U.S. at 668.
It follows that despite its potential impact on the Texas treasury,
Harrison’s suit is properly brought under Young because it seeks only
prospective relief to remedy ongoing violations of law. That Harrison seeks
only forward-looking relief distinguishes this suit from cases like Edelman and
Ford Motor Co. v. Department of Treasury, 323 U.S. 459 (1945), in which the
injunctions against state officials required payments to compensate for past
violations of the law. In Edelman, sovereign immunity barred a district court
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from ordering states to compensate federal-aid applicants whose applications
were processed too slowly before the injunction issued. 415 U.S. at 668. In
Ford Motor, sovereign immunity barred a district court from ordering a state
to return taxes it previously collected in violation of federal law. 323 U.S. at
460–62; see also Turnage v. Britton,
29 F.4th 232, 239–40 (5th Cir. 2022)
(holding that sovereign immunity barred suit against state officials seeking
interest for refund payments based on unlawful utility rate increase). By
contrast, any costs Texas would incur if Harrison were to succeed would be
based on her future needs. In fact, there is not even possibility of
retrospective relief as up to now Harrison has received all the Medicaid care
she has sought.
The Commissioner also misses the mark in arguing that Pennhurst
State School & Hospital v. Halderman, 465 U.S. 89 (1984), bars this suit.
Pennhurst emphasizes another requirement for Ex parte Young: the plaintiff
must be seeking to prevent an ongoing violation of a federal law.
Id. at 106.
Suits to enjoin violations of state law do not get around sovereign immunity.
Id. Harrison’s claims, however, arise under federal law—the Rehabilitation
Act, the Americans with Disabilities Act, and the Due Process Clause of the
14th Amendment. Federal jurisdiction thus does not offend Pennhurst. See,
e.g., Jordan v. Fisher,
823 F.3d 805, 809−10 (5th Cir. 2016) (holding that
sovereign immunity and Pennhurst do not bar a section 1983 lawsuit alleging
that failure to adhere to state law violated federal due process); Raj v. La.
State Univ.,
714 F.3d 322, 327−29 (5th Cir. 2013) (holding that sovereign
immunity and Pennhurst barred only state law claims when a defendant
brought both federal and state causes of action seeking the same relief).
Sovereign immunity does not bar this suit. There is federal
jurisdiction.
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III
We thus review the injunction. For a preliminary injunction to issue,
a plaintiff must show: (1) a substantial likelihood of success on the merits, (2)
a substantial threat of irreparable harm absent the injunction, (3) that the
harm she will suffer without the injunction outweighs the cost to comply with
the injunction, and (4) that the injunction is in the public interest. Jefferson
Cmty. Health Care Ctrs., Inc. v. Jefferson Par. Gov’t, 849 F.3d 615, 624 (5th
Cir. 2017). We review the district court’s grant of Harrison’s preliminary
injunction for abuse of discretion, reviewing underlying factual findings for
clear error and legal conclusions de novo. Atchafalaya Basinkeeper v. U.S.
Army Corps of Eng’rs,
894 F.3d 692, 696 (5th Cir. 2018).
A
In addressing the plaintiff’s likelihood of prevailing, we first consider
whether she is likely to overcome the Commissioner’s argument that the
district court should abstain from exercising jurisdiction.
District courts have discretion to abstain from deciding unclear
questions of state law arising in complex state administrative schemes when
federal court intervention would undermine uniform treatment of local
issues. New Orleans Pub. Serv., Inc. v. Council of New Orleans, 491 U.S. 350,
362 (1989) (NOPSI); Burford v. Sun Oil Co.,
319 U.S. 315, 332 (1943). But
this “Burford abstention is disfavored as an abdication of federal
jurisdiction.” Aransas Proj. v. Shaw,
775 F.3d 641, 653 (5th Cir. 2014); see
also Colo. River Water Conservation Dist. v. United States,
424 U.S. 800, 817
(1976) (recognizing that federal courts have a “virtually unflagging
obligation” to exercise the jurisdiction Congress gives them). In deciding
whether to abstain under Burford, district courts consider: (1) whether the
plaintiff raises state or federal claims, (2) whether the case involves unsettled
state law or detailed local facts, (3) the importance of the state’s interest in
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the litigation, (4) the state’s need for a coherent policy in the area, and (5)
whether there is a special state forum for judicial review. Grace Ranch, L.L.C.
v. BP Am. Prod. Co., 989 F.3d 301, 313 (5th Cir. 2021).
The first factor counsels against abstention as Harrison raises only
federal claims (under the ADA, the Rehabilitation Act, and section 1983).
The second factor likewise supports the court’s excercising its
jurisdiction. The case does not require a federal court to resolve unsettled
state law or apply detailed facts related to local conditions. The state
statutory scheme seems clear, as our due process analysis below
demonstrates. Evaluating Harrison’s claims requires applying federal law to
her circumstances, an exercise of judicial authority well within the expertise
of federal courts. See Romano v. Greenstein, 721 F.3d 373, 380 (5th Cir. 2013)
(declining to abstain when Medicaid beneficiary alleged her benefits were
terminated in violation of the federal Medicaid Act and Due Process Clause
of the 14th Amendment).
The third factor does point towards abstention. Texas has a strong
interest in deciding how it allocates state funds. That is somewhat offset by
the countervailing federal interest in combating disability discrimination. Cf.
Aransas Proj., 775 F.3d at 650–51 (balancing state and federal interests in
Endangered Species Act context). Plus, Medicaid is a program of
cooperative federalism that involves the expenditure of both state and federal
funds. Although this factor still favors abstention, “[t]he weight” it receives
depends on the next factor, “which focuses on the potential for federal
disruption of a coherent state policy.” Grace Ranch, 989 F.3d at 316.
Whether a lawsuit might cause a complex state administration “to
crumble” is the “fundamental Burford concern.” Id. at 319; see also NOPSI,
491 U.S. at 362 (reasoning that Burford abstention is primarily concerned
with preventing federal court rulings from disrupting the uniform application
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of state policy). This lawsuit by a single Medicaid recipient does not risk
“recurring and confusing federal intervention in an ongoing state scheme.”
Wilson v. Valley Elec. Membership Corp., 8 F.3d 311, 315 (5th Cir. 1993).
Although ordering Young to provide services to Harrison would reduce
funds available for other state priorities, Young cites no case holding that
merely ordering the expenditure of state funds represents the federal court
interference with an “interdependent” administrative scheme that Burford
seeks to prevent. Grace Ranch,
989 F.3d at 317. To the contrary, we have
rejected abstention in another suit seeking an order to provide Medicaid
services. Romano,
721 F.3d at 380.
The final factor also counsels against abstention as Texas does not
have a special forum for judicial review of Medicaid determinations.
With the scorecard lopsided in favor of exercising jurisdiction, it is
unlikely the district court abused its discretion in declining to abstain. See
Grace Ranch, 989 F.3d at 319 (holding that abstention was not warranted even
when the first three factors favored abstention).
B
Although Harrison has shown that the district court should hear her
claims, we conclude she is unlikely to succeed on one of them: her due
process claim.
States cannot “deprive any person of life, liberty, or property, without
due process of law.” U.S. Const. amend. XIV, § 1. The preliminary
question is whether Harrison has a property interest in receiving Texas
general revenue to pay for 24/7 nursing care.
We have a hard time seeing such a property right. Individuals have a
constitutionally protected property interest in social welfare benefits when a
statute entitles them to the benefits if they satisfy eligibility criteria. See Bd.
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of Regents of State Colls. v. Roth, 408 U.S. 564, 577 (1972). Social Security
disability benefits are an example of such a property interest. See Mathews v.
Eldridge,
424 U.S. 319, 332 (1976); see also Goldberg v. Kelly,
397 U.S. 254,
261–62 (1970) (recognizing property interest in state welfare payments when
statute entitles a recipient to them). Such a property interest likely exists for
Texas’s Medicaid “waiver” program that provides home- and community-based care. Those who satisfy the criteria for that program have a “legitimate
claim of entitlement” to participate. Roth,
408 U.S. at 577. But Harrison
concedes she no longer qualifies for that program as her medical needs now
far exceed the spending cap.
Given her concession that she no longer qualifies under the waiver
program, no statute promises Harrison the home care she is seeking. Id.
(explaining that a “claim of entitlement” to benefits must be “grounded in
the statute defining eligibility for them”). Texas law says HHSC is
“authorized” to use general funds for home-care services in certain
situations but does not require the agency to do so or otherwise guarantee
such benefits to Medicaid beneficiaries. Without “mandatory language”
requiring the payment of benefits, a claimant has no property interest in the
requested funds. Ridgely v. FEMA,
512 F.3d 727, 736 (5th Cir. 2008) (quoting
Ky. Dep’t of Corr. v. Thompson,
490 U.S. 454, 463 (1989)) (finding it unlikely
that applicants for FEMA rental assistance had a property interest in those
benefits because neither statutes nor regulations contained “‘explicitly
mandatory language’ that entitles an individual to receive benefits if he
satisfies that criteria”). A “benefit is not a protected entitlement if
government officials may grant or deny it in their discretion.” Town of Castle
Rock v. Gonzales,
545 U.S. 748, 756 (2005). HHSC appears to have that
discretion in deciding whether to use general revenue for home- or
community-care services that exceed the cap in Texas’s Medicaid waiver
plan.
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Because it is unlikely that Harrison has a property interest in the
treatment she is seeking, a preliminary injunction was not warranted on her
due process claim. See Cardoni v. Prosperity Bank, 805 F.3d 573, 589 (5th Cir.
2015) (noting importance of the “likelihood of success” factor in holding that
preliminary injunction was not warranted based on plaintiff’s failure to meet
this first factor).
C
That leaves the Rehabilitation Act and ADA claims as the only
potential source for the injunction.
“Unjustified isolation” of disabled individuals in institutions rather
than community placement is unlawful discrimination under the ADA and
the Rehabilitation Act. Olmstead v. L.C. ex rel. Zimring, 527 U.S. 581, 597
(1999). That requirement is rooted in an ADA regulation providing that “[a]
public entity shall administer services, programs, and activities in the most
integrated setting appropriate to the needs of qualified individuals with
disabilities.”
28 C.F.R. § 35.130(d), quoted in Olmstead,
527 U.S. at 592.
The difficulty is determining when institutionalization is
“unjustified.” States accordingly must treat disabled individuals in
community settings if: (1) treatment professionals determine such placement
is appropriate, (2) the individual does not oppose the placement, and (3) the
placement can be reasonably accommodated, taking into account state
resources and the needs of other disabled individuals. Olmstead, 527 U.S. at
607.
In addressing plaintiff’s likelihood of prevailing, the district court
recognized conflicting evidence on whether 24-hour nursing care was
necessary but “afford[ed] more weight to the opinion of Harrison’s
doctors.” We do not see clear error in that credibility determination. And
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the second requirement—Harrison’s desire to remain at the community care
center with nursing care—was not contested.
That leaves the third requirement: the reasonable accommodation
inquiry that is the crux of an ADA claim. The district court concluded that
plaintiff is likely to show the 24/7 nursing care is a reasonable
accommodation because she provided a cost estimate showing that the
alternative of institutionalization would be slightly more expensive.
($333,204.85 for institutionalization versus $327,923.10 for community-based care with a nurse always present). But Olmstead warned against “so
simple” a focus on just the marginal costs of the plaintiff’s treatment. Id. at
604 (explaining that such a limited focus “overlooks costs the State cannot
avoid; most notably, a ‘State . . . may experience increased overall expenses
by funding community placements without being able to take advantage of
the savings associated with the closure of institutions’” (omission in original)
(quoting Brief for United States as Amicus Curiae at 21, Olmstead,
527 U.S.
581)). Determining whether an Olmstead accommodation is reasonable
requires “taking into account the resources available to the State and the
needs of others with . . . disabilities.”
Id. at 607.
Although we recognize that the Commissioner did not offer its own
evidence of costs at this early stage in the case, we nonetheless conclude that
the narrow, marginal cost comparison the district court relied on—one that
just barely showed institutionalization to be more costly—is not sufficient to
determine that plaintiff is likely to succeed on her disability-discrimination
claims. That is especially so when the plaintiff cites no case, nor could we
find one, holding that Olmstead requires community-care services that would
exceed the federally approved cost cap on a Medicaid program that provides
an alternative to institutionalization. In fact, other courts have rejected
Olmstead claims that would exceed similar caps on Medicaid programs. See,
e.g., Arc of Wash. State Inc. v. Braddock, 427 F.3d 615, 620–22 (9th Cir. 2005)
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(rejecting ADA class action that sought expansion of the cap on the number
of enrollees in Medicaid waiver plan because the existence of the plan showed
the state’s commitment to deinstitutionalization). And the cost cap of
roughly $170,000 in Texas’s Medicaid waiver plan is itself some evidence of
the relevant costs as federal law allows approval of waiver plans only if “the
average per capita expenditure estimated by the State in any fiscal year for
medical assistance provided with respect to such individuals does not exceed
100 percent of the average per capita expenditure that the State reasonably
estimates would have been made . . . for such individuals if the waiver had
not been granted.” 42 U.S.C. § 1396n(c)(2)(D).
A “preliminary injunction is an extraordinary remedy which should
not be granted unless the party seeking it has ‘clearly carried the burden of
persuasion.’” PCI Transp., Inc. v. Fort Worth & W.R. Co., 418 F.3d 535, 545
(5th Cir. 2005) (quotation omitted). On the current record, plaintiff has not
shown that she can prevail on an Olmstead claim seeking services that exceed
the cost cap in Texas’s Medicaid waiver program.
…
We VACATE the preliminary injunction and REMAND for further
proceedings.
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Edith H. Jones, Circuit Judge, concurring:
I concur in the opinion and decision to remand but am skeptical, not
only because no court has yet issued an individual treatment plan in this
setting, but for several additional reasons, that the plaintiff has slender
likelihood of prevailing on remand. First, the extent to which Olmstead
remains definitive is unclear to me in light of the 2008 amendments to the
ADA. Second, Justice Kennedy’s concurrence in Olmstead, which furnished
the fifth vote for the Supreme Court’s judgment, emphasizes that
(a) whether “isolation” is justified includes considerations such as the fact
that the ADA does not require individual treatment plans, Olmstead,
527 U.S. at 613–14, 119 S. Ct. at 2193, and (b) federalism costs inherent in
federal court decrees concerning state-managed programs must be taken
seriously,
id. at 610, 2192. Third, the extent to which the plaintiff is a
qualified individual under ADA, that is, a person who would actually benefit
from her community placement as opposed to institutionalization, is
disputed on this record and, indeed, may have changed since the preliminary
injunction hearing. These second and third points reinforce that Olmstead’s
reasoning does not boil down to a mere comparative cost analysis in this case.
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