Snodgrass-King Pediatric Dental Associates, P.C., et al. v. DentaQuest USA Insurance Co., Inc.

Petitioners Snodgrass-King Pediatric Dental Associates, P.C., and David J. Snodgrass, D.D.S., (collectively, “Snodgrass-King”) sued Respondent DentaQuest USA Insurance Co., Inc. (“DentaQuest”) because it excluded Snodgrass-King from Tennessee’s state Medicaid program (“TennCare”) in retaliation for Snodgrass-King’s exercise of its First Amendment rights in violation of 42 U.S.C. § 1983 (“Section 1983”). The jury determined that DentaQuest acted “under color of state law,” i.e., engaged in state action, because TennCare “significantly encouraged” DentaQuest’s exclusion of Snodgrass-King, a longtime political enemy of TennCare and DentaQuest. The jury’s conclusion was based on internal DentaQuest emails that recounted a private meeting in which TennCare directed DentaQuest that it needed to “keep [Snodgrass-King] out” of TennCare if DentaQuest wanted to be awarded a lucrative contract with TennCare. The district court set aside the jury’s verdict, and the Sixth Circuit affirmed that decision in a 2-1 decision. The question presented is: 1. Whether a government directive made to a private contractor while the contractor is bidding on a lucrative and admittedly important government contract can constitute “significant encouragement,” and, thus, state action under Blum v. Yaretsky, 457 U.S. 991 (1982), or whether the government must require the decision or otherwise take away the free-