The American Civil Liberties Union has filed a lawsuit in the United States District Court in Denver , Colorado , challenging the state’s Senate Bill 176 as unconstitutional because it cuts off legal immigrants who qualify for Medicaid benefits under federal law. The legislation, signed by Governor Owens on the same day it passed through the legislature, is purported to cut over 3,500 legal immigrants from medical assistance. Medicaid is a government program that is funded equally by federal and states funds. The legislation is a budget-cutting measure that will save Colorado $1.3 million this year and about $8 million next year.

The ACLU argued that the Supreme Court has repeatedly ruled that this kind of discrimination against legal immigrants is a direct violation of the Constitution. They contended that states do not have the power to save money by adopting their own restrictions that punish legal immigrants who are entitled to live here and who qualify for assistance under federal law. The ACLU had hoped to get an emergency order blocking the legislation from going into effect at midnight April 1, but the federal judge did not rule on the restraining order and the law is now in effect.

The class action suit was filed on behalf of eight legal immigrants who benefited from Medicaid. It held that the government should conduct individual investigations before cutting off benefits, because some immigrants may be eligible for benefits based upon work histories. The ACLU claimed that the state officials have failed to inform individuals of their right to appeal. Before the lawsuit was filed, some elderly immigrants living in nursing homes had already been served eviction notices.