Opinion

Leal v. Azar

Court: District Court, N.D. Texas
Filed: Dec 23, 2020
Cited by: 0 cases
Authority: More cited than 29.9%

If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.”

How later courts described this case

If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.”
“The distinction between that relief permissible under the doctrine of x parte Young and that found barred in Edelman was the difference between prospective relief on one hand and retrospective relief on the other.”
using “state sovereign immunity” and “Eleventh Amendment immunity” interchangeably
“[T]he bare text of the Amendment is not an exhaustive description of the States’ constitutional immunity from suit.”

Written by the judges who cited it.

The opinion

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

AMARILLO DIVISION

VICTOR LEAL, §

Plaintiff, §

§ 2:20-CV-185-Z

ALEX M. AZAR II, et al., §

Defendants. §

MEMORANDUM OPINION AND ORDER

Before the Court are the respective motions to dismiss filed by the federal defendants’ and

the state defendants.2 ECF Nos. 7, 15. Having reviewed the motions, related pleadings, and

applicable law, the Court finds the federal defendants’ Motion (ECF No. 15) should be and is

hereby GRANTED as to Plaintiffs Leal and Von Dohlen and DENIED IN PART as to Plaintiff

Armstrong. Plaintiffs Leal and Von Dohlen’s claims against the federal defendants are

DISMISSED WITH PREJUDICE under Rule 12(b)(6) because the claims are barred by res

judicata. Plaintiff Armstrong’s nondelegation challenge is DISMISSED WITH PREJUDICE

under Rule 12(b)(6) for failing to state a claim.

The Court also finds the state defendants’ Motion (ECF No. 7) should be and is hereby

GRANTED, Plaintiffs’ state-law claims against the state defendants are DISMISSED WITHOUT

PREJUDICE under Rule 12(b)(1) because Texas’ sovereign immunity deprives this Court of

jurisdiction.

The federal defendants are the United States, Alex M. Azar II in his official capacity as Secretary of Health and

Human Services, Steven T. Mnuchin in his official capacity as Secretary of the Treasury, and Eugene Scalia in his

official capacity as Secretary of Labor.

?The state defendants are the Texas Department of Insurance and Kent Sullivan in his official capacity of Texas

Commissioner of Insurance.

FEDERAL DEFENDANTS’ MOTION TO DISMISS

The Affordable Care Act requires group health plans and health-insurance issuers to cover

“preventive care and screenings . . . as provided for in comprehensive guidelines supported by the

Health Resources and Services Administration for purposes of this paragraph.” See

42 U.S.C. § 300gg-13(a)(4). Preventive care and screenings must be provided without any cost-

sharing requirements such as deductibles or co-pays. In 2011, the Health Resources and Services

Administration issued guidelines requiring that all FDA-approved contraceptive methods be

covered as “preventive care” under 42 U.S.C. § 300gg-13(a)(4). Consequently, the Secretary of

Health and Human Services, the Secretary of the Treasury, and the Secretary of Labor issued

notice-and-comment regulations to implement HRSA’s decision to require private insurers to

cover contraception. See 45 C.F.R. § 147.130(a)(1)(iv); 29 C.F.R. § 2590.715—.2713(a)(1)(iv); 26

C.F.R. § 54.9815—.2713(a)(1)(iv). These rules are commonly known as the federal “Contraceptive

Mandate.”

In 2018, the Departments issued a final rule giving individual religious objectors the option

of purchasing health insurance that excludes contraception from any willing health insurance

issuer. 45 C.F.R. § 147.133(b). But enforcement of the 2018 final rule was enjoined by a

nationwide injunction on the day it was to take effect. See Pennsylvania y. Trump, 351 F. Supp.

3d 791 (E.D. Pa. 2019), rev’d sub nom, Little Sisters of the Poor Saints Peter and Paul Home v.

Pennsylvania, 140 8. Ct. 2367 (2020).

As a result of that injunction, litigation was filed in this District contending that the 2018

final rule’s exemption for religious objectors was required by the Religious Freedom Restoration

Act (“RFRA”). DeOtte v. Azar, 393 F. Supp. 3d 490 (N.D. Tex. 2019). The court in DeOfte

certified a class of individuals who “(1) object to coverage or payments for some or all

contraceptive services based on sincerely held religious beliefs; and (2) would be willing to

purchase or obtain health insurance that excludes coverage or payments for some or all

contraceptive services,” and “permanently enjoined federal officials from enforcing the

Contraceptive Mandate against any religious objector protected by the [2018] final rule.” Jd. at

513-14,

Plaintiffs Victor Leal and Patrick Von Dohlen are devout Roman Catholics who oppose all

forms of birth control. They want to purchase health insurance that excludes coverage of

contraception to avoid subsidizing other people’s contraception and becoming complicit in its use.*

These Plaintiffs contend the federal Contraceptive Mandate continues to inflict injury in

fact on them and other religious objectors even though the DeOfte injunction permits issuers of

health insurance to issue group or individual health-insurance coverage that excludes contraception

to religious objectors. Plaintiffs aver that this remedy is not enough:

[F]ew if any insurance companies are offering health insurance [which excludes

contraception] because only a small number of individuals hold sincere religious

objections to all forms of contraception. And even if a health insurer were willing

to create and offer a policy that excludes contraceptive coverage solely for religious

objectors, the Contraceptive Mandate drastically restricts the available options on

the market to consumers who hold religious objections to contraceptive coverage.

The Mandate requires any policy that covers anyone who lacks a sincere religious

objection to contraception to cover all forms of FDA-approved contraceptive

methods, without any deductibles or co-pays. Without the federal Contraceptive

Mandate, insurers will have the freedom to offer policies that exclude contraceptive

coverage to the general public, just as they did before the Contraceptive Mandate,

which will expand the health-insurance options available to consumers who oppose

contraceptive coverage for sincere religious reasons.

ECF No. | at 9.

3 For years, the Federal Program Branch tasked with defending earlier versions of the Contraceptive Mandate argued

that religious plaintiffs were “fighting an invisible dragon” when religious plaintiffs argued they were morally

complicit in the use of contraception. This is merely a factual impossibility argument masquerading as a legal

impossibility argument under the “substantial burden” prong of RFRA. See, e.g. Defendants’ Reply in Support of

Their Motion to Dismiss at 1, Little Sisters of the Poor Home for the Aged v. Sebelius, 6 F. Supp. 3d 1225 (D. Colo.

2013); Brief of Former Justice Department Officials as Amici Curiae Supporting Petitioners, Zubik vy, Burwell, 136 S.

Ct. 1557 (2016) (No. 14-1418), 2016 WL 155631. The federal defendants do not invoke the Dragon Argument in this

case and should never chase the Dragon Argument in this Court.

Plaintiff Kim Armstrong also alleges she is injured by the Contraceptive Mandate.

Although she is not a religious objector to the mandate, she alleges she is forced to pay higher

premiums for health insurance that covers contraceptive services that she does not want. Plaintiff

Armstrong is fifty years old and has had a hysterectomy and therefore is incapable of becoming

pregnant. Armstrong would prefer to acquire less expensive health insurance which excludes

contraceptive coverage but is unable because she is outside of the protections of the DeOjite

injunction and the Trump Administration’s rules that exempt religious and moral objectors from

the Contraceptive Mandate.

Plaintiffs filed suit in this Court on August 1, 2020 challenging the federal Contraceptive

Mandate on various grounds. Specifically, Plaintiffs filed a complaint alleging violations of (1)

the Appointments Clause; (2) the nondelegation doctrine; and (3) RFRA.4 The federal defendants

moved to dismiss the case arguing Plaintiffs lack standing and are time-barred under Rule 12(b)(1).

Additionally, federal defendants allege under Rule 12(b)(6) that Plaintiffs Leal and Von Dohlen

are barred by res judicata and, even if they are not, all Plaintiffs fail to state claims for violations

of the Appointments Clause, the nondelegation doctrine, and RFRA.

A. Legal Standards

Federal courts are courts of limited jurisdiction which possess only that power authorized

by Constitution and statute. Xitronix Corp. vy, KLA-Tencor Corp., 916 F.3d 429, 435 (Sth Cir.

2019). “The requirement that jurisdiction be established as a threshold matter spring[s] from the

nature and limits of the judicial power of the United States and is inflexible and without exception.”

Id. (quoting Steel Co, v. Citizens for a Better Env’t, 523 U.S. 83, 94-95 (1998)).

HipinifP □□□□□□□□□□□□□□□□□□□□□ aclaim against the federal defendants under RFRA, because she has no religious

or moral objections to contraceptive coverage.

I, Rule 12(b)(1)

When a motion to dismiss for lack of subject-matter jurisdiction “is filed in conjunction

with other Rule 12 motions, the court should consider the Rule 12(b)(1) jurisdictional attack before

addressing any attack on the merits.” Ramming v. United States, 281 F.3d 158, 161 (Sth Cir. 2001).

Furthermore, where a complaint could be dismissed under Rule 12(b)(1) or 12(b)(6), “the court

should dismiss only on the jurisdictional ground . . . without reaching the question of failure to

stateaclaim....” Hitt v. City of Pasadena, 561 F.2d 606, 608 (Sth Cir. 1977). By doing so, courts

avoid issuing advisory opinions. Stee/ Co., 523 U.S. at 101. Additionally, this prevents courts

without jurisdiction “from prematurely dismissing a case with prejudice.” Ramming, 281 F.3d at

161.

A Rule 12(b)(1) motion can mount either a facial or factual challenge. See, e.g., Hunter v.

Branch Banking & Tr. Co., 2013 WL 607151, at *2 (N.D. Tex. Feb. 19, 2013) (citing Paterson v.

Weinberger, 644 F.2d 521, 523 (Sth Cir. May 1981)). When a party makes a Rule 12(b)(1) motion

without including evidence, the challenge to subject matter jurisdiction is facial. Jd. The court

assesses a facial challenge as it does a Rule 12(b)(6) motion in that it “looks only at the sufficiency

of the allegations in the pleading and assumes them to be true. If the allegations are sufficient to

allege jurisdiction, the court must deny the motion.” Jd.

2. 12(b)(6) dismissal

“To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead ‘enough facts to

state a claim to relief that is plausible on its face.’” Jn re Katrina Canal Breaches Litigation, 495

F.3d 191, 205 (Sth Cir. 2007) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

“While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual

allegations, a plaintiffs obligation to provide the grounds of his entitlement to relief requires more

than labels and conclusions, and a formulaic recitation of the elements of the cause of action will

not do.” Twombly, 550 U.S. at 555 (internal marks omitted). “Factual allegations must be enough

to raise a right to relief above the speculative level, on the assumption that all the allegations in

the complaint are true (even if doubtful in fact).” Jn re Katrina, 495 F.3d at 205 (quoting Twombly,

550 U.S. at 555) (internal marks omitted). “The court accepts all well-pleaded facts as true,

viewing them in the light most favorable to the plaintiff.” Jd. (quoting Martin K. Eby Construction

Company, Inc. v. Dallas Area Rapid Transit, 369 F.3d 464, 467 (Sth Cir. 2004)) (internal marks

omitted).

The Court must “begin by identifying the pleadings that, because they are no more than

conclusions, are not entitled to the assumption of truth.” Ashcroft v. Igbal, 556 U.S. 662, 679

(2009). After assuming the veracity of any well-pleaded allegations, the Court should then

“determine whether they plausibly give rise to an entitlement of relief.” Jd. “A claim has facial

plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable

inference that the defendant is liable for the misconduct alleged.” /d. at 678 (citation omitted). This

standard of “plausibility” is not necessarily a “probability requirement,” but it requires “more than

a sheer possibility that a defendant has acted unlawfully.” /d. “Where a complaint pleads facts that

are ‘merely consistent with’ a defendant’s liability, it stops short of the line between possibility

and plausibility of ‘entitlement to relief.” /d. (internal marks omitted). “Determining whether a

complaint states a plausible claim for relief [is] . . . a context-specific task that requires the

reviewing court to draw on its judicial experience and common sense.” Jd, at 679,

B. Analysis

I. Standing

Ata minimum, Article III requires a plaintiff to show (1) an “injury in fact” that is (2) fairly

traceable to the defendant’s conduct and (3) is likely to be redressed by the requested relief. Lujan

v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). An injury in fact means an injury that is

“concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Jd.

(internal marks omitted), “At the pleading stage, allegations of injury are liberally construed.”

Little v. KPMG LLP, 575 F.3d 533, 540 (Sth Cir. 2009). Although “when the injury’s existence

depends on the decisions of third parties not before the court,” it is generally “too conjectural or

hypothetical to confer standing.” Jd. Yet the bar for proving causality at the pleading stage is low

and allows for an injury to be traced to a defendant even if defendant’s conduct just “contributes”

in a “scientifically imprecise” way to the plaintiff's injury, Apple Inc. v. Pepper, 139 8. Ct. 1514,

1522-24 (2019); Massachusetts v. EPA, 549 U.S. 523-25 (2007). Standing is a jurisdictional

inquiry and thus falls under the standards of Rule 12(b)(1) and must be decided before motions

under Rule 12(b)(6).

a. Plaintiffs Leal and Von Dohlen have properly alleged standing

First, Leal and Von Dohlen have alleged an injury in fact. These plaintiffs allege the

continued enforcement of the Contraceptive Mandate makes it “impossible” for them to obtain

health insurance that excludes contraceptive coverage. ECF No. | at 9. This is true, they allege,

notwithstanding the DeO/fe injunction. Plaintiffs Leal and Von Dohlen allege the “inability to

purchase a desired product or service constitutes injury in fact. ECF No. 16 at 2 (citing Consumer

Fed'n of Am. v. FCC, 348 F.3d 1009, 1012 (D.C. Cir. 2003)).

For their part, the federal defendants argue “Plaintiffs Leal and Von Dohlen’s allegation

that their options to choose health insurance coverage are narrower than they would prefer is

insufficient to establish a cognizable injury.” ECF No. 15 at 6. Defendants, however, cite no case

law supporting this proposition. Although neither party nor the Court has located any Fifth Circuit

cases on point, the D.C. Circuit has long held a restricted marketplace can constitute an injury in

fact:

Orangeburg suffered an injury-in-fact because it cannot purchase wholesale power

on its desired terms. “This Court has permitted consumers of a product to challenge

agency action that prevented the consumers from purchasing a desired product.”

Coal. for Mercury-Free Drugs v. Sebelius, 671 F.3d 1275, 1281 (D.C. Cir. 2012);

see, e.g., Chamber of Comm. v. SEC, 412 F.3d 133, 136-38 (D.C. Cir. 2005) (Lost

opportunity to purchase shares in mutual funds with fewer than 75% independent

directors).

The lost opportunity to purchase a desired product is a cognizable injury, even

though Orangeburg can purchase, and has purchased, wholesale power from

another source. “[T]he inability of consumers to buy a desired product may

constitute injury-in-fact even if they could ameliorate the injury by purchasing some

alternative product.” Consumer Fed’n of Am., 348 F.3d at 1012 (emphasis added).

Orangeburg, S.C. v. Fed. Energy Regulatory Comm'n, 862 F.3d 1071, 1078 (D.C.

Cir. 2017) (collecting cases) (some citations omitted),

In response, the federal defendants argue “there is no legally protected right to an unfettered

choice in health insurance coverage.” ECF No. 15 at 6. But the Supreme Court has made it clear

“t]he ‘legal interest’ test goes to the merits. The question of standing is different.” Ass’n of Data

Processing Serv. Org., Ine. v. Camp, 397 U.S. 150, 153 (1970). Plaintiffs need only “allege[] that

the challenged action has caused him injury in fact, economic or otherwise” /d. at 152. Plaintiffs

have done so here.

Second, Leal and Von Dohlen have alleged the injury in fact is fairly traceable to the federal

defendants. Article III standing requires a plaintiff to show “‘a causal connection between the injury

and the conduct complained of.” Lujan, 504 U.S. at 560. This is where the parties spill the most

ink. Plaintiffs argue “few if any insurance companies are currently offering health insurance that

excludes coverage for contraception” even though “the DeOfte injunction permits issuers of health

insurance to issue group or individual health insurance that excludes contraception to religious

objectors.” ECF No. | at 7, 9. Plaintiffs’ theory is that the “the continued enforcement of the

Contraceptive Mandate makes it untenable for insurers to offer contraceptive-free health-insurance

policies to the general public.” ECF No. 16 at 5. In other words, even though insurance companies

can issue contraceptive-free policies, they do not because the Contraceptive Mandate which still

applies to all other policies makes it financially untenable to do so.

The federal defendants seize on this allegation to show that the injury in fact is traceable

to the “business choices of insurers” and not the Contraceptive Mandate. ECF No. 20 at 1. The

federal defendants argue Plaintiffs’ real quarrel is with the free market for not providing the

policies they would prefer. The federal defendants aver that when Plaintiffs’ asserted injuries

“depend[] on the unfettered choices made by independent actors not before the courts,” rendering

standing “substantially more difficult to establish.” Lujan, 504 U.S. at 562 (citations omitted),

Additionally, the federal defendants note courts are “reluctan[t] to endorse standing theories that

rest on speculation about the decisions of independent actors.” Clapper v. Amnesty Int’l, USA, 568

U.S. 398, 414 (2013), The federal defendants correctly state a plaintiff in these circumstances must

show that the government’s action will have a “determinative or coercive effect upon the action

of” those third parties. Bennett v. Spear, 520 U.S. 154, 169 (1997).

But Plaintiffs have precisely alleged that insurance companies are not independent and do

not make wnfettered choices regarding the insurance policies they issue. On the contrary, insurers

are heavily regulated. Plaintiffs allege the Contraceptive Mandate creates a coercive effect by

making “it untenable for insurers to offer contraceptive-free health-insurance policies to the

general public.” ECF No. 16 at 5. Defendants contest this allegation, but that is a fact and merits

determination which is inappropriate to address at the motion to dismiss stage. [n re Katrina, 495

F.3d at 205 (“The court accepts all well-pleaded facts as true, viewing them in the light most

favorable to the plaintiff.”).

Lastly, Leal and Von Dohlen have alleged redressability. This analysis follows in close

lockstep to the traceability analysis. These Plaintiffs allege an “injunction against the continued

enforcement of the will expand the availability of contraceptive-free health insurance.” ECF No.

16 at 6. The federal defendants counter that Plaintiffs must show “it is likely, as opposed to merely

speculative, that the injury will be redressed by a favorable decision.” Jnclusive Cmtys. Project,

Inc. v. Dept. of Treasury, 946 F.3d 649, 655 (Sth Cir. 2019) (quoting Friends of the Earth, Ine. v.

Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 181 (2000)). The federal defendants would be

correct if this case were at the summary judgment stage where the Plaintiffs “‘must set forth by

affidavit or other evidence specific facts’ supporting standing.” /d. (quoting Lujan, 504 U.S. at

561), At this stage, the Court must “‘accept[] all well-pleaded facts as true, viewing them in the

light most favorable to the plaintiff.” Jn re Katrina, 495 F.3d at 205. Plaintiffs have alleged

insurance companies will expand their insurance policies to include contraceptive-free policies

and, at this stage, that is enough for Plaintiffs to satisfy their burden.°

In sum, Leal and Von Dohlen have satisfied their burden to allege standing at the motion

to dismiss stage by articulating an injury in fact which is fairly traceable to the federal defendants

and can be redressed by a decision of this Court.

addition, Plaintiffs argue “[t]he entire reason for the Contraceptive Mandate’s existence was that some private

insurers were of providing contraceptive coverage on their own initiative or in response to market forces; that is why

the Obama Administration issued regulations to force every insurer to provide this coverage regardless of whether the

beneficiary wanted or needed it.” ECF No. 16 at 5 (emphasis added). If the Contraceptive Mandate were enjoined or

repealed, the market might return to pre-mandate conditions where insurers offered contraceptive-free policies.

b. Plaintiff Armstrong has also properly alleged standing

Plaintiff Armstrong has also adequately alleged standing. Although not a religious objector,

Armstrong has likewise alleged injury in fact by asserting that she is unable to purchase or obtain

less expensive health insurance that excludes contraceptive coverage. ECF No. 16 at 3. An

economic burden is a classic injury in fact. Indeed, the federal defendants’ main objection to

Armstrong’s standing is that the federal defendants contest Armstrong’s allegations that she is

forced to pay higher premiums for contraceptive coverage that she does not want. ECF No. 15 at

9 (citing to Federal Regulations to show that the Contraceptive Mandate is cost-neutral to

insurance providers). But this is a mere factual disagreement with Armstrong about the impact of

the Contraceptive Mandate on premiums. Such a disagreement is inappropriate grounds for

dismissal at the motion to dismiss stage.

The traceability and redressability analyses are far easier here because the Contraceptive

Mandate is being applied directly to Armstrong because she is unprotected by the DeOfte

injunction or the Trump Administration’s final rules detailing exceptions for religious objectors.

The Court hereby incorporates the same analyses as above, supra p. 8-10, and concludes

Armstrong has adequately alleged standing at this stage in this case.

2. Statute of Limitations

The federal defendants urge the Court to dismiss Plaintiffs’ claims as time barred.

Normally, a statute of limitations defense is waivable and thus is decided under the Rule 12(b)(6)

standard. But “the United States enjoys sovereign immunity unless it consents to suit, ‘and the

terms of its consent circumscribe our jurisdiction.” Texas v. Retfig, 968 F.3d 402, 413 (Sth Cir.

2020) (quoting Dunn-McCampbell Royalty Interest, Inc. v. Nat’l Park Servy., 112 F.3d 1283, 1287

(Sth Cir. 1997)). “‘The applicable statute of limitations is one such term of consent,’ so, unlike the

ordinary world of statutes of limitations, here the failure to sue the United States within the

limitations period deprives us of jurisdiction.” Jd, Accordingly, the Court reviews the issue under

the Rule 12(b)(1) standard.

The federal defendants argue Plaintiffs failed to sue within the relevant limitations period

for each claim. The federal defendants argue Plaintiffs’ claims under the Appointments Clause and

nondelegation doctrine are barred by under the six-year statute of limitations governing civil

actions against the United States. 28 U.S.C. § 2401 (a). And PlaintiffLeal and Von Dohlen’s RFRA

claims are barred by a four-year statute of limitations. 28 U.S.C. § 1658(a). Most importantly,

under the federal defendants’ theory, all the claims accrued eight years ago when the Contraceptive

Mandate fook effect. Because Plaintiffs did not sue within the relevant time periods, the federal

defendants state their claims must be barred by the statute of limitations thus depriving this Court

of jurisdiction.

The federal defendants, however, fundamentally misunderstand the type of suit Plaintiffs

bring in this case. For example, in their Reply, the federal defendants state “[t]he courts readily

apply the same six-year statute of limitations at issue here to facial claims that an agency violated

its procedural obligations under the Administrative Procedure Act in issuing a rule.” ECF No. 20

at 2.

But Plaintiffs are nof bringing an APA claim, nor are they challenging a final agency action.

Instead, they are bringing a suit for injunctive relief under the Larson framework.®” Larson y.

6 Plaintiffs state this suit is being brought pursuant Ex parte Young. But this is incorrect. As discussed in Leal v. Azar,

No. 2:20-CV-124, 2020 WL 6281641 (N.D. Tex. Sept. 24, 2020), Ex parte Young applies to state officials who attempt

to invoke sovereign immunity while the Larson doctrine applies to federal officials. While these two doctrines are

similar, they are not identical. £./. v. Robinson, 906 F.3d 1082, 1090 n.8 (9th Cir. 2018) (“The [Larson] framework

is not identical to the [Young] fiction that is commonly invoked in the Eleventh Amendment context.”).

7 The court acknowledges it is an open question whether the 1976 amendments to the APA abrogated the Larson

doctrine in suits against federal agency officials. See, e.g., Robinson, 906 F.3d at 1092-93; Danos v. Jones, 652 F.3d

577, 582 (Sth Cir. 2011); Geyen v. Marsh, 775 F.2d 1303, 1307 (Sth Cir. 1985). Most challenges to federal agency

action are now brought via the APA, so there has been little need to litigate the margins of the Larson doctrine.

Domestic & Foreign Com. Corp., 337 U.S. 682, 689 (1949). Under the Larson doctrine, there are

two types of suits that can proceed against federal officers in their official capacities: (1) suits

alleging a federal official acted w/tra vires of statutorily delegated authority; and (2) suits alleging

“the statute or order conferring power upon the officer to take action in the sovereign’s name is

claimed to be unconstitutional” /d. at 689-90. As the Supreme Court stated, “in case of an injury

threatened by his illegal action, the officer cannot claim [sovereign] immunity from injunction

process.” Id. at 690 (quoting Philadelphia Co. v. Stimson, 223 U.S. 605, 620 (1912)). This suit

implicates the second type of case as Plaintiffs are challenging the constitutionality of the statute

which conferred power upon the agencies to create the Contraceptive Mandate.

So, like Ex parte Young and state sovereign immunity, the Larson doctrine pierces the

United States’ traditional sovereign immunity. There are, however, limits to the doctrine. Just like

Young, cases brought under the Larson doctrine are limited to injunctive relief—Plaintiffs cannot

pursue damages for past conduct. /d. at 691 n. 11 (“[A] suit may fail, as one against the sovereign

... if the relief requested cannot be granted by merely ordering the cessation of the conduct

complained.”); Quern v. Jordan, 440 U.S. 332, 337 (1979) (“The distinction between that relief

permissible under the doctrine of x parte Young and that found barred in Edelman was the

difference between prospective relief on one hand and retrospective relief on the other.”),

This is why neither party cites a case where a statute of limitations barred a suit brought

under Ex parte Young or Larson. By their very nature, these types of suits are seeking prospective

relief for ongoing injuries. Statutes of limitations are simply inapplicable to such injuries.

Assuming 42 U.S.C. § 300gg-13(a)(4) violates the Appointments Clause and the nondelegation

doctrine, Plaintiffs have demonstrated a continuing violation. The same is true for Plaintiffs Leal

Defendants do not challenge Plaintiffs’ invocation of this “equitable cause of action,” so the Court assumes the Larson

doctrine applies here.

and Von Dohlen’s RFRA claims. Flynt v. Shimazu, 940 F.3d 457, 462 (9th Cir. 2019) (“When the

continued enforcement of a statute inflicts a continuing or repeated harm, a new claim arises (and

a new limitations period commences) with each new injury.”).

The federal defendants respond that there is no continuing violation, but rather the

Plaintiffs’ inability to acquire health insurance is the continued effects of a past violation. ECF No.

20 at 2 (citing McGregor v. Louisiana State Univ. Bd. of Sup’rs, 3 F.3d 850, 867 (Sth Cir. 1993).

The agencies’ promulgation of the Contraceptive Mandate eight years ago is not what impedes or

prohibits Plaintiffs from acquiring health insurance foday. Rather, it is the agencies’ continued

enforcement of the Contraceptive Mandate which harms Plaintiffs. Accordingly, McGregor is

inapplicable.’ In sum, the Court finds that none of Plaintiffs’ claims are time barred.

3. Res Judicata

All of Plaintiff Leal and Von Dohlen’s claims are barred by res judicata. As Plaintiffs’

Complaint states, another court in this District “permanently enjoined federal officials from

enforcing the Contraceptive Mandate against any religious objector.” ECF No. | at 6~7 (citing

DeOtte v, Azar, 393 F. Supp. 3d 490 (N.D. Tex. 2019)). The final judgment in that case bars all of

Plaintiffs Leal and Von Dohlen’s claims in this case because the claims in both cases are “based

on the same nucleus of operative facts, and could have been brought in the first lawsuit.” Houston

Pro. Towing Ass'n v. City of Houston, 812 F.3d 443, 447 (Sth Cir. 2016). Plaintiffs try to rebuff

this finding by making two arguments: (1) the two suits are not based on the same transaction

under the traditional res judicata test or (2) Hellerstedt reworked the res judicata test for cases that

For the same reason, even if one views Plaintiffs’ claims against the agencies as an administrative challenge under

the APA, they are not barred by the statute of limitations. “Indeed, we have held that when an agency applies a rule,

the limitations period running from the rule’s publication will not bar a claimant from challenging the agency’s

statutory authority.” Dunn-McCampbell, 112 F.3d at 1287. Here, under Plaintiffs’ theory of the case, the agencies

continued alleged unconstitutional application of the Contraceptive Mandate which causes harm to Plaintiffs creates

a new limitations period each and every day.

involved “important human values.” Whole Woman’s Health v. Hellerstedt, 136 S, Ct. 2292, 2306

(2016). Neither of Plaintiffs’ arguments are availing.

a. Plaintiffs Leal and Von Dohlen’s claims are barred by the traditional test for

res judicata

The Fifth Circuit’s test for res judicata “has four elements: (1) the parties are identical or

in privity; (2) the judgment in the prior action was rendered by a court of competent jurisdiction;

(3) the prior action was concluded by a final judgment on the merits; and (4) the same claim or

cause of action was involved in both actions.” Houston, 812 F.3d at 447 (quoting Comer vy. Murphy

Oil USA, Ine., 718 F.3d 460, 467 (Sth Cir. 2013)). Plaintiffs do not contest the application of the

first three elements.’ Rather, Plaintiffs disputes whether the “same claim or case of actions” exists

here and in DeOfte.

To determine whether two suits involve the same claim or cause of action, the Fifth Circuit

uses a transactional test. “The transactional test focuses on whether the two cases are based on the

same nucleus of operative facts. It is the nucleus of operative facts, rather than the type of relief

requested, substantive theories advanced, or types of rights asserted that defines the claim.” Jd.

(citations and footnotes omitted).

The federal defendants argue this case arises from the same nucleus of operative facts. In

both cases, Plaintiffs were injured by the Contraceptive Mandate and sought an injunction against

its enforcement. The federal defendants contend Plaintiffs cannot now use new legal theories to

attack the Contraceptive Mandate based on the same alleged injury.

° The parties here are in privity with those in DeOfte. Plaintiffs Leal and Von Dohlen allege that they have no desire

to purchase health insurance that includes contraceptive coverage because “[they] are devout Roman Catholics who

oppose all forms of birth control, and they want to purchase health insurance that excludes coverage of contraception.

...” ECF No. 1 at 8. As such, Plaintiffs Leal and Von Dohlen are members of the plaintiff class certified in DeOtte.

The second and third criteria for res judicata are also satisfied: The DeO/te court entered final judgment in favor of

the plaintiffs on July 29, 2019. Although appealed, the District Court judgment continues to have preclusive effect

pending the appeal. See, e.g., Prager v. El Paso Nat'l Bank, 417 F.2d 1111, 1112 Gth Cir. 1969).

For their part, Plaintiffs maintain the suits are based on two separate transactions, They

argue in this case:

[T]he constitutional challenges to section 300gg-13(a)(4) allege that Congress

violated the Constitution by enacting this statute. They are challenges to the

legislature’s action in enacting a law that confers authority on individuals who are

not appointed in conformity with Article I, and that fails to provide an intelligible

principle to guide the discretion of the Health Resources Services Administration.

The “nucleus” of relevant facts concerns the text of this statute and the meaning of

the Constitution—nothing more. The alleged constitutional violation occurred at

the moment of the statute’s enactment, and the “nucleus” of relevant facts is

centered around that event and nothing else. There is no concern with how HRSA

decides to use its powers under the statute; that is irrelevant to the Appointments

Clause and nondelegation challenges alleged in the complaint.”

Plaintiffs ask the Court to compare that nucleus with the previous case:

The claims in DeOfte, by contrast, were challenging only the behavior of executive-

branch officials who enforced the Contraceptive Mandate in a manner that violated

the Religious Freedom Restoration Act. The relevant facts concerned the meaning

of RFRA and the conduct of the executive branch, which have nothing to do with

any of facts surrounding the plaintiffs’ constitutional challenges to section 300gg-

13(a)(4).

ECF No. 16 at 16-17.

But Plaintiffs’ theory about differing nuclei cannot square with their theory of standing in

this case. Plaintiffs’ theory, which the Court adopted in its Rule 12(b)(1) analysis, is that the

Contraceptive Mandate inflicts an injury in fact. But Plaintiffs’ suit, by its own terms, is

challenging the constitutionality of the statute which is only logically possible if the statute and

the mandate were related in some way. And obviously they are because the mandate was

promulgated pursuant to the statute; they are inextricably intertwined. The mandate could not exist

without the statute.

Plaintiffs’ distinctions between the cases are based on different legal theories, not different

facts. To the extent Plaintiffs did not challenge the statutory basis for the Contraceptive Mandate

in DeOtte, they unquestionably “could have raised” those claims there. Colonial Oaks Assisted

Living Lafeyette, LLC vy. Hannie Dev., Inc., 972 F.3d 684, 691 (Sth Cir. 2020). And this sort of

litigation is exactly what the traditional test for res judicata bars.

Additionally, if Plaintiffs’ theory about two different nuclei were accepted as true, it would

run headlong into other standing issues. Assuming 42 U.S.C. § 300gg-13(a)(4) violates the

Constitution, Plaintiffs could not just bring a suit challenging that violation because the violation,

at that point, is a mere generalized grievance. The Supreme Court has “consistently held that a

plaintiff raising only a generally available grievance about government—claiming only harm to

his and every citizen’s interest in proper application of the Constitution and laws, and secking

relief that no more directly and tangibly benefits him than it does the public at large—does not

state an Article III case or controversy.” Lance v. Coffman, 549 U.S. 437, 439 (2007) (quoting

Lujan, 504 U.S. at 573-74). Here, Plaintiffs cannot challenge “the legislature’s actions in enacting

a law” alleged to be unconstitutional because that is a textbook example of a generalized grievance.

It was the “behavior of executive-branch officials” by promulgating regulations pursuant to that

statute which elevated Plaintiffs’ injuries from generalized to particularized.

In sum, Plaintiffs’ argument that this suit is not part of the same transaction under the

traditional res judicata test is of no avail. But Plaintiffs spend most of their Response arguing the

traditional test should not apply at all after Hellerstedt. The Court now turns to this argument and

finds that it too is unconvincing,

b. Hellerstedt altered the test for res judicata in cases that involve “important

human values”

Plaintiffs Leal and Von Dohlen contend Hellersfedt is incompatible with the conventional

test for res judicata in the Fifth Circuit. Plaintiffs view the holding of Hellerstedt as “courts need

not apply the same-transaction test for res judicata when ‘important human values’ are at stake—

and that even the slightest change of circumstances allows abortion litigants to avoid res judicata

and litigate claims that they undoubtedly could have brought in a previous lawsuit.” ECF No. 16

at 17 (quoting Hellerstedt, 136 S. Ct. at 2305). Plaintiffs even concede “Hellerstedt did not

overrule the same transaction test for res judicata—and that test remains applicable in mine run of

cases, i.e., cases in which ‘important human values’ are not at stake.” Jd. at 18.2

Plaintiffs argue the right of religious freedom — a right notable for being enshrined in the

written text of the First Amendment — is at least as important a human value as the judicially-

created right to an abortion — a “right” notable for a complete lack of historical or textual support.

Hellerstedt, 136 S. Ct. at 2329 (Thomas, J., dissenting) (“The Court has simultaneously

transformed judicially created rights like the right to abortion into preferred constitutional rights,

while disfavoring many of the rights actually enumerated in the Constitution.”). Accordingly,

Plaintiffs argue they should at least receive the same latitude as the abortion litigants and have the

substantially narrower version of res judicata promulgated in Hellerstedt applied in this case.

The Court begin its analysis by first noting — even though the Supreme Court said that it

applied a narrower version of res judicata because “important human values” were at stake —

everyone knows that “important human values” is a euphemism for abortion. “The abortion-rights

debate, and the attendant language wars, are emotionally charged” and thus makes “[t]he law []

awash in coy euphemisms.” This is but another example. Whole Woman’s Health v, Paxton, 978

F.3d 896, 912 (Sth Cir. 2020) (Willett, J., dissenting), reh’g en banc granted by 978 F.3d 974, 975.

Every case that comes into a court involves “important human values.” The whole system

of law is predicated upon the notion of justice.'' And justice, which is a part of every case before

10 Plaintiff must make this concession because the Fifth Circuit has continually applied its traditional res judicata test

since Hellerstedt, See, e.g., Colonial Oak., 972 F.3d at 691. It is impossible to claim that He/lerstedt completely

abrogated the traditional test.

'! Of course, invocations of “justice” are frequently euphemistic too: The Department of Justice, John Rawls’ Theory

of Justice, and the 501(c)(3) Earthjustice use the same word to describe very different things. “We must think things

not words ... if we are to keep to the real and the true.” Oliver Wendell Holmes, Jr., Law in Science and Science in

any court, is undoubtably an “important human value.”!? But, as stated, Hel/erstedt does not apply

in every case and no one pretends that it does. The only logical conclusion is that the phrase

“important human values” is a synonym for abortion.

Given this tortured and much-maligned jurisdictional trajectory, it is altogether

unsurprising that the Supreme Court treats abortion differently. It always has. Hill vy. Colorado,

530 U.S. 703, 742 (2000) (Scalia, J., dissenting) (“Like the rest of our abortion jurisprudence,

today’s decision is in stark contradiction of the constitutional principles we apply in all other

contexts.”). And it continues to do so. June Med. Serv. LLC v. Russo, 140 S, Ct. 2103, 2171 (2020)

(Gorsuch, J., dissenting) (“The real question we face concerns our willingness to follow the

traditional constraints of the judicial process when a case touching on abortion enters the

courtroom.”). Indeed, lower courts are left to wonder whether the rules crafted for abortion-related

cases have any application outside of that sctting. Hellersfedt, 136 S. Ct. at 2311 (Thomas, J.,

dissenting) (“[T]oday’s decision creates an abortion exception to ordinary rules of res judicata.”).

While a majority of the Supreme Court may act “unconstrained by many of the neutral

principles that normally govern the judicial process,” June Med., 140 S. Ct. at 2181-82

(Gorsuch, J., dissenting), this Court has “an obligation to apply [res judicata] in a neutral fashion

in all cases, regardless of the subject of the suit.” Hellersfedt, 136 S. Ct. at 2330 (Alito, J.,

dissenting). But this Court also must apply “[abortion] precedent[].” Planned Parenthood of

Greater Texas v. Kauffman, 981 F.3d 347, 2020 WL 6867212, at *29 (Sth Cir. 2020) (Ho, J.,

concurring). Accordingly, this Court must “analyze the law faithfully, without fear or favor” and

Law, 12 Harv. L. REV. 443, 460 (1899), Holmes’ words came in an address delivered before the New York State Bar

Association on January 17, 1899

'2 See e.g., ARISTOTLE, NICOMACHEAN ETHICS (W.D. Ross trans., Digireads 2016); J. BUDZISZEWSKI, COMMENTARY

ON THOMAS AQUINAS’S TREATISE ON LAW (2014); THE FEDERALIST No, 78 (Alexander Hamilton). Notably, the

members of the Supreme Court are called “Justices.”

will not apply the adulterated version of res judicata enthroned by Hellerstedt unless it applies

squarely to the instant case before the Court. Jd.

Turning to the present case, if the Court takes the He//erstedf majority at its word, this case

certainly involves “important human values.” The right of religious freedom has been enshrined

in both the Constitution and the Religious Freedom Restoration Act. The federal defendants do not

challenge this characterization. Rather, the focus of the dispute is whether this case is comparable

to Hellerstedt.

Plaintiffs make two arguments why Hellerstedt should apply in this case. One, like

Hellerstedt, Plaintiffs allege their challenge is based on “new material facts that post-date the

DeOtte litigation.” ECF No. 16 at 10. Two, Plaintiff alleges, like Hellerstedt, this lawsuit

challenges a statute that is “separate and distinct” from the agency rules that were challenged in

DeOtte. Id. The Court examines each of these arguments in turn and finds them unpersuasive.

c. The factual development standard in Hellerstedt related to the injury in fact,

not the remedy

First, Plaintiffs allege their “facial challenge to the Contraceptive Mandate is not ‘the very

same claim’ as the as-applied challenge in DeOfte because it rests on factual developments that

emerged after DeOfte” which makes this case “indistinguishable from Hellerstedt.” ECF No. 16

at 11.

In Hellerstedt, the plaintiffs brought an initial lawsuit against Texas’s then-recently enacted

admitting-privileges law known as H.B. 2. See 136 S. Ct. at 2306. The lawsuit was a facial

challenge that sought to enjoin the law before it was enforced. Jd. After losing at the Fifth Circuit,

the plaintiffs filed a new lawsuit that brought an as-applied challenge after the law was being

enforced which resulted in the closing of several clinics. The Supreme Court held this second as-

applied challenge was not barred because “[flactual developments may show that constitutional

harm, which seemed too remote or speculative to afford relief at the time of an earlier suit, was in

fact indisputable. In our view, such changed circumstances will give rise to a new constitutional

claim.” Jd. at 2305.

Here, Leal and Von Dohlen argue their situation is comparable to the abortion litigants in

Hellerstedt. Plaintiffs allege the plaintiffs in DeOftfe brought their initial lawsuit against the

Contraceptive Mandate before they could know for certain whether the as-applied relief that they

sought would ensure the availability of contraceptive-free health insurance to each member of the

class. The instant second lawsuit was filed after the DeO/re injunction had taken effect, because

now it is clear the as-applied relief in DeOtte was insufficient to fully protect the religious freedom

of Plaintiffs. In essence, Plaintiffs are alleging the injunction they received in DeOffe was

insufficient to remedy their situation.

But Plaintiffs’ analogy is mistaken. The He//erstedt majority’s analysis was not focused on

the scope of the remedy. Rather, the analysis asked whether “factual developments” showed that

an injury had actually occurred. The abortion litigants were unable to prove an undue burden in

their first case, but they were able to prove an undue burden in Hellerstedt with newly acquired

evidence.

That is nothing like this case. Consider Plaintiffs’ constitutional challenge. Plaintiffs allege

Congress violated the Appointments Clause and nondelegation doctrine. Those violations occurred

over eight years ago. Those same alleged violations undisputedly existed when the DeOfte suit

was brought. There have been zero “factual developments” since DeOfte that would shine a light

on whether the Appointments Clause or nondelegation doctrines were violated. Thus, unlike

Hellerstedt, there is no newly acquired evidence that would create a new cause of action.

To put it succinctly, Plaintiffs failed to distinguish between causes of actions and remedies

in their analysis of Hellerstedt’s “factual developments” test. When an injunction fails to provide

the remedy for which it is purposed, the correct response is not to file a new lawsuit. Rather,

Plaintiffs should seek to modify the DeOtte injunction. “An injunction is by nature an equitable

decree. The power of a federal court that enters an equitable injunction is not spent simply because

it has once spoken. The federal courts have always affirmed their equitable power to modify any

final decree that has prospective application.” LULAC v. City of Boerne, 659 F.3d 421, 436 (Sth

Cir. 2011) (quoting United States v. Lawrence Cnty. Sch. Dist., 799 F.2d 1031, 1046 (Sth Cir.

1986)). “Inasmuch as an injunctive decree is drafted in light of what the court believes will be the

future course of events, a court must continually be willing to redraft the order at the request of

the party who obtained equitable relief in order to insure that the decree accomplishes its intended

result.” Lawrence Cnty., 799 F.2d at 1046 (quoting 11 CHARLES ALLEN WRIGHT & ARTHUR

MILLER, FEDERAL PRACTICE AND PROCEDURE § 2961, at 599 (1973)) (emphasis added).

d. Unlike Hellerstedt, this case does not involve separate and distinct statutes

Plaintiffs also argue this case falls into the “separate and distinct” category in Hellerstedt.

This too is unpersuasive. The Court has already analyzed above how the Contraceptive Mandate

and the statute are “inextricably intertwined.” Supra, p. 16. Hellerstedt involved two statutes

passed in the same bill. Here, Plaintiffs are challenging a statute and a regulation passed pursuant

fo that same statute. This forms a nexus that cannot possibly fall into the “separate and distinct”

category from Hellersted.

For these reasons, the Court finds Hellerstedt inapplicable to this case. Accordingly, all of

Leal and Von Dohlen’s claims are barred by the traditional test for res judicata and thus the Court

finds the federal defendants’ Motion to Dismiss should be GRANTED as to these Plaintiffs. Of

course, this dismissal is without prejudice to Plaintiffs’ right to seek modification of the order

granting relief in DeOfte.

4. Failure to State a Claim

Plaintiff Armstrong is not barred by res judicata, however, because she is not part of the

religious objector class certified in DeOtte. The federal defendants, however, move to dismiss

Plaintiff Armstrong’s claims under Rule 12(b)(6) for failing to state a claim for violation of the

Appointments Clause and for failing to state a claim for violation of the nondelegation doctrine.

a. Plaintiff Armstrong has alleged a violation of the Appointments Clause

Armstrong alleges 42 U.S.C. § 300gg-13(a)(4) violates the Appointments Clause. Her

argument proceeds as follows: the members of the HRSA — who determine the guidelines which

mandate what private insurers must cover — exercise “significant authority pursuant to laws of

the United States.” Buckley v. Valeo, 424 U.S. 1, 126 (1976). Anyone who exercises such authority

is an “Officer of the United States.” Jd. The Appointments Clause requires all Officers of the

United States to be nominated by the President and confirmed by the Senate. U.S. CONST. art.

II § 2. Because the members of the HRSA were not nominated or confirmed, their exercise of

significant authority is in violation of the Appointments Clause.'? Accordingly, any law

promulgated pursuant to 42 U.S.C. § 300gg-13(a)(4) must be struck down as unconstitutional.

For their part, the federal defendants do not contest this chain of argument. Rather, the

federal defendants assert Armstrong has failed to state a claim because she (1) forfeited the claim

by failing to raise it before the agencies and (2) any constitutional defect was cured by the Secretary

not contest this assertion that members of the HRSA are Officers, the Court does not reach a conclusion on the

question.

of Health and Human Services’ ratification of the Contraceptive Mandate. Both arguments come

up short.

First, there is no requirement that a potential plaintiff must raise a challenge to a regulation

at the time of notice and comment. City of Seabrook v. EPA, 659 F.3d 1349, 1360-61 (Sth Cir.

Unit A Oct. 1981).

Second, there is no hard and fast rule about whether a claim must be presented to agency

through an adversarial process before proceeding to federal court. Rather, there are three types of

exhaustion requirements: those that are (1) statutorily created, (2) regulatorily created, and (3)

judicially created. Sims v. Apfel, 530 U.S 103, 107-09 (“It is true that we have imposed an issue-

exhaustion requirement even in the absence of a statute or regulation.”). The federal defendants

have cited neither a statute nor a regulation that presumes to require exhaustion.

This leaves only judicially created exhaustion requirements. The Fifth Circuit has not

decided what standards should apply for exhaustion in Appointment Clause related cases. But the

Third Circuit has recently decided a persuasive case which set a standard for “whether to impose

an exhaustion requirement where we have not done so before.” Cirko v. Commissioner of Social

Security, 948 F.3d 148 (3d Cir. 2020). The Third Circuit articulated a three-part test which balances

“(a) the ‘nature of the claim presented,’ (b) the ‘characteristics of the particular administrative

procedure provided,’ and (c) the proper ‘balance [between] the interest of the individual in

retaining prompt access to a federal judicial forum [and] countervailing institutional interests

favoring exhaustion.’” Jd. at 153 (quoting McCarthy v. Madigan, 503 U.S. 140, 146 (1992)).

'4 The Fifth Circuit’s precedents in this area are admittedly in conflict. See BCCA Appeal Grp, v. EPA, 355 F.3d 817,

829 (Sth Cir, 2003) (acknowledging conflict); Tey. Oil & Gas Ass’n vy. EPA, 161 F.3d 923, 933 n.7 (Sth Cir. 1998)

(finding waiver due to “failure to raise the objections during the notice and comment period.”). The Court must follow

the earlier precedent, however, which directly refutes the agency’s forfeiture argument. When precedents conflict,

“under our rule of orderliness, the earlier case controls.” GlobeRanger Corp. y. Software AG United States of Am.,

Inc., 836 F.3d 477, 497 (Sth Cir. 2016).

Examining the first factor, the Third Circuit explained that the nature of Appointments

Clause claims does not favor exhaustion:

Asa general matter, exhaustion is appropriate for certain claims involving “exercise

of the agency’s discretionary power or when the agency proceedings in question

allow the agency to apply its special expertise.” AM/cCarthy, 503 U.S. at 145. But

exhaustion is generally inappropriate where a claim serves to vindicate structural

constitutional claims like Appointments Clause challenges, which implicate both

individual constitutional rights and the structural imperative of separation of

powers.

Id. at 153-54 (citing Glidden Co. v. Zdanok, 370 U.S. 530, 536-37 (1962)).

The second factor was whether the administrative process is adversarial or inquisitorial. Jd.

at 155-56. That factor weighs in favor of not requiring an exhaustion requirement because at the

notice-and-comment stage there is no adversarial process.

The third factor is actually itself a two-part balancing test. On one hand, the Third Circuit

weighed the interest of the individual and found it to be high. “[T]he Appointments Clause is aimed

at more than an abstract division of labor between the branches of government. Jd. at 156. “The

structural principles secured by the separation of powers protect the individual as well.” Jd.

(quoting Bond y. United States, 564 U.S. 211, 222 (2011)). “[S]o a citizen’s ability to enforce it

through a merits hearing is critical to “protec[ting] individual liberty.” Jd. (quoting NLRB v, Noel

Canning, 573 U.S. 513, 571 (2014) (Scalia, J., concurring)).

On the other hand, the governmental interest in exhaustion is “negligible at best.” /d. This

is because the two traditional governmental interests in exhaustion — “deference to agency

expertise and opportunity for agency error” — are not implicated in Appointment Clause cases.

Id.

“(D]eference to agency expertise[] is rendered irrelevant here by the well-worn maxim that

constitutional questions, including Appointments Clause challenges, are ‘outside the [agency’s]

competence and expertise.’” Jd. at 158 (quoting Free Enter. Fund y. Pub. Co, Accounting

Oversight Bd., 561 U.S. 477, 491 (2010)). “[C]ourts are at no disadvantage in answering”

Appointments Clause claims and thus the Secretaries have no legitimate basis to argue that agency

expertise requires that those claims be exhausted before the agency. Free Enter. Fund, 561 U.S. at

491.

The second traditional rationale for exhaustion is no more applicable. “We need not give

an agency the opportunity for error correction that it is incapable of providing — i.e., where it is

not ‘empowered to grant effective relief.’” Cirko, 948 F.3d at 158 (quoting MeCarthy, 503 U.S. at

147). This case falls into that category. At no point could the Secretaries cure the constitutionality

of the appointments of the members of the HRSA because only an act of Congress could change

the statute which vested them with the power to manufacture binding guidelines.

In the end, all three of the Cirko factors weigh in favor of not having a judicially created

exhaustion requirement for Appointments Clause claims in this context.

Lastly, the federal defendants’ alternative argument — that the Secretary’s ratification

cured any constitutional maladies — fares no better. The federal defendants cite Guedes v. Bureau

of Alcohol, Tobacco, Firearms & Explosive, for the proposition that a “properly appointed

official’s ratification of an allegedly improper official’s prior action... resolves the claim on the

merits by ‘remedying the defect’ (if any) from the initial appointment.” 920 F.3d 1, 13 (D.C. Cir.

2019) (quoting Wilkes-Barre Hosp. Co., LLC vy. NLRB, 857 F.3d 364, 371 (D.C. Cir. 2017)

(internal marks omitted). While this is true, “ratification can remedy a defect arising from the

decision of ‘an improperly appointed official ... when .. .. a properly appointed official has the

power fo conduct an independent evaluation of the merits and does so.’” Wilkes-Barre Hosp., 857

F.3d at 371 (D.C. Cir. 2017) (quoting Intercollegiate Broad. Sys., Inc. y. Copyright Royalty Bd.,

796 F.3d 111, 117 (D.C. Cir. 2015)) (alterations in original) (emphasis added).

A plain reading of 42 U.S.C. § 300gg-13(a)(4) shows the statute does not allow the

Secretary to countermand HRSA’s guidelines nor does it give the Secretary the discretion to accept

or reject the guidelines that HRSA produces. See Liffle Sisters of the Poor, 140 S. Ct. at 2381 “By

its terms, the ACA leaves the Guidelines’ content to the exclusive discretion of HRSA.”).

The federal defendants attempt to counter this argument by noting “Reorganization Plan

No. 3 of 1966—~which is part of the United States Code, see 5 U.S.C. app. 1—vests the Secretary

with ‘all functions of all agencies of or in the Public Health Service,’ including HRSA, which is

the Secretary’s creation.” ECF No. 20 at 7. But reorganization plans are nothing more than

executive regulations which are done unilaterally by the President pursuant to 5 U.S.C, § 901 et

seq. But a regulation cannot confer authority on the Secretary which the statute vests exclusively

in HRSA. Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842-43 (1984) (If

the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency,

must give effect to the unambiguously expressed intent of Congress.”).

In conclusion, the Court finds both arguments made by the federal defendants

unpersuasive. Accordingly, the Court DENIES the federal defendants’ motion to dismiss as to

Plaintiff Armstrong’s Appointments Clause claim.

b. Plaintiff Armstrong has not alleged a violation of the nondelegation doctrine

“The nondelegation doctrine is rooted in the principle of separation of power that underlies

our tripartite system of Government.” Big Time Vapes, Inc. v. FDA, 963 F.3d 436, 441 (Sth Cir,

2020) (quoting Mistretta y. United States, 488 U.S. 361, 371 (1989)). This is because “All

legislative Powers herein granted shall be vested in a Congress of the United States.” U.S. Consr.

art. I, § 1. Because the legislative power must be vested in Congress, “[a]ecompanying that

assignment of power to Congress is a bar on its further delegation.” Gundy v. United States, 139

S. Ct. 2116, 2123 (2019) (plurality),

But “[t]he Constitution has never been regarded as denying to the Congress the necessary

resources of flexibility and practicality to perform its function.” Yakus v. United States, 321 U.S.

414, 425 (1944) (internal marks omitted). Thus, “delegations are constitutional so long as Congress

‘lays down by legislative act an intelligible principle to which the person or body authorized to

exercise the authority is directed to conform.’” Big Time Vapes, 963 F.3d at 441 (quoting □□□

Hampton, Jr., & Co. v. United States, 276 U.S. 394, 409 (1928)) (internal marks omitted)

(emphasis added). An intelligible principle is “constitutionally sufficient if Congress (1) clearly

delineates its general policy, (2) the public agency which is to apply it, and (3) the boundaries of

that delegated authority.” Jd. at 443-44 (quoting Mistretta, 488 U.S. at 372-73)."°

“*A nondelegation inquiry always begins (and often almost ends) with statutory

interpretation,’ because we need ‘to figure out what task the statute delegates and what instructions

it provides.’” Jd. at 443 (quoting Gundy, 139 S. Ct. at 2123) (plurality) (internal marks omitted).

The first two factors are not disputed by Armstrong. First, the general policy of the Affordable

Care Act was ostensibly to improve health care coverage for Americans, Second, the text

designates the Secretary of Health and Human Services as the one who will apply the law. 42

U.S.C. § 201(c). But regarding the last factor, despite Plaintiff's arguments, the delegation falls

within the outer boundaries of the intelligible principle doctrine drawn by the Supreme Court,

'5 Much of “nondelegation doctrine” jurisprudence sounds in policy nof the plain text of the Constitution. Relevant

here, the Article I legislature may confer “legislative Powers” to Article II agencies // Congress is careful enough to

articulate an “intelligible principle’—an extraconstitutional basis for disrupting the “separation of powers.” Hopefully,

the Supreme Court will revisit this issue in the near future. See Gundy, 139 S. Ct. at 2131-48 (Alito, J., concurring)

(Gorsuch, J., dissenting).

Beginning with the text, Section 2713 of the Affordable Care Act states:

A group health plan and a health insurance issuer offering group or individual

health insurance coverage shall, at a minimum provide coverage for and shall not

impose any cost sharing requirements for—...

(4) with respect to women, such additional preventive care and screenings not

described in paragraph (1) as provided for in comprehensive guidelines supported

by the Health Resources and Services Administration for purposes of this

paragraph.

Codified at 42 U.SC, § 300gg-13(a)(4).

It is plain from the text of the statute that Congress has limited the authority it delegated.

Congress’s purpose in this section was to mandate coverage of certain health insurance items. In

delegating its authority to the HRSA to decide which items to mandate, Congress imposed at least

two limits. First, (a)(4) only relates to health coverage for women. Second, and more importantly,

the statute limits the agency to only “preventive care and screenings.”

Armstrong admits the text outlines a “statutory boundary” but argues “limiting the scope

of HRSA’s powers to ‘preventive care and screenings’ does nothing to provide guidance when

HRSA is deciding which ‘preventive care’ and which ‘screenings’ will be covered,” ECF No, 16

at 23 (emphasis in original), However, the guiding principle is that of all health items that insurers

may be forced to cover, HRSA is limited to mandating preventive care and screenings. As it

currently stands, this lies within the bounds of the intelligible principle test. While the Supreme

Court might soon breathe new life into the nondelegation doctrine, that time has not yet come.

Gundy, 139 S. Ct. at 2130-31 (Alito, J., concurring) (“Ifa majority of this Court were willing to

reconsider the approach we have taken for the past 84 years, J would support that effort.”). The

Supreme Court “has found only two delegations to be unconstitutional. Ever. And none in more

than eighty years.” Big Time Vapes, 963 F.3d at 446. The Court is bound by this precedent. The

Court thus GRANTS the federal defendants’ Motion as to Armstrong’s nondelegation claim.

STATE DEFENDANTS’ MOTION TO DISMISS

In Texas, a health insurance provider offering a health benefit plan that covers prescription

drugs must also provide coverage for prescription contraception drugs at no additional cost to an

insured. TEX. INS. CODE §§ 1369.104—.105. There is a limited exception to this requirement if the

health insurance plan is issued by a religious organization. Jd. § 1369.108. But overall, Texas

prohibits insurance providers from excluding prescription contraception drugs unless the health

benefit plan excludes coverage for all prescription drugs. See id. §§ 1369.101—.109. These

requirements are commonly known as Texas’ “contraceptive-equity laws.”

Plaintiffs Leal and Von Dohlen contend the state defendants’ enforcement of the

contraceptive-equity laws prohibits health insurers from excluding coverage of non-abortifacient

contraception unless they also exclude coverage of all prescription drugs, which drastically limits

the scope of acceptable health insurance that Plaintiffs can purchase consistent with their religious

beliefs.'® Plaintiffs contend this substantially burdens their exercise of religion in violation of the

Texas Religious Freedom Restoration Act (“TRFRA”).

The state defendants moved to dismiss the case arguing Plaintiffs lack standing and are

barred by sovereign immunity from suing them in federal court. Alternatively, the state defendants

argue Plaintiffs have failed to state a claim for violation of the TRFRA.

A. Legal Standards

“(Slovereign immunity deprives the court of jurisdiction, [so] claims barred by sovereign

immunity can be dismissed only under Rule 12(b)(1) and not with prejudice.” Warnock v, Pecos

Cnty., 88 F.3d 341, 343 (Sth Cir. 1996). A motion to dismiss pursuant to Rule 12(b)(1) is analyzed

under the same plausibility standard as a motion to dismiss under Rule 12(b)(6). Lane v.

'6 Plaintiff Armstrong is not asserting a claim against the state defendants under Texas RFRA, because she has no

religious or moral objections to contraceptive coverage.

Halliburton, 529 F.3d 548, 557 (Sth Cir. 2008). The burden of proof for a Rule 12(b)(1) motion to

dismiss is on the party asserting jurisdiction. Ramming, 281 F.3d at 161.

B. Analysis

The Court grants the states defendants’ motion to dismiss for two reasons. First, the Court

finds Texas has not waived its sovereign immunity in federal court. Although Plaintiffs are correct

regarding the distinctions between state sovereign immunity inherent in the structure of Article III

and sovereign immunity as expressly protected by the Eleventh Amendment, Plaintiffs misread

Fifth Circuit precedent regarding the unequivocal statement needed to affect a waiver of sovereign

immunity. Second, even if the state waived its sovereign immunity, the Court declines to exercise

supplemental jurisdiction over the state-law claim.

I. Plaintiffs’ TRFRA claim is barred by sovereign immunity

“The preeminent purpose of state sovereign immunity is to accord States the dignity that

is consistent with their status as sovereign entities.” Ked. Mar. Comm’n vy, South Carolina State

Ports Auth., 535 U.S. 743, 760 (2002). “The founding generation thought it neither becoming nor

convenient that the several States of the Union, invested with that large residuum of sovereignty

which had not been delegated to the United States, should be summoned as defendants to answer

the complaints of private persons.” /d. (quoting Alden v. Maine, 527 U.S. 706, 748 (1999)) (internal

marks omitted). Therefore, a state’s consent to suit in federal court must be “unequivocally

expressed.” Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S 89, 99 (1984). Indeed, a waiver

must be “stated by the most express language or by such overwhelming implication from the text

as will leave no room for any other reasonable construction.” Port, Auth. Trans-Hudson Corp. v.

Feeney, 495 U.S. 299, 305 (1990) (internal marks omitted), Accordingly, a statutory waiver of

immunity in federal court “must specify the State’s intention to subject itself to suit in federal

court.” Id, at 306 (emphasis in original).

a. Supreme Court precedent makes it clear state sovereign immunity is enshrined

in the Constitution

To provide context for Plaintiffs’ arguments, the Court will lay out a primer on the

sovereign immunity enjoyed by the States. “When the states ratified the Constitution, they did not

abrogate their sovereignty, but instead created a federal government of limited, enumerated

powers.” United States Oil Recovery Site Potentially Responsible Parties Grp. v. R.R. Comm’n of

Texas, 898 F.3d 497, 500 (5th Cir. 2018). “As the Supreme Court has observed, ‘the founding

document specifically recognizes the States as sovereign entities.’” /d. (quoting Alden v. Maine,

527 U.S. 706, 713 (1999) (internal marks omitted). “‘Any doubt regarding the constitutional role

of the States as sovereign entities is removed by the Tenth Amendment’—teserving those powers

not delegated to the federal government to the states in their sovereign capacity, or to the people.”

Id. (quoting Alden, 527 U.S. at 713).

As sovereign entities, the several States enjoy the privilege of sovereign immunity which

has “ancient origins.” Cutrer v. Tarrant Cnty. Loc. Workforce Dev. Bd., 943 F.3d 265, 268 (Sth

Cir, 2019), However, the Supreme Court undermined this immunity in Chisolm vy. Georgia, 2 U.S.

(2 Dall.) 419 (1793). In response to this decision, the Eleventh Amendment was ratified.

Principality of Monaco v. Mississippi, 292 U.S. 313, 325 (1934) (noting the Chisholm “decision

created such a shock of surprise that the Eleventh Amendment was at once proposed and adopted”).

The text of the Eleventh Amendment provides: “The Judicial power of the United States

shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one

of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.”

U.S. Const. amend XI (emphasis added). Thus, it is accurate to say that the Eleventh Amendment

only expressly “prohibits an individual from suing a foreign state in federal court (as Chisholm

had).” Cutrer, 943 F.3d at 269.

But for over a hundred years, the Supreme Court has made it clear that the States’

constitutional sovereign immunity is far broader than the express text of the Eleventh Amendment.

“Shortly after Congress gave the courts federal question jurisdiction in 1875, the Supreme Court

held that sovereign immunity also prohibits an individual from suing his home state in federal

court.” Jd. (citing Hans v. Louisiana, 134 U.S. 1 (1890)). As the Fifth Circuit recently explained:

[The Eleventh Amendment] says nothing about a suit brought by a citizen against

her home state. But a long line of precedent holds that “the Eleventh Amendment

accomplished much more: It repudiated the central premise of Chisholm that the

jurisdictional heads of Article III superseded the sovereign immunity that the States

possessed before entering the Union.” College Sav. Bank vy. Fla, Prepaid

Postsecondary Educ. Expense Bd., 527 U.S. 666, 669 (1999); see also Alden v.

Maine, 527 U.S. 706, 736 (1999) (“[T]he bare text of the Amendment is not an

exhaustive description of the States’ constitutional immunity from suit.”).

Cutrer, 943 F.3d at 269 n, 3 (some citations omitted)

The States thus possess sovereign immunity that predates the Constitution from suit by its

own citizens and foreign citizens.'’ For clarity’s sake, the Court will refer to this broad sovereign

immunity from suit as Hans immunity.'® The Eleventh Amendment expressly protects only a small

sub-part of this Hans immunity. This small subsection of Hans immunity the Court will refer to as

“Eleventh Amendment immunity.”

'7 There are three exceptions to this sovereign immunity. “First, Congress may authorize such a suit in the exercise of

its power to enforce the Fourteenth Amendment—an Amendment enacted after the Eleventh Amendment and

specifically designed to alter the federal-state balance. Second, a State may waive its sovereign immunity by

consenting to suit.” College Sav. Bank v. Fla. Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666, 670 (1999).

The third exception is suing the state indirectly by using the Ex parte Young fiction. See Green Valley Spec. Util. Dist.

v. City of Shertz, 969 F.3d 460, 496 (Sth Cir, 2020) (Oldham, J., concurring). The issue in this case implicates the

second ground concerning whether Texas waived its sovereign immunity.

18 Hans vy. Louisiana, 134 U.S. 1 (1890) was the seminal case that recognized this broad sovereign immunity. Plaintiffs

also refer to this immunity as Hans immunity in their briefing.

b. The parties diverge on whether there is a meaningful distinction between Hans

and Eleventh Amendment immunity

With this predicate laid, the Court now examines Plaintiffs’ legal arguments and the text

of the statute. Plaintiffs argue Texas has consented to this lawsuit by waiving its sovereign

immunity for claims brought pursuant to the Texas Religious Freedom Restoration Act. ECF No.

17 at 1. The relevant portion of the statute is reproduced below.

SOVEREIGN IMMUNITY WAIVED. (a) Subject to Section 110.006, sovereign

immunity to suit and from liability is waived and abolished to the extent of liability

created by Section 110.005, and a claimant may sue a government agency for

damages allowed by that section.

(b) Notwithstanding Subsection (a), this chapter does not waive or abolish

sovereign immunity to suit and from liability under the Eleventh Amendment to the

United States Constitution.

TEX. Clv. PRAC. & REM. CODE § 110.008(a)-(b).

Plaintiffs’ argument is as follows. Section 110.008(a) waived the entirety of Hans

immunity including Eleventh Amendment immunity, ECF No. 17 at 3 (“Subsection (a) waives all

soverecign-immunity defenses”) (emphasis in original). To be clearer, under Plaintiffs

understanding, Subsection (a) waives sovereign immunity in both state and federal court and in

suits brought by foreign citizens and its own citizens. Plaintiffs then argue that Subsection (b)

“claws back and preserves” only the state’s sovereign immunity under the Eleventh Amendment.

Id. at 5. Plaintiffs aver that the Eleventh Amendment, by its express terms, does not apply to this

case. Thus, because Subsection (a) waived Hans immunity, and Subsection (b) does not apply in

this case, Texas has waived sovereign immunity against its own citizens in federal court under

TRFRA.

Both Plaintiffs and the state defendants proceed to spill much ink over the application of

Subsection (b). The state defendants make two main arguments. First, the state defendants contend

“Eleventh Amendment immunity” is the exact same thing as Hans immunity and not merely a sub-

part. In support of this theory, the state defendants aver that even the Supreme Court has recognized

Eleventh Amendment immunity is “convenient shorthand” for a State’s sovereign immunity in

federal court. Alden, 527 U.S. at 713. Additionally, the Supreme Court has noted “the Court long

ago held that the Eleventh Amendment bars a citizen from bringing suit against the citizen’s own

State in federal court, even though the express terms of the Amendment refer only to suits by

citizens of another State.” Welch v. Texas Dep’t of Highways & Pub. Transp., 483 U.S. 468, 472

(1987) (emphasis added). Accordingly, the state defendants reject the split between Hans

immunity and Eleventh Amendment immunity outright. Thus Subsection (b) serves to preserve

and claw back both Hans and Eleventh Amendment immunity (because they are the same thing).

Secondly, the state defendants aver that even if Hans immunity and Eleventh Amendment

immunity are not the same thing, the Texas legislature surely intended to preserve sovereign

immunity in federal court. The state defendants argue if federal courts use the terms Hans

immunity and Eleventh Amendment immunity interchangeably then legislatures should be

allowed to do the same thing. The state defendants then cite nineteen Fifth Circuit and District

Court cases (including one case by this Court) stretching over three decades that use the terms

interchangeably. In a recent concurrence, Judge Oldham also noted the imprecision with which

courts talk about sovereign immunity:

By its terms, the Amendment does not apply ... where a citizen sues his own State

(or a public official of that State). Still, the Supreme Court has often used “Eleventh

Amendment immunity” as a synonym for the States’ broader constitutional

sovereign immunity. See, e.g., Seminole Tribe of Fla. v. Florida, 517 U.S. 44 (1996)

(using “state sovereign immunity” and “Eleventh Amendment immunity”

interchangeably); Franchise Tax Bd. of Cal. v. Hyatt, 139 8. Ct. 1485, 1496 (2019)

(“Although the terms of [the Eleventh] Amendment address only . . . specific

provisions . . . [,] the natural inference from its speedy adoption is that the

Constitution was understood . . . to preserve the States’ traditional immunity from

private suits.” (quotation omitted)).

Green Valley, 969 F.3d at 495 n. 7 (some citations omitted).

For their part, Plaintiffs assert there is a difference between Hans and Eleventh Amendment

immunity. Plaintiffs stress both the Supreme Court and the Fifth Circuit have identified Eleventh

Amendment immunity as a “misnomer, however, because that immunity is really an aspect of the

Supreme Court’s concept of state sovereign immunity and is neither derived from nor limited by

the Eleventh Amendment.” Meyers ex rel. Benzing v. Texas, 410 F.3d 236, 240-41 (Sth Cir. 2005)

(citing Alden, 527 U.S. at 713). The Court agrees with Plaintiffs on this point. The Fifth Circuit

has emphasized, as exampled by Judge Oldham’s recent concurrence, that Hans and Eleventh

Amendment immunity are distinctly different concepts.

Plaintiffs then counter the state defendants’ argument that the Court should look at the

presumed intent of the Texas legislature which allegedly did not intend to waive sovereign

immunity in federal court. Again, the Court agrees with Plaintiffs that courts “cannot replace the

actual text with speculation as to [the legislature’s] intent.” Magwood v. Patterson, 561 U.S. 320,

334 (2010). The Supreme Court has made it crystal clear that “[i]f [the legislature] enacted into

law something different from what it intended, then it should amend the statute to conform it to its

intent.” Lamie v. U.S. Trustee, 540 U.S. 526, 542 (2006). This Court “has no roving license... to

disregard clear language simply on the view that . . . [the legislature] ‘must have intended’

something broader.” Michigan y. Bay Mills Indian Cmty., 572 U.S. 782, 794 (2014). In fact, the

Supreme Court recently applied an ultra-literalist hermeneutic that defied “long-settled principles

of statutory interpretation” and “widespread ordinary use of the English language” to avoid even

an appearance of an inquiry into legislative intent. Bostock v. Clayton County, 140 S. Ct. 1731,

2 Judge Oldham then stated he would “use the term ‘Eleventh Amendment immunity’ to refer to the immunity

recognized in the text of that amendment and the term ‘state sovereign immunity’ to refer to the States’ broader

constitutional immunity that predated the ratification of the Eleventh Amendment.” Courts and legislatures should

follow this example and be more precise in their drafting and writing.

1833 (2020) (Kavanaugh, J., dissenting). In fact, it appears the only piece of legislation that is not

subject to these usual textual rules of statutory interpretation is the Affordable Care Act. King v.

Burwell, 576 U.S. 473, 517 (2015) (Scalia, J., dissenting),

Sub-section (b)’s text is clear and unambiguous. It only preserves Eleventh Amendment

immunity, not Hans immunity. This does not mean, however, that Plaintiffs have the winning

argument, Even though Subsection (b) does not “claw back” Hans immunity, Plaintiffs’ argument

only succeeds if Subsection (a) waived Hans immunity in federal court. As detailed below,

Subsection (a) does not.

c. The Fifth Cireuit’s holding in Martinez necessitates the conclusion that

Subsection (a) does not waive Hans immunity in federal court

The Fifth Circuit has already reviewed statutory language that is identical to TRFRA and

held that it does not waive sovereign immunity in federal court. In Martinez v. Texas Dept. of

Crim. Just., the Fifth Circuit addressed whether the Texas Whistleblower Act (“TWA”) waived

Texas’ sovereign immunity in federal court.”° 300 F.3d 567 (Sth Cir. 2002). The panel held that

the claim could only be brought in state court because Texas had not waived its sovereign

immunity from suit in federal court. /d. at 575-76. The panel’s reasoning consisted of two textual

statutory analyses: the waiver section and the venue provision. The text of the waiver section

provides that “Sovereign immunity is waived and abolished to the extent of liability for the

relief allowed under the chapter for violation of this chapter.” TEX. GovT. CODE § 554.0035

(Vernon Supp. 2001) (emphasis added). The bolded language is identical to the language of

TRFRA,

0 Martinez is yet another case where the Fifth Circuit uses Eleventh Amendment immunity and Hans immunity

interchangeably.

The Martinez panel held this language did not evidence any intent by Texas to waive its

Hans sovereign immunity in federal court, and that “the only reasonable construction of the Act”

was that it waived state sovereign immunity in Texas state court but not in federal court, Martinez,

300 F.3d at 575.

Plaintiffs try to sidestep Martinez’s clear holding by insisting the panel only reached its

conclusion because of the existence of the venue provision which mandated the case to be filed in

state district court. The venue provision of the TWA “speciffies] that a public employee may sue

‘in a district court of the county in which the cause of action arises or in a district court of Travis

County.’” Jd. (quoting TEX. Govr. CODE § 554.007(a) (Vernon. Supp. 2001)). Plaintiffs argue

without this provision “there would be [no] basis for limiting section 554.0035’s waiver of

sovereign immunity to state-court litigation.” ECF No. 17 at 8. Plaintiffs state there is no

comparable venue provision in TRFRA, so Martinez does not apply.

But Plaintiffs misread Martinez. Under Plaintiffs’ interpretation of Martinez, the TWA’s

waiver provision showed an intent to waive immunity in federal court, but the venue provision

showed the opposite. But that interpretation does not comport with the Fifth Circuit’s statement

that “/n Jeither section evidences any intent by Texas to waive its Eleventh Amendment immunity

and subject itself to suit in federal courts” Martinez, 300 F.3d at 575 (emphasis added). It is

abundantly clear that Martinez’s holding is that the waiver provision itself does not “evidence[]

any intent by Texas” to waive its sovereign immunity. Jd.

Applying Martinez to Subsection (a) is a straightforward task. The language waiving

sovereign immunity in each statute is identical. Therefore, just as the Texas Whistleblower Act

did not waive sovereign immunity in federal court, TRFRA likewise does not waive sovereign

immunity in federal court.

Moreover, contrary to Plaintiff's assertion, there is a venue provision in TRFRA which is

somewhat similar to the venue provision of the TWA. Under the section titled “Remedies”,

TRFRA states “[a]n action under this section must be brought in district court.” TEX. Crv. PRAC.

& REM. CODE § 110.005(c). While the phrase “district court” may be ambiguous as to whether an

action may be brought in state district court or federal district court,?! this ambiguity serves to

underline the fact that there is no “unequivocal” expression of waiver of sovereign immunity in

federal court.

d. Plaintiffs’ claims appear to be barred by TRFRA’s statute of limitations

In most cases, failure to sue within the statute of limitations is a waivable defense, but this

is not so here. “In order to preserve the legislature’s interest in managing state fiscal matters

through the appropriations process, a statute shall not be construed as a waiver of sovereign

immunity unless the waiver is effected by clear and unambiguous language.” TEX. GOVT. CODE

§ 311.034 “Statutory prerequisites to a suit, including the provision of notice, are jurisdictional

requirements in all suits against a governmental entity.” /d. (emphasis added) Accordingly,

complying with the statute of limitations is a jurisdictional prerequisite and noncompliance

deprives this Court of jurisdiction.

TREA mandates that “[a] person must bring an action to assert a claim for damages under

this chapter not later than one year after the date the person knew or should have known of the

substantial burden on the person’s free exercise of religion.” TEX. Civ. PRAC, & REM. CODE

§110.007 (emphasis added), Thus, unlike the federal statute of limitations under RFRA which runs

21 If the Court were to try to resolve the ambiguity, the Court could proceed by reviewing legislative history “as mere

evidence of the ‘ordinary public meaning’” of the phrase “district court.” Deanda v. Azar, No. 2:20-CV-092 (N.D.

Tex, Sept. 24, 2020), ECF No. 23 at 5 (emphasis in original) (citing A. SCALIA, A MATTER OF INTERPRETATION 17

(1997)). The Committee Report of the House Research Organization on TRFRA shows a legislative expectancy that

“an action would have to be brought in state district court.” TEX. H. RESEARCH ORGANIZATION, BILL ANALYSIS, □□□□

138, 76th Leg. R.S. (May 17, 1999), available at □□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□□

0/SB138.PDF.

390

from each day the cause of action accrues, a TRFRA claim must be brought from the date the

person knew or should have known of the burden even if the burden continues for more than one

year. Walters vy. Livingston, 519 S.W.3d 658, 667 (Tex.App—Amarillo 2017, no pet.).

Consequently, Plaintiffs Leal and Von Dohlen’s burden arose when the contraceptive-equity laws

were enacted in 2001.” Because Plaintiffs’ claims are time barred, this is yet another reason the

Court does not have jurisdiction over Plaintiffs’ TRFRA claim.

2. Alternatively, the Court declines to exercise supplemental jurisdiction over the state-

law claim

Alternatively, even if Texas did waive its sovereign immunity, the Court, in its discretion,

declines to exercise supplemental jurisdiction over the remainder of this case. Supplemental

jurisdiction is codified at 28 U.S.C. § 1367 which gives courts discretion to exercise jurisdiction

over pendant state-law claims when: “(1) federal question jurisdiction is proper, and (2) the state-

law claims derive from a common nucleus of operative facts.” Arena v. Graybar Elec. Co., Inc.,

669 F.3d 214, 221 (Sth Cir, 2012).

Only after finding that original jurisdiction exists over at least one claim can a court decide

whether to exercise its discretion to decline supplemental jurisdiction. 28 U.S.C. § 1367(a). The

statutory provisions of section 1367(c) set out four factors that control this Court’s discretion over

state-law claims: whether (1) the claim raises a novel or complex issue of state law; (2) the claim

substantially predominates over the claim or claims over which the district court has original

jurisdiction; (3) the district court has dismissed all claims over which it has original jurisdiction;

or (4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.

Id. at § 1367(c).

2 Plaintiff does not allege any facts that support the statute of limitations not applying such as if Plaintiffs Leal or

Von Dohlen were new residents to the state or have never sought health insurance in Texas before and were thus

unaware of the contraceptive-equity laws. Indeed, neither party briefed on the issue at all.

Additionally, “a federal court should consider and weigh in each case, and at every stage

of the litigation, the values of judicial economy, convenience, fairness, and comity in order to

decide whether to exercise jurisdiction over a case brought in that court involving pendent state-

law claims,” Carnegie—Mellon Univ. y. Cohill, 484 U.S. 343, 350 (1988).

Here, the Court has no original jurisdiction over Plaintiffs’ state-law claims. First, no

diversity jurisdiction exists between Plaintiffs (who are all residents of Texas) and the state

defendants. Second, there is no federal question jurisdiction because it is a state-law claim. Lastly,

Ex Parte Young is inapplicable here because Young does not apply in cases where plaintiffs are

alleging that state actors are violating state law. Pennhurst State Sch. & Hosp. v. Halderman, 465

U.S. 89, 111 (1984). This means Plaintiffs’ TRFRA claim’s only hook to federal court is

supplemental jurisdiction.

The section 1367 factors and Carnegie-Mellon weigh heavily in favor of declining to

exercise supplemental jurisdiction. As for the section 1367 factors, the Court has dismissed all

federal claims by Plaintiffs Leal and Von Dohlen. § 1367(c)(3). These claims were the only hook

for supplemental jurisdiction. With these federal claims dismissed, there is simply no connection

— no “common nucleus of operative facts” — between Plaintiff Armstrong’s surviving claim

which is explicitly not based on religious beliefs and Plaintiffs Leal and Von Dohlen’s TRFRA

claim.”> As Carnegie-Mellon indicates, this fact weighs heavily in favor of dismissing the claim

and leads the Court to not exercise supplemental jurisdiction over the TRFRA claims.

23 In fact, the Court is unsure whether supplemental jurisdiction would exist even if Plaintiffs Leal and Von Dohlen’s

federal claims were not dismissed. The only “common nucleus of operative facts” is that the actions of Texas and the

United States harm the Plaintiffs in trying to find health insurance. But having merely the same type of injury doesn’t

necessarily mean the two cases share a “common nucleus of operative facts,” In this case, Plaintiffs are suing two

separate sovereigns for enacting two separate statutes (one which allegedly violates the Constitution and one which

allegedly violates TRFRA) which have no relationship with one another which are causing two distinct injuries.

Neither party addresses these arguments, But, because it does not affect the disposition of the case, the Court assumes

arguendo that the claims do share a common nucleus of operative facts.

Lastly, the Carnegie-Mellon factors also favor declining supplemental jurisdiction. The

case is in the very early stages of litigation, the discovery process has not yet started, and no trial

date has been set. As a result, judicial economy will not be wasted by dismissing this case,

Additionally, Leal and Von Dohlen are free to litigate their claim in state court as the dismissal in

this case is without prejudice. Therefore, the Court declines to exercise supplemental jurisdiction.

CONCLUSION

In sum, the Court holds (1) all Plaintiffs have standing for their claims against the federal

defendants; (2) no federal claims are barred by the statute of limitations; (3) all of Plaintiffs Leal

and Von Dohlen’s federal claims are barred by res judicata; (4) Plaintiff Armstrong has adequately

stated a claim for violations of the Appointments Clause but (5) has not stated a claim for a

violation of the nondelegation doctrine; (6) all claims against the state defendants are barred by

sovereign immunity; and (7), even if Texas waived its sovereign immunity, the Court declines to

exercise its supplemental jurisdiction over the state-law claims.

Accordingly, the federal defendants’ Motion to Dismiss (ECF No. 15) is GRANTED as to

Plaintiffs Leal and Von Dohlen and DENIED IN PART as to Plaintiff Armstrong. Plaintiffs Leal

and Von Dohlen’s claims against the federal defendants are DISMISSED WITH PREJUDICE.

Plaintiff Armstrong’s nondelegation claim is DISMISSED WITH PREJUDICE.

The state defendants’ Motion to Dismiss (ECF No. 7) is GRANTED. Plaintiffs’ state-law

claims against the state defendants are DISMISSED WITHOUT PREJUDICE,

SO ORDERED.

December 25, 2020, -

MAZ THEW J. KACSMARYK

UNITED STATES DISTRICT JUDGE

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.