# Leal v. Azar

> District Court, N.D. Texas · December 23, 2020

URL: https://www.frixlaw.com/law-library/cases/10449812

## Case

- **Court:** District Court, N.D. Texas
- **Decided:** December 23, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

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.

10

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

1]

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.

1?

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.

13

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.

14

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).

15

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

16

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

17

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

18

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.”

19

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

20

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.

34

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

© plaintiff also asserts the mentbers of the HRSA are not “inferior officers” either. Because the federal defendants do
not contest this assertion that members of the HRSA are Officers, the Court does not reach a conclusion on the
question.

43

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).

a4

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]

95

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

26

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.

a7

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).

98

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.

99

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.

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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

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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

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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.

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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

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“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)).

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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.

36

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.

an

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.

38

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.

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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.

40

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.

4]

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10449812. Public record. Not legal advice.