The opinion
Opinions of the United
2005 Decisions States Court of Appeals
for the Third Circuit
10-31-2005
Citizens for Health v. Secretary HHS
Precedential or Non-Precedential: Precedential
Docket No. 04-2550
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 04-2550
CITIZENS FOR HEALTH;
AMERICAN ASSOCIATION FOR HEALTH FREEDOM;
AMERICAN ASSOCIATION OF PRACTICING
PSYCHIATRISTS;
AMERICAN MENTAL HEALTH ALLIANCE-USA;
AMERICAN PSYCHOANALYTIC ASSOCIATION;
NATIONAL COALITION OF MENTAL HEALTH
PROFESSIONALS AND CONSUMERS;
NEW HAMPSHIRE CITIZENS FOR HEALTH FREEDOM;
SALLY SCOFIELD; TED KOREN, DC;
MICHAELE DUNLAP, PSY.D.; MORTON ZIVAN, PH.D.;
CALIFORNIA CONSUMER HEALTHCARE COUNCIL;
CONGRESS OF CALIFORNIA SENIORS;
HEALTH ADMINISTRATION RESPONSIBILITY
PROJECT;
DANIEL S. SHRAGER; EUGENE B. MEYER;
JANE DOE; JANIS CHESTER; DEBORAH PEEL,
Appellants
v.
*MICHAEL O. LEAVITT,
SECRETARY U.S. DEPARTMENT OF
HEALTH AND HUMAN SERVICES
*Amended Per Court's Order dated 2/4/05
Pursuant to F.R.A.P. 43(c)(2)
Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 03-cv-02267)
District Judge: Honorable Mary A. McLaughlin
Argued March 9, 2005
Before: McKEE, RENDELL and NYGAARD**,
Circuit Judges.
(Filed: October 31, 2005)
Robert N. Feltoon
Conrad, O’Brien, Gellman & Rohn
1515 Market Street, 16 th Floor
Philadelphia, PA 19102
** Since the date of argument Judge Nygaard has assumed
senior status.
2
James C. Pyles [ARGUED]
Powers, Pyles, Sutter & Verville
1875 Eye Street, N.W., 12 th Floor
Washington, DC 20006
Peter D. Winebrake
Trujillo, Rodriguez & Richards
226 West Rittenhouse Square
The Penthouse
Philadelphia, PA 19103
Counsel for Appellants
Charles W. Scarborough [ARGUED]
U.S. Department of Justice
Appellate Section
950 Pennsylvania Avenue, N.W.
Washington, DC 20530
Mark B. Stern
U.S. Department of Justice
Civil Division, Appellate Staff
601 D. Street, N.W.
Washington, DC 20530
Counsel for Appellee
Stacy A. Fols
Montgomery, McCracken, Walker & Rhoads
457 Haddonfield Road
Liberty View, 6 th Floor, Suite 600
Cherry Hill, NJ 08002
Counsel for Amicus-appellants
3
The National Association of Social Workers, Inc.
and PA Chapter of the National Association of
Social Workers
M. Duncan Grant
Pepper Hamilton
18 th & Arch Streets
3000 Two Logan Square
Philadelphia, PA 19103
Counsel for Amicus-appellant
Program for Psychiatry and the Law
at Harvard Medical School
Jonathan S. Martel
Arnold & Porter
555 12 th Street, N.W.
Washington, DC 20004
Counsel for Amicus-appellant
NARAL Pro-Choice America Foundation
David P. Felsher
488 Madison Avenue
New York, NY 10022
Counsel for Amicus-appellants
Guenter L. Spanknebel, Leonard Morse,
Wayne Glazier, Graham L. Spruiell, and
Association of American Physicians and
Surgeons, Inc.
4
OPINION OF THE COURT
RENDELL, Circuit Judge.
Appellant Citizens for Health, along with nine other
national and state associations and nine individuals (collectively
“Citizens”), brought this action against the Secretary of the
United States Department of Health and Human Services
(“HHS” or “Agency”) challenging a rule promulgated by the
Agency pursuant to the administrative simplification provisions
of the Health Insurance Portability and Accountability Act of
1996 (“HIPAA”), Pub. L. 104-191, 110 Stat. 1936. Citizens
allege that the “Privacy Rule”–officially titled “Standards for
Privacy of Individually Identifiable Health Information”–is
invalid because it unlawfully authorizes health plans, health care
clearinghouses, and certain health care providers to use and
disclose personal health information for so-called “routine uses”
without patient consent. The relevant part of the specific
offending provision of the Privacy Rule reads:
(a) Standard: Permitted uses and disclosures.
Except with respect to uses or disclosures that
require an authorization under § 164.508(a)(2)
[relating to psychotherapy notes] and (3) [relating
to marketing], a covered entity may use or
disclose protected health information for
treatment, payment, or health care operations . . .
provided that such use or disclosure is consistent
5
with other applicable requirements of this subpart.
(b) Standard: Consent for uses and disclosures
permitted. (1) A covered entity may obtain
consent of the individual to use or disclose
protected health information to carry out
treatment, payment, or health care operations.
(2) Consent, under paragraph (b) of this section,
shall not be effective to permit a use or disclosure
of protected health information when an
authorization, under § 164.508, is required or
when another condition must be met for such use
or disclosure to be permissible under this subpart.
45 C.F.R. § 164.506 (emphasis added). Citizens challenge
subsection (a) as authorizing disclosures that, they contend,
violate individual privacy rights.
The District Court granted summary judgment to the
Secretary on all of Citizens’ claims based on its conclusions that
the promulgation of the Privacy Rule did not violate the
Administrative Procedure Act, that the Secretary did not exceed
the scope of authority granted to him by HIPAA, and that,
insofar as the Privacy Rule is permissive and does not compel
any uses or disclosures of personal health information by
providers, it does not affirmatively interfere with any right
protected by the First or Fifth Amendments. Because we reason
to the same conclusions reached by the District Court, albeit
under a slightly different analysis, we will affirm.
6
I. Background
The objectionable provision is only one aspect of a
complex set of regulations that is the last in a series of attempts
by HHS to strike a balance between two competing objectives
of HIPAA–improving the efficiency and effectiveness of the
national health care system and preserving individual privacy in
personal health information.
A. HIPAA
HIPAA was passed by Congress in August 1996 to
address a number of issues regarding the national health care
and health insurance system. The statutory provisions relevant
to the issues in this case are found in Subtitle F of Title II.1
Aimed at “administrative simplification,” HIPAA Sections 261
through 264 provide for “the establishment of standards and
requirements for the electronic transmission of certain health
1
HIPAA Title II, Subtitle F comprises sections 261 through
264. Section 261, codified at 42 U.S.C. § 1320d note, states the
purpose of the Subtitle. Section 262 amends Title XI of the
Social Security Act, 42 U.S.C. § 1301 et seq., to add Part C,
“Administrative Simplification,” with sections 1171-1179,
codified at 42 U.S.C. §§ 1320d to 1320d-8. Section 263 amends
the Public Health Service Act at 42 U.S.C. § 242k(k). Section
264, discussed infra, is codified at 42 U.S.C. § 1320d-2 note.
See South Carolina Med. Ass’n v. Thompson, 327 F.3d 346, 348
n.1 (4th Cir. 2003) (explaining effect of HIPAA administrative
simplification provisions).
7
information.” § 261, 110 Stat. at 2021. More specifically, these
provisions direct the Secretary to adopt uniform national
standards for the secure electronic exchange of health
information. § 262, 110 Stat. at 2021-26.
Section 264 prescribes the process by which standards
regarding the privacy of individually identifiable health
information were to be adopted. § 264(a), 110 Stat. at 2033.
This process contemplated that, within a year of HIPAA’s
enactm ent, the Secretary w ould su bm it detailed
recommendations on such privacy standards, including
individual rights concerning individually identifiable health
information, procedures for exercising such rights, and the “uses
and disclosures of such information that should be authorized or
required,” to Congress. § 264(a)-(b), 110 Stat. at 2033. If
Congress did not enact further legislation within three years of
HIPAA’s enactment, the Secretary was directed to promulgate
final regulations implementing the standards within 42 months
of HIPAA’s enactment. § 264(c)(1), 110 Stat. at 2033. The Act
specified that any regulation promulgated pursuant to the
authority of Section 264 would provide a federal baseline for
privacy protection, but that such regulations would “not
supercede a contrary provision of State law, if the provision of
State law imposes requirements, standards, or implementation
specifications that are more stringent than the requirements,
standards, or implementation specifications imposed under the
regulation.” § 264(c)(2), 110 Stat. at 2033-34.2
2
Section 264(c)(2) is cross-referenced in HIPAA § 1178,
which provides that HIPAA generally preempts provisions of
8
B. The Privacy Rule
Because Congress did not enact privacy legislation by its
self-imposed three-year deadline, the Secretary promulgated the
privacy standards contemplated in Section 264 through an
administrative rulemaking process. During this process, the
Rule went through four iterations: the Proposed Original Rule,
the Original Rule, the Proposed Amended Rule, and the
Amended Rule. 3 The Original Rule required covered entities to
seek individual consent before using or disclosing protected
health information for routine uses. Standards for Privacy of
Individually Identifiable Health Information, 65 Fed. Reg.
82,810 (Dec. 28, 2000) (codified at former 45 C.F.R. pts. 160,
164 (2002)). Before the Original Rule could take effect,
however, the Secretary was inundated with unsolicited criticism,
principally from health care insurers and providers, warning that
the Original Rule’s mandatory consent provisions would
state law except, inter alia, where a provision of state law,
“subject to section 264(c)(2) of the Health Insurance Portability
and Accountability Act of 1996, relates to the privacy of
individually identifiable health information.” § 1178(a)(2)(B),
110 Stat. at 2030.
3
The District Court explored the regulatory history of the
Privacy Rule in detail. See Citizens for Health v. Thompson,
No. 03-2267, 2004 U.S. Dist. LEXIS 5745, at *6-21 (E.D. Pa.
Apr. 2, 2004). Because our decision here turns mostly on the
effect of the Rule as amended, we have chosen not to repeat that
discussion here.
9
significantly impact the ability of the health care industry to
operate efficiently.4 Standards for Privacy of Individually
Identifiable Health Information, 67 Fed. Reg. 14,776, 14,777
(Mar. 27, 2002). He responded by reopening the rulemaking
process. Id. at 14,776. The final result was the Amended
Rule–the currently effective, codified version of the Privacy
Rule, see generally 45 C.F.R. pts. 160 & 164, which is the
subject of Citizens’ challenge here.5
The Amended Rule retains most of the Original Rule’s
4
According to the Secretary, some of the “more significant
examples and concerns” that commenters raised in connection
with the Original Rule were that the prior consent requirement
for routine disclosures would bar pharmacists from filling
prescriptions and searching for potential drug interactions before
patients arrived at the pharmacy, it would interfere with the
practice of emergency medicine in cases where it would be
difficult or impossible to obtain patient consent before
treatment, and it would delay the scheduling of and preparation
for hospital procedures until the patient provided the required
consent. Standards for Privacy of Individually Identifiable
Health Information, 67 Fed. Reg. 53,182, 53,209 (Aug. 14,
2002).
5
The Amended Rule took effect on April 14, 2003, the same
date that had been set for compliance with the Original Rule. 45
C.F.R. § 164.534.
10
privacy protections. It prohibits “covered entities” 6 –defined as
health plans, health care clearinghouses, and health care
providers who transmit any health information in electronic
form in connection with a transaction covered by the
regulations–from using or disclosing an individual’s “protected
health information”–defined as individually identifiable health
information maintained in or transmitted in any form or media
including electronic media–except as otherwise provided by the
Rule. See 45 C.F.R. §§ 160.103 (defining “covered entities”
and “protected health information”), 164.502(a) (“A covered
entity may not use or disclose protected health information,
except as permitted or required by this subpart or by subpart C
of part 160 of this subchapter.”). Covered entities must seek
authorization from individuals before using or disclosing
information unless a specific exception applies. Id. §
164.508(a)(1) (“Authorization required: general rule. Except as
otherwise permitted or required by this subchapter, a covered
entity may not use or disclose protected health information
without an authorization that is valid under this section.”). Uses
and disclosures that the Amended Rule allows must be limited
to the “minimum necessary” to accomplish the intended
purpose. Id. § 164.502(b).
The Amended Rule departs from the Original Rule in one
crucial respect. Where the Original Rule required covered
6
The statutory language, as well as the Rule, limits the
applicability of the provisions of the Rule to “covered entities”.
See HIPAA § 262(a) (amending § 1172(a) of the Social Security
Act) (codified at 42 U.S.C. § 1320d-1).
11
entities to seek individual consent to use or disclose health
information in all but the narrowest of circumstances,7 the
Amended Rule allows such uses and disclosures without patient
consent for “treatment, payment, and health care
operations”–so-called “routine uses.” Id. §§ 164.506 (providing
routine use exception). “Health care operations,” the broadest
category under the routine use exception, refers to a range of
management functions of covered entities, including quality
assessment, practitioner evaluation, student training programs,
insurance rating, auditing services, and business planning and
development. Id. § 164.501. The Rule allows individuals the
right to request restrictions on uses and disclosures of protected
health information and to enter into agreements with covered
entities regarding such restrictions, but does not require covered
entities to abide by such requests or to agree to any restriction.
Id. § 164.522(a). The Rule also permits, but does not require,
covered entities to design and implement a consent process for
7
Health care providers who had indirect treatment
relationships with an individual and those who created or
received health information in the course of treating inmate
patients were exempt from the Original Rule’s consent
requirement. 65 Fed. Reg. 82,462, 82,810. In addition, the
Original Rule allowed providers to proceed without consent in
situations where they had a legal obligation to provide treatment
and attempts to obtain consent had failed, e.g., in emergency
situations, or where a provider’s attempts to obtain explicit
consent were thwarted by a substantial communication barrier,
but the provider could properly infer such consent from the
circumstances. Id.
12
routine uses and disclosures. Id. § 164.506; see also Standards
for Privacy of Individually Identifiable Health Information, 67
Fed. Reg. 53,182, 53,211 (Aug. 14, 2002).
Importantly, the Rule contains detailed preemption
provisions, which are consistent with HIPAA Sections
1178(a)(2)(B) and 264(c)(2). These provisions establish that the
Rule is intended as a “federal floor” for privacy protection,
allowing state law to control where a “provision of State law
relates to the privacy of individually identifiable health
information and is more stringent than a standard, requirement,
or implementation specification adopted under [the Privacy
Rule].” 45 C.F.R. § 160.203 (emphasis added).8
8
The regulations define the following terms with the
following meanings:
“More stringent” means, in the context of a
comparison of a provision of State law and a
standard, requirement, or implementation
specification adopted under [the Privacy Rule], a
State law that meets one or more of the following
criteria:
(1) With respect to a use or disclosure, the law
prohibits or restricts a use or disclosure in
circumstances under which such use or disclosure
otherwise would be permitted under this
subchapter, except if the disclosure is:
(i) Required by the Secretary in connection
with determining whether a covered entity is in
compliance with this subchapter; or
13
(ii) To the individual who is the subject of the
individually identifiable health information.
(2) With respect to the rights of an individual,
who is the subject of the individually identifiable
health information, regarding access to or
amendment of individually identifiable health
information, permits greater rights of access or
amendment, as applicable.
(3) With respect to information to be provided to
an individual who is the subject of the
individually identifiable health information about
a use, a disclosure, rights, and remedies, provides
the greater amount of information.
(4) With respect to the form, substance, or the
need for express legal permission from an
individual, who is the subject of the individually
identifiable health information, for use or
disclosure of individually identifiable health
information, provides requirements that narrow
the scope or duration, increase the privacy
protections afforded (such as by expanding the
criteria for), or reduce the coercive effect of the
circumstances surrounding the express legal
permission, as applicable.
(5) With respect to recordkeeping or requirements
relating to accounting of disclosures, provides for
the retention or reporting of more detailed
information or for a longer duration.
(6) With respect to any other matter, provides
14
II. Procedural History
Citizens filed this action on April 10, 2003. In its
Amended Complaint, Citizens alleged that the Secretary violated
the APA and Sections 261 through 264 of HIPAA in
promulgating the Amended Rule, and that, to the extent that the
Amended Rule rescinded or eliminated the need for consent for
the use and disclosure of individually identifiable health
information for “routine uses,” the Amended Rule violated
privacy rights protected by the Fifth Amendment and free
speech rights protected by the First Amendment of the United
States Constitution. Citizens for Health v. Thompson, No. 03-
2267, 2004 U.S. Dist. LEXIS 5745, at *22 (E.D. Pa. Apr. 2,
2004). Both parties moved for summary judgment, and, after a
hearing on December 10, 2003, the District Court granted
greater privacy protection for the individual who
is the subject of the individually identifiable
health information.
“Relates to the privacy of individually identifiable
health information ” means, with respect to a
State law, that the State law has the specific
purpose of protecting the privacy of health
information or affects the privacy of health
information in a direct, clear, and substantial way.
“State law” means a constitution, statute,
regulation, rule, common law, or other State
action having the force and effect of law.
45 C.F.R. § 160.202.
15
summary judgment in favor of the Secretary. Id. at *2.
On Citizens’ APA claims, the Court concluded that the
Secretary had adequately informed the public regarding the
proposed rulemaking, examined the relevant data, responded to
public comments, and provided a reasoned analysis that
rationally connected the facts with the decision to rescind the
consent requirement in the Amended Rule. Id. at *33-43.
Regarding Citizens’ claims alleging violations of HIPAA, the
Court concluded that the changes in the Amended Rule were
reasonably related to the legislative purpose of Subtitle F of the
Act, and, because the Amended Rule was promulgated before
the Original Rule took effect, the Amended Rule did not
eliminate any “rights” created under the Original Rule. Id. at
*43-46. Finally, regarding Citizens’ constitutional claims, the
Court concluded that because (1) neither the First Amendment
nor the Fifth Amendment places an affirmative obligation on the
State to protect individuals’ rights from harm by third parties
and (2) the Amended Rule is wholly permissive as to whether
covered entities seek consent from an individual before using or
disclosing personal health information for routine uses, the
Amended Rule did not violate individual rights under either
Amendment. Id. at *46-50.
III. Jurisdiction and Standard of Review
The District Court had jurisdiction under 28 U.S.C. §
1331, and we have jurisdiction to review the final decision of
the District Court under 28 U.S.C. § 1291. We exercise plenary
16
review over the District Court’s grant of summary judgment,
applying the same test as the District Court. Goodman v. Mead
Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976). To affirm the
grant of summary judgment, we must be convinced that there is
no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law when the facts
are viewed in the light most favorable to the nonmoving party.
Fed. R. Civ. P. 56(c).
IV. Discussion
On appeal, Citizens reassert the claims they made before
the District Court, that the Secretary, by promulgating the
Privacy Rule, (1) unlawfully infringed Citzens’ fundamental
rights to privacy in personal health information under due
process principles of the Fifth Amendment of the United States
Constitution; (2) unlawfully infringed Citzens’ rights to
communicate privately with their medical practitioners under the
First Amendment of the Constitution; (3) contravened
Congress’s intent in enacting HIPAA by eliminating Citizens’
reasonable expectations of medical privacy; and (4) violated the
APA by arbitrarily and capriciously reversing a settled course of
behavior and adopting a policy that he had previously rejected.
Before addressing Citizens’ claims on the merits, we note
that we raised the issue of justiciability at oral argument, and
asked the parties for separate briefing on this issue. Our concern
was that, in their complaint, the party plaintiffs do not recount
specific instances of violations of their privacy rights traceable
17
to the regulation, but, instead, complain of the regulation’s
general effect. After reviewing the parties’ responses to our
questions, however, we are satisfied that these specific instances
do, in fact, exist, notwithstanding the general allegations in the
complaint.9 We therefore proceed to address each of Citizens’
9
To satisfy Article III’s justiciability requirement, “plaintiffs
must demonstrate that they have suffered an injury-in-fact, that
the injury is causally connected and traceable to an action of the
defendant, and that it is redressable.” The Pitt News v. Fisher,
215 F.3d 354, 359 (3d Cir. 2000) (citing Doe v. Nat’l Bd. of
Med. Exam’rs, 199 F.3d 146, 152-53 (3d Cir. 1999)). To
support his or her standing at the summary judgment stage,
“plaintiff . . . must ‘set forth’ by affidavit or other evidence
‘specific facts’ . . . which for purposes of the summary judgment
motion will be taken to be true.” Lujan v. Defenders of
Wildlife, 504 U.S. 555, 561 (1992) (quoting Fed. R. Civ. P.
56(e)). A plaintiff satisfies the injury-in-fact prong of the
justiciability requirement where he or she alleges an injury that
affects him or her “in a personal and individual way.” Id. at 561
n.1. We agree with the District Court that Citizens have met this
burden through affidavits, letters, and other documentary
evidence demonstrating that at least one individual plaintiff’s
health information has been, or will imminently be, disclosed
without her consent by private health care providers and
drugstore chains, and that she and her family will avoid seeking
medical care to prevent further disclosures of medical
information without their consent. See Citizens for Health,
2004 U.S. Dist. LEXIS 5745, at *27-30. An injury is
redressable for justiciability purposes where plaintiff can show
18
that “it is likely, as opposed to merely speculative, that the injury
will be redressed by a favorable decision.” Friends of the Earth,
Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 181 (2000).
According to Citizens’ affidavits, at least one individual plaintiff
had successfully restricted the use of her health information
before the Privacy Rule took effect on April 14, 1003. Citizens
for Health, 2004 U.S. Dist. LEXIS 5745, at *27. Accepting
these facts as true, as we must at this stage in the litigation, it
follows that invalidating the Privacy Rule is likely to redress her
alleged injury by restoring the status quo ante.
With respect to the “traceability” prong of the
justiciability requirement, we conclude that Citizens’ alleged
injury is traceable to the promulgation of the Privacy Rule for
two reasons. First, notices that plaintiffs received from covered
entities such as Kaiser Permanente, Eckerd Drugs and Genovese
Drugs, and Blue Cross/Blue Shield of Delaware explain the
entities’ intent to use and disclose plaintiffs’ health information
without consent (i.e., the sources of the alleged injury at the
heart of this case) using language lifted directly from the Privacy
Rule itself. Second, plaintiff’s statement in her affidavit that her
ability to restrict the use and disclosure of her health information
changed after April 14, 2003, the Privacy Rule’s effective date,
Citizens for Health, 2004 U.S. Dist. LEXIS 5745, at *28-30,
implies that the Rule is a “cause in fact” of her alleged injury.
We emphasize that, as justiciability is a “threshold”
matter, The Pitt News, 215 F.3d at 360, our analysis for these
purposes is distinct from our analysis of the merits of plaintiffs’
claims. As a result, our determination that Citizens’ alleged
injuries are “fairly traceable” to the Secretary’s promulgation of
19
claims in turn.
A. Fifth Amendment Substantive Due Process Claim
In discussing Citizens’ Fifth Amendment claim, the
District Court noted that substantive due process bars the
government from depriving individuals of life, liberty, or
property without due process of law, but it does not “‘impose an
affirmative obligation on the State to ensure that those interests
do not come to harm through other means.’” Citizens for
Health, 2004 U.S. Dist. LEXIS 5745, at *46-47 (quoting
DeShaney v. Winnebago County Soc. Servs. Dep’t, 489 U.S.
189, 195 (1989)). Applying this principle to the case at hand,
the Court reasoned that, even assuming that individuals have a
constitutional right to medical privacy, the Amended Rule is
“wholly permissive with respect to whether a covered entity
should seek consent from a patient before using his or her
information for routine purposes. The Amended Rule neither
requires nor prohibits that practice.” Id. at *47-48. In short,
“[b]ecause the Amended Rule is not compulsory in nature, it
does not affirmatively interfere with any right.” Id. We agree
with the District Court that Citizens’ constitutional claims
the Privacy Rule and that rescission of the Rule is likely to
redress plaintiffs’ alleged injuries in no way amounts to a
determination that the decisions of private entities to disclose or
use plaintiffs’ health care information without their consent are
legally attributable to the federal government in such a way as
to constitute state action. See id. at 361 n.4. In fact, we reach
the opposite conclusion below.
20
should ultimately be resolved based on the nature of the state’s
involvement in light of the Amended Rule’s permissive
character. However, we think that the District Court’s analysis
does not go far enough, and that its reliance on DeShaney does
not fully explain why Citizens cannot succeed here.
We begin our analysis with the premise that the right to
medical privacy asserted by Citizens is legally cognizable under
the Due Process Clause of the Fifth Amendment, although, as
Citizens themselves concede, its “boundaries . . . have not been
exhaustively delineated.” (Appellants’ Br. at 12.) 10 Whatever
10
We express no opinion here on the scope of the federal
constitutional right to medical privacy, or on whether the injury
asserted by Citizens, if it were directly attributable to a state
actor, would amount to a constitutional violation. Citizens
assert in their brief that “the right . . . to not have [ones’]
personal and identifiable health information made public or
disclosed to numerous government employees in routine
situations is a fundamental right implicit in the concept of
ordered liberty and deeply rooted in the Nation’s history.”
(Appellants’ Br. at 20.) But the question of the scope of the
constitutional right to privacy in one’s medical information is
largely unresolved. See, e.g., Whalen v. Roe, 429 U.S. 589, 602
(1977) (recognizing that, despite constitutionally protected
interest in avoiding disclosure of personal matters, “disclosures
of private medical information to doctors, to hospital personnel,
to insurance companies, and to public health agencies are often
an essential part of modern medical practice even when the
disclosure may reflect unfavorably on the character of the
21
those boundaries may be, it is undisputed that a violation of a
citizen’s right to medical privacy rises to the level of a
constitutional claim only when that violation can properly be
ascribed to the government. The Constitution protects against
state interference with fundamental rights. It only applies to
restrict private behavior in limited circumstances. Because such
circumstances are not present in this case, and because the
“violations” of the right to medical privacy that Citizens have
asserted, if they amount to violations of that right at all, occurred
at the hands of private entities, the protections of the Due
Process Clause of the Fifth Amendment are not implicated in
this case. We will accordingly affirm the District Court’s
finding that the Secretary did not violate Citizens’ constitutional
rights when he promulgated the Amended Rule.
patient”); United States v. Westinghouse Elec. Corp., 638 F.2d
570, 578 (3d Cir. 1980) (“[T]he right of an individual to control
access to his or her medical history is not absolute.”). And,
although Citizens contend that “governmental intrusions” on the
right to privacy are subject to “heightened scrutiny,” the
standard of review we would apply would depend on the
specific nature of the asserted violation. See Fraternal Order of
Police v. City of Philadelphia, 812 F.2d 105, 110 (3d Cir. 1987)
(“Most circuits appear to apply an ‘intermediate standard of
review’ for the majority of confidentiality violations, . . . with a
compelling interest analysis reserved for ‘severe intrusions’ on
confidentiality.” (citations omitted)). Because we conclude that
Citizens’ claims are more appropriately resolved through
application of the state action doctrine, we do not decide these
difficult questions now.
22
“The Constitution structures the National Government,
confines its actions, and, in regard to certain individual liberties
and other specified matters, confines the actions of the States.
With a few exceptions, . . . constitutional guarantees of
individual liberty and equal protection do not apply to the
actions of private entities.” Edmonson, 500 U.S. at 619.
Indeed, it is well established that the substantive component of
due process, embodied in both the Fifth and Fourteenth
Amendments,11 “‘provides heightened protection against
government interference with certain fundamental rights and
liberty interests.’” Troxel v. Granville, 530 U.S. 57, 65 (2000)
(quoting Washington v. Glucksberg, 521 U.S. 702, 720 (1997))
(emphasis added); see also Reno v. Flores, 507 U.S. 292, 301
(1993). As explained in DeShaney, the Due Process Clauses of
the Fifth and Fourteenth Amendments were intended to prevent
federal and state governments “‘from abusing [their] power, or
employing it as an instrument of oppression.’” 489 U.S. at 196
(quoting Davidson v. Cannon, 474 U.S. 344, 348 (1986)). Their
“purpose was to protect the people from the State, not to ensure
that the State protected them from each other.” Id.
11
In a due process claim brought under the Fifth Amendment,
the “State” in the state action analysis is the federal government.
See Malloy v. Hogan, 378 U.S. 1, 26 (1964) (“‘Due process of
law is secured against invasion by the federal Government by
the Fifth Amendment, and is safeguarded against state action in
identical words by the Fourteenth.’”) (quoting Betts v. Brady,
316 U.S. 455, 462 (1942)); see also Public Utilities Comm’n v.
Pollak, 343 U.S. 451, 461-62 (1952).
23
At first glance, the posture of this case seems different
from that of most state action cases. The issue of state action
usually arises where plaintiffs assert that their rights have been
violated by private parties who, they claim, are acting on behalf
of the state. E.g., Jackson v. Metro. Edison Co., 419 U.S. 345
(1974) (customer suing private utility company for violation of
procedural due process on the theory that the utility was a “state
actor” by virtue of a state-granted monopoly and extensive
state regulation). In this case, by contrast, the action that
Citizens challenge–the promulgation of the Amended Rule by
the Secretary–is clearly government conduct. As noted above,
however, the injury that Citizens allege is that their “personal
health information” is being “used and disclosed, without their
permission and against their will” by third parties. (Appellants’
Br. at 2.) To support their claims, Citizens point to privacy
notices that they received from private health care providers and
pharmacies. See Citizens for Health, 2004 U.S. Dist. LEXIS
5745, at *27-28. Citizens did not challenge any use or
disclosure by the Secretary himself, or urge that the third parties
were somehow acting on the Secretary’s behalf, before the
District Court.12 The relevant question, then, is whether the
12
To be sure, Citizens and amici curiae have referred to other
actions on the part of the federal government besides the
promulgation of the Amended Rule that they believe violate the
Fifth Amendment in their arguments before this court. For
instance, they argue in their briefs that, as the supervisor of a
number of federal programs that qualify as “health plans” under
HIPAA–including Medicare, Medicaid, and the Indian Health
Services Programs–under the Amended Rule, HHS could make
24
Secretary, as a state actor, was sufficiently involved in
producing the harm Citizens assert to satisfy the Constitution’s
state action requirement.
As noted above, the District Court touched on the state
action issue when it applied DeShaney’s holding that due
process does not impose an affirmative obligation on the State
to protect individuals’ interests in life, liberty, or property from
harm inflicted by private actors. See 489 U.S. at 195. But the
District Court’s analysis in this respect was incomplete.
Although the fundamental principle that due process protections
apply only to prevent injury attributable to conduct of the State
underlies the discussion in DeShaney, the Supreme Court’s
analysis in that case did not focus on “state action” as such.
There, the Court was presented with a claim against a local
government for its failure to prevent a father from physically
abusing his son to the point of permanent injury where the local
social services agency knew of the abuse but failed to remove
the child from the father’s custody. Id. at 191. Plaintiffs argued
that the State was “categorically obligated” to protect the child
from abuse and that, given this obligation, the State’s failure to
act was a proper basis for a due process challenge. Id. at 195.
disclosures of protected health information as a covered entity.
(Amici Supp. Br. at 6.) However, Citizens here challenge the
Secretary’s promulgation of the Privacy Rule, not specific
disclosures by HHS or any of the federal agency “health plans”
that it supervises. Whether a challenge to such specific
disclosures would satisfy the Constitution’s state action
requirement thus remains outside the scope of this appeal.
25
The Court’s analysis thus sought to determine whether due
process imposed a “duty” or “obligation” on the State to protect
individuals from private harm, not “whether the State was
sufficiently involved [in the privately caused harm] to treat that
decisive conduct as state action.” Tarkanian, 488 U.S. at 192.
In this case, DeShaney helps resolve a preliminary
question: Was the Secretary obliged to prohibit any and all
disclosures without consent in order to protect privacy rights
across the board? We think the District Court appropriately
relied on DeShaney to answer that question in the negative. But
DeShaney does not reach the specific question before us: Is the
nonconsensual use or disclosure of individual health information
by private parties, as permitted by the Amended Rule, legally
attributable to the Secretary? We conclude that it is not.
To answer this question, we must determine “whether
there is a sufficiently close nexus between the State and the
challenged action of the regulated entity [–the private party–] so
that the action of the latter may fairly be treated as that of the
State itself.” Jackson, 419 U.S. at 351. Where, as here, plaintiff
argues that the State has “authorized” or “empowered” a private
entity to act in a way that directly brings about the alleged
injury, our inquiry focuses on “whether the State provided a
mantle of authority that enhanced the power of the harm-causing
individual actor.” Tarkanian, 488 U.S. at 192. Unfortunately,
there is no “infallible test” to employ in this analysis. Reitman
v. Mulkey, 387 U.S. 369, 378 (1967). Rather, it is “‘[o]nly by
sifting facts and weighing circumstances’ on a case-by-case
basis [that] a ‘nonobvious involvement of the State in private
conduct [can] be attributed its true significance.’” Id. (quoting
26
Burton v. Wilmington Parking Auth., 365 U.S. 715, 722
(1961)).
The Supreme Court provided guidance as to what
satisfies the Constitution’s state action requirement in Adickes
v. S.H. Kress & Co., 398 U.S. 144 (1970). In that case, the
Court explained that actions challenged on constitutional
grounds fall somewhere along a continuum, with direct action
by the State on one side and action by a “private party not acting
against a backdrop of state compulsion or involvement” on the
other. Id. at 168. Whereas the former meets the state action
requirement for constitutional claims, the latter does not
(although it could form the basis for a claim on statutory or
common law grounds, depending on the alleged violation). The
Court further elaborated that, along this continuum, the
enactment of a state law “requiring” violation of individual
rights, and “enforcement” of such a law establish the requisite
state action. Id. at 170. “[A] State is responsible for the
discriminatory act of a private party when the State, by its law,
has compelled the act” or when the State has “commanded” a
particular result. Id. (emphasis added) (citing Peterson v. City
of Greenville, 373 U.S. 244, 248 (1963); Robinson v. Florida,
378 U.S. 153 (1964); Lombard v. Louisiana, 373 U.S. 267
(1963); Shuttlesworth v. Birmingham, 373 U.S. 262 (1963)).
The first inquiry, then, is whether the Amended Rule can
fairly be read to “require,” “compel,” or “command” routine use
disclosures without consent. We conclude that it cannot. The
fact that subsection (b) of the Rule expressly permits covered
entities to obtain consent belies such an interpretation. See 45
C.F.R. § 164.506(b)(1) (“A covered entity may obtain consent
27
of the individual to use or disclose protected health information
to carry out treatment, payment, or health care operations.”)
(emphasis added). Thus, the Amended Rule does not directly
“provide a mantle of authority that enhance[s] the power of”
health care providers and other entities, Tarkanian, 488 U.S. at
192.
Citizens argue that the Amended Rule’s grant of
“regulatory permission” to make the challenged uses and
disclosures, see, e.g., 67 Fed. Reg. at 53,209, 53,211, 53,212
(discussing Amended Rule), indirectly provides the requisite
“mantle of authority”. To demonstrate a link between the
Amended Rule and private parties’ use and disclosure of
Citizens’ health information without their consent, Citizens
point to two sources: (1) changes in the privacy policies of
covered entities, and (2) evidence that some entities have begun
ignoring applicable state privacy laws. On the first point,
Citizens have identified at least one covered entity that has
adopted a blanket policy of refusing all requests for restrictions
on uses and disclosures of health information since the
promulgation of the Amended Rule.13 They further assert that
13
(See Appellants’ Br. at 26 (quoting Kaiser Permanente’s
Notice of Privacy Practices (“You may request that we limit our
uses and disclosures of your [personal health information] for
treatment, payment, and health care operations purposes.
However, by law, we do not have to agree to your request.
Because we strongly believe that this information is needed to
appropriately manage the care of our members/patients, it is our
policy to not agree to requests for restrictions.”)).)
28
some covered entities have simply ignored applicable, more
restrictive, state laws in making such uses and disclosures.14
Our reading of the case law discussed below, however,
leads us to the conclusion that the fact that a private party
changed its behavior in response to a law does not give the law
the coercive quality upon which the state action inquiry depends
unless the law itself suddenly authorized something that was
previously prohibited. Citizens’ argument assumes (1) that
14
Citizens noted in their Reply Brief:
As Plaintiffs noted at oral argument before the
District Court, covered entities in Pennsylvania
and Delaware are using and disclosing Plaintiffs’
health information without consent under the
authority granted by the Amended Rule despite a
Delaware law that prohibits such disclosures
without “informed consent of the individual” and
a Pennsylvania law that deems it “unprofessional
conduct” and a licensure violation for a licensed
health professional to “depart from or fail[] to
conform to an ethical or quality standard of the
profession.”
(Appellants’ Reply Br. at 6 n.7 (citations omitted).) We
note that, to the extent that these contentions are
accurate, Citizens are free to pursue these covered
entities directly under state law. That private entities are
violating Citizens’ state statutory rights does not in any
way imply that the Secretary has violated Citizens’
constitutional rights.
29
covered entities were previously prohibited from making
nonconsensual uses or disclosures for routine uses and (2) that
the Amended Rule’s “authorization” somehow permits uses or
disclosures that were previously “unauthorized”. But there is no
authority for either proposition. Citizens have not shown that
federal law prohibited nonconsensual uses or disclosures of
health information before the Rule was promulgated.15 And the
preemption provisions of HIPAA and the Amended Rule
expressly provide that any state statutes that prohibited such uses
and disclosures before the Amended Rule was promulgated
remain in effect.16 Because there is no indication that the
15
Citizens rely on Federal Rule of Evidence 501 and the
recognition of common law evidentiary privileges establishing
special treatment for such information to establish that the uses
and disclosures “authorized” by the Rule were prohibited before
its promulgation. (Appellants’ Reply Br. at 15.) But the Rule
of Evidence and the common law of privilege are just
evidentiary rules. They are not Acts of Congress or regulations
that prohibit disclosure outside of court proceedings or
otherwise provide Citizens with some affirmative “right” against
disclosure of their information by private parties without their
consent.
16
Citizens contend that a number of otherwise “more
stringent” state laws provide exceptions for disclosures that are
“authorized” or “permitted” by federal law. (See Appellants’
Reply Br. at 13-14 & n.9.) Whether or not that is the case, the
fact remains that the Secretary has repeatedly emphasized that
the Privacy Rule defers to states that impose stringent consent
30
nonconsensual uses and disclosures permitted by the Amended
requirements. See, e.g., Standards for Privacy of Individually
Identifiable Health Information, 67 Fed. Reg. 53,182, 53,212
(Aug. 14, 2002) (“The Privacy Rule provides a federal floor of
privacy protection. State laws that are more stringent remain in
force.”); Notice of Proposed Rulemaking, Standards for Privacy
of Individually Identifiable Health Information, 64 Fed. Reg.
59,918, 59,997 (Nov. 3, 1999) (“We recognize that many State
laws require patients to authorize or consent to disclosures of
their health information for treatment and/or payment purposes.
We consider individual authorization generally to be more
protective of privacy interests than the lack of such
authorization, so such State requirements would generally stand
. . . .”). We take the Secretary’s assurances that the Privacy Rule
leaves pre-existing state law privacy rights in place at face
value, particularly in light of the express non-preemption
provisions for “more stringent” state laws in HIPAA and the
Privacy Rule. As such, we do not read the Rule to “authorize”
or “permit” disclosures that state laws would otherwise prohibit.
Cf. Fidelity Fed. Sav. & Loan Ass’n v. de la Cuesta, 458 U.S.
141, 154 (1982) (“When the administrator promulgates
regulations intended to pre-empt state law, the court’s inquiry is
. . . limited: ‘If [h]is choice represents a reasonable
accommodation of conflicting policies that were committed to
the agency’s care by the statute, we should not disturb it unless
it appears from the statute or its legislative history that the
accommodation is not one that Congress would have
sanctioned.’” (quoting United States v. Shimer, 367 U.S. 374,
383 (1961)).
31
Rule were prohibited before the Rule went into effect, we have
difficulty understanding how the Amended Rule “authorizes”
covered entities to take action that they could not have otherwise
taken. In the words of the Tarkanian test, Citizens have not
shown how, by promulgating the Amended Rule, the Secretary
“enhanced the power” of the covered entities to use or disclose
health information without patients’ consent; covered entities
had this power already.
By way of analogy, assume that Congress were to pass
legislation permitting private cinema operators, at their
discretion, to search all moviegoers for any reason, without any
showing of probable cause or reasonable suspicion. Although
the Fourth Amendment would preclude the federal government
from conducting such a search, private cinema operators are not
bound by the Fourth Amendment, and absent any other law
prohibiting it, private cinema operators were already “permitted”
to conduct such a search before the new legislation took effect.
To the extent that this new legislation changes the legal
landscape at all, then, it only codifies a power that cinema
operators had already. The codification does not transform the
private exercise of the codified power into “state action.”
Similarly, although the codification itself is clearly government
action, it seems insufficient to endow a moviegoer’s challenge
to a search by a cinema operator with constitutional significance
given that the codification has neither enhanced nor diminished
the individual moviegoer’s rights.
None of the cases that Citizens or amici cite supports the
view that a government authorization of conduct that was
already legally permissible satisfies the constitutional state
32
action requirement. It is true that these cases find state action
based on the enactment of statutes that permit private parties to
infringe the constitutional rights of others.17 But the laws that
the Supreme Court has struck down in these cases allowed
private parties to take some action (usually discrimination based
on race) where they would otherwise have been prohibited from
doing so. In other words, the Court found that the state, by
enacting these laws, had “empowered” private parties to act in
ways that would have been prohibited but for the enactment of
the law. As we explained above, that is not the case here.
The Supreme Court’s decision in Reitman v. Mulkey, 387
U.S. 369 (1967), illustrates this point. That case involved a
constitutional challenge to an amendment to the California
Constitution that allowed private persons absolute discretion to
refuse to sell, lease, or rent property to another. The amendment
17
(Amicus Br. of Texas Civil Rights Project at 11-14 (citing
Reitman v. Mulkey, 387 U.S. 369 (1967) (California
Constitution could not provide that all persons have the absolute
discretion to refuse to sell, lease, or rent property to another);
Gilmore v. City of Montgomery, 417 U.S. 556 (1974) (city
could not allow private groups to use and control city facilities
where those private groups could deny access to the facility on
the basis of race); Nixon v. Condon, 286 U.S. 73 (1932) (state
statute could not permit political parties to deny party
membership on the basis of race); McCabe v. Atchison, Topeka,
& Santa Fe Railway Co., 235 U.S. 151 (1914) (state statute
could not permit railway to provide accommodations for
Caucasian patrons, but not African American patrons)).)
33
effectively nullified California statutes that prohibited racial
discrimination in private housing transactions. Id. at 374. The
California Supreme Court reasoned that, because the State had
taken affirmative action designed to make private discrimination
legally possible–changing the situation from one in which
private discrimination was restricted by statute to one in which
it was encouraged–the State was at least a partner in the
challenged discrimination. Id. at 375. The Court noted that the
State could maintain a neutral position regarding private
discrimination and was not bound by the Federal Constitution to
forbid it. But once the State acted in a way that encouraged
private discrimination, even if it stopped short of mandating
such action, it crossed the constitutional line. Id.
The United States Supreme Court affirmed the judgment
of the California Supreme Court. The Court rejected
petitioners’ argument that the state court’s reasoning was flawed
because it meant that the mere repeal of a statute that prohibited
private racial discrimination could be said to “authorize” or
“encourage” discrimination simply because it permitted that
which was formerly proscribed, pointing out that the challenged
state action in case was not “the mere repeal” of prior anti-
discrimination laws. Id. at 376. Rather, the offensive action
was the state’s authorization and “constitutionalization” (under
the state constitution) of the previously forbidden private right
to discriminate. Id. Consequently, the amendment had a much
broader impact than the mere repeal of existing statutes:
Private discriminations in housing were now not
only free from [the previously enacted anti-
discrimination statutes] but they also enjoyed a far
34
different status than was true before the passage
of those statutes. The right to discriminate,
including the right to discriminate on racial
grounds, was now embodied in the State’s basic
charter, immune from legislative, executive, or
judicial regulation at any level of the state
government. Those practicing racial discrimina-
tions need no longer rely solely on their personal
choice. They could now invoke express [state]
constitutional authority, free from censure or
interference of any kind from official sources.
Id. at 380-81 (emphasis added).18 In other words, the
amendment was constitutionally offensive not only because it
18
The Court reiterated this reasoning at the conclusion of the
majority opinion:
Here we are dealing with a provision which does
not just repeal an existing law forbidding private
racial discriminations. [The amendment] was
intended to authorize, and does authorize, racial
discrimination in the housing market. The right to
discriminate is now one of the basic policies of
the State. The California Supreme Court believes
that the [amendment] will significantly encourage
and involve the State in private discriminations.
We have been presented with no persuasive
considerations indicating that these judgments
should be overturned.
Reitman, 387 U.S. at 380-81.
35
now permitted conduct that was previously prohibited, but also
because it affirmatively protected such conduct under the state
constitution.
The Reitman Court elaborated on this principle by
referring to its ruling in Nixon v. Condon, 286 U.S. 73 (1932).
It noted that, in Nixon,
the Court was faced with a statute empowering
the executive committee of a political party to
prescribe the qualifications of its members for
voting or for other participation, but containing no
directions with respect to the exercise of that
power. This was authority which the committee
otherwise might not have had and which was used
by the committee to bar Negroes from voting in
primary elections. Reposing this power in the
executive committee was said to insinuate the
State into the self-regulatory, decision-making
scheme of the voluntary association; the exercise
of the power was viewed as an expression of state
authority contrary to the Fourteenth Amendment.
Reitman, 387 U.S. at 379 (discussing Nixon) (emphasis added).
As in Reitman, then, the Nixon Court found that the enactment
of the statute satisfied the state action requirement because the
challenged law provided the committee with a power that it
“otherwise might not have had.” Id. Because the Amended
Rule does not endow covered entities with any power that they
did not have otherwise, the action of the Secretary that Citizens
challenge does not fit the Reitman / Nixon mold.
36
The Amended Rule has not enhanced covered entities’
power, under federal or state law, to use or disclose confidential
health information without patients’ consent. The Rule does not
“compel” or “command” or “require” that private entities use
information without patients’ consent. See Adickes, 398 U.S.
at 170. Nor has the Rule changed the situation from one in
which nonconsensual routine uses and disclosures were
prohibited to one in which they are now encouraged, see
Reitman, 387 U.S. 369, or conferred authority on health care
providers that they might not have had otherwise. See Nixon,
286 U.S. 73. Accordingly, we conclude that the Secretary’s
promulgation of the Amended Rule does not satisfy the
Constitution’s state action requirement.
The fact that covered entities are construing the “may
use” language as constituting a new federal seal of approval, and
may be ignoring state laws regarding protections to be afforded
to such information, is regrettable and disquieting. That routine
requests for privacy are apparently being ignored by covered
entities is even more unfortunate. But our task here is to
determine the constitutionality of the Amended Rule, not the
propriety of covered entities’ actions under state or common
law. Because, for all of the reasons stated above, the covered
entities’ actions that Citizens challenge do not implicate the
federal government, we reject Citizens’ Fifth Amendment claim.
B. First Amendment Claim
Citizens’ First Amendment claim is that the Amended
Rule infringes individuals’ right to confidential communications
with health care practitioners, i.e., a right to refrain from public
37
speech regarding private personal health information. Citizens
argue that the effect of the Amended Rule is to chill speech
between individuals and their health care practitioners because
the possibility of nonconsensual disclosures makes individuals
less likely to participate fully in diagnosis and treatment and
more likely to be evasive and withhold important information.
Further, because the Rule applies to “health information . . .
whether oral or recorded in any form or medium . . . ,” 45 C.F.R.
§ 160.103, Citizens argue that the Rule is a content-based
regulation reviewable under strict scrutiny.
We believe that a First Amendment claim is an ill-suited
challenge to the Amended Rule. Cf. South Carolina Med. Ass’n
v. Thompson, 327 F.3d 346, 355 n.4 (4th Cir. 2003) (“We
summarily dispense with appellants’ argument that the Privacy
Rule will chill patients’ rights of free speech, as we find this
claim to be without merit.”). The cases on which Citizens rely
are not authoritative on the precise issue before us. See
Bartnicki v. Vopper, 532 U.S. 514, 533 (2001) (suggesting that
“the fear of public disclosure of private conversations might
well have a chilling effect on private speech,” but ultimately
holding that any such interest was outweighed in that case by the
media’s countervailing First Amendment interest in publishing
truthful information of public concern); Jaffee v. Redmond, 518
U.S. 1, 11-12 (1996) (citing the “public interest” in confidential
communications between a psychotherapist and her patient as
justification for recognizing a psychotherapist-patient privilege
in federal courts). And, more to the point, Citizens’ First
Amendment claim fails on the same grounds as their Fifth
Amendment claim: the potential “chilling” of patients’ rights to
free speech derives not from any action of the government, but
38
from the independent decisions of private parties with respect to
the use and disclosure of individual health information. For all
of the reasons enumerated above, the decisions of the private
parties to use or disclose private health information in reliance
on the Amended Rule, which may or may not “chill” expression
between health care providers and their patients, does not
implicate the government in a way that gives rise to a
constitutional claim. We will therefore affirm the District
Court’s grant of summary judgment to the Secretary on Citizens’
First Amendment claim.
C. Claims Alleging Violations of HIPAA
In claims based on HIPAA’s statutory language, Citizens
argue (1) that the Secretary exceeded the regulatory authority
delegated by HIPAA because the Act only authorizes the
Secretary to promulgate regulations that enhance privacy and (2)
that the Amended Rule impermissibly retroactively rescinded
individual rights created by the Original Rule and disturbed
Citizens’ “settled expectations” in the privacy of their health
information. We find the District Court’s analysis of these
statutory claims to be cogent. Citizens argue that the Secretary
has eliminated their reasonable expectations of medical privacy
retroactively and prospectively and that such action is
inconsistent with Congress’s intent in enacting HIPAA.
However, Citizens’ argument that the controlling policy
underlying HIPAA is medical privacy and that the Amended
Rule wholly sacrifices this interest to covered entities’ interests
in efficiency and flexibility ignores the Act’s stated goals of
“simplify[ing] the administration of health insurance,” HIPAA
pmbl., 110 Stat. at 1936, and “improv[ing] the efficiency and
39
effectiveness of the health care system,” HIPAA § 261 (stating
purpose of Subtitle F). As the District Court aptly explained,
HIPAA requires the Secretary to “balance privacy protection
and the efficiency of the health care system–not simply to
enhance privacy.” Citizens for Health, 2004 U.S. Dist. LEXIS
5745, at *43. We thus conclude that Citizens’ first HIPAA
claim lacks merit.
We also agree with the District Court’s finding that the
Amended Rule does not retroactively eliminate rights that
Citizens enjoyed under the Original Rule or under various laws
or standards of practice that existed before the Amended Rule
went into effect. Because the Original Rule was amended
before its compliance date, “[c]overed entities were never under
a legal obligation to comply with the Original Rule’s consent
requirement.” Id. at *45-46. Citizens, therefore, never enjoyed
any rights under the Original Rule at all. Nor does the Amended
Rule retroactively eliminate Citizens’ reasonable expectations
based on state law, standards of medical ethics and established
standards of practice because the Amended Rule does not
disturb any preexisting, “more stringent” state law privacy
rights. See id. at *45-46. See also Standards for Privacy of
Individually Identifiable Health Information, 67 Fed. Reg.
53,182, 53,212 (Aug. 14, 2002) (“State laws that are more
stringent [than the Privacy Rule] remain in place. In order not
to interfere with such laws and ethical standards, this Rule
permits covered entities to obtain consent. Nor is the Privacy
Rule intended to serve as a ‘best practices’ standard. Thus,
professional standards that are more protective of privacy retain
their vitality.” (emphasis added)). Accordingly, we reject
Citizens’ second HIPPA claim as well, and will affirm the grant
40
of summary judgment to the Secretary on these claims.
D. APA Claims
Lastly, Citizens challenge the rulemaking process under
the APA, contending that (1) the Secretary’s rulemaking was
arbitrary and capricious, in violation of 5 U.S.C. § 706(2)(A),
and (2) the Secretary failed to provide adequate notice of the
rescission of the consent requirement of the Original Rule, a
violation of 5 U.S.C. § 553(b)(3). Citizens argue that the
Secretary acted arbitrarily and capriciously by failing to
adequately explain the rescission of the consent requirement,
ignoring earlier findings, and failing to respond to public
comments.
We dispose of Citizens’ argument that the Secretary did
not provide adequate notice to the public of his intention to
rescind the consent requirement first. On this point, the District
Court correctly pointed out that the APA requires a notice to
provide either “the terms or substance of the proposed rule” or
“a description of the subjects and issues involved.” Citizens for
Health, 2004 U.S. Dist. LEXIS 5745, at *42-43 (quoting 5
U.S.C. § 553(b)(3)). In this case, the Notice for Proposed
Rulemaking did both. See Standards for Privacy of Individually
Identifiable Health Information, 64 Fed. Reg. 14,776, 14,810-
14,815 (Mar. 27, 2002) (setting forth the language of the
Proposed Amended Rule); id. at 14,778-14,783 (describing the
subjects and issues involved in the proposed modification). We
will therefore affirm the District Court’s grant of summary
judgment to the Secretary on this claim.
41
We also reject Citizens’ claim that the Secretary acted
arbitrarily and capriciously in promulgating the Amended Rule.
Citizens argue that the Secretary acted arbitrarily and
capriciously in promulgating the Amended Rule by improperly
reversing a “settled course of behavior” established in the
Original Rule and adopting a policy that he had previously
rejected. When an agency rejects a “settled course of behavior,”
however, it need only supply a “reasoned analysis” for the
change to overcome any presumption that the settled rule best
carries out the policies committed to the agency by Congress.
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co.,
463 U.S. 29, 41-42 (1983) (quoting Atchison, T. & S. F. R. Co.
v. Wichita Bd. of Trade, 412 U.S. 800, 807-08 (1973)). Such an
analysis requires the agency to “examine the relevant data and
articulate a satisfactory explanation for its action including a
‘rational connection between the facts found and the choice
made.’” Id. at 43 (quoting Burlington Truck Lines, Inc. v.
United States, 371 U.S. 156, 168 (1962)).
Here, the Secretary examined the relevant data, see
Citizens for Public Health, 2004 U.S. Dist. LEXIS 5745, at *39-
41, and gave adequate consideration to the large volume of
public comments that HHS received during the rulemaking
process. Id. at *41-42. The Secretary considered other
alternatives and explained why they were unworkable. Id. at
*35-38. The Secretary also considered Congress’s dual goals in
devising the privacy standards, i.e., protecting the confidentiality
of personal health information and improving the efficiency and
effectiveness of the national health care system. Id. at *41-42.
In sum, the Secretary’s decision to respond to the
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unintended negative effects and administrative burdens of the
Original Rule by rescinding the consent requirement for routine
uses and implementing more stringent notice requirements was
explained in a detailed analysis that rationally connected the
decision to the facts. “Normally, an agency rule would be
arbitrary and capricious if the agency has relied on factors which
Congress has not intended it to consider, entirely failed to
consider an important aspect of the problem, offered an
explanation for its decision that runs counter to the evidence
before the agency, or is so implausible that it could not be
ascribed to a difference in view or the product of agency
expertise.” Id. at *43. The Secretary has not failed in any of
these respects, and, hence, we agree with the District Court’s
analysis and conclusion that the Secretary’s decision was
reasonable given the findings and that the Secretary did not act
arbitrarily and capriciously in violation of the APA.
Accordingly, we will affirm the grant of summary judgment to
the Secretary on these claims.
V. Conclusion
For the reasons set forth above, we will AFFIRM the
judgment of the District Court.
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