Planned Parenthood v. Sanchez

United States Court of Appeals

Fifth Circuit

F I L E D

REVISED MARCH 30, 2005

IN THE UNITED STATES COURT OF APPEALS March 11, 2005

Charles R. Fulbruge III

FOR THE FIFTH CIRCUIT Clerk

No. 03-50930

PLANNED PARENTHOOD OF HOUSTON AND SOUTHEAST TEXAS;

PLANNED PARENTHOOD OF NORTH TEXAS;

PLANNED PARENTHOOD OF SAN ANTONIO AND SOUTH CENTRAL TEXAS;

PLANNED PARENTHOOD OF WEST TEXAS;

PLANNED PARENTHOOD OF THE TEXAS CAPITAL REGION;

PLANNED PARENTHOOD OF CENTRAL TEXAS,

Plaintiffs-Appellees,

versus

EDUARDO J SANCHEZ, Texas Commissioner of Health,

Defendant-Appellant.

Appeal from the United States District Court

for the Western District of Texas

USDC No. A-03-CA-415-SS

Before HIGGINBOTHAM, DENNIS, and CLEMENT, Circuit Judges.

PATRICK E. HIGGINBOTHAM, Circuit Judge:

The Texas Legislature restricted the distribution of federal

family planning funds. Finding this state legislation likely

preempted by federal spending statutes, the district court granted

a preliminary injunction against its enforcement. The district

court concluded that the state legislation could not be interpreted

to permit various Planned Parenthood organizations to continue

1

receiving federal funds by creating independent affiliates. We

disagree. Persuaded that the state legislation does admit of this

potentially saving construction, we remand for further proceedings.

I

The State of Texas voluntarily participates in several federal

programs that provide funds for family planning services. Among

these programs are Title X of the Public Health Service Act,1 which

provides project grants to public and private agencies for family

planning services, and Title XX of the Social Security Act,2 which

provides block grants to the states for social services, including

family planning. The regulations for Title X specify that funds

may not be used to finance abortions or abortion-related activity.3

Both parties agree that any Title XX funds used to match Title X

funds are subject to the same restrictions. Furthermore, Title XX

funds may not be used for the provision of medical care.4 The

State also receives Medicaid funding under Title XIX of the Social

1

42 U.S.C. § 300 et seq.

2

42 U.S.C. § 1397 et seq.

3

Title X provides that “[n]one of the funds appropriated under this

subchapter shall be used in programs where abortion is a method of family

planning.” 42 U.S.C. § 300a-6.

4

42 U.S.C. § 1397d(a)(4) (“[G]rants made under this subchapter may not be

used by the State, or by any other person with which the State makes arrangements

to carry out the purposes of this subchapter . . . for the provision of medical

care (other than family planning services, rehabilitation services, or initial

detoxification of an alcoholic or drug dependent individual) unless it is an

integral but subordinate part of a social service for which grants may be used

under this subchapter.”).

2

Security Act,5 which provides medical care to the needy through a

cooperative federal-state program.

The Texas Department of Health (TDH)6 distributes federal

family program grants under Titles X and XX. On May 8, 2003, TDH

sent letters to the family planning contractors that had been

approved to receive funding under TDH’s federal family planning

program grants.7 Appellees--six Planned Parenthood entities

located in various parts of Texas that had been contractors in

Texas’s family planning program for many years--were among the

groups approved for funding. Pursuant to Title X’s statutory

requirements, Appellees strictly segregated their Title X programs

from their abortion-related activities to ensure that no federal

funds were used for abortions.8 Thus, Appellees provided Title X

and XX family planning services using the federal funds disbursed

by TDH, and provided abortion services using private funding.

There is no evidence in the record to suggest that Title X or XX

funds were ever improperly commingled with private abortion funds.

5

42 U.S.C. § 1396 et seq.

6

TDH became part of the Texas Department of State Health Services (TDSHS)

on September 1, 2004. See Act of June 10, 2003, 78th Leg., R.S., Tex. H.B. 2292.

Eduardo J. Sanchez, previously the Texas Commissioner of Health, is now the

Commissioner of the TDSHS. For simplicity we will continue refer to the

defendant as TDH.

7

The letters stated that the “funding award is subject to change as a

result of legislation and/or changes in appropriations.”

8

One of the Appellees, Planned Parenthood of the Texas Capital Region, had

not yet begun providing abortions but intended to “break ground” on the

construction of an abortion clinic in September 2003.

3

Just under one month later, on June 2, 2003, the Texas

Legislature passed the Texas General Appropriations Act.9 The Act

included Rider 8, a provision restricting distribution of federal

family planning money, including Title X and XX funds.10 Rider 8

provides:

8. Prohibition on Abortions

a. It is the intent of the Legislature that no

funds shall be used to pay the direct or

indirect costs (including overhead, rent,

phones and utilities) of abortion procedures

provided by contractors of the department.

b. It is also the intent of the legislature

that no funds appropriated under Strategy

D.1.2, Family Planning, shall be distributed

to individuals or entities that perform

elective abortion procedures or that contract

with or provide funds to individuals or

entities for the performance of elective

abortion procedures.

c. If the department concludes that compliance

with b. would result in a significant

reduction in family planning services in any

public health region of the state, the

department may waive b. for the affected

region to the extent necessary to avoid a

significant reduction in family planning

services to the region. This waiver provision

shall expire on August 31, 2004, and no waiver

shall extend beyond that date.

d. The department shall include in its

financial audit a review of the use of

appropriated funds to ensure compliance with

this section.

9

78th Leg., R.S., Tex. H.B. 1. The Governor signed the Act on June 22,

2003 and it became effective on September 1, 2003.

10

Rider 8 applies to all TDH contractors receiving funds under Strategy

D.1.2, which includes federal funds granted to TDH pursuant to Title X, Title XIX

and Title XX. The parties focus primarily on Rider 8’s effect on Title X funds.

4

TDH immediately began efforts to implement Rider 8. On June

10, 2003, TDH sent letters to previously approved family planning

contractors, including Appellees, requiring them to sign and return

an affidavit by June 30, 2003. The affidavit was a pledge by a

contractor applying for Title X and XX funds that, as of September

1, 2003, it would perform no elective abortion procedures and that

it would not contract with or provide funds to individuals or

entities for the performance of abortions. Appellees were informed

that unless they made this pledge they would be ineligible for

participation in the funding programs.

Appellees filed suit on June 26, 2003, seeking immediate

injunctive relief. Appellees focused on section (b) of Rider 8 and

raised three basic arguments: (1) that Rider 8(b) imposes an

unconstitutional condition on Appellees’ eligibility for funds; (2)

that it imposes an unconstitutional burden on a woman’s right to

obtain an abortion; and (3) that it violates the Supremacy Clause11

by imposing additional eligibility requirements on Appellees’

receipt of federal funds that are inconsistent with the federal

funding statutes.

The district court issued a temporary restraining order on

June 30, 2003. A few days later, on August 4, 2003, the court

entered a preliminary injunction barring TDH from enforcing

11

U.S. CONST. art. VI, cl. 2.

5

paragraphs (b) and (c) of the Rider.12 The court determined that

Appellees had demonstrated a likelihood of success on the

unconstitutional condition claim and the Supremacy Clause claim.

In reaching this conclusion the court held that Rider 8 could not

be interpreted to allow Appellees effectively to continue receiving

federal funds by creating independent “affiliates”--that is, legal

entities separate from those performing abortions.

TDH appeals the court’s holding as to the unconstitutional

condition and Supremacy Clause claims, and asserts that Rider 8 can

be interpreted to allow affiliates. Appellees, in turn, contend

that the district court erred in concluding that Rider 8 imposes no

undue burden on women’s right to obtain an abortion.

II

We review the ultimate decision to grant a preliminary

injunction for an abuse of discretion.13 A decision grounded in

erroneous legal principles is reviewed de novo.14

To obtain a preliminary injunction plaintiffs must show (1) a

substantial likelihood of success on the merits, (2) a substantial

threat that plaintiffs will suffer irreparable injury if the

12

Planned Parenthood of Cent. Tex. v. Sanchez, 280 F. Supp. 2d 590 (W.D.

Tex. 2003).

13

See Doran v. Salem Inn, Inc., 422 U.S. 922, 931-32 (1975) (“[W]hile the

standard to be applied by the district court in deciding whether a plaintiff is

entitled to a preliminary injunction is stringent, the standard of appellate

review is simply whether the issuance of the injunction . . . constituted an

abuse of discretion.”); Karaha Bodas Co., L.L.C. v. Perusahaan Pertambangan

Minyak Dan Gas Bumi Negara, 335 F.3d 357, 363 (5th Cir. 2003).

14

See Karaha Bodas Co., 335 F.3d at 363.

6

injunction is not granted, (3) that the threatened injury outweighs

any damage that the injunction might cause the defendant, and (4)

that the injunction will not disserve the public interest.15 A

preliminary injunction is an “extraordinary remedy” and should only

be granted if the plaintiffs have “‘clearly carried the burden of

persuasion’ on all four requirements.”16

III

We turn to the Supremacy Clause claim. Appellees assert that

Rider 8 is invalid under the Supremacy Clause because it adds

eligibility requirements to the receipt of federal funds that are

inconsistent with federal law. The district court found a

substantial likelihood of success on the merits. In our review, we

first explain why this is a preemption claim. Then we examine

whether the district court had jurisdiction and whether the

Appellees stated a claim, as well as the role of 42 U.S.C. § 1983

in this case.

A

Where, as here, a state law purportedly conflicts with federal

statutes enacted under the Spending Clause,17 courts often proceed

15

Id.

16

Id. (quoting Miss. Power & Light Co. v. United Gas Pipe Line Co., 760

F.2d 618, 621 (5th Cir. 1985)).

17

U.S. CONST. art. 1, § 8, cl. 1 (“The Congress shall have Power To lay and

collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the

common Defence and general Welfare of the United States . . . .”).

7

without invoking “preemption.”18 Some courts have explicitly found

that preemption was not an issue in such cases,19 while others have

expressed ambivalence.20 The growing consensus, however, is to

analyze such claims under traditional preemption doctrine.21 The

First Circuit gave the following explanation:

18

See, e.g., Townsend v. Swank, 404 U.S. 282 (1971) (holding state law

invalid by virtue of conflict with federal Spending Clause legislation but

without reference to “preemption”); King v. Smith, 392 U.S. 309 (1968) (same).

19

See, e.g., Jane Does 1 Through 4 v. State of Utah Dep’t of Health, 776

F.2d 253, 256 (10th Cir. 1985) (finding state parental consent conditions

violated Title X, but noting that “[w]e do not see a preemption issue in this

case”).

20

See, e.g., N.Y. State Dep’t of Soc. Servs. v. Dublino, 413 U.S. 405, 411

n.9 (1973) (noting that “pre-emption” is used “in a rather special sense” because

the litigation addresses whether a state has gone too far in placing conditions

on the receipt of federal funds, rather than the “arguable federal pre-emption

of a wholly independent state program dealing with the same or a similar

problem”).

Another court expressed the following:

It would not seem to be of any consequence whether this

is described as “preemption” in the sense used in the

traditional doctrine, or as an application of the

Supremacy Clause to the administration of state-federal

programs derived from the voluntary nature of state

participation in the programs. The latter is a more

realistic treatment . . . .

. . . .

. . . If the [state chooses] to participate, there

is thereby accepted a limitation or restriction on state

statutes or regulations which conflict with the federal

statutes. This has consequences similar to the

traditional preemption doctrine but as mentioned they

come about by a choice made by the state.

Planned Parenthood Ass’n of Utah v. Dandoy, 810 F.2d 984, 988 (10th Cir. 1987)

(citation omitted).

21

See, e.g., Pharm. Research & Mfrs. of Am. v. Walsh, 538 U.S. 644, 661-68

(2003) (plurality) (addressing potential conflict between state statute and

Medicaid as preemption question); id. at 684-85 (O’Connor, J., joined by

Rehnquist, C.J., and Kennedy, J., dissenting) (also utilizing preemption

framework); Lawrence County v. Lead-Deadwood Sch. Dist. No. 40-1, 469 U.S. 256,

259 n.6, 260 (1985).

8

The vast majority of preemption cases

involve situations in which Congress has

exercised its power under the Commerce Clause.

Here, however, we are dealing with a

congressional exercise of the spending power,

not the commerce power, and the dynamics

between preemption and Congress’s reliance on

the spending power differ appreciably from

those applicable in the Commerce Clause

context. The principal difference is that

whereas preemptive legislation enacted under

the Commerce Clause trumps state law

throughout the United States ex proprio

vigore, preemptive legislation enacted under

the spending power presents states with a

choice: they may either accept federal funds

(and subject themselves to requirements

imposed by federal law) or decline such funds

(and avoid the necessity of abiding by those

requirements).22

Because TDH has “willingly tapped into the federal fisc,”23 we

use the terminology and framework of preemption in analyzing

Appellees’ Supremacy Clause claim, as did the district court

below.24

B

We next ask whether the district court properly exercised

jurisdiction over Appellees’ preemption claim and whether

Appellees’ efforts state a claim. We answer in the affirmative.

1

22

O’Brien v. Mass. Bay Transp. Auth., 162 F.3d 40, 42-43 (1st Cir. 1998)

(citation omitted) (citing LAURENCE H. TRIBE, AMERICAN CONSTITUTIONAL LAW § 6-29, at 508

(2d ed. 1988)); cf. Frew ex rel. Frew v. Hawkins, 540 U.S. 431, (2004) (upholding

enforcement of consent decree as federal law against state agency, TDH, that

entered into it).

23

O’Brien, 162 F.3d at 43.

24

See Sanchez, 280 F. Supp. 2d at 596-605.

9

It is well-established that the federal courts have

jurisdiction under 28 U.S.C. § 1331 over a preemption claim seeking

injunctive and declaratory relief.25 In Shaw v. Delta Airlines, the

Supreme Court held:

A plaintiff who seeks injunctive relief from

state regulation, on the ground that such

regulation is pre-empted by a federal statute

which, by virtue of the Supremacy Clause of

the Constitution, must prevail, thus presents

a federal question which the federal courts

have jurisdiction under 28 U.S.C. § 1331 to

resolve.26

We recently affirmed this principle, holding that when a plaintiff

seeks “injunctive relief based on a federal statute, federal

question jurisdiction clearly exists based on Shaw.”27 Several of

our sister circuits have explicitly agreed.28

2

25

See, e.g., Verizon Md., Inc. v. Pub. Serv. Comm'n of Md., 535 U.S. 635,

641-43 (2002); Lawrence County, 469 U.S. at 259 n.6; Shaw v. Delta Air Lines,

Inc., 463 U.S. 85, 96 n.14 (1983).

26

Shaw, 463 U.S. at 96 n.14.

27

Gillis v. Louisiana, 294 F.3d 755, 760 (5th Cir. 2002) (citation

omitted); see also Hope Med. Group for Women v. Edwards, 63 F.3d 418 (5th Cir.

1995) (assuming jurisdiction exists for federal courts to adjudicate plaintiffs’

claims that state abortion law conflicts with federal spending statute).

28

See Qwest Corp. v. City of Santa Fe, 380 F.3d 1258, 1264 n.1 (10th Cir.

2004) (where preemption “is the basis for a federal claim in [plaintiff’s]

complaint in federal court, [Shaw and Verizon] make clear that there is federal

question jurisdiction in these circumstances”); Local Union No. 12004, United

Workers of Am. v. Massachusetts, 377 F.3d 64, 74 (1st Cir. 2004) (“[A] claim of

preemption . . . does constitute a federal question under § 1331.”); Ill. Ass’n

of Mortgage Brokers v. Office of Banks & Real Estate, 308 F.3d 762, 765 (7th Cir.

2002) (finding that § 1331 provides jurisdiction over preemption claim); St.

Thomas-St. John’s Hotel & Tourism Ass’n, Inc. v. Government of the United States

Virgin Islands, 218 F.3d 232, 241 (3d Cir. 2000) (same).

10

TDH argues that, even with federal jurisdiction over the

claim, it was improper for the district court to resolve it because

Appellees were not seeking to vindicate any right or to enforce any

duty running to them--a necessary host, in the view of TDH, to

Appellees’ assertion that Rider 8 was preempted by federal Spending

Clause legislation. We disagree.

Cognizant of the distinction between the inquiry into federal

court jurisdiction and whether a claim has been stated, we remind

that “[i]t is firmly established [by Supreme Court precedent] that

the absence of a valid (as opposed to arguable) cause of action

does not implicate subject-matter jurisdiction, i.e., the courts’

statutory or constitutional power to adjudicate the case.”29

Recently, however, a majority of the Supreme Court in

Pharmaceutical Research and Manufacturers of America v. Walsh

implicitly rejected the contention that asserting the preemptive

force of federal Spending Clause legislation is itself no claim.30

In that case, the plaintiff alleged that a state regulation was

preempted by Medicaid, a federal Spending Clause statute. The

lower court, in discussing the plaintiff’s standing, observed that

29

Verizon Md., Inc., 535 U.S. at 642-43 (internal quotation marks and

citation omitted); see also Steel Co. v. Citizens for Better Env’t, 523 U.S. 83,

96 (“[N]onexistence of a cause of action was no proper basis for a jurisdictional

dismissal.”); Bell v. Hood, 327 U.S. 678, 682 (1946) (“Jurisdiction . . . is not

defeated . . . by the possibility that the averments might fail to state a cause

of action on which petitioners could actually recover. For it is well settled

that the failure to state a proper cause of action calls for a judgment on the

merits and not for a dismissal for want of jurisdiction.”).

30

538 U.S. at 661-69 (plurality); id. at 684-90 (O’Connor, J.,

dissenting).

11

the plaintiff had “not asserted an action to enforce rights under

the Medicaid statute . . . but rather a preemption-based challenge

under the Supremacy Clause. In this type of action, it is the

interests protected by the Supremacy Clause, not by the preempting

statute, that are at issue.”31 A plurality of four Justices,

apparently accepting these conclusions, reached the merits of the

plaintiff’s claim,32 as did the three dissenting Justices.33 In sum,

seven Justices assumed both that the federal courts have

jurisdiction and that a claim was stated for Spending Clause

preemption, tacitly rejecting the suggestion advanced by two

concurring Justices--and today espoused by TDH--that no claim was

stated.34

Following Walsh, the D.C. Circuit addressed and quickly

dispensed with a defendant state agency’s contention that

31

Pharm. Research & Mfrs. of Am. v. Concannon, 249 F.3d 66, 73 (1st Cir.

2001), aff’d sub nom. Pharm. Research & Mfrs. of Am. v. Walsh, 538 U.S. 644

(2003).

32

Walsh, 538 U.S. at 661-69 (plurality) (finding state law not preempted).

33

Id. at 684-90 (O’Connor, J., dissenting) (arguing that state regulation

was preempted).

34

See Walsh, 538 U.S. at 675 (Scalia, J., concurring) (“I would reject

petitioner’s statutory claim on the ground that the remedy for the States’s

failure to comply with the obligations it has agreed to undertake under the

Medicaid Act is set forth in the act itself: termination of funding by the

Secretary of the Department of Health and Human Services. Petitioner must seek

enforcement of the Medicaid conditions by that authority . . . .” (citations

omitted)); id. at 683 (Thomas, J., concurring) (expressing doubt as to “whether

third parties may sue to enforce Spending Clause legislation--through pre-emption

or otherwise”). These arguments have great purchase, and they might also apply

in the Title X context, see, e.g., 42 C.F.R. § 59.7(b); 42 C.F.R. § 59.10; 42

C.F.R. § 50.404(a)(1); however, their persuasive force is wasted on the inferior

courts. Rather, they must persuade at least three other Justices.

12

plaintiffs “have no private right of action for injunctive relief

against the state” based on the preemptive effect of a federal

Spending Clause statute.35 The court explained that “[b]y

addressing the merits of the parties’ arguments without mention of

any jurisdictional flaw . . . seven Justices [in Walsh] appear to

have sub silentio found no flaw.”36

Outside the Spending Clause context, the Supreme Court has

repeatedly entertained federal preemption claims seeking injunctive

and declaratory relief.37 Shaw itself indicates that the federal

courts have jurisdiction “to resolve” such claims.38 In Verizon

Maryland, Inc. v. Public Service Commission of Maryland, the Court

recently reinforced this understanding in holding that there was

jurisdiction to resolve Verizon’s claim that a state utility

commission’s order was inconsistent with federal law.39 The Court

noted:

Whether the text of [the federal statute] can

be so construed [to provide for federal court

review] is a question we need not decide. For

we agree with the parties’ alternative

35

Pharm. Research & Mfrs. of Am. v. Thompson, 362 F.3d 817, 819 n.3 (D.C.

Cir. 2004).

36

Id.

37

See, e.g., Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (2001); Crosby

v. Nat’l Foreign Trade Council, 530 U.S. 363 (2000); Shaw, 463 U.S. at 96 n.14;

see also David Sloss, Constitutional Remedies for Statutory Violations, 89 IOWA

L. REV. 355, 380 & n.141 (2004) (collecting cases).

38

Shaw, 463 U.S. at 96 n.14 (emphasis added).

39

535 U.S. at 642.

13

contention, that even if [the federal statute]

does not confer jurisdiction, it at least does

not divest the district courts of their

authority under 28 U.S.C. § 1331 to review the

Commission’s order for compliance with federal

law.40

The Court explicitly held that there was jurisdiction to entertain

the preemption claim, and implicitly accepted that the plaintiffs

had a right of action to bring such a claim.41

Our precedent likewise supports an implied right of action in

this case. In Gillis v. Louisiana, after examining the plaintiff’s

petition for injunctive relief based on federal preemption and

concluding that we had jurisdiction to consider it, we addressed

the merits without pausing to examine the footing of the claim.42

Similarly, in Hope Medical Group for Women v. Edwards, we decided

the question of whether state law conflicted with federal Spending

Clause legislation, again gliding by the question of whether a

40

Id.

41

TDH’s suggestion that Verizon is distinguishable because “the plaintiffs

identified contractual rights that were violated and therefore gave them a cause

of action under the Supremacy Clause based on their existing rights” is

unpersuasive. Verizon did not sue to enforce its contractual rights, and none

of its claims was based on its alleged contractual rights. As the Court

explained:

Verizon alleged in its complaint that the Commission

violated the Act and the FCC ruling when it ordered

payment of reciprocal compensation for ISP-bound calls.

Verizon sought a declaratory judgment that the

Commission’s order was unlawful, and an injunction

prohibiting its enforcement. We have no doubt that

federal courts have jurisdiction under § 1331 to

entertain such a suit.

Id.

42

294 F.3d 759-60 (suit removed to federal court from state court).

14

claim had been stated.43 Finally, in Self-Insurance Institute of

America v. Korioth, we confronted a claim that a Texas statutory

provision was preempted by ERISA, noting that “[t]he question of

preemption is particularly one for the federal courts and arises as

much from the Constitution as from ERISA.”44 In exercising

jurisdiction and upholding the plaintiff’s standing, we held that

the non-profit organization had proffered “allegations of actual

injury that are likely to be remedied with favorable court action”

and remanded the case for an “inquiry into the merits.”45 While

Gillis, Hope Medical and Korioth do not directly address the issue

of whether a valid cause of action existed, we assumed that one

did. Today we hold that one does.

Other circuits have similarly recognized an implied cause of

action to bring preemption claims seeking injunctive and

declaratory relief even absent an explicit statutory claim.46 One

43

63 F.3d at 423-38.

44

993 F.2d 479, 484 (5th Cir. 1993).

45

Id. at 484-85.

46

See Local Union No. 12004, 377 F.3d at 74-75 (“A plaintiff may assert

federal preemption as an affirmative cause of action to enjoin state officials

from interfering with federal rights. . . . Verizon and Shaw make clear that in

suits against state officials for declaratory and injunctive relief, a plaintiff

may invoke the jurisdiction of the federal courts by asserting a claim of

preemption, even absent an explicit statutory cause of action.”); Thompson, 362

F.3d at 819 n.3 (rejecting the argument that plaintiffs asserting preemption

based on Spending Clause legislation have “no private right of action for

injunctive relief against the state”); Village of Westfield v. Welch’s, 170 F.3d

116, 124 n.4 (2d Cir. 1999) (“Without deciding whether Welch has a private right

of action under the [federal statute], we note that Welch has asserted several

federal causes of action--including claims based on the Supremacy Clause . . .

--that do not depend on the existence of a private right of action under the

[federal statute].”); Bud Antle, Inc. v. Barbosa, 45 F.3d 1261, 1269 (9th Cir.

15

leading authority sums it up as follows:

While there may be some lack of harmony in the

case law, the rule that there is an implied

right of action to enjoin state or local

regulation that is preempted by a federal

statutory or constitutional provision--and

that such an action falls within the federal

question jurisdiction--is well-established.47

1994) (“Even in the absence of an explicit statutory provision establishing a

cause of action, a private party may ordinarily seek declaratory and injunctive

relief against state action on the basis of federal preemption.”); First Nat’l

Bank of E. Ark. v. Taylor, 907 F.2d 775, 776 n.3 (8th Cir. 1990) (“[T]he Supreme

Court has . . . made clear that a party may apply directly to federal court for

relief based on an affirmative claim of preemption.” (citing Lawrence County, 469

U.S. at 259 n. 6; Shaw, 463 U.S. at 96 n.14)).

47

RICHARD H. FALLON, DANIEL J. MELTZER, & DAVID L. SHAPIRO, HART & WECHSLER’S THE

FEDERAL COURTS & THE FEDERAL SYSTEM 903 (5th ed. 2003).

While the Supreme Court has not explained the source of this right of

action, one school of thought holds that the Supremacy Clause itself creates an

implied cause of action. Professors Wright, Miller and Cooper argue that “[t]he

best explanation of Ex Parte Young and its progeny is that the Supremacy Clause

creates an implied right of action for injunctive relief against state officers

who are threatening to violate the federal Constitution or laws.” 13B CHARLES A.

WRIGHT, ARTHUR R. MILLER, & EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE: JURISDICTION 2D

§ 3566, at 102 (1984). Some courts share this view. See, e.g., Burgio &

Campofelice v. N.Y. State Dep’t of Labor, 107 F.3d 1000, 1006 (2d Cir. 1997)

(“[T]he Supremacy Clause creates an implied right of action for injunctive relief

against state officers who are threatening to violate [federal law].”); see also

BellSouth Telecomms., Inc. v. MCImetro Access Transmission Servs., Inc., 317 F.3d

1270, 1289 (11th Cir. 2003) (Tjoflat, J., dissenting) (disputing majority’s

finding of jurisdiction but characterizing Shaw as “holding that plaintiffs may

assert a private right of action directly under the Supremacy Clause of the

Constitution”); League of Women Voters v. Blackwell, 340 F. Supp. 2d 823, 828

(N.D. Ohio 2004) (“[T]he Supremacy Clause provides the cause of action and

federal jurisdiction.”); but see Legal Envtl. Assistance Found., Inc. v. Pegues,

904 F.2d 640, 643 (11th Cir. 1990) (rejecting the proposition that a

“constitutional cause of action should be implied directly from the Supremacy

Clause”); Mashpee Tribe v. Watt, 542 F. Supp. 797, 806 (D. Mass. 1982) (“The

Supremacy Clause does not support direct causes of action . . . . It only gives

priority to federal rights created by a federal statute when they conflict with

state law.”), aff’d, 707 F.2d 23 (1st Cir. 1983).

Another possible source is the Declaratory Judgment Act, 28 U.S.C.

§§ 2201-2202, upon which courts have occasionally explicitly relied. See, e.g.,

First Nat’l Bank of E. Ark., 907 F.2d at 776 (affirming lower court’s declaration

that state’s action was preempted by the National Bank Act where “[j]urisdiction

was invoked pursuant to 28 U.S.C. §§ 1331 and 2201”); Doe v. Pickett, 480 F.

Supp. 1218, 1223 (S.D. W. Va. 1979) (entering judgment pursuant to §§ 2201-2202

that state cannot impose parental consent requirement on use of Title X funds).

While the Declaratory Judgment Act “is not an independent ground for jurisdiction

[and] permits the award of declaratory relief only when other bases for

16

We have little difficulty in holding that Appellees have an

implied right of action to assert a preemption claim seeking

injunctive and declaratory relief.

C

TDH further argues that plaintiffs must meet the requirements

for an action under § 1983,48 as recently enunciated in Gonzaga

University v. Doe.49 We are not persuaded.

As an initial matter, TDH mischaracterizes the nature of

Appellees’ claim. Appellees are not asking the courts to enforce

their “right” under § 1983 to secure enforcement of Title X, as TDH

asserts. Rather, Appellees’ Supremacy Clause argument is

fundamentally different: they argue that Rider 8 imposes conditions

on the receipt of federal funds that are incompatible with Title X.

Therefore, we need not be concerned that the Supremacy Clause does

not of its own force create rights enforceable under § 1983.50

Next, we note that Gonzaga, by its terms, applies only to

jurisdiction are present,” Jones v. Alexander, 609 F.2d 778, 781 (5th Cir. 1980)

(citing, inter alia, Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671

(1950)), it might well provide a cause of action where, as here, jurisdiction is

well-established. While the district court was correct in noting that the DJA

did not supply jurisdiction, it did not address the potential for the DJA to

supply a right of action. See Sanchez, 280 F. Supp. 2d at 602.

48

42 U.S.C. § 1983 (creating private cause of action against one who,

“under color of any statute, ordinance, regulation, custom, or usage, of any

State or Territory” causes a “deprivation of any rights, privileges, or

immunities secured by the Constitution and laws”).

49

536 U.S. 273 (2002).

50

See Golden State Transit Corp. v. Los Angeles, 493 U.S. 103, 107-08

(1989).

17

§ 1983 claims. With respect to the plaintiff’s claim for damages,

the Supreme Court held that “unless Congress ‘speak[s] with a clear

voice,’ and manifests an ‘unambiguous’ intent to confer individual

rights, federal funding provisions provide no basis for private

enforcement by § 1983.”51 The Supremacy Clause claim advanced here

by Appellees is not based on a claim of right under Title X, nor is

it a claim for damages; it is a preemption claim. The Gonzaga

Court gave no indication that it intended to alter its prior

practice regarding such claims, as we have explained.52

In sum, we affirm the district court’s finding of jurisdiction

and we hold that Appellees have an implied right of action to seek

injunctive relief from a state statute purportedly preempted by

federal Spending Clause legislation. Such a claim for relief does

not require a showing, as per Gonzaga, that a § 1983 action would

also be proper. We express no opinion on the district court’s

holding as to the availability of § 1983 in this case.

51

Gonzaga Univ., 536 U.S. at 280.

52

See supra Part III.B.2; see also Ill. Ass'n of Mortgage Brokers, 308

F.3d at 765 (finding it unnecessary in adjudicating preemption claim to determine

whether the federal statute at issue creates rights enforceable under § 1983);

cf. Concannon, 249 F.3d at 73 (noting in discussing standing that “regardless of

whether the Medicaid statute’s relevant provisions were designed to benefit [the

plaintiff, it] can invoke the statute’s preemptive force”), aff’d sub nom. Walsh,

538 U.S. 644; St. Thomas-St. John Hotel & Tourism Ass’n, 218 F.3d at 241 (noting

in discussing standing that “[w]e know of no governing authority to the effect

that the federal statutory provision which allegedly preempts enforcement of

local legislation by conflict must confer a right on the party that argues in

favor of preemption. On the contrary, a state or territorial law can be

unenforceable as preempted by federal law even when the federal law secures no

individual substantive rights for the party arguing preemption.” (emphasis

added)).

18

IV

We turn now to the merits of Appellees’ preemption claim,

beginning with core principles.

A

By virtue of the Supremacy Clause, it is a “fundamental

principle of the Constitution . . . that Congress has the power to

preempt state law.”53 Preemption doctrine requires an examination

of Congressional intent.54 Federal regulations have no less

preemptive effect than federal statutes.55 State action may be

preempted by federal law in three ways: “by express language in a

congressional enactment, by implication from the depth and breadth

of a congressional scheme that occupies the legislative field, or

by implication because of a conflict with a congressional

enactment.”56 Implied conflict preemption occurs when “compliance

with both federal and state regulations is a physical

impossibility” or where state law “stands as an obstacle to the

accomplishment and execution of the full purposes and objectives of

53

Crosby, 530 U.S. at 372.

54

Fid. Fed. Sav. & Loan Ass’n v. de la Cuesta, 458 U.S. 141, 152 (1982).

55

Id. at 152-53.

56

Lorillard Tobacco Co., 533 U.S. at 541 (citations omitted); accord

English v. Gen. Elec. Co., 496 U.S. 72, 79 (1990) (listing three categories of

preemption); AT&T Corp. v. Public Util. Comm’n of Tex., 373 F.3d 641, 645 (5th

Cir. 2004) (same). As the Supreme Court has hastened to point out, however, “the

categories of preemption are not ‘rigidly distinct.’” Crosby, 530 U.S. at 372 n.6

(quoting English, 496 U.S. at 79 n.5).

19

Congress.”57

Implied conflict preemption of the obstacle variety is at

issue in this case as Appellees are claiming that TDH has

impermissibly added conditions and impediments to the receipt of

federal funds. It is the prerogative of Congress, within limits,

to attach conditions to federal funds:

There is of course no question that the

Federal Government, unless barred by some

controlling constitutional prohibition, may

impose the terms and conditions upon which its

money allotments to the States shall be

disbursed, and that any state law or

regulation inconsistent with such federal

terms and conditions is to that extent

invalid.58

We start with “a presumption that the state statute is valid,

and ask whether petitioner has shouldered the burden of overcoming

that presumption.”59 The mere fact that a state program imposes an

additional “modest impediment” to eligibility for federal funds

57

Pac. Gas & Elec. Co. v. State Energy Res. Conservation & Dev. Comm’n,

461 U.S. 190, 204 (1983) (internal quotation marks omitted) (quoting Fla. Lime

& Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43 (1963); Hines v.

Davidowitz, 312 U.S. 52, 67 (1941)); see also Wells Fargo Bank of Tex. NA v.

James, 321 F.3d 488, 491 n.3 (5th Cir. 2003) (explaining that implied conflict

preemption occurs “where the state law mandates or places irresistible pressure

on the subject of the regulation to violate federal law, where compliance with

both regulations is physically impossible, where the state regulation frustrates

or hectors the overall purpose of the federal scheme, or where the federal scheme

expressly authorizes an activity which the state scheme disallows” (citations

omitted)).

58

King, 392 U.S. at 333 n.34. Congress has wide latitude to attach

conditions to funds, as long as they are not “unduly coercive” or “impermissibly

sweeping.” Sabri v. United States, 124 S.Ct. 1941, 1947 (2004); see South Dakota

v. Dole, 483 U.S. 203, 206 (1987).

59

Walsh, 538 U.S. at 661-62 (citation omitted) (citing Davies Warehouse

Co. v. Bowles, 321 U.S. 144, 153 (1944)).

20

does not provide a sufficient basis for preemption.60 However, a

state eligibility standard that altogether excludes entities that

might otherwise be eligible for federal funds is invalid under the

Supremacy Clause.61 State participation in federal funding programs

is voluntary, but once a state has accepted federal funds, it is

bound by the strings that accompany them.62

B

60

Id. at 667 (rejecting Medicaid Act preemption challenge to state statute

imposing prior authorization requirement on access to prescription drugs financed

by federal funds); see also Dublino, 413 U.S. at 422 (rejecting preemption

challenge to state statute imposing employment requirements as conditions for

continued eligibility for AFDC benefits).

61

See Blum v. Bacon, 457 U.S. 132, 145-46 (1982) (holding provisions of

New York welfare program that conflicted with federal Social Security regulations

invalid under the Supremacy Clause); Carleson v. Remillard, 406 U.S. 598, 604

(1972) (holding California regulation that conflicted with the Social Security

Act invalid under the Supremacy Clause and noting that “there is no congressional

authorization for States to exclude these so-called military orphans from AFDC

benefits”); Townsend, 404 U.S. at 286 (“[A] state eligibility standard that

excludes persons eligible for assistance, under federal AFDC standards violates

the Social Security Act and is therefore invalid under the Supremacy Clause.”);

King, 392 U.S. at 320 (holding Alabama statute conflicted with Social Security

Act “by flatly denying AFDC assistance to otherwise eligible dependent

children”).

The Court summarized this line of cases as follows:

In [Carleson, Townsend, and King,] it was clear that

state law excluded people from AFDC benefits who the

Social Security Act expressly provided would be

eligible. The Court found no room either in the Act’s

language or legislative history to warrant the States’

additional eligibility requirements. Here, by contrast,

the Act allows for complementary state work incentive

programs and procedures incident thereto--even if they

become conditions for continued assistance. Such

programs and procedures are not necessarily invalid, any

more than other supplementary regulations promulgated

within the legitimate sphere of state administration.

Dublino, 413 U.S. at 421-22 (emphasis added).

62

See Hope Med. Group for Women, 63 F.3d at 421 (“Although a state’s

participation in the Medicaid program is voluntary, participating states must

abide by the requirements imposed by Title XIX and regulations issued by the

[corresponding federal agency].”).

21

1

We first examine the question of affiliates. According to

TDH, Rider 8 can be read to allow Appellees to continue to receive

funds by creating separate affiliates--e.g. by dividing into

“Family Planning” entities and “Abortion Services” entities. The

district court concluded that “[s]uch a suggestion is absurd in

light of the stated purpose of Rider 8--to eradicate the supposed

imprimatur of state funding of abortion that currently exists--

which would be undermined if recipients could avoid Rider 8 simply

by creating affiliates and making no substantive changes.”63

However, nothing in the plain language of Rider 8 precludes

the creation of affiliates. The district court’s observation that

“under Rider 8, funding recipients cannot provide any funds to or

contract with an abortion provider” does not answer the question.64

Rider 8 only prohibits contracting for the performance of

abortions. It does not prohibit all contracting with an entity

that performs abortions. As such, Rider 8 does not preclude a

family planning services provider from maintaining a contract with

TDH while simultaneously creating a separate legal entity that

performs abortions and receives no federal funds.

In Planned Parenthood of Mid-Missouri & Eastern Kansas, Inc.

v. Dempsey, the Eighth Circuit examined a Missouri state statute,

63

Sanchez, 280 F. Supp. 2d at 611.

64

Id.

22

similar to Rider 8, that prohibited organizations or affiliates of

organizations that provided or promoted abortions from receiving

state family-planning funds.65 The court ultimately concluded that

the state law was not unconstitutional, but it reached this

decision only by interpreting the regulation to allow grantees to

create independent affiliates that could perform abortions.66 The

court came to this conclusion despite language in the Missouri

statute that, unlike Rider 8, seemed to foreclose the formation of

affiliates.67

We have less difficulty concluding that Rider 8 admits of an

interpretation that allows service providers to affiliate.

Appellees’ argument that Rider 8 must be read to prevent all

contracting with entities that perform abortions is without merit.

Accordingly, the district court’s conclusion that Rider 8 prohibits

affiliation is in error.

65

167 F.3d 458 (8th Cir. 1999). The state statute at issue there

restricted the Missouri Department of Health’s expenditure of state funds:

[N]one of these funds may be expended for the purpose of

performing, assisting or encouraging for abortion, and

further provided that none of these funds may be

expended to directly or indirectly subsidize abortion

services or administrative expenses, as verified by

independent audit. None of these funds may be paid or

granted to organizations or affiliates of organizations

which provide or promote abortions. None of the funds

may be expended for directly referring for abortion

. . . .

89th Leg., 2d Sess., Mo. H.B. 1010, § 10.715(1), quoted in Dempsey, 167 F.3d at

463.

66

Dempsey, 167 F.3d at 461-64.

67

Id.

23

2

Whether Rider 8 permits the formation of separate entities and

its effect if it does not permit them is the controlling question

on this appeal. That is because, as we will explain, we are

persuaded that, absent the possibility of affiliates, Rider 8 would

likely be preempted. Under an interpretation that forecloses

affiliates, Rider 8 denies participation by entities--abortion

providers--that are deemed eligible by Title X and the associated

regulations.68 Rider 8’s eligibility standard, by excluding

entities eligible under Title X, would violate that statute and

therefore be invalid under the Supremacy Clause.69

Appellees point to three provisions in the statute and

regulations which evince a congressional intent to allow abortion

providers to obtain funding. First, § 300a-6 specifies that

“[n]one of the funds appropriated under this subchapter shall be

used in programs where abortion is a method of family planning.”70

This provision, Appellees contend, illustrates that Congress

intended only to limit the use of funding, not the identity of

recipients. Had Congress wished to bar abortion providers from

receiving funding, it presumably could have included its own Rider

68

Although Appellees also support their Supremacy Clause claim by

reference to Title XIX and Title XX, as the instant disposition will not change,

we express no opinion beyond Title X.

69

See Townsend, 404 U.S. at 286.

70

42 U.S.C. § 300a-6.

24

8-style provision in Title X instead of a provision like § 300a-6.71

Second, Appellees point to a provision in the Department of

Health and Human Services (DHHS) regulations that explicitly

provides as follows:

§ 59.3 Who is eligible to apply for a family

planning services grant?

Any public or nonprofit private entity in a

State may apply for a grant under this

subpart.72

As Appellees stress, by its terms, this provision allows any

applicant to apply for funds, even applicants who perform abortions

with private funds or in separate facilities.

Finally, Appellees point to regulations adopted by DHHS on

July 3, 2000, entitled the “Standards of Compliance for

Abortion-Related Services in Family Planning Services Projects.”73

These standards “revise the regulations that apply to grantees

under the federal family planning program” and “establish[]

requirements for recipients of family planning services grants

under [Title X].”74 Overall, “[t]he effect of the revisions . . .

is to revoke the compliance standards, promulgated in 1988 and

popularly known as the ‘Gag Rule,’ that restricted family planning

71

Such a provision might, of course, be unconstitutional on other grounds.

72

42 C.F.R. § 59.3.

73

See 65 Fed. Reg. 41,270.

74

Id. at 41,270 (citing 42 U.S.C. § 300).

25

grantees from providing abortion-related information in their

grant-funded projects.”75 After discussing and rejecting the “Gag

Rule,” which was evaluated by the Supreme Court in Rust v.

Sullivan,76 the regulations carefully define how an entity can

comply with the prohibition on the use of Title X funds “in

programs where abortion is a method of family planning.”77 The

compliance regulations state, in particular, that there need not be

complete physical separation between a Title X project and private

abortion activities as long as the abortion activities receive no

Title X funding and the Title X activities do not promote or

encourage abortion.78 In these standards, the Secretary

exhaustively considers the statute’s requirements and the

government’s interest in ensuring that funds are not used to

provide abortions and concludes that the financial audits of grant

recipients are sufficient to uphold the government’s interest. The

Secretary’s comments are clearly premised on the notion that

abortion providers will receive funding. Indeed, one of the

Secretary’s explicit concerns is that hospitals that provide

abortions not be put to needless expense by having to create

75

Id.

76

500 U.S. 173 (1991).

77

65 Fed. Reg. at 41,270-77 (quoting 42 U.S.C. § 300a-6).

78

Id. at 41,275-76.

26

separate facilities for family planning services.79 The discussion

makes clear that abortion providers are eligible for funding.

These standards represent the interpretation of the statute by the

Secretary of the DHHS, and thus are entitled to great deference.80

The Supreme Court’s decision in Rust also supports Appellees’

reading of the relevant congressional intent. The Court held,

first, that DHHS may require physical and financial separation of

abortion activities and family planning services without violating

the plain language of Title X.81 The Court explained, however, that

Title X draws a distinction between Title X projects and Title X

grantees:

The Secretary’s regulations do not force the

Title X grantee to give up abortion-related

speech; they merely require that the grantee

keep such activities separate and distinct

from Title X activities. Title X expressly

distinguishes between a Title X grantee and a

Title X project. The grantee, which normally

is a health-care organization, may receive

funds from a variety of sources for a variety

of purposes. The grantee receives Title X

funds, however, for the specific and limited

79

Id.

80

See United States v. Mead Corp., 533 U.S. 218, 226-27 (2001)

(“[A]dministrative implementation of a particular statutory provision qualifies

for Chevron deference when it appears that Congress delegated authority to the

agency generally to make rules carrying the force of law, and that the agency

interpretation claiming deference was promulgated in the exercise of that

authority.”); In re Cajun Elec. Power Coop., Inc., 109 F.3d 248, 254 (5th Cir.

1997) (finding preemption by first examining “whether the Secretary meant to pre-

empt [the state agency’s] rate order, and, if so, whether that action is within

the scope of the Secretary’s delegated authority”); see also Thompson, 362 F.3d

at 821; Planned Parenthood Affiliates of Mich. v. Engler, 73 F.3d 634, 638 (6th

Cir. 1996).

81

Rust, 500 U.S. at 187-90.

27

purpose of establishing and operating a Title

X project. The regulations govern the scope

of the Title X project’s activities, and leave

the grantee unfettered in its other

activities. The Title X grantee can continue

to perform abortions, provide abortion-related

services, and engage in abortion advocacy; it

simply is required to conduct those activities

through programs that are separate and

independent from the project that receives

Title X funds.82

The Supreme Court examined Title X and, even with the restrictive

Gag Rule then in place, expressly stated that grant recipients

could continue to provide abortion services outside the scope of

the Title X project. The Court concluded:

By requiring that the Title X grantee

engage in abortion-related activity separately

from activity receiving federal funding,

Congress has . . . not denied it the right to

engage in abortion-related activities.

Congress has merely refused to fund such

activities out of the public fisc, and the

Secretary has simply required a certain degree

of separation from the Title X project in

order to ensure the integrity of the federally

funded program.83

Under Title X, then, abortion providers are eligible to receive

family planning funding; Title X requires only that they use that

funding for legitimate Title X purposes.

TDH provides little to dispute Appellees’ argument. Its

principal argument focuses on Title X’s prohibition on the use of

Title X funds to pay for abortions. As the argument goes, Rider 8

82

Id. at 196 (citations omitted) (last emphasis added).

83

Id. at 198.

28

furthers this end by ensuring that federal funds are used

correctly. TDH also points to Rust’s vindication of the

government’s power to impose regulations requiring physical and

financial separation of family planning and abortion facilities.

TDH insists that Rider 8 falls within Rust’s safe-harbor.

TDH’s argument is not persuasive. While it is no doubt true

that an affiliate-prohibiting Rider 8 would help ensure that funds

are not misappropriated, it nonetheless would disqualify entities

that Title X regards as eligible for funding without any showing

that the entity has misused funds. Rust, moreover, provides no

support for Appellees because, while Rust approved of regulations

requiring physical and financial separation and limiting doctors’

reference to abortion, those regulations were promulgated by the

federal government.84 Here, Texas is attempting to impose

regulations that restrict the scope of a federal program. And

Rider 8--still assuming arguendo that it does not allow for

affiliates--would do far more than require physical separation; it

would require that entities not engage in abortion activities even

with private funds and in separate facilities. In the end, TDH

84

See Rust, 500 U.S. at 178-81; see also Regan v. Taxation with

Representation of Wash., 461 U.S. 540 (1997) (Congress, exercising spending

power, can refuse to fund lobbying activities where organizations are free to

establish a separate affiliate to engage in lobbying without the use of federal

funds); Planned Parenthood Fed’n of Am. v. Heckler, 712 F.2d 650, 663 (D.C. Cir.

1983) (“Although Congress is free to permit the states to establish eligibility

requirements for recipients of Title X funds, Congress has not delegated that

power to the states. Title X does not provide, or suggest, that states are

permitted to determine eligibility criteria for participants in Title X

programs.” (internal quotation marks and citation omitted)).

29

provides nothing to counter Appellees’ argument that Title X--both

by its express terms and as interpreted by the DHHS--allows

abortion providers to receive funding.

To be entitled to a preliminary injunction, Appellees must

show a substantial likelihood that they will succeed on their

claim. On an affiliate-precluding interpretation of Rider 8, the

district court would not abuse its discretion in so concluding,

given that Rider 8’s eligibility requirements would seriously

undermine and obstruct Congress’s intent in distributing funds

under Title X.

3

As just described, without affiliates, Rider 8 is likely

doomed to preemption, so we ask if there is an alternative. We

turn to that inquiry, mindful that we “will not rewrite a . . . law

to conform it to constitutional requirements.”85 For example, in

a case involving an abortion statute, the Nebraska Attorney General

offered a “saving” interpretation not supported by the statute’s

text or legislative history, and the Supreme Court rejected the

invitation, explaining that “we are without power to adopt a

narrowing construction of a state statute unless such a

construction is reasonable and readily apparent.”86 Where, as here,

language in a statute is ambiguous and “an otherwise acceptable

85

Reno v. ACLU, 521 U.S. 844, 884-85 (1997) (internal quotation marks and

citation omitted).

86

Stenberg v. Carhart, 530 U.S. 914, 944 (2000).

30

construction of a statute would raise serious constitutional

problems,” we must “construe the statute to avoid such problems”

unless such a construction would be plainly contrary to legislative

intent.87 In this case we are not merely deferring to a “convenient

litigation position”88 on the part of TDH--although it may be just

that. Our own reading of Rider 8 leads us to the conclusion that

affiliates are permitted.

In Dempsey, the court similarly sought to interpret a state

statute so as to avoid running afoul of federal law.89 In that

case, the statute at issue regulated only state funds and, thus,

did not address federal preemption issues but rather focused only

on unconstitutional conditions. Nonetheless, the court’s

willingness to interpret the statute to allow for affiliates in

order to avoid constitutional problems is instructive.90 Similarly,

we must choose the interpretation of Rider 8 that has a chance of

87

Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Constr. Trades

Council, 485 U.S. 568, 575 (1988).

88

Cf. Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 213 (1988)

(“Deference to what appears to be nothing more than an agency’s convenient

litigating position would be entirely inappropriate.”).

89

167 F.3d at 461-64.

90

The Dempsey opinion is a stretch. The Missouri statute explicitly

stated that “[n]one of these funds may be paid or granted to organizations or

affiliates of organizations which provide or promote abortions.” 89th Leg., 2d

Sess., Mo. H.B. 1010, § 10.715(1) (emphasis added), quoted in Dempsey, 167 F.3d

at 463. The court stated that “nothing [in this statute] expressly prohibits

grantees from maintaining an affiliation with an abortion service provider, so

long as the affiliated abortion service provider does not directly or indirectly

receive State family-planning funds.” Dempsey, 167 F.3d at 463. Perhaps the

court concluded that the statute barred affiliates but not “independent”

affiliates, but even this is less than persuasive.

31

avoiding federal preemption.

4

At this point, under the affiliate-permissible interpretation

of Rider 8, there are two possibilities: either the affiliate

requirement is a relatively empty formalism or it is a more

substantial obstacle. The former is permissible, while the latter

likely is not.

Given the district court’s view that Rider 8 did not permit

affiliation, the vitality of the alternative was not developed.

From the limited record, we cannot say whether there is nonetheless

a substantial likelihood that Rider 8 would in practical terms work

the same mischief in this case as it would if it disallowed

affiliation entirely. Recall that Appellees had been approved as

contractors to receive federal funds when Rider 8 was enacted.

Assuming that affiliation is prospectively an option for providers

in general, it is not clear on this record whether Appellees had

that opportunity. TDH evidenced its intent to enforce Rider 8 as

to these providers when it sent them letters in early June, giving

Appellees roughly twenty days to return an affidavit swearing that

they would not provide abortions or contract for their provision.

Given that TDH made no mention at that time of the possibility of

affiliation, it is not clear that Appellees could have avoided

forfeiting their contracts by affiliating, nor is it clear that

there was sufficient time to do so even had they been so inclined.

We note that Rider 8’s effect on these previously-approved

32

providers might prove to be different from the impact of a purely

prospective application of Rider 8 on new contract determinations.

On remand, unless Appellees can show that the burden of

forming affiliates in forthcoming years would in practical terms

frustrate their ability to receive federal funds, Rider 8 should be

upheld and the injunction dissolved. While creating affiliates

might entail some time and expense, and might not be the most

convenient arrangement, this extra effort alone would not relegate

the state statute to preemption.91

Given the disposition in this case, we need not address the

district court’s treatment of the remaining requirements for a

preliminary injunction: threat of injury to the Appellees, to TDH,

and to the public interest.

V

The case is REMANDED and the district court is directed to

proceed with a trial on the merits. The injunction granted below

must be dissolved unless the Appellees carry their burden of

demonstrating that insisting on the use of affiliates would so

hinder their operations as to work in practical terms an

impermissible prohibition by the State of Texas upon the ability of

these Appellees to continue their abortion services using their own

91

Cf. Dempsey, 167 F.3d at 464 (“The Constitution does not guarantee that

recipients of State funds will not be required to ‘expend effort’ to comply with

funding restrictions.” (citation omitted)); Legal Aid Soc’y of Haw. v. Legal

Servs. Corp., 145 F.3d 1017, 1027 (9th Cir. 1998) (White, J. (Retired), sitting

by designation) (“The [Rust] Court did not find it constitutionally significant

that the restrictions required the recipient of Title X funds to expend effort

to comply with the restrictions.”).

33

funds with no direct or indirect federal funding.

REMANDED with instructions.

34