Petition for Writ of Certiorari — Little Sisters of the Poor Saints Peter and Paul Home, Petitioner v. Pennsylvania, et al.
Supreme Court briefOct 1, 2019
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APPENDIX A
PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 17-3752, 18-1253, 19-1129, 19-1189
COMMONWEALTH OF PENNSYLVANIA;
STATE OF NEW JERSEY
v.
PRESIDENT UNITED STATES OF AMERICA;
SECRETARY UNITED STATES DEPARTMENT OF
HEALTH AND HUMAN SERVICES; UNITED
STATES DEPARTMENT OF HEALTH AND
HUMAN SERVICES; SECRETARY UNITED
STATES DEPARTMENT OF TREASURY; UNITED
STATES DEPARTMENT OF TREASURY;
SECRETARY UNITED STATES DEPARTMENT OF
LABOR; UNITED STATES DEPARTMENT OF
LABOR; UNITED STATES OF AMERICA
Little Sisters of the Poor Saints Peter and Paul Home
(Intervenor in D.C.),
Appellant in 17-3752, 19-1129
President United States of America, Secretary United
States of Department of Health and Human Services,
United States Department of Health and Human
Services, Secretary United States Department of
Treasury, United States Department of Treasury,
Secretary United States Department of Labor, United States Department of Labor,
Appellants in 18-1253,
19-1189 (Except President
United States of America)
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ON APPEAL FROM THE UNITED STATES
DISTRICT COURT FOR THE EASTERN
DISTRICT OF PENNSYLVANIA
(E.D. Pa. No. 2:17-cv-04540)
District Judge: Hon. Wendy Beetlestone
Argued May 21, 2019
Before: McKEE, SHWARTZ, and FUENTES,
Circuit Judges.
(Filed July 12, 2019)
Michael J. Fischer [ARGUED]
Aimee D. Thomson
Office of Attorney General of Pennsylvania
1600 Arch Street, Suite 300
Philadelphia, PA 19103
Glenn J. Moramarco
Office of Attorney General of New Jersey
Department of Law & Public Safety, Division of Law
Richard J. Hughes Justice Complex
25 Market Street, P.O. Box 112
Trenton, NJ 08625
Counsel for Appellees Commonwealth of
Pennsylvania and State of New Jersey
Lowell V. Sturgill, Jr.
United States Department of Justice, Civil Division
950 Pennsylvania Avenue, N.W.,
Room 7241
Washington, DC 20530
Hashim M. Moopan [ARGUED]
United States Department of Justice
Civil Division, Appellate Staff
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950 Pennsylvania Avenue, N.W.
Washington, DC 20530
Karen Schoen
United States Department of Justice
Civil Division, Appellate Section
950 Pennsylvania Avenue, N.W. Room 7533
Washington, DC 20530
Counsel for Appellants President United States
of America, Secretary United States Department of Health & Human Services, United
States Department of Health & Human Services, United States Department of Treasury,
Secretary United States Department of Treasury, United States Department of Labor, Secretary United States Department of Labor, and
United States of America
Mark L. Rienzi [ARGUED]
Lori H. Windham
Becket Fund for Religious Liberty
1200 New Hampshire Avenue, N.W.,
Suite 700
Washington, DC 20036
Nicholas M. Centrella
Conrad O’Brien
1500 Market Street West Tower,
Suite 3900 Philadelphia, PA 19102
Counsel for Appellee-Intervenor Little Sisters of
the Poor Saints Peter and Paul Home
Jason R. LaFond
Office of Attorney General of Texas
209 West 14th Street, 7th Floor
Austin, TX 78711
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Counsel for Amici Curiae in Support of Appellants States of Texas, Alabama, Arkansas,
Georgia, Idaho, Louisiana, Missouri, Nebraska, Oklahoma, South Carolina, and
West Virginia
Elizabeth N. Dewar
Office of Attorney General of Massachusetts
20th Floor, One Ashburton Place
McCormack Building
Boston, MA 02108
Counsel for Amici Curiae States of
Massachusetts, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine,
Maryland, Michigan, Minnesota, Nevada, New
Mexico, New York, North Carolina, Oregon,
Rhode Island, Vermont, Virginia, Washington
and the District of Columbia
Dariely Rodriguez
Lawyers’ Committee for Civil Rights Under Law
1500 K Street, N.W., Suite 900
Washington, DC 20005
Counsel for Amici Curiae Center for Reproductive Rights, Lawyers Committee for Civil
Rights Under Law, California Womens Law
Center, GLBTQ Legal Advocates and Defenders, LatinoJustice PRLDEF, Lawyers for Civil
Rights, Legal Momentum, Legal Voice,
Mississippi Center for Justice, National Center
for Lesbian Rights, and Women’s Law Project
Sara J. Rose
American Civil Liberties Union
313 Atwood Street
Pittsburgh, PA 15213
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Counsel for Amici Curiae American Civil Liberties Union, Anti Defamation League, Leadership Conference on Civil and Human Rights,
and National Urban League
Thomas W. Hazlett
Stephen J. Kastenberg
Ballard Spahr
1735 Market Street, 51st Floor
Philadelphia, PA 19103
Counsel for Amici Curiae Public Interest Law
Center of Philadelphia, Washington Lawyers
Committee for Civil Rights and Urban Affairs,
Chicago Lawyers Committee for Civil Rights,
Lawyers Committee for Civil Rights of the San
Francisco Bay Area, and Public Counsel
Jeffrey Blumenfeld
Lowenstein Sandler
2200 Pennsylvania Avenue, N.W., Suite 5
Washington, DC 20037
Counsel for Amici Curiae National Womens
Law Center, National Latina Institute for Reproductive Health, Sisterlove Inc., and National Asian Pacific American Women Forum
Robert Dunn
Gibson Dunn & Crutcher
1881 Page Mill Road
Palo Alto, CA 94304
Counsel for Amicus Curiae Religious Sisters of
Mercy
Miles Coleman
Nelson Mullins Riley & Scarborough
104 South Main Street, Suite 900
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Greenville, SC 29601
Counsel for Amici Curiae Ronald J. Colombo,
Richard Epstein, Carl H. Esbeck, David F.
Forte, Richard W. Garnett, Esq., Professor Robert P. George, Mary Ann Glendon, Michael P.
Moreland, Stacy Scaldo, and Michael
Uhlmann
Bruce H. Schneider
Stroock Stroock & Lavan
180 Maiden Lane, 38th Floor
New York, NY 10038
Counsel for Amici Curiae American Nurses Association, American College of Obstetricians
and Gynecologists, American Academy of Nursing, American Academy of Pediatrics, and Physicians for Reproductive Choice and Health
Allan J. Arffa
Melina M. Meneguin-Layerenza
Sierra Robart
Paul Weiss Rifkind Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019
Counsel for Amici Curiae Planned Parenthood
Federation of America, National Health Law
Program, and National Family Planning &
Reproductive Health Association
Priscilla J. Smith
Yale Law School RRJP Clinic
319 Sterling Place
Brooklyn, NY 11328
Counsel for Amicus Curiae Program for the
Study of Reproductive Justice
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Leah Bruno
Dentons US
233 South Wacker Drive, Suite 5900
Chicago, IL 60606
Jeffrey S. Feldman
The Feldman Firm
600 West Germantown Pike, Suite 400
Plymouth Meeting, PA 19462
Counsel for Amici Curiae United States Women’s Chamber of Commerce and National Association for Female Executives
Joshua A. Matz
Kaplan Hecker & Fink
350 Fifth Avenue, Suite 7110
New York, NY 10118
Counsel for Amicus Curiae Church State
Scholars
Rhiannon N. Batchelder
Jamie A. Levitt
Morrison & Foerster 250 West 55th Street
New York, NY 10019
Counsel for Amici Curiae American Association
of University Women and Service Employees
International Union
Richard B. Katskee
Americans United for Separation of Church & State
1310 L Street, N.W., Suite 200
Washington, DC 20005
Counsel for Amicus Curiae Americans United
for Separation of Church and State
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___________________________
OPINION OF THE COURT
___________________________
SHWARTZ, Circuit Judge.
The Women’s Health Amendment to the Affordable Care Act (“ACA”) mandated that women’s health
insurance include coverage for preventive health
care. Through the Amendment, Congress directed
the Health Resources and Services Administration
(“HRSA”), a component of the Department of Health
and Human Services (“HHS”), to issue guidelines setting forth the preventive health care services that
women should be provided. Among the services
HRSA identified was contraceptive care. Nowhere in
the enabling statute did Congress grant the agency
the authority to exempt entities from providing insurance coverage for such services nor did Congress
allow federal agencies to issue regulations concerning
this coverage without complying with the Administrative Procedure Act.
Notwithstanding Congress’s directives, in 2017,
HHS and the Departments of Labor and Treasury
(collectively, “the Agencies”) promulgated regulations
that expanded the entities that could invoke an exemption to the requirement that group health insurance plans cover contraceptive services as a form of
women’s preventive health care. Because the state
plaintiffs are likely to succeed in proving that the
Agencies did not follow the APA and that the regulations are not authorized under the ACA or required
by the Religious Freedom Restoration Act (“RFRA”),
we will affirm the District Court’s order preliminarily
enjoining the rules’ enforcement nationwide.
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I
A
Enacted as a part of the ACA, Pub. L. No. 111-148,
124 Stat. 119 (2010), the Women’s Health Amendment mandates that “[a] group health plan[] 1and a
health insurance issuer offering group or individual
health insurance coverage shall, at a minimum provide coverage for and shall not impose any cost sharing requirements for . . .preventive care and screenings [for women] . . . as provided for in comprehensive
guidelines supported by the [HRSA].”2 42 U.S.C.
§ 300gg-13(a), (a)(4). HRSA commissioned an expert
panel from the Institute of Medicine to recommend
covered services. In 2011, HRSA adopted the Institute’s recommendations and issued guidelines defining preventive care to include all “Food and Drug
Administration approved contraceptive methods,
sterilization procedures, and patient education and
counseling for all women with reproductive capacity,”
“as prescribed” by a woman’s health care provider.
HRSA, Women’s Preventive Services Guidelines,
https://www.hrsa.gov/womens-guidelines/index.html
(last visited May 8, 2019). This statutory and regula-
Pursuant to 42 U.S.C. § 300bb-8(1), the term “group health
plan” has the meaning set forth in 26 U.S.C. § 5000(b)(1), which
defines a “group health plan” as “a plan (including a self-insured
plan) of, or contributed to by, an employer . . . to provide health
care (directly or otherwise) to the employees.”
1
2 Congress expressly exempted two sets of actors from various
CA requirements, including the Women’s Health Amendment:
grandfathered health plans, 42 U.S.C. § 18011, and employers
with fewer than 50 employees, 26 U.S.C. § 4980H(c)(2).
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tory scheme was deemed the “Contraceptive Mandate.” Several regulations and litigation followed.
1
The same day that the Guidelines were issued,
the Agencies promulgated an interim final rule
(“IFR”), followed by a final rule in 2013, to exempt certain religious employers— namely, churches and similar entities—from the Contraceptive Mandate. Group
Health Plans and Health Insurance Issuers Relating
to Coverage of Preventive Services Under the Patient
Protection Affordable Care Act, 77 Fed. Reg. 8,725
(Feb. 15, 2012) (the “Church Exemption”); Group
Health Plans and Health Insurance Issuers Relating
to Coverage of Preventive Services Under the Patient
Protection and Affordable Care Act, 76 Fed. Reg.
46,621 (Aug. 3, 2011).3 As the Agencies later explained, the “exemption for churches and houses of
worship is consistent with their special status under
longstanding tradition in our society and under federal law.” Coverage of Certain Preventive Services
3 After a notice-and-comment rulemaking process, which includ-
ed consideration of comments concerning whether coverage may
conflict with the religious beliefs of some employers, Group
Health Plans and Health Insurance Issuers Relating to Coverage of Preventive Services Under the Patient Protection and
Affordable Care Act, 76 Fed. Reg. 46,621, 46,623 (August 3,
2011), the Agencies defined “religious employer[s]” in the
Church Exemption as entities “that [are] organized and operate[] as . . . nonprofit entit[ies] and [are] referred to” as such in
the internal revenue code provision applying to “churches, their
integrated auxiliaries, and conventions or associations of
churches, as well as to the exclusively religious activities of any
religious order,” Coverage of Certain Preventive Services Under
the Affordable Care Act, 78 Fed. Reg. 39,870, 39,871, 39,889
(July 2, 2013); see 45 C.F.R. § 147.132.
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Under the Affordable Care Act, 80 Fed. Reg. 41,318,
41,325 (July 14, 2015).
The 2013 final rule also separately provided that
a nonprofit religious employer who “(1) [o]pposes
providing coverage for some or all of the contraceptive services required to be covered . . . on account of
religious objections; (2) is organized and operates as a
nonprofit entity; (3) holds itself out as a religious organization; and (4) self-certifies that it satisfies the
first three criteria,” 78 Fed. Reg. at 39,874, is entitled
to an accommodation to avoid “contracting, arranging, paying, or referring for contraceptive coverage,”
id. at 39,875. This accommodation process (the “Accommodation”) permits an employer to send a selfcertification form to its insurance issuer, which then
excludes contraceptive coverage, either in full or in
part, from the group health plan and in turn “provide[s] payments for contraceptive services for plan
participants and beneficiaries, separate from the
group health plan, without the imposition of cost
sharing, premium, fee, or other charge on plan participants or beneficiaries or on the eligible organization
or its plan.” Id. at 39,876. A third party administrator (“TPA”) may also be used as a claims or plan administrator “solely for the purpose of providing payments for contraceptive services for participants and
beneficiaries in a self-insured plan of an eligible organization at no cost to plan participants or beneficiaries or to the eligible organization.” Id. at 39,879.
By invoking the Accommodation, the employer was no
longer responsible for providing coverage for contraceptive care.
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2
Various legal challenges followed. First, in Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682 (2014),
the Supreme Court held that the Accommodation
must be extended to closely-held for-profit corporations with sincere religious objections to the provision
of contraceptive coverage so that their religious beliefs were not substantially burdened under RFRA,
42 U.S.C. § 2000bb-1. Id. at 724-26. The Court observed that use of the Accommodation process was a
less restrictive means to ensure access to cost-free
contraceptives. Id. at 730-31. Days later, in Wheaton
College v. Burwell, 573 U.S. 958 (2014), the Court
concluded that Wheaton College, who also lodged a
religious objection to providing insurance for services
covered by the Contraceptive Mandate, did not have
to use the Accommodation self-certification form,
known as the ESBA Form 700, but could instead rely
on its notification to HHS to satisfy the Accommodation’s prerequisites. Id. at 959.
To ensure compliance with these rulings, the
Agencies promulgated another IFR and final rule.4
Coverage of Certain Preventive Services Under the
Affordable Care Act, 80 Fed. Reg. 41,318 (July 14,
2015). The rule “extend[ed] the [A]ccommodation to a
for-profit entity that is not publicly traded, is majority-owned by a relatively small number of individuals,
and objects to providing contraceptive coverage based
on its owners’ religious beliefs.” Id. at 41,324. The
The final rule implementing Hobby Lobby was preceded by
notice of proposed rulemaking. Coverage of Certain Preventive
Services Under the Affordable Care Act, 79 Fed. Reg. 51,118
(Aug. 27, 2014).
4
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rule also “allow[ed] eligible organizations to choose
between using [the] ESBA Form 700 or the alternative process [of notifying HHS in writing of a religious objection to covering contraceptive services]
consistent with the Wheaton interim order.” Id. at
41,323.
In Zubik v. Burwell, 136 S. Ct. 1557 (2016) (per
curiam), the Supreme Court addressed the petitioners’ assertions that “submitting [the Accommodation]
notice substantially burden[ed] the exercise of their
religion, in violation of [RFRA].” Id. at 1559. The
Court did not reach the merits of this claim but
7parties “an opportunity to arrive at an approach going forward that accommodates petitioners’ religious
exercise while at the same time ensuring that women
covered by petitioners’ health plans receive full . . .
contraceptive coverage.” Id. at 1560 (internal quotation marks and citation omitted).
In response to the Court’s direction in Zubik, the
Agencies solicited comments regarding the current
procedure and possible alternatives to the Accommodation. Coverage for Contraceptive Services, 81 Fed.
Reg. 47,741 (July 22, 2016). The Agencies reviewed
the comments and found that “no feasible approach
has been identified at this time that would resolve
the concerns of religious objectors while still ensuring
that the affected women receive full and equal health
coverage, including contraceptive coverage.” Dep’t of
Labor, FAQs About Affordable Care Act Implementation Part 36, at 4 (Jan. 9, 2017), Available at
https://www.dol.gov/sites/default/files/ebsa/aboutebsa/our-activities/resource-center/faqs/aca-part36.pdf. As a result, the Accommodation remained unchanged.
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3
In May 2017, President Donald Trump issued an
executive order directing the Agencies to “consider
issuing amended regulations, consistent with applicable law, to address conscience-based objections to
the preventive-care mandate promulgated under [42
U.S.C. § 300gg-13(a)(4)].” Exec. Order No. 13,798 § 3,
82 Fed. Reg. 21,675 (May 9, 2017). In response, and
without issuing a notice of proposed rulemaking or
soliciting public comment, the Agencies issued two
new IFRs: the Religious IFR and the Moral IFR.
These IFRs expanded the existing exemption and Accommodation framework, made the Accommodation
process voluntary, and offered similar protections to
organizations with moral objections to contraceptives.
See Religious Exemptions and Accommodations for
Coverage of Certain Preventive Services Under the
Affordable Care Act, 82 Fed. Reg. 47,792 (Oct. 13,
2017); Moral Exemptions and Accommodations for
Coverage of Certain Preventive Services Under the
Affordable Care Act, 82 Fed. Reg. 47,838 (Oct. 13,
2017). This litigation followed.
B
1
The Commonwealth of Pennsylvania filed suit
against various governmental entities5 and sought to
enjoin the enforcement of the IFRs. Little Sisters of
the Poor Saints Peter and Paul Home (“Little Sis-
5 These entities include the President, the Agencies and their
Secretaries, and the United States of America (collectively, “the
Government”).
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ters”) intervened.6 The District Court granted Pennsylvania’s request to preliminarily enjoin the IFRs.
See generally Pennsylvania v. Trump, 281 F. Supp.
3d 553 (E.D. Pa. 2017). The Court held that Pennsylvania was likely to succeed on its procedural and substantive challenges under the APA. Id. at 576, 581.
The Government appealed, and the District Court
granted a stay pending appeal.
6 Little Sisters, a religious nonprofit operating a home in Pitts-
burgh, moved to intervene, the District Court denied its motion,
and our Court reversed, concluding, at that time, intervention
was appropriate because the litigation posed a threat to Little
Sisters’ interest in an exemption, and that its interests are not
adequately represented by the Government. See generally Pennsylvania v. President of the United States of Am., 888 F.3d 52
(3d Cir. 2018). Since then, however, the United States District
Court for the District of Colorado permanently enjoined enforcement of the Contraceptive Mandate for benefit plans in
which Little Sisters participates. Pennsylvania v. Trump, 351 F.
Supp. 3d 791, 829 n.27 (E.D. Pa. 2019) (“Defendant-Intervenor
has secured a permanent injunction, preventing enforcement of
the Contraceptive Mandate against it.”); Little Sisters of the
Poor v. Azar, No. 1:13-cv-02611, Dkt. No. 82 at 2-3 (D. Colo. May
29, 2018); Accordingly, Little Sisters is no longer aggrieved by
the District Court’s ruling, its need for relief is moot, and thus
they lack appellate standing. See Ass’n of Banks in Ins. v.
Duryee, 270 F.3d 397, 403 (6th Cir. 2001) (“[T]he intervenordefendants face the threat of economic injury should the Ohio
statutory provisions not be enforced. Such threatened injury is
sufficient to confer appellate standing on the intervenordefendants and allows them to challenge the merits of the district court’s decision.”); cf. In re Grand Jury, 111 F.3d 1066,
1071 (3d Cir. 1997) (“Since both intervenors remain aggrieved
after the district court’s disposition, the constitutional requirements for standing to appeal as well as standing to sue are satisfied.”).
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While the appeal of the order preliminarily enjoining the IFRs was pending, the Agencies promulgated
two Final Rules, which are virtually identical to the
Religious and Moral IFRs. See Religious Exemptions
and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 83 Fed.
Reg. 57,536 (Nov. 15, 2018); 45 C.F.R. § 147.132
(“Religious Rule” or “Religious Exemption”); Moral
Exemptions and Accommodations for Coverage of
Certain Preventive Services Under the Affordable
Care Act, 83 Fed. Reg. 57,592 (Nov. 15, 2018); 45
C.F.R. § 147.133 (“Moral Rule” or “Moral Exemption”) (collectively, “the Rules” or “the Exemptions”).
Like the Religious IFR, the Final Rule creating the
Religious Exemption expanded the categories of employers who are permitted to invoke the exemption
from the Contraceptive Mandate to include all nonprofit, for-profit, and publicly-held companies. The
Religious Exemption also made participation in the
Accommodation process completely voluntarily, relieving employers from the need to “file notices or certifications of their exemption.”7 83 Fed. Reg. at
57,558; see also id. at 57,537, 57,562. The Final Rule
creating the Moral Exemption offered the same exemption and voluntary accommodation process to
nonprofit organizations and non-publicly traded organizations “with sincerely held moral convictions
7 The Agencies assert that under ERISA, employees will at least
receive notice that their plans no longer cover certain contraceptives because, “with respect to plans subject to ERISA, a plan
document must include a comprehensive summary of the benefits covered by the plan,” which will “serve to help provide notice
to participants and beneficiaries” of what services are covered.
83 Fed. Reg. at 57,558. Even if this is true, this would apply only to certain employers.
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opposed to coverage of some or all contraceptive or
sterilization methods.” Id. at 57,593.
At Pennsylvania’s request, the District Court lifted the stay, and Pennsylvania filed an amended complaint, joined New Jersey as a plaintiff,8 added challenges to the Final Rules and moved to enjoin them.9
The District Court held hearings and received evidence regarding the Rules. Specifically, the States
submitted evidence from health care professionals
and state insurance regulators about the Rules’ impact. The evidence addressed the relationship between costs and contraceptive use and the impact the
Rules would have on state-funded healthcare services.
Cost is a significant barrier to contraceptive use
and access. The most effective forms of contraceptives
are the most expensive. After the ACA removed cost
barriers, women switched to the more effective and
expensive methods of contraception.10 Because the
8 Pennsylvania and New Jersey are referred to herein collective-
ly as the “the States.”
9 The States’ amended complaint for declaratory and injunctive
relief pleads five counts: (I) violation of Equal Protection of the
laws under the Fifth Amendment; (II) violation of Title VII of
the Civil Rights Act and the Pregnancy Discrimination Act; (III)
violation of the procedural requirements of the APA; (IV) violation of the substantive requirements of the APA; and (V) violation of the Establishment Clause of the First Amendment.
10 Before the ACA, women spent between 30 and 40% of their
total out-of-pocket health costs on contraceptives, and 55% of
women experienced a time where they could not afford contraceptives. Amicus Curiae Women’s Law Ctr. Br. at 15-17; id. at
17 (describing that the ACA dropped out-of-pocket contraceptive
expenditures by 70%).
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Rules allow employers to opt out of providing coverage for contraceptive services, some women may no
longer have insurance to help offset the cost for these
and other contraceptives.
Pennsylvania and New Jersey have state-funded
programs that provide family planning and contraceptive services for eligible individuals. For example,
Pennsylvania
Medicaid and New Jersey’s FamilyCare11 cover all
health care for childless adults, pregnant women, and
parents with incomes up to 138% and up to 215% of
the federal poverty level, respectively. Pennsylvania’s
Family Planning Services Program also covers all
family planning-related services, including contraceptives, for individuals with incomes up to 215% of
the federal poverty level even if they have private insurance, and New Jersey’s Plan First program offers
the same for individuals with incomes up to 205% of
the federal poverty level.
Women who lack contraceptive coverage and who
meet certain income levels may also turn to Title X
family planning clinics which “provide access to contraceptive services, supplies, and information to all
who want and need them” with priority to low-income
persons. Office of Population Affairs, Funding History,
HHS,
https://www.hhs.gov/opa/title-x-familyplanning/about-title-x-grants/funding-history/index.
html (last visited May 12, 2019). State and federal
governments fund Title X clinics, but recently, federal funding has decreased.
NJ FamilyCare is New Jersey’s state and federally-funded
Medicaid.
11
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The States expect that when women lose contraceptive insurance coverage from their employers,
they will seek out these state-funded programs and
services. The States further assert that women who
do not seek or qualify for state-funded contraceptives
may have unintended pregnancies. Public funds are
used to cover the costs of many unintended pregnancies.12 Accordingly, the States expect to spend
more money due to the Rules.
In addition to this evidence, the Agencies presented spread sheets that listed the organizations and
companies that were previously involved in ACA
Contraceptive Mandate litigation. The Agencies offered this evidence to demonstrate the likely universe
of employers whom they contend may seek to invoke
the Rules and opt out of covering contraceptive care.
3
The day the Final Rules were set to go into effect,
January 14, 2019, the District Court issued a nationwide injunction enjoining their enforcement.
Pennsylvania v. Trump, 351 F. Supp. 3d 791 (E.D.
Pa. 2019). The Court found that the States had standing to challenge the Final Rules and established a
likelihood of success on the merits of their APA
claims. First, the Court held that the States are likely to succeed on their procedural APA claims because
the Agencies failed to comply with the notice-andcomment requirement and this defect tainted the Final Rules. Id. at 813. Second, the Court held that the
12 Nationally, a publicly-funded birth in 2010 cost $12,770, and
that year, New Jersey spent an estimated $186.1 million on unintended pregnancies and Pennsylvania an estimated $248.2
million.
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States were likely to succeed on their substantive
APA challenges because neither the ACA nor RFRA
authorized the Agencies to create exemptions. Specifically, the unambiguous language of the ACA’s Women’s Health Amendment only authorized the Agencies
to decide what services would be covered, not who
provides them, id. at 821, and RFRA did not require
or authorize such broad exemptions, particularly given RFRA’s remedial function that places the responsibility for adjudicating religious burdens on the
courts, not the Agencies, id. at 822-23. The Court concluded that the balance of equities and public interest
favored an injunction, id. at 829-30, and that a nationwide injunction was appropriate to ensure complete relief for the States, id. at 834-35. The Government appeals.
II13
We first address whether the States have standing.14 Article III limits the scope of federal judicial review to “cases” or “controversies.” U.S. Const. art. III
§ 2. A fundamental safeguard of this limitation is the
doctrine of standing. Spokeo, Inc. v. Robins, 136 S.
Ct. 1540, 1547 (2016). Put simply, only parties with
standing “can invoke the jurisdiction of the federal
courts.” Constitution Party of Pa. v. Aichele, 757 F.3d
347, 357 (3d Cir. 2014). To have standing to sue,
13 The District Court had
jurisdiction under 28 U.S.C. § 1331.
We have jurisdiction under 28 U.S.C. § 1292(a)(1).
14 “We review the legal conclusions related to standing de novo,
but review for clear error the factual elements underlying the
District Court’s determination of standing.” Edmonson v. Lincoln Nat’l Life Ins. Co., 725 F.3d 406, 414 (3d Cir. 2013) (internal quotation marks and citation omitted).
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“[t]he plaintiff must have (1) suffered an injury in
fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, 136
S. Ct. at 1547 (citing Lujan v. Defenders of Wildlife,
504 U.S. 555, 560-61 (1992)). We will examine each
element in turn.
A
To establish injury in fact, the alleged injury must
be “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.” Id. at 1548
(quoting Lujan, 504 U.S. at 560). An injury is concrete if it “actually exist[s]” and is not abstract. Id.
“For an injury to be particularized, it must affect the
plaintiff in a personal and individualized way.” Id.
(internal quotation marks and citations omitted).
Plaintiffs need not “demonstrate that it is literally
certain that the harms they identify will come about.”
Clapper v. Amnesty Int’l USA, 568 U.S. 398, 414 n.5
(2013). Instead, “[a]n allegation of future injury may
suffice if . . . there is a substantial risk that the harm
will occur.” Susan B. Anthony List v. Driehaus, 573
U.S. 149, 158 (2014) (internal quotation marks and
citation omitted); see also Clapper, 568 U.S. at 410
(rejecting lower court’s use of an “objectively reasonable likelihood” standard to assess injury).
1
The States have established that they will suffer a
concrete and particularized injury. The States describe that (1) employers will take advantage of the
exemptions and women covered by their plans will
lose contraceptive coverage; and (2) financiallyeligible women will turn to state-funded services for
22a
their contraceptive needs and for the unintended
pregnancies that may result from the loss of coverage. As a result, the States will suffer a concrete financial injury from the increased use of state-funded
services. See Cottrell v. Alcon Labs., 874 F.3d 154,
163 (3d Cir. 2017) (“Typically, a plaintiff’s allegations
of financial harm will easily satisfy each of these
components, as financial harm is a classic and paradigmatic form[ ] of injury in fact.” (alteration in original) (internal quotation marks and citations omitted)). The States will suffer this injury in a particularized manner, as each State’s coffers will be depleted by the expenditure of funds to meet the increased
demand for state services. Having concluded that the
States have identified a concrete and particular injury, we next examine whether the injury at issue is
not conjectural and is actual or imminent.
The record shows that the injury the States expect
to sustain is not conjectural. First, the Agencies’ regulatory impact analysis acknowledges that between
70,500 and 126,400 women nationwide will lose contraceptive coverage as a result of their employers’ invocation of the Religious Exemption, 83 Fed. Reg. at
57,578, 57,581, and fifteen women will lose coverage
as a result of their employers’ use of the Moral Exemption, 83 Fed. Reg. at 57,627. See California v.
Azar (“California II”), 911 F.3d 558, 572 (9th Cir.
2018) (noting that the Agencies’ own regulatory impact analysis estimates loss of coverage, and therefore “it is reasonably probable that women in the
plaintiff states will lose some or all employersponsored contraceptive coverage due to the IFRs”),
cert. denied Little Sisters of the Poor v. California,
No. 18-1192, — S. Ct. —, 2019 WL 1207008 (June 17,
2019) (Mem.).
23a
Second, based on the Agencies’ list of entities who
challenged the Contraceptive Mandate, eight employers, not including Little Sisters, between New
Jersey and Pennsylvania would likely take advantage
of the Exemptions. Massachusetts v. U.S. Dep’t of
Health & Human Servs., 923 F.3d 209, 224 (1st Cir.
2019) (relying on spreadsheet of litigating entities to
find “it is highly likely that at least three employers
in the Commonwealth with self-insured health
plans . . . will use the expanded exemptions”). Accordingly, it is not conjecture to conclude that employers
in Pennsylvania and New Jersey will take advantage
of the Exemptions and, as a result, women will lose
coverage. Id. at 224 n.12 (stating that “it is improbable based on the evidence that no women in the
[States] would lose contraceptive coverage” (emphasis
omitted)).
2
The record also supports the District Court’s conclusion that the injury is imminent. The States have
provided evidence showing that the Exemption will
result in the expenditure of state funds because some
women who lose coverage will inevitably seek out
state-sponsored programs providing contraceptive
services; and some women will forego contraceptive
use, causing the States to shoulder the costs of unintended pregnancies.
With the ACA, many patients “switch[ed] from a
cheaper, less effective [contraceptive] method to a
more effective, expensive method that was better for
their medical health and personal needs.” App. 272.
Contraceptives are not only used for pregnancy prevention. They are the “standard first-line of care for a
number of hormonal, and other, disorders, including
24a
poly-cystic ovarian syndrome, primary ovarian insufficiency/premature ovarian failure, amenorrhea,
dysmenorrhea/chronic pelvic pain, and abnormal
uterine bleeding.” App. 292. A “vast majority” of
women use inter-uterine devices (“IUDs”)—a treatment religious objectors are particularly focused on,
App. 350-83—“for purposes other than birth control.”
App. 293 (describing 90-95% of patients using IUDs
for non-birth control purposes). Contraceptive use
“carries long-term health benefits for women[,]” including reducing the risk of ovarian and uterine cancer. App. 294. “Contraception also helps protect the
health of those women for whom pregnancy can be
hazardous, or even life-threatening.” Amici Curiae
Health Prof’l Orgs. Br. at 16. Thus, removing cost
free contraceptive coverage can have ramifications on
women’s health beyond birth control and unplanned
pregnancies.
Without insurance to defray or eliminate the cost
for the more-effective contraceptive methods, women
will use “less expensive and less effective methods,”
App. 245, and both Pennsylvania and New Jersey
“anticipate[] that women who lose contraceptive coverage through employer plans—whether the plan of
their own employer or that of another family member—may seek contraception from other sources, including
state-funded
programs.”15
App. 299;
15 The Agencies “theorize” that some women may be able to pay
out of pocket or obtain coverage through a spouse or family
member’s plan. Massachusetts, 923 F.3d at 227. While “[s]uch a
hypothetical woman may exist, .
the number of women with
incomes that make them eligible for state-assisted contraceptive
coverage but who still fit in that category would, logically, be
very small.” Id.
25a
App. 317. Thus, the State-funded programs will be
tapped to provide coverage for financially eligible
women whose employers invoke the Exemptions.
Furthermore, some women who lose contraceptive
coverage may either fail to qualify for state services
or elect to forego the use of contraceptives altogether.
“Women who stop using contraception are more likely
to have unplanned pregnancies and to require additional medical attention.” App. 312. The costs of such
unintended pregnancies are often shouldered by
states, costing hundreds of millions of dollars. Therefore, the evidence supports the conclusion that the
loss of contraceptive coverage may also result in unintended pregnancies for which the States will bear
associated health care costs.
For these reasons, “[t]he expanded exemptions are
expected to result in greater financial expenditures”
by the States on contraceptive services. App. 318.
This anticipated substantial impact on state finances
presents an imminent injury. Thus, the District
Court properly found that the States showed an imminent injury in fact.
The Government faults the States for failing to
identify a specific woman who will be affected by the
Final Rules, but the States need not define injury
with such a demanding level of particularity to establish standing. Massachusetts v. EPA, 549 U.S. 497,
523 n.21 (2007); see Massachusetts, 923 F.3d at 225;
California II, 911 F.3d at 572. The likelihood that
employers will invoke the Exemptions and leave
women without contraceptive coverage, and that
women will turn to the States for coverage, is sufficient to demonstrate imminent injury. This likelihood
“has nothing to do with whether petitioners have de-
26a
termined [a] precise” woman who will seek such funding. Massachusetts, 549 U.S. at 523 n.21.16
B
The States’ imminent injury is causally connected
and fairly traceable to the Exemptions. The States
will suffer financial injury when employers in Pennsylvania and New Jersey take advantage of the Exemptions, leaving female employees without contraceptive coverage and prompting financially eligible
women to turn to state-funded services. See Texas v.
United States, 809 F.3d 134, 159 (5th Cir. 2015) (“For
Texas to incur injury, DAPA beneficiaries would have
to apply for driver’s licenses as a consequence of
DHS’s action, and it is apparent that many would do
so.”), aff’d by an equally divided court, United States
v. Texas, 136 S. Ct. 2271 (2016) (Mem.) (per curiam).
In other words, the States will not experience an in16 In the context of an environmental case and a claim that the
plaintiff-state Massachusetts lacked standing because it failed
to identify land that would be impacted by federal regulators’
inaction, the Supreme Court observed that
the likelihood that Massachusetts’ coastline will recede
has nothing to do with whether petitioners have determined the precise metes and bounds of their soon-to-beflooded land. Petitioners maintain that the seas are rising and will continue to rise, and have alleged that such
a rise will lead to the loss of Massachusetts’ sovereign
territory. . . . Our cases require nothing more.
Massachusetts, 549 U.S. at 523 n.21. Just as it was unnecessary
for Massachusetts to identify specific coastline that would be
flooded by the agencies’ inaction, it is unnecessary for the States
to identify a specific woman who would be impacted by the Government’s action where in both instances, the record provided a
basis to infer specific imminent injury.
27a
creased demand for services and the resulting financial burden unless the new Exemptions, which create
a void in contraceptive coverage, go into effect. See id.
at 160 (“Far from playing an insignificant role,
DAPA would be the primary cause and likely the only one. Without the program, there would be little
risk of a dramatic increase in the costs of the driver’slicense program.”). Thus, there is a link between the
Exemptions and the impact on the States’ fiscs.
C
The District Court also correctly concluded that
an injunction would redress the financial injury the
States face from the Rules. Enjoining the Final Rules
until their legality is adjudicated on the merits will
avoid the imminent financial burden the States face
if they are not enjoined. Massachusetts, 923 F.3d at
228 (“[A]n injunction preventing the application of
these exemptions would stop the alleged fiscal injury
from occurring, making it not only ‘likely,’ Spokeo,
136 S. Ct. at 1547, but certain that this injury would
not occur for as long as the exemptions are enjoined.”); see Massachusetts, 549 U.S. at 526 (“The
risk of catastrophic harm, though remote, is nevertheless real. That risk would be reduced to some extent if petitioners received the relief they seek.”).
For these reasons, the States have standing to
bring this suit.17
17 Based upon of the foregoing discussion, we need not decide
whether the States also have standing under the special solicitude or parens patriae doctrines.
28a
III
Having determined that the States have standing,
we now address whether they are entitled to a preliminary injunction. The decision to grant or deny a
preliminary injunction is within the sound discretion
of the district court.18 Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24, 33 (2008). To obtain a preliminary injunction, the movants must:
demonstrate (1) that they are reasonably likely
to prevail eventually in the litigation and (2)
that they are likely to suffer irreparable injury
without relief. If these two threshold showings
are made the District Court then considers, to
the extent relevant, (3) whether an injunction
would harm the [defendants] more than denying relief would harm the plaintiffs and (4)
whether granting relief would serve the public
interest.
K.A. ex rel. Ayers v. Pocono Mountain Sch. Dist., 710
F.3d 99, 105 (3d Cir. 2013) (alteration in original)
(quoting Tenafly Eruv Ass’n v. Borough of Tenafly,
309 F.3d 144, 157 (3d Cir. 2002)); accord Fed. R. Civ.
P. 65. To establish a likelihood of success, “a sufficient degree of success for a strong showing exists if
there is ‘a reasonable chance, or probability, of winning.’” In re Revel AC, Inc., 802 F.3d 558, 568 (3d Cir.
18 “We employ a tripartite standard of review for . . . preliminary
injunctions. We review the District Court’s findings of fact for
clear error. Legal conclusions are assessed de novo. The ultimate decision to grant or deny the injunction is reviewed for
abuse of discretion.” K.A. ex rel. Ayers v. Pocono Mountain Sch.
Dist., 710 F.3d 99, 105 (3d Cir. 2013) (omission in original) (internal quotation marks and citations omitted).
29a
2015) (quoting Singer Mgmt. Consultants, Inc. v.
Milgram, 650 F.3d 223, 229 (3d Cir. 2011) (en banc)).
Here, we must decide whether the District Court
correctly concluded that the States have a reasonable
probability of showing that the Final Rules violate
the APA, and if so, whether the equitable factors
warrant a nationwide injunction.
A19
To promulgate binding regulations, agencies engage in what is known as notice-and-comment rulemaking. 5 U.S.C. § 553. This requires an agency to
publish notice of the proposed rule in the Federal
Register, collect and consider public comments, and
issue a concise statement of purpose upon finalizing
the new rule. Id. § 553(b)-(c). Deviation from these
procedures is only permitted where expressly authorized by statute, id. § 559, or when the agency has
“good cause” to dispense with them, id. § 553(b)(3)(B).
The Agencies assert that both grounds justify their
decision to forego notice-and-comment procedures
here. They are mistaken.
1
The Government first argues that provisions within the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) grant the Agencies discretion to proceed by IFR in lieu of notice-and-comment
19 Quite appropriately, the Agencies do not challenge the States’
statutory standing to sue under the APA. 5 U.S.C. § 702; Massachusetts, 549 U.S. at 520 (recognizing states’ “procedural right
to challenge the rejection of its rulemaking petition as arbitrary
and capricious” under the EPA).
30a
rulemaking. The provisions upon which the Government relies provide:
The Secretary, consistent with section 104 of
[HIPAA], may promulgate such regulations as
may be necessary or appropriate to carry out
the provisions of this [subchapter]. The Secretary may promulgate any interim final rules as
the Secretary determines are appropriate to
carry out this [subchapter].
26 U.S.C. § 9833; 29 U.S.C. § 1191c; 42 U.S.C.
§ 300gg-92 [hereinafter “Regulation Provision”]. This
language does not eliminate the need for notice and
comment.
First, the APA only allows a subsequent statute to
modify or supersede its procedural requirements “to
the extent [the statute] does so expressly.” 5 U.S.C.
§ 559. The Regulation Provision contains no express
language supplanting APA procedures, and the sole
reference to “interim final rules” does not confer a license to ignore APA requirements. Indeed, in contrast to statutory authorizations to forego APA procedures, the Regulation Provision is “permissive (‘The
Secretary may promulgate any interim final rules as
the Secretary determines are appropriate . . .’), wideranging (applying to any regulatory proceeding relating to group health insurance plans), and do[es] not
contain any specific deadlines for agency action.”
Coal. for Parity, Inc. v. Sebelius, 709 F. Supp. 2d 10,
18-19 (D.D.C. 2010) (omissions in original and emphasis omitted); see also California II, 911 F.3d at
578-80. In short, because the Regulation Provision
“neither contain[s] express language exempting
agencies from the APA nor provide[s] alternative procedures that could reasonably be understood as de-
31a
parting from the APA,” it does not authorize the
Agencies to disregard the notice-and-comment requirements. California II, 911 F.3d at 579.
Second, the statutory reference within the Regulation Provision sheds light on the scope and purpose
of its IFR sentence. As the Court of Appeals for the
Ninth Circuit points out, § 104 of HIPAA aims to assure regulatory coordination between the Agencies’
Secretaries for matters over which they share responsibility. See California II, 911 F.3d at 579-80 (citing
Pub. L. No. 104-191, 110 Stat. 1936 (1996) (codified at
42 U.S.C. § 300gg-92)). The first sentence of the Regulation Provision authorizes each Secretary to promulgate regulations “consistent with” the HIPAA section on coordination. The second sentence is identical
but for two differences: it discusses IFRs instead of
final regulations, and it omits any mention of
HIPAA’s coordination section. Read in light of the
first sentence, the second ensures that each Agency
can proceed by IFR where a Secretary “need[s] to
regulate within his or her own domain temporarily
while sorting out . . . inter-agency conflict.” Id. at 579.
Thus, “we need not give the second sentence the
[A]gencies’ expansive interpretation in order for the
second sentence to retain independent effect.” Id. at
579-80. In sum, the Regulation Provision does not expressly excuse the Agencies from complying with
APA procedures and therefore does not provide a basis for issuing the IFRs without notice and comment.20
20 Congress knows how to excuse an agency from complying with
the APA. For example, one HIPAA provision expressly permits
the Agencies to promulgate a rule prior to notice and comment.
32a
2
The Agencies also lacked good cause for dispensing with notice of and comment to the IFRs. An agency has “good cause” to forego APA procedures where
following them would be “impracticable, unnecessary,
or contrary to the public interest.”21 5 U.S.C.
§ 553(b)(3)(B). “[C]ircumstances justifying reliance on
[the good cause] exception are indeed rare and will be
accepted only after the court has examine[d] closely
proffered rationales justifying the elimination of public procedures.” Nat. Res. Def. Council, Inc. v. EPA
(“NRDC”), 683 F.2d 752, 764 (3d Cir. 1982) (alterations in original) (internal quotation marks and citation omitted). Thus, we construe the “good cause” ex-
42 U.S.C. § 1320a-7b note. That provision requires the Secretary
of Health and Human Services to publish a rule prescribing
penalties for kickbacks by January 1, 1997, then less than four
months away. It provides that “[s]uch rule shall be effective and
final immediately on an interim basis, but is subject to change
and revision after public notice and opportunity for . . . public
comment.” Unlike the Regulation Provision, § 1320a-7b expressly provides for notice and comment after the promulgation of an
IFR. Congress’s omission of that procedure from the Regulation
Provision demonstrates that it did not provide the Agencies authority to promulgate IFRs without notice and comment.
21 5 U.S.C. § 553(b)(3) provides
[e]xcept when notice or hearing is required by statute,
this subsection does not apply—
...
(B) when the agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure
thereon are impracticable, unnecessary, or contrary to
the public interest.
33a
ception to the notice-and-comment requirement narrowly.22 Id.
When they issued the IFRs, the Agencies claimed
good cause to waive notice and comment based on
(1) the urgent need to alleviate harm to those with
religious objections to the current regulations; (2) the
need to address “continued uncertainty, inconsistency, and cost” arising from “litigation challenging the
previous rules”; and (3) the fact that the Agencies
had already collected comments on prior Mandaterelated regulations. 82 Fed. Reg. at 47,813-15; see also
82 Fed. Reg. at 47,855-59. None of these assertions
meet the standard for good cause.
First, the Agencies’ desire to address the purported harm to religious objections does not ameliorate
the need to follow appropriate procedures. All regulations are directed toward reducing harm in some
manner.23 See United States v. Reynolds, 710 F.3d
Though the review standard for agency assertions of good
cause remains an open question in our circuit, see United States
v. Reynolds, 710 F.3d 498, 509 (3d Cir. 2013), we need not answer that question here. Even applying the most deferential of
the potential standards—reviewing the agency’s good cause determination to see if it is arbitrary and capricious—the IFRs
cannot stand.
22
23 As we observed in Reynolds,
[m]ost, if not all, laws passed by Congress requiring
agencies to promulgate new rules are designed to eliminate some real or perceived harm. If the mere assertion
that such harm will continue while an agency gives notice and receives comments were enough to establish
good cause, then notice and comment would always have
to give way. An agency will invariably be able to point to
34a
498, 512-13 (3d Cir. 2013). Thus, “[a] need to regulate
affected parties does not create the urgency necessary
to establish good cause.” Id. at 511. “As with any other administrative agency conclusion, we require some
statement of facts or circumstances that justifies the
existence of good cause (e.g., an imminent, externally
imposed deadline or the existence of an emergency).”
Id. at 512. The Agencies fail to cite any facts or impending deadlines sufficient to raise “good cause”
here.
Second, the need to address uncertainty is likewise insufficient to establish good cause. Uncertainty
precedes every regulation, and to allow uncertainty
to excuse compliance with notice-and-comment procedures “would have the effect of writing [those] requirements out of the statute.” Id. at 510. Furthermore, our precedent forecloses the acceptance of uncertainty as a basis for good cause. Id. (“An agency’s
intention to provide clarity, without more, cannot
amount to good cause.”).
Third, the Agencies’ previous solicitation and collection of comments regarding other rules concerning
Contraceptive Mandate cannot substitute for notice
and comment here. If the APA permitted agencies to
forego notice-and-comment concerning a proposed
regulation simply because they already regulated
similar matters, then the good cause exception could
largely obviate the notice-and-comment requirement.
Furthermore, the IFRs did not make a minor change.
some continuing harm during the notice and comment
period antecedent to the promulgation of a rule.
710 F.3d at 512-13.
35a
The IFRs create exemptions from the Contraceptive
Mandate with unprecedented scope and make the Accommodation wholly voluntary. Such a dramatic
overhaul of the Contraceptive Mandate regulations
required notice-and-comment under the APA.
For these reasons, the Agencies did not have good
cause to ignore the APA’s notice and comment requirement.
B
The Government also contends that, even if the
IFRs were procedurally deficient, the Agencies’ subsequent use of notice-and-comment rulemaking to finalize the Rules cured any procedural defects. Under
our precedent, however, “post-promulgation notice
and comment procedures cannot cure the failure to
provide such procedures prior to the promulgation of
the rule at issue.” NRDC, 683 F.2d at 768; see Reynolds, 710 F.3d at 519 (“Any suggestion that the post
promulgation comments to the Interim Rule can satisfy [the purposes of notice-and-comment rulemaking] misses the point.” (internal citation omitted));
Sharon Steel Corp. v. EPA, 597 F.2d 377, 381 (3d Cir.
1979) (“We hold that the period for comments after
promulgation cannot substitute for the prior notice
and comment required by the APA.”).
APA notice-and-comment procedures serve several goals, including “(1) to ensure that agency regulations are tested via exposure to diverse public comment, (2) to ensure fairness to affected parties, and
(3) to give affected parties an opportunity to develop
evidence in the record to support their objections to
the rule and thereby enhance the quality of judicial
review.” Prometheus Radio Project v. FCC, 652 F.3d
36a
431, 449 (3d Cir. 2011) (quoting Int’l Union, United
Mine Workers of Am. v. Mine Safety & Health Admin., 407 F.3d 1250, 1259 (D.C. Cir. 2005)). The
comment process also allows each agency to “maintain[] a flexible and open-minded attitude towards its
own rules,” Reynolds, 710 F.3d at 511 (alteration in
original and citation omitted) (quoting Prometheus
Radio, 652 F.3d at 449); see also Azar v. Allina
Health Servs., 139 S. Ct. 1804, 1816 (2019) (“Notice
and comment . . . affords the agency a chance to avoid
errors and make a more informed decision.” (internal
citation omitted)). To preserve the integrity of this
process, “[t]he opportunity for comment must be a
meaningful opportunity,” Prometheus Radio, 652
F.3d at 450 (alteration in original), to have interested
parties share their views, and to have the agency
consider them with an “open mind,” Reynolds, 710
F.3d at 517-19.
The notice and comment exercise surrounding the
Final Rules does not reflect any real openmindedness toward the position set forth in the
IFRs.24 First, as the Government admits, the minor
changes to the Final Rules do not “alter the fundamental substance of the exemptions set forth in the
IFRs.” Dkt. 107-1 at 8. Second, the reasons the Agencies supplied for promulgating the Final Rules simply
echoed those provided for issuing the IFRs. See 83
Fed. Reg. at 57,552, 57,609. These rationales do not
show the “flexible and open-minded attitude” the notice-and-comment process requires. Reynolds, 710
24 We express no opinion on whether the Agencies appropriately
responded to comments collected during this process, see Trump,
351 F. Supp. 3d at 811-12, as this issue is not before us.
37a
F.3d at 511. Together, the Agencies’ justifications for
avoiding notice and comment to the IFRs, and the fact
that the IFRs and the Final Rules are virtually identical, suggest that the opportunity for comment was
not a “meaningful” one in the way the APA requires.
Prometheus Radio, 652 F.3d at 450.
Lastly, even setting aside the Agencies’ lack of
open-mindedness, the IFRs also impaired the rulemaking process by altering the Agencies’ starting
point in considering the Final Rules. In NRDC, our
Court rejected the EPA’s argument that the opportunity for post-promulgation comment remedied the
EPA’s initial failure to promulgate a rule through notice-and-comment rulemaking:
[t]o allow the APA procedures in connection
with the [new rule] to substitute for APA procedures in connection with [the initial, procedurally defective rule] would allow [the] EPA
to substitute post-promulgation notice and
comment procedures for pre-promulgation notice and comment procedures at any time by
taking an action without complying with the
APA, and then establishing a notice and comment procedure on the question of whether
that action allow agencies to circumvent [our
case law] and the APA. We cannot countenance
such a result.
683 F.2d at 768 (citation omitted). This reasoning applies with equal force here. By first promulgating the
IFRs that granted the expanded exemptions without
notice and comment, the Agencies changed the question presented concerning the Final Rules from
whether they should create the exemptions to whether they should depart from them. This starting posi-
38a
tion is impermissible under the APA. Id.; see also
Sharon Steel, 597 F.2d at 381 (“Provision of prior notice and comment allows effective participation in the
rulemaking process while the decisionmaker is still
receptive to information and argument. After the final rule is issued, the petitioner must come hat-inhand and run the risk that the decisionmaker is likely to resist change.” (citation omitted)).
In sum, because deficits in the promulgation of the
IFRs compromised the procedural integrity of the Final Rules, the States have demonstrated a likelihood
of success in showing that the Final Rules are procedurally defective, and in turn, violate the APA.
C
There are also serious substantive problems with
the Final Rules. More specifically, neither of the
statutes upon which the Agencies rely, the ACA and
RFRA, authorize or require the Final Rules. Thus,
they were enacted “in excess of statutory jurisdiction,
authority, or limitations, or short of statutory right,”
making them “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”
5 U.S.C. § 706(2)(A), (C).
1
The Agencies argue that their authority under the
ACA to issue preventive care guidelines includes the
power to promulgate the Exemptions. This assertion
is without textual support. The Women’s Health
Amendment to the ACA, 42U.S.C. § 300gg-13(a)(4),
provides:
A group health plan and a health insurance issuer offering group or individual health insur-
39a
ance coverage shall, at a minimum provide
coverage for and shall not impose any cost
sharing requirements for— . . .
(3) with respect to infants, children, and adolescents, evidence-informed preventive care
and screenings provided for in the comprehensive guidelines supported by the [HRSA].
(4) with respect to women, such additional
preventive care and screenings not described
in paragraph (1)25 as provided for in comprehensive guidelines supported by the [HRSA]
for purposes of this paragraph.
42 U.S.C. § 300gg-13(a). The authority to issue “comprehensive guidelines” concerns the type of services
that are to be provided and does not provide authority
to undermine Congress’s directive concerning who
must provide coverage for these services. Section
300gg-13(a) unambiguously dictates that group
health plans and health insurance issuers “shall provide” the preventive care services set forth in the
HRSA-supported comprehensive guidelines, and
“shall” not impose cost sharing. The term “shall” denotes a requirement, Prometheus Radio Proj. v. FCC,
824 F.3d 33, 50 (3d Cir. 2016) (“Th[e] repeated use of
‘shall’ creates ‘an obligation impervious to . . . discretion.’” (omission in original) (quoting Lexecon Inc. v.
Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26,
35 (1998)), and HRSA’s authority to issue the guide25 Paragraph (1) refers to “evidence-based items or services that
have in effect a rating of ‘A’ or ‘B’ in the current recommendations of the United States Preventive Services Task Force.” 42
U.S.C. § 300gg-13(a)(1).
40a
lines does not empower it to ignore that requirement.
Nothing from § 300gg-13(a) gives HRSA the discretion to wholly exempt actors of its choosing from
providing the guidelines services. On the contrary,
the mandate articulated in § 300gg-13(a) forecloses
such exemptions.26
The Agencies’ reliance on the language that directed HRSA to create the guidelines concerning
women’s preventive health care and the use of the
phrase “as provided for in” such guidelines does not
advance their position. The Agencies contrast
§ 300gg-13(a)(4)’s use of the phrase “as provided for
in” comprehensive guidelines with a neighboring subsection’s provision addressing preventive care for infants, children, and adolescents, which is “provided
for in the” comprehensive guidelines for those services. Compare 42 U.S.C. § 300gg-13(a)(3) (describing
26 The Government argues that if the ACA does not grant the
authority to issue the Exemptions, then HRSA was equally
without authority to issue the Church Exemption and the Accommodation. This argument fails. Though the Church Exemption may seem facially at odds with § 300gg-13(a), Supreme
Court precedent dictates a narrow form of exemption for houses
of worship. See 80 Fed. Reg. at 41,325 (describing the exemption
for churches and houses of worship as “consistent with their
special status under longstanding tradition in our society and
under federal law”); see, e.g., Hosanna-Tabor Evangelical Lutheran Church & Sch. v. EEOC, 565 U.S. 171 (2012) (discussing
the existence of a ministerial exception precluding application of
employment legislation to a religious institution to respect
churches’ internal autonomy). The Accommodation likewise does
not plainly run afoul of the ACA. Instead, it provides a process
through which a statutorily identified actor “shall provide” the
mandated coverage. In any event, the Agencies’ authority to issue the Church Exemption and Accommodation is not before us.
41a
“preventive care and screenings provided for in the
comprehensive guidelines”), with id. § 300gg-13(a)(4)
(describing “preventive care and screenings as provided for in comprehensive guidelines”). They assert
that the use of the word “as” in § 300gg-13(a)(4) gives
HRSA authority to dictate the preventive services to
be provided and who must provide them. This argument overlooks the clear explanation for the different
language. When the ACA was passed, the comprehensive guidelines for children’s preventive care already existed, but guidelines for women’s preventive
care were not yet written. Congress used the definite
article “the” in § 300gg-13(a)(3) to refer to those existing children’s preventive care guidelines. In § 300gg13(a)(4), Congress addressed the women’s preventive
care guidelines that were yet to be promulgated by
stating “as provided for in comprehensive guidelines.”
The Agencies’ interpretation of “comprehensive”
as authorizing them to issue guidelines that exempt
entities from complying with the Mandate likewise
fails. Put simply, the discretion the statute grants
HRSA to issue comprehensive guidelines concerning
services to be provided does not include the power to
exempt actors from the statute itself. This is borne out
by the fact that the word “comprehensive” is also
used to describe the children’s preventive care guidelines, and those guidelines do not exempt any statutorily required party from providing services. See
HHS, Preventive Care Benefits for Children,
https://www.healthcare.gov/preventive-care- children
(last visited May 8, 2019). Congress was obviously
aware of the existing children’s guidelines when it
drafted the Women’s Health Amendment, and Congress’s use of “comprehensive” to describe both sets of
guidelines conveys that it intended them to cover the
42a
same type of subject matter, namely health care services for the identified groups. See F.A.A. v. Cooper,
566 U.S. 284, 292 (2012) (“[W]hen Congress employs
a term of art, it presumably knows and adopts the
cluster of ideas that were attached to each borrowed
word in the body of learning from which it was taken.” (internal quotation marks and citation omitted)).
Other portions of the ACA also show that Congress retained the authority to exempt certain employers from providing contraceptive coverage. In
passing the ACA, Congress explicitly exempted
grandfathered plans from the Contraceptive Mandate
and other ACA requirements. 42 U.S.C. § 18011(a),
(e). Congress also considered and rejected a statutory
conscience amendment that would have operated
similarly to the challenged Exemptions. 158 Cong.
Rec. S1162, 1173-74 (2012). Between the substantially analogous exemption Congress rejected, and the
one it decided to keep, Congress demonstrated that
exempting specific actors from the ACA’s mandatory
requirements is its job, not the Agencies. See United
States v. Johnson, 529 U.S. 53, 58 (2000) (“When
Congress provides exceptions in a statute,” we may
infer “that Congress considered the issue of exceptions and, in the end, limited the statute to the ones
set forth.”). Relatedly, by promulgating the Moral
Exemption, which sought to do what Congress refused to do with the conscience amendment, the
Agencies contravened Congress’s intent. See Food &
Drug Admin. v. Brown & Williamson Tobacco Corp.,
529 U.S. 120, 147 (2000) (considering Congress’s prior
refusal to pass laws as material to whether an agency’s interpretation of its statute is entitled to deference).
43a
Because § 300gg-13(a) does not authorize the
Agencies to exempt plans from providing the required
coverage, the Agencies’ authority under the ACA to
enact the Final Rules is without merit.
227
The Agencies’ effort to cast RFRA as requiring the
Religious Exemption is also incorrect. Even assuming
that RFRA provides statutory authority for the Agencies to issue regulations to address religious burdens
the Contraceptive Mandate may impose on certain
individuals, RFRA does not require the enactment of
the Religious Exemption to address this burden.
RFRA provides that the federal government
“[s]hall not substantially burden a person’s exercise
of religion even if the burden results from a rule of
general applicability,” 42 U.S.C. § 2000bb-1(a), unless “that application of the burden to the person—
(1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest,” id.
§ 2000bb-1(b). “[A] person whose religious exercise
has been burdened in violation of this section” may
seek relief in a judicial proceeding. Id. § 2000bb-1(c).
Thus, RFRA authorizes a cause of action for government actions that impose a substantial burden on a
person’s sincerely-held religious beliefs, and provides
a judicial remedy via individualized adjudication. See
42 U.S.C. § 2000bb-3(a); City of Boerne v. Flores, 521
U.S. 507, 529 (1997) (“[RFRA] prevents and remedies
laws which are enacted with the unconstitutional ob27 No party argues that RFRA authorizes or requires the Moral
Exemption.
44a
ject of targeting religious beliefs and practices.”). Because Congress has deemed the courts the adjudicator of private rights of actions under RFRA, Gonzales
v. O Centro Espirita Beneficente Uniao do Vegetal,
546 U.S. 418, 434 (2006) (holding RFRA “plainly contemplates that courts would . . . consider whether exceptions are required under the test set forth by Congress” (emphasis omitted)), we owe the Agencies no
deference when reviewing determinations based upon
RFRA, see Adams Fruit Co., Inc. v. Barrett, 494 U.S.
638, 649 (1990) (declining to defer to an agency’s
statutory interpretation where Congress “expressly
established the Judiciary and not the [agency] as the
adjudicator of private rights of action arising under
the statute”).
A prima facie RFRA case requires a plaintiff to
prove that the government imposed a substantial
burden on religious exercise. Mack v. Warden Loretto
FCI, 839 F.3d 286, 304 (3d Cir. 2016). A substantial
burden exists if
(1) a follower is forced to choose between following the precepts of his religion and forfeiting benefits otherwise generally available to
other [persons] versus abandoning one of the
precepts of his religion in order to receive a
benefit; or (2) the government puts substantial
pressure on an adherent to substantially modify his behavior and to violate his beliefs.28
28 Although we “defer to the reasonableness” of an objector’s re-
ligious beliefs, “this does not bar our objective evaluation of the
nature of the claimed burden and the substantiality of that burden on [the objector’s] religious exercise.” Real Alternatives, Inc.
45a
Real Alternatives, Inc. v. Sec’y Dep’t of Health & Human Servs., 867 F.3d 338, 371 (3d Cir. 2017) (alteration in original) (internal quotation marks and citation omitted). The Supreme Court has directed that,
when considering a requested accommodation to address the burden, “courts must take adequate account
of the burdens a requested accommodation may impose on nonbeneficiaries.”Cutter v. Wilkinson, 544
U.S. 709, 720 (2005) (referring to third parties who
may face collateral consequences from accommodating an observer’s burden).29 The Accommodation fulfills this directive as it provides a means for an observer to adhere to religious precepts and simultaneously allows women to receive statutorily-mandated
health care coverage.
RFRA does not require the broad exemption embodied in the Final Rule nor to make voluntary a notice of the employer’s decision not to provide such
coverage to avoid burdening those beliefs. As our
Court has explained,
the self-certification form does not trigger or
facilitate the provision of contraceptive coverage because coverage is mandated to be otherwise provided by federal law. Federal law, rather than any involvement by the [employers] in
v. Sec’y Dep’t of Health & Human Servs., 867 F.3d 338, 356 (3d
Cir. 2017) (emphasis omitted) (citation omitted).
29 Although Cutter v. Wilkinson, 544 U.S. 709 (2005), dealt with
an application of the Religious Land Use and Institutionalized
Persons Act (“RLUIPA”), we have said that RLUIPA and RFRA
“are analogous for the purpose of the substantial burden test,”
and we may therefore may apply RLUIPA law. Mack, 839 F.3d
at 304 n.103; see Holt v. Hobbs, 135 S. Ct. 853, 860 (2015).
46a
filling out or submitting the self-certification
form, creates the obligation of the insurance
issuers and third-party administrators to provide coverage for contraceptive services. . . .
[And] the submission of the self-certification
form does not make the [employers] “complicit”
in the provision of contraceptive coverage.
Geneva Coll. v. Sec’y of U.S. Dep’t of Health & Human Servs., 778 F.3d 422, 437-38 (3d Cir. 2015) (emphasis omitted), vacated and remanded sub nom. Zubik, 136 S. Ct. 1557.30
The religious objectors who oppose the Accommodation mechanism disapprove of “what follows from”
filing the self-certification form, but under Free Exercise jurisprudence, we examine the conduct of the objector, not third parties. Id. at 439-40. Here, through
the Accommodation process, “the actual provision of
contraceptive coverage is by a third party,” so any
possible burden from the notification procedure is not
substantial. Id. at 442. For these reasons, RFRA does
not require that the Agencies permit religious objectors to decline to provide contraceptive coverage
without notifying their insurance issuer, TPA, HHS,
or the employees.
Contrary to the Agencies’ assertions in the Rule,
the Supreme Court has not held that the Accommodation imposes substantial burdens on religious
30 While Zubik vacated our opinion in Geneva College, it did not
reach the merits of the Accommodation nor did it “attack our
reasoning.” Real Alternatives, 867 F.3d at 356 n.18. After Zubik,
we repeated that the Accommodation does “not impose a substantial burden.” Id.
47a
rights. Hobby Lobby ruled that closely-held corporations are entitled to take advantage of the Accommodation process rather than facing fines for noncompliance with the contraceptive mandate, observing that the Accommodation was a less restrictive alternative to forcing objectors to choose between adhering to the mandate or violating their sincerelyheld beliefs. 573 U.S. at 730-31. While the Court “did
not decide” whether the Accommodation “complies
with RFRA,” it found that “[a]t a minimum . . . it does
not impinge on that plaintiffs’ religious belief that
providing insurance coverage for [certain contraceptives] violates their religion, and it serves HHS’s
stated interests equally well.” Id. at 731; see also Zubik, 136 S. Ct. at 1561 (Sotomayor, J., concurring)
(“The opinion does not . . . endorse the petitioners’
position that the existing regulations substantially
burden their religious exercise or that contraceptive
coverage must be provided through a separate policy,
with a separate enrollment process.” (internal quotation marks and citations omitted)); Wheaton, 573 U.S.
at 960 (noting that Hobby Lobby “expressly rel[ied] on
the availability of the religious-nonprofit accommodation” to reach its holding).
Furthermore, the Religious Exemption and the
new optional Accommodation would impose an undue
burden on nonbeneficiaries—the female employees
who will lose coverage for contraceptive care. The
Agencies downplayed this burden on women, contradicting Congress’s mandate that women be provided
contraceptive coverage. “No tradition, and no prior
decision under RFRA, allows a religion-based exemption when the [A]ccommodation would be harmful to
others—here, the very persons the contraceptive coverage requirement was designed to protect.” Hobby
48a
Lobby, 573 U.S. at 764 (Ginsburg, J., dissenting). As
the Agencies recognize, the record shows that thousands of women may lose contraceptive coverage if
the Rule is enforced and frustrate their right to obtain contraceptives. Id. at 727 (citation omitted); 42
U.S.C. § 300gg-13(a)(4) (directing the enactment of
the Women’s Preventive Services Guidelines, which
include contraceptives).
In short, the status quo prior to the new Rule,
with the Accommodation, did not infringe on the religious exercise of covered employers, nor is there a basis to conclude the Accommodation process infringes
on the religious exercise of any employer. For these
reasons, RFRA does not demand the Religious Exemption.
D
Because the States demonstrated a likelihood of
success on the merits as to their APA claim, we next
turn to the remaining equitable factors. To obtain a
preliminary injunction, a plaintiff must “demonstrate
that irreparable injury is likely in the absence of an
injunction.” Winter, 555 U.S. at 22 (emphasis omitted). Because the States cannot collect money damages under the APA,31 5 U.S.C. § 702 (enabling
claimants to obtain “relief other than money damages”); see also California II, 911 F.3d at 581, the States
will suffer irreparable harm if the Rules are enforced.
The States will face unredressable financial consequences from subsidizing contraceptive services,
31 Monetary injuries ordinarily do not constitute irreparable
harm because they are compensable. See Instant Air Freight Co.
v. C.F. Air Freight, Inc., 882 F.2d 797, 801 (3d Cir. 1989).
49a
providing funds for medical care associated with unintended pregnancies, and absorbing medical expenses that arise from decreased use of contraceptive
medications for other health conditions. Therefore,
the District Court did not abuse its discretion in holding that the States demonstrated a likelihood of irreparable harm.
Furthermore, because the current Accommodation
does not substantially burden employers’ religious
exercise and the Exemption is not necessary to protect a legally-cognizable interest, the States’ financial
injury outweighs any purported injury to religious
exercise. Moreover, the public interest favors minimizing harm to third-parties by ensuring that women
who may lose ACA guaranteed contraceptive coverage
are able to maintain access to the preventive care to
which they are entitled under the ACA and HRSA’s
comprehensive guidelines while final adjudication of
the Rules is pending. Therefore, the District Court
did not abuse its discretion in concluding that the
balance of the equities and the public interest both
favor issuing an injunction.
E
Having determined that a preliminary injunction
is warranted, the final question we address is whether
the District Court abused its discretion by enjoining
the Final Rules nationwide. “Crafting a preliminary
injunction is an exercise of discretion and judgment,
often dependent as much on the equities of a given
case as the substance of the legal issues it presents.”
Trump v. Int’l Refugee Assistance Project, 137 S. Ct.
2080, 2087 (2017) (per curiam). While courts are
vested with the power to issue equitable relief with a
nationwide reach, see Texas, 809 F.3d at 188 (quoting
50a
U.S. Const. art. III, § 1), they must ensure that “injunctive relief [is] no more burdensome to the defendant than necessary to provide complete relief to
plaintiffs,” Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharm. Co., 290
F.3d 578, 598 (3d Cir. 2002) (internal quotation
marks and citation omitted). We must also bear in
mind that the purpose of injunctions is “not to conclusively determine the rights of the parties, but to balance the equities as the litigation moves forward.”
Trump, 137 S. Ct. at 2087 (internal citation omitted).
Mindful of these considerations, the District Court
did not abuse its discretion in concluding that a nationwide injunction is necessary to afford complete
relief to the States and that it is not “more burdensome to the defendant than necessary” to provide
such relief.32 Groupe SEB USA, Inc. v. Euro-Pro Operating LLC, 774 F.3d 192, 206 (3d Cir. 2014) (internal quotation marks and citations omitted). First, our
APA case law suggests that, at the merits stage,
courts invalidate—without qualification—unlawful
administrative rules as a matter of course, leaving
their predecessors in place until the agencies can
take further action. See, e.g., Prometheus Radio, 652
F.3d at 453-54 & n.25 (vacating procedurally defective rule and leaving the prior rule in effect); Council
Tree Commc’ns, Inc. v. FCC, 619 F.3d 235, 258 (3d
32 Our sister circuit declined to uphold a nationwide injunction
concerning the IFRs, but the record before us is substantially
more developed than the record before that court. California II,
911 F.3d at 584 (“On the present record, an injunction that applies only to the plaintiff states would provide complete relief to
them.”).
51a
Cir. 2010) (same). Congress determined that rulevacatur was not unnecessarily burdensome on agencies when it provided vacatur as a standard remedy
for APA violations. See 5 U.S.C. § 706(2) (“The reviewing court shall . . . hold unlawful and set aside
agency action” that is outside an agency’s authority,
or “without observance of procedure required by law,”
among other things). While vacatur is the ultimate
remedy the States seek, and that is not the relief being granted here, by enjoining enforcement of the
Rules we provide a basis to ensure that a regulation
that the States have shown likely to be proven to be
unlawful is not effective until its validity is finally adjudicated.
Second, a nationwide injunction is necessary to
provide the States complete relief. Many individuals
work in a state that is different from the one in which
they reside. See Amici Curiae Massachusetts, et al.,
Br. at 24 (“Mass. Amici Br.”) (stating that 14% of the
workforce in New Jersey and 5.4% in Pennsylvania
work out of state, comprising more than 800,000
workers in total). An injunction geographically limited to the States alone will not protect them from financial harm, as some share of their residents who
work out-of-state will lose contraceptive coverage
originally provided through employers in nonenjoined states who will exempt themselves. Women
covered by these plans who live in the States will
seek state-funded services, and a state specific injunction will not be sufficient to prevent the resulting
financial harm.
Out-of-state college attendance further exacerbates the States’ injury. As the Moral Exemption
points out, “[o]nly a minority of students in higher
52a
education receive health insurance coverage from
plans arranged by their colleges or universities.” 83
Fed. Reg. at 57,564; 83 Fed. Reg. at 57,619. Instead,
most of these students remain on their parents’ employer-based plans. Mass. Amici Br. at 26. The States
host many such students at their colleges. “Each
year, for example, Pennsylvania takes in more than
32,000 first-time out-of-state students alone—the
second most of any state in the country.” Mass. Amici
Br. at 25 (citing Nat’l Ctr. For Educ. Statistics, Residence and Migration of All First-Time Degree/Certificate-Seeking Undergraduates, Digest of
Education Statistics (2017)). In the absence of a nationwide injunction, students attending school in the
States may lose contraceptive coverage from their
parents’ out-of-state plans, again leaving programs
within the States to pick up the bill.33 In light of the
impact of these interstate activities, the District
Court did not abuse its discretion in concluding that
a nationwide injunction was necessary to afford the
States complete relief.34
33 It is also likely that residents of the States will attend out-ofstate schools that invoke the Exemptions, and that such students will seek contraceptive services through programs their
home states, also giving rise to fiscal injuries to the States that
only a nationwide injunction can remedy.
The Government also argues that a nationwide injunction
takes a toll on the court system, foreclosing “adjudication by a
number of different courts and judges,” Califano v. Yamasaki,
442 U.S. 682, 702 (1979), thereby preventing legal questions
from “percolating” throughout the court system, Gov’t Br. at 7980. The argument has little force in this case. First, other federal courts have examined substantially the same legal issues as
we confront here. See generally Massachusetts, 923 F.3d 209;
California II, 911 F.3d 558. Second, the extensive litigation sur34
53a
V
For the foregoing reasons, we will affirm the District Court’s order granting the nationwide preliminary injunction.
rounding the Exemption and Accommodation have allowed for
an airing of the legal issues. See Petition for Writ of Certiorari
at 27, The Little Sisters of the Poor Jeanne Jugan Residence v.
California (No. 18-1192) (“Further percolation is unnecessary. . . . [T]his issue was adjudicated by ten courts of appeals
and dozens of district courts. . . . The arguments have all been
aired.”). Thus, there is no “percolation” problem here.
54a
APPENDIX B
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF
PENNSYLVANIA
COMMONWEALTH OF
PENNSYLVANIA AND
STATE OF NEW JERSEY,
Plaintiffs,
CIVIL ACTION
NO. 17-4540
v.
DONALD J. TRUMP, ALEX
M. AZAR II, UNITED
STATES DEPARTMENT OF
HEALTH AND HUMAN
SERVICES, STEVEN T.
MNUCHIN, UNITED
STATES DEPARTMENT OF
THE TREASURY, RENE
ALEXANDER ACOSTA,
THE UNITED STATES DEPARTMENT OF LABOR,
AND THE UNITED STATES
OF AMERICA,
Defendants,
LITTLE SISTERS OF THE
POOR SAINTS PETER AND
PAUL HOME,
Defendant-Intervenor.
ORDER
AND NOW, this 14th day of January, 2019, upon
consideration of the Plaintiffs’ Second Motion for a
Preliminary Injunction (ECF No. 90), Defendants’
55a
and Defendant-Intervenor’s Responses thereto (ECF
Nos. 107 & 108), the Plaintiffs’ Reply in Support
thereof (ECF No. 118), the Administrative Record
(ECF Nos. 23, 47 & 126), Briefs of the Amici Curiae
(ECF Nos. 110, 112, 113, 115, 117 & 127), and following a Hearing on Plaintiffs’ Motion on January 10,
2019, IT IS HEREBY ORDERED that the Motion is
GRANTED.
It is FURTHER ORDERED that Defendants
Alex M. Azar II, as Secretary of the United States
Department of Health and Human Service; the United States Department of Health and Human Services;
Steven T. Mnuchin, as Secretary of the United States
Department of Treasury; the United States Department of Treasury; Rene Alexander Acosta, as Secretary of the United States Department of Labor; and
the United States Department of Labor;1 and their
officers, agents, servants, employees, attorneys, designees, and subordinates, as well as any person acting in concert or participation with them, are hereby
ENJOINED from enforcing the following Final
Rules across the Nation, pending further order of this
Court:
1.
Religious Exemptions and Accommodations for Coverage of Certain Preventive
Services Under the Affordable Care Act,
83 Fed. Reg. 57,536 (Nov. 15, 2018); and
1 In light of the constitutional concerns associated with enjoin-
ing the President of the United States for a claim under the
Administrative Procedure Act, this injunction does not apply to
the President. See Franklin v. Massachusetts, 505 U.S. 788, 801
(1992).
2.
56a
Moral Exemptions and Accommodations
for Coverage of Certain Preventive Services Under the Affordable Care Act, 83
Fed. Reg. 57,592 (Nov. 15, 2018).
The Court has considered the issue of security
pursuant to Rule 65(c) of the Federal Rules of Civil
Procedure and determines that Defendants will not
suffer any financial loss that warrants the need for
the Plaintiffs to post security.
BY THE COURT:
/s/Wendy Beetlestone, J.
WENDY BEETLESTONE, J.
57a
APPENDIX C
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT
OF PENNSYLVANIA
COMMONWEALTH OF
PENNSYLVANIA AND
STATE OF NEW JERSEY,
Plaintiffs,
v.
DONALD J. TRUMP, ALEX M.
AZAR II, UNITED STATES
DEPARTMENT OF HEALTH
AND HUMAN SERVICES,
STEVEN T. MNUCHIN,
UNITED STATES DEPARTMENT OF THE TREASURY,
RENE ALEXANDER ACOSTA,
THE UNITED STATES DEPARTMENT OF LABOR, AND
THE UNITED STATES OF
AMERICA,
Defendants,
LITTLE SISTERS OF THE
POOR SAINTS PETER AND
PAUL HOME,
Defendant-Intervenor.
CIVIL ACTION
NO. 17-4540
58a
OPINION
Table of Contents
I. Background .............................................................. 3
A. Contraceptive Mandate .................................... 3
B. Regulatory Action to Accommodate
Religious Objections ......................................... 4
C. Hobby Lobby & Wheaton College ..................... 6
D. Regulatory Response to Hobby
Lobby & Wheaton College ................................. 7
E. Zubik Remand & Impasse ................................ 8
F. 2017 IFRs & First Preliminary Injunction ...... 9
G. 2018 Final Rules & Second
Motion for Preliminary Injunction ................. 12
II. Analysis ................................................................. 13
A. Standing .......................................................... 13
1. Special Solicitude ........................................ 15
2. Article III Standing .................................... 18
B. Venue............................................................... 20
C. Preliminary Injunction ................................... 23
1. Legal Standard ........................................... 23
2. Likelihood of Success on the Merits ........... 24
a. APA Procedural Claim .......................... 24
i. Inadequate Response
to Comments .................................... 25
ii. IFRs Taint the Final Rules .............. 27
b. APA Substantive Claim ........................ 34
59a
i. The ACA ........................................... 35
ii. RFRA ................................................ 42
3. Irreparable Harm ....................................... 52
4. Balance of the Equities ............................... 55
5. Public Interest ............................................ 56
D. Remedy ............................................................ 57
Plaintiffs, the Commonwealth of Pennsylvania and
the State of New Jersey (collectively “the States”),
have sued the United States of America, President
Donald J. Trump, the United States Secretary of
Health and Human Services Alex M. Azar II, the
United States Secretary of the Treasury Steven T.
Mnuchin, and the United States Secretary of Labor
Rene Alexander Acosta in their official capacities, as
well as each of their agencies (collectively “Defendants”), seeking to enjoin enforcement of two Final
Rules that grant exemptions to the Affordable Care
Act’s requirement that health plans cover women’s
preventive services. The Final Rules “finalize” two Interim Final Rules, which Defendants issued in October
2017 and which this Court enjoined soon thereafter,
see Pennsylvania v. Trump, 281 F. Supp.3d 553, 585
(E.D. Pa. 2017). On November 15, 2018, while their
appeal of that preliminary injunction was pending,
Defendants promulgated the Final Rules currently before the Court. The States move to enjoin enforcement
of the Final Rules arguing that, like the IFRs before
them, the Final Rules violate a variety of constitutional and statutory provisions. For the reasons set
forth below, Plaintiffs’ Second Motion for a Preliminary Injunction shall be granted.
60a
I. Background 1
0F
Although the relevant factual and procedural history of this dispute has been laid out at length before,
see id. at 560-64, that background information is recounted here for the sake of clarity.
A. Contraceptive Mandate
In March 2010, Congress enacted the Affordable
Care Act. See Patient Protection and Affordable Care
Act (“ACA”), Pub L. No. 111-148, 124 Stat. 119 (2010).
A provision of the ACA, the Women’s Health Amendment, mandated that insurance providers cover preventive health services and screenings for women
without cost-sharing responsibilities. Specifically, the
Women’s Health Amendment requires that “[a] group
health plan and a health insurance issuer offering
group or individual health insurance coverage shall, at
a minimum provide coverage for and shall not impose
any cost sharing requirements . . . with respect to
women, such additional preventive care and screenings . . . as provided for in comprehensive guidelines
supported by the Health Resources and Services Administration [“HRSA”] for purpose of this paragraph.”
42 U.S.C. § 300gg-13(a)(4). This requirement applies
to all health insurers offering individual or group insurance, as well as all group health plans, with an exception for certain “grandfathered” plans. 42 U.S.C.
§ 18011 (exempting “grandfathered” plans); see also
29 C.F.R. § 2590.715- 1251 (2010).
1 The factual statements found here and elsewhere in the opinion
constitute this Court’s findings of fact, as required under Rule
52(a) of the Federal Rules of Civil Procedure, regardless of any
heading or lack thereof.
61a
Rather than enumerate the preventive services to
be covered by the mandate, Congress delegated that
decision to HRSA, which is an agency of Defendant Department of Health and Human Services (“HHS”).
HRSA, in turn, commissioned the then-named Institute of Medicine (“the Institute”), to convene a panel of
experts to provide recommendations. 2 On July 19,
2011, the Institute issued its report, recommending
that the ACA cover “the full range of Food and Drug
Administration-approved contraceptive methods, sterilization procedures, and patient education and counseling for women with reproductive capacity.” Institute of Medicine, Clinical Prevention Services for
Women: Closing the Gaps, at 109-10 (2011).
1F
On August 1, 2011, HRSA issued its preventive
care guidelines (“2011 Guidelines”), which adopted the
Institute’s recommendations. See HRSA, Women’s
Preventive Services
Guidelines,
available at
https://www.hrsa.gov/womens-guidelines/index.html. 3
The 2011 Guidelines hewed to the Institute’s report,
defining preventive care to include all FDA-approved
“contraceptive methods, sterilization procedures, and
patient education and counseling.” Id.
2F
2 The Institute, renamed the National Academy of Medicine in
2015, is an arm of the National Academy of Sciences, an organization that Congress established for the explicit purpose of furnishing advice to the federal government. See Pub. Citizen v.
Dep’t of Justice, 491 U.S. 440, 460 n.11 (1989).
3 The Guidelines were updated in 2016 but continue to define
“preventive services” to include contraceptive services and counseling. See Updating the HRSA-Supported Women’s Preventive
Services Guidelines, 81 Fed. Reg. 95,148, 95,149 (Dec. 27, 2016).
62a
Under the Women’s Health Amendment, “nongrandfathered group health plans and health insurance issuers are required to provide coverage consistent with the HRSA Guidelines, without cost sharing.” Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventive Services Under
the Patient Protection and Affordable Care Act, 77 Fed.
Reg. 8,725, 8,725 (Feb. 15, 2012). Thus these interlocking statutory and regulatory requirements created the
so-called “Contraceptive Mandate.”
B. Regulatory Action to Accommodate
Religious Objections
At the same time, and based on “considerable feedback,” HHS, the Department of Labor, and the Department of the Treasury (collectively “the Agencies”)
found it was “appropriate that HRSA, in issuing [the
2011] Guidelines, take[] into account the effect on the
religious beliefs of certain religious employers if coverage of contraceptive services were required.” Group
Health Plans and Health Insurance Issuers Relating to
Coverage of Preventive Services Under the Patient Protection and Affordable Care Act, 76 Fed. Reg. 46,621,
46,623 (Aug. 3, 2011). The Agencies therefore provided
HRSA with “additional discretion to exempt certain
religious employers from the Guidelines where contraceptive services are concerned.” Id.
On August 1, 2011, the Agencies promulgated an
interim final rule exempting certain religious employers from providing contraceptive services. Id. Under
the exemption, a “religious employer” could be exempt
from the Contraceptive Mandate only if it: (1) had the
inculcation of religious values as its purpose; (2) primarily employed people who shared its religious ten-
63a
ets; (3) primarily served persons who shared its religious tenets; and (4) was a church, its integrated auxiliary, or a convention or association of a church exempt from taxation under the Internal Revenue Code.
Id. On February 15, 2012, after considering more than
200,000 responses to this interim final rule, the Agencies issued a final rule adopting the “religious employer” definition. 77 Fed. Reg. at 8,725.
On March 21, 2012, the Agencies issued a notice of
proposed rulemaking requesting comments on “alternative ways of providing contraceptive coverage without cost sharing in order to accommodate non-exempt,
non-profit religious organizations with religious objections to such coverage.” Certain Preventive Services
Under the Affordable Care Act, 77 Fed. Reg. 16,501,
16,503 (March 21, 2012). After receiving and considering over 400,000 comments, the Agencies issued their
final rule on July 2, 2013. Coverage of Certain Preventive Services Under the Affordable Care Act, 78 Fed.
Reg. 39,870, 39,871 (July 2, 2013). The final rule had
two noteworthy effects.
First, the rule “eliminate[ed] the first three prongs
and clarif[ied] the fourth prong of the definition” of “religious employer” adopted in 2012. Id. at 39,874. Under the new definition, an entity qualified as a “religious employer” so long as it “is organized and operates as a nonprofit entity and is referred to in section
6033(a)(3)(A)(i) or (iii)” of the Internal Revenue Code,
which applies to “churches, their integrated auxiliaries, and conventions or associations of churches, as
well as to the exclusively religious activities of any religious order.” Id.
Second, the rule established an accommodation for
“eligible organizations” with religious objections to
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providing contraceptive coverage. Id. The rule defined
an “eligible organization” as one that: “(1) [o]pposes
providing coverage for some or all of the contraceptive
services required to be covered . . . ; (2) is organized
and operates as a nonprofit entity; (3) holds itself out
as a religious organization; and (4) self-certifies that it
satisfies the first three criteria.” Id. An eligible organization was required to provide a copy of the self-certification to its insurance provider, which then would
provide contraceptive coverage to the organization’s
employees. Id. at 39,876. Thus an eligible organization
that self-certified as such was “not required to contract, arrange, pay, or refer for contraceptive coverage,” but its “plan participants and beneficiaries
[would] still benefit from separate payments for contraceptive services without cost sharing or other
charge,” consistent with the Contraceptive Mandate.
Id. at 39,874.
C. Hobby Lobby & Wheaton College
Meanwhile, a host of legal challenges to the Contraceptive Mandate progressed through the federal
courts, several of which eventually reached the Supreme Court.
On June 30, 2014, the Supreme Court issued its
opinion in Burwell v. Hobby Lobby Stores, Inc., 134 S.
Ct. 2751 (2014). There, three closely-held corporations
challenged the Contraceptive Mandate. Id. at 2765.
The Supreme Court held that the application of the
Contraceptive Mandate to the organizations violated
the Religious Freedom Restoration Act, 42 U.S.C.
§ 2000bb-1 (“RFRA”), because the Contraceptive Mandate imposed a substantial burden on the plaintiffs’
religious exercise and was not the “least restrictive
means” of guaranteeing cost-free access to certain
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methods of contraception. 134 S. Ct. at 2780-82. The
Supreme Court found the existence of the accommodation supported its conclusion that the Contraceptive
Mandate was not the “least restrictive means”: “HHS
itself has demonstrated that it has at its disposal an
approach that is less restrictive than requiring employers to fund contraceptive methods that violate
their religious beliefs HHS has already established
an accommodation for nonprofit organizations with religious objections.” Id. at 2782. Nevertheless, the Supreme Court refrained from deciding “whether an approach of this type”—meaning the accommodation—
“complies with RFRA for purposes of all religious
claims.” Id.
A few days later, the Supreme Court issued an order in a related case, Wheaton College v. Burwell, 134
S. Ct. 2806 (2014) (per curiam). There, Wheaton College, an organization eligible for the accommodation,
sought an injunction “on the theory that its filing of a
self-certification form [would] make it complicit in the
provision of contraceptives by triggering the obligation
for someone else to provide the services to which it objects.” Id. at 2808 (Sotomayor, J., dissenting). The Supreme Court granted the injunction, permitting
Wheaton College to “inform[] the Secretary of Health
and Human Services in writing that it has religious
objections to providing coverage for contraceptive services”—that is, the college did not have to “use the
[self-certification] form prescribed by the [g]overnment.” Id. at 2807 (per curiam). The Supreme Court
warned, however, that the “order should not be construed as an expression of the Court’s views on the
merits.” Id.
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D. Regulatory Response to Hobby Lobby &
Wheaton College
The Agencies responded to Hobby Lobby and
Wheaton College by issuing a notice of proposed rulemaking “amend[ing] the definition of an eligible organization [for purposes of the accommodation] to include a closely held for-profit entity that has a religious objection to providing coverage for some or all of
the contraceptive services otherwise required to be
covered.” Coverage of Certain Preventive Services Under the Affordable Care Act, 79 Fed. Reg. 51,118,
51,121 (Aug. 27, 2014). Furthermore, the Agencies issued an interim final rule, effective immediately, that
provided “an alternative process” for eligible organizations to self- certify “consistent with the Wheaton order.” Coverage of Certain Preventive Services Under
the Affordable Care Act, 79 Fed. Reg 51,092, 51,094-96
(Aug. 27, 2014). On July 14, 2015, the Agencies issued
a rule that finalized the extended accommodation and
alternative self- certification process. Coverage of Certain Preventive Services Under the Affordable Care
Act, 80 Fed. Reg. 41,318, 41,323-24 (July 14, 2015).
E. Zubik Remand & Impasse
On May 16, 2016, the Supreme Court issued its
third decision regarding the Contraceptive Mandate.
In Zubik v. Burwell, 136 S. Ct. 1557 (2016) (per curiam), several organizations eligible for the accommodation challenged the self-certification process on the
grounds that the requirement to submit a notice either
to their insurer or the federal government violated
RFRA. Id. at 1559. The Supreme Court declined to
reach the merits of the dispute, requesting instead
“supplemental briefing from the parties addressing
‘whether contraceptive coverage could be provided to
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petitioners’ employees, through petitioners’ insurance
companies, without any such notice from petitioners.’”
Id. at 1559-60. After the parties agreed that “such an
option [was] feasible,” the Supreme Court remanded
to afford them “an opportunity to arrive at an approach going forward that accommodates petitioners’
religious exercise while at the same time ensuring that
women covered by petitioners’ health plans receive full
and equal health coverage, including contraceptive
coverage.” Id. at 1560 (internal quotation marks omitted). Again, though, the Court “express[ed] no view on
the merits of the cases,” and refrained from “decid[ing]
whether petitioners’ religious exercise has been substantially burdened, whether the [g]overnment has a
compelling interest, or whether the current regulations are the least restrictive means of serving that interest.” Id.
Following the remand the Agencies reached an impasse. After reviewing over 50,000 comments submitted in response to a request for information, the Agencies concluded that there was “no feasible approach . .
. at this time that would resolve the concerns of religious objectors, while still ensuring that the affected
women receive full and equal health coverage, including contraceptive coverage.” Dep’t of Labor, FAQs
About Affordable Care Act Implementation Part 36, at
4 (2016), available at https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-36.pdf.
F. 2017 IFRs & First Preliminary
Injunction
On May 4, 2017, President Donald Trump issued
an Executive Order entitled “Promoting Free Speech
and Religious Liberty.” Exec. Order No. 13798, 82 Fed.
68a
Reg. 21,675 (May 4, 2017). The Order directed the
Agencies to “consider issuing amended regulations,
consistent with applicable law, to address consciencebased objections to the preventive-care mandate promulgated under [the Women’s Health Amendment].” Id.
at § 3.
On October 6, 2017, aiming to be “[c]onsistent with
the President’s Executive Order and the Government’s
desire to resolve the pending litigation and prevent future litigation from similar plaintiffs,” Religious Exemptions and Accommodations for Coverage of Certain
Preventive Services Under the Affordable Care Act, 82
Fed. Reg. 47,792, 47,799 (Oct. 13, 2017), the Agencies
issued two, new IFRs, referred to as the Religious Exemption IFR and the Moral Exemption IFR. See id. at
47,792 (“Religious Exemption IFR”); Moral Exemptions and Accommodations for Coverage of Certain
Preventive Services Under the Affordable Care Act, 82
Fed. Reg. 47,838, 47,838 (Oct. 13, 2017) (“Moral Exemption IFR”) (collectively, “the IFRs”).
The IFRs made several significant changes to the
prior exemption and accommodation framework. 4 For
one, the Moral Exemption IFR made the exemption
3F
4 The following is not an exhaustive list of the changes enacted
by the IFRs, and subsequently the Final Rules. For example, the
IFRs also changed the level at which exemptions are to be applied. So, whereas before the availability of an exemption was to
be “‘determined on an employer by employer basis,’” the IFRs
provide that an exemption “will be determined on a plan basis.”
82 Fed. Reg. at 47,810. The effect of this change, according to the
States, is that an employer may disregard the Contraceptive
Mandate by adopting a group health plan “established or maintained” by an objecting organization, id., even if the employer itself does not hold a sincere religious or moral objection to contraception.
69a
available to “additional entities”—including for-profit
entities that are not publicly traded—that object based
on “sincerely held moral convictions,” without any
need for the objection to be grounded in a religious objection to contraception. 82 Fed. Reg. at 47,862 (emphasis added). Second, the Religious Exemption IFR
significantly broadened the scope of the religious exemption to encompass any non-profit or for-profit entity, whether closely held or publicly traded. 82 Fed.
Reg. at 47,810. Third, the IFRs “likewise” expanded eligibility for the accommodation, allowing entities with
sincerely held religious or moral convictions to take
advantage of the accommodation process. 82 Fed. Reg.
at 47,813; 82 Fed. Reg. at 47,849. Fourth, the IFRs
made “the accommodation process optional for eligible
organizations,” such that entities taking advantage of
the accommodation would “not be required to comply
with a self-certification process.” 82 Fed. Reg at
47,808; 82 Fed. Reg. at 47,850. Finally, the IFRs eliminated the requirement to provide notice of an intent
to take advantage of the exemption or accommodation—entities that stop providing contraceptive care
“do not need to file notices or certifications of their exemption.” 82 Fed. Reg. at 47,808; 82 Fed. Reg. at
47,850. Thus the IFRs permit entities with religious
or moral objections to forgo providing contraceptive
coverage to employees without “fil[ing] notices or certifications of their exemption.” 82 Fed. Reg. at 47,838. 5
4F
5 The IFRs note that ERISA requires certain disclosures: “[u]nder
ERISA, the plan document provides what benefits are provided
to participants and beneficiaries under the plan and, therefore, if
an objecting employer would like to exclude all or a subset of contraceptive services, it must ensure that the exclusion is clear in
the plan document.” 82 Fed. Reg. at 47,838.
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The IFRs became effectively immediately. 82 Fed.
Reg. at 47,815; 82 Fed. Reg. at 47,855. Rather than
engage in advance notice-and-comment procedures,
the Agencies requested post-promulgation comments
be submitted by December 5, 2017, 60 days after the
IFRs went into effect. 82 Fed. Reg. at 47,792; 82 Fed.
Reg. at 47,838. The Commonwealth filed suit in the
interim seeking to enjoin enforcement of the IFRs, arguing: (1) they failed to comply with the notice-andcomment procedures required by the APA, 5 U.S.C.
§ 551, et seq.; (2) they are “arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance
with law” in violation of the substantive provisions of
the APA, 5 U.S.C. § 706(2)(A); (3) they violate Title VII
of the Civil Rights Act, 42 U.S.C. § 2000e-2, et seq.;
(4) they violate the Equal Protection Guarantee of the
Fifth Amendment, U.S. Const. amend. V; and, (5) they
violate the Establishment Clause, U.S. Const. amend.
I. 6 This Court granted the preliminary injunction,
finding the Commonwealth was likely to succeed on its
claims that the IFRs violated both the procedural and
substantive strictures of the APA; it did not, however,
reach the merits of the other statutory or constitutional claims. See Pennsylvania, 281 F. Supp.3d at
585. 7
5F
6F
6 The State of New Jersey was not party to the original Com-
plaint, and thus, not a party to the first motion for a preliminary
injunction either.
7 Following this Court’s issuance of a preliminary injunction, sev-
eral other district courts issued decisions regarding the propriety
of the IFRs. See California v. Health & Human Servs., 281 F.
Supp.3d 806, 832 (N.D. Cal. 2017) (enjoining the IFRs for violating the procedural requirements of the APA only), aff’d in part,
vacated in part, remanded sub nom., California v. Azar, 911 F.3d
558, 566 (9th Cir. 2018) (upholding the lower court’s conclusion
71a
Defendants subsequently appealed the decision
and moved to stay proceedings while the appeal was
pending, which this Court granted. 8
7F
G. 2018 Final Rules & Second Motion for
Preliminary Injunction
On November 15, 2018, while their appeal of the
preliminary injunction was pending before the Third
Circuit, the Agencies promulgated two new rules that
“finalize[d]” the IFRs. Religious Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 83 Fed. Reg.
57,536, 57,536 (Nov. 15, 2018) (“Final Religious Exemption”); Moral Exemptions and Accommodations for
Coverage of Certain Preventive Services Under the Affordable Care Act, 83 Fed. Reg. 57,592, 57,592 (Nov.
15, 2018) (“Final Moral Exemption”). “In response to
public comments,” the Agencies made “various
changes” to the Final Rules “to clarify the intended
scope of the language” in the IFRs. 83 Fed. Reg. at
57,537; 83 Fed. Reg. at 57,593. The changes, however,
were largely “non-substantial technical revisions.” 83
Fed. Reg. at 57,567. Defendants assert such changes
on the merits, but striking down the remedy as overbroad); Massachusetts v. Health & Human Servs., 301 F. Supp.3d 248, 266
(D. Mass. 2018) (finding State lacked standing to challenge the
IFRs), app. docketed, No. 18-1514 (1st Cir. June 6, 2018).
8 Following the Commonwealth’s initial motion for a preliminary
injunction, Defendant-Intervenor Little Sisters filed a motion to
intervene. The Court denied that motion. See Pennsylvania v.
Trump, 2017 WL 6206133, at *1 (E.D.Pa. Dec. 8, 2017). On appeal, however, the Third Circuit reversed, remanding the case to
permit intervention. See Pennsylvania v. President United States
of Am., 888 F.3d 52, 62 (3d Cir. 2018). The Court duly vacated its
prior ruling and granted Defendant-Intervenor Little Sisters’ motion.
72a
“do not alter the fundamental substance of the exemptions set forth in the IFRs.” The Final Rules were
scheduled to take effect on January 14, 2019. 83 Fed.
Reg. at 57,567; 83 Fed. Reg. at 57,592.
The Commonwealth then sought to lift the stay to
challenge the Final Rules. The Court granted the motion, 9 and Pennsylvania—now joined by New Jersey—
filed an Amended Complaint and a Second Motion for
a Preliminary Injunction, seeking to enjoin enforcement of the Final Rules. 10 The States argue the Final
Rules: (1) failed to comply with the notice-and- comment procedures required by the APA; (2) are “arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law” in violation of the substantive provisions of the APA; (3) violate Title VII of the
Civil Rights Act; (4) violate the Equal Protection Guarantee of the Fifth Amendment; and, (5) violate the Establishment Clause. It is to the merits of these contentions that the Court now turns.
8F
9F
9 While the filing of a notice of appeal is generally “an event of
jurisdictional significance—it confers jurisdiction on the court of
appeals and divests the district court of its control over those aspects of the case involved in the appeal,” Griggs v. Provident Consumer Disc. Co., 459 U.S. 56, 58 (1982),—“[a]n appeal from the
grant or denial of a preliminary injunction does not divest the
trial court of jurisdiction or prevent it from taking other steps in
the litigation while the appeal is pending,” 11A Wright & Miller,
Fed. Prac. & Pro. § 2962 (3d ed.); see also In re Merck & Co., Inc.
Sec. Litig., 432 F.3d 261, 268 (3d Cir. 2005) (observing that the
district court retains the power to “modify or grant injunctions”
following an appeal).
10 The Third Circuit stayed Defendants’ appeal pending the resolution of the Second Motion for a Preliminary Injunction. Pennsylvania v. President United States of Am., No. 17-3752 (3d Cir.
Jan. 9, 2019).
73a
II. Analysis 11
10F
A. Standing
A threshold question is whether the States have
standing. Standing is a litigant’s ticket to federal
court—a constitutional requirement that “limits the
category of litigants empowered to maintain a lawsuit
in federal court to seek redress for a legal wrong.”
Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016).
The States contend that they are properly before the
Court because the Final Rules will imminently cause
direct harm to their sovereign, quasi-sovereign and
proprietary interests. Additionally, they assert that
they have parens patriae standing to protect the
health, safety and well-being of their residents in ensuring that they enjoy access to healthcare services.
Defendants, on the other hand, contend that the
States have not suffered any legal wrong that would
allow them to get through the turnstile into federal
court.
“No principle is more fundamental to the judiciary’s proper role in our system of government than the
constitutional limitation of federal-court jurisdiction
to actual cases or controversies.” Simon v. E. Kentucky
Welfare Rights Org., 426 U.S. 26, 37 (1976). The doctrine of standing “is part of this limitation.” Id.; see
also Finkleman v. Nat’l Football League, 810 F.3d 187,
203 (3d Cir. 2016). “[T]he irreducible constitutional
minimum of standing contains three elements.” Lujan
v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).
First, a plaintiff must have suffered an “injury in fact,”
11 This section and all others afterwards includes the Court’s legal
conclusions as required under Rule 52(a) of the Federal Rules of
Civil Procedure.
74a
which is “an invasion of a legally protected interest
which is (a) concrete and particularized and (b) actual
or imminent, not conjectural or hypothetical.” Id. (internal quotation marks and citations omitted). Second,
a plaintiff must show that there is a “causal connection
between the injury and the conduct complained of”—
that is, the injury must be “fairly traceable” to the
“challenged action of the defendant.” Id. (internal quotation marks omitted). Third, a plaintiff must show
that it is “likely, as opposed to merely speculative, that
the injury will be redressed by a favorable decision.”
Id. at 561 (internal quotation marks omitted).
As “[t]he party invoking federal jurisdiction,” the
States “bear[] the burden of establishing these elements.” Id. And, “[s]ince they are not mere pleading
requirements but rather an indispensable part of the
plaintiff’s case, each element must be supported in the
same way as any other matter on which the plaintiff
bears the burden of proof, i.e., with the manner and
degree of evidence required at the successive stages of
the litigation.” Id. “[A]t the preliminary injunction
stage, allegations are”—without more—“not enough to
support standing;” rather, the States must “adduce[]
evidence demonstrating more than a mere possibility”
that the elements of standing are met. Doe v. Nat’l Bd.
of Med. Exam’rs, 199 F.3d 146, 152-53 (3d Cir. 1999).
1. Special Solicitude
This standing inquiry must be made with recognition that States, like Pennsylvania and New Jersey
here, “are not normal litigants for the purposes of invoking federal jurisdiction.” Massachusetts v. EPA,
549 U.S. 497, 518 (2007). They are “entitled to special
solicitude in [the] standing analysis” if they have: (1)
a procedural right that authorizes them to challenge
75a
the conduct at issue; and, (2) a “stake in protecting
[their] quasi-sovereign interests.” Id. at 520; see also
Texas v. United States, 809 F.3d 134, 151 (5th Cir.
2015), aff’d by an equally divided Court, 136 S. Ct.
2271 (2016) (per curiam).
In determining whether the States have met these
conditions, both Massachusetts v. EPA and Texas v.
United States are instructive. In Massachusetts v.
EPA, Massachusetts sued the Environmental Protection Agency (“EPA”), alleging that the EPA had “abdicated its responsibility under the Clean Air Act” when
it failed to issue regulations regarding the emission of
certain greenhouse gases. 549 U.S. at 505. The EPA
challenged Massachusetts’ standing to bring the suit,
arguing greenhouse gas emissions are a widespread
and generalized harm not unique to any specific plaintiff. Id. at 517. The Supreme Court nonetheless held
that Massachusetts had special solicitude in the
standing inquiry to challenge the EPA’s inaction:
First, Massachusetts had a procedural right under the
relevant statute, the Clean Air Act, which allowed it
to “challenge agency action unlawfully withheld.” Id.
(citing 42 U.S.C. § 7607(b)(1)). Second, Massachusetts
had a quasi-sovereign interest—a “well-founded desire
to preserve its sovereign territory” from the effects of
global warming because Massachusetts “own[ed] a
great deal of the territory alleged to be affected.” Id. at
519 (internal quotation marks omitted); see also id. at
522 (noting affidavits asserting that “rising seas have
already begun to swallow Massachusetts’ coastal
land.”). After concluding that Massachusetts was entitled to special solicitude in the standing analysis, the
Supreme Court ultimately held that it had Article III
standing to sue the EPA based on the injury to its territory stemming from global warming. Id. at 526.
76a
In Texas v. United States, the Fifth Circuit, relying
on Massachusetts v. EPA, similarly concluded that
Texas and a multitude of other States were entitled to
special solicitude in seeking to enjoin implementation
of the Deferred Action for Parents of Americans and
Lawful Permanent Residents program (“DAPA”). 809
F.3d at 154-55. There, non-citizens in Texas could apply for a driver’s license if they presented “documentation issued by the appropriate United States agency
that authorizes the applicant to be in the United
States.” Id. at 155 (internal quotation marks omitted).
DAPA would have permitted at least 500,000 non-citizens to qualify for these driver’s licenses. Id. Because
Texas subsidized its licenses, it would have lost money
for each license issued to a DAPA beneficiary. Id.
Texas therefore sought injunctive relief to prevent
DAPA’s implementation. See id. at 149.
The Fifth Circuit applied the Massachusetts v. EPA
framework and concluded that Texas was entitled to
special solicitude. First, the Fifth Circuit considered
whether the States’ challenge was similar in kind to
the challenge brought by Massachusetts, and concluded that it was. Both suits turned on the construction of a federal statute that specifically provided for a
procedural right to judicial review, and Texas’ use of
the APA to challenge an “affirmative decision” made
by a federal agency was comparable to Massachusetts’
use of the judicial review provision in the Clean Air Act
to challenge the EPA’s inaction. Id. at 152. Second, as
to the quasi-sovereign interest, the Fifth Circuit held
that DAPA imposed “substantial pressure” on Texas to
change its laws to avoid bearing further costs from
subsidizing additional driver’s licenses. Id. at 153. The
Fifth Circuit thus concluded that Texas, and its fellow
plaintiff States, warranted special solicitude in their
77a
suit against the federal government under the APA.
Id. at 154-55. 12
1F
The Fifth Circuit’s reasoning in Texas v. United
States is persuasive here. Here as there, the States
bring suit under the APA to challenge an affirmative
action by the federal government. See Texas, 809 F.3d
at 152. And, the Final Rules—like DAPA—“affect[] the
[S]tates’ ‘quasi-sovereign’ interest by imposing substantial pressure on them to change their laws.” Id.
Specifically, they put pressure on provisions of the
States’ laws that provide state- funded contraceptive
care to low-income citizens. As the States show, the
Final Rules permit more employers to exempt themselves from the Contraceptive Mandate, which would
result in more of the States’ women seeking state12 Defendants here question the binding effect of Texas v. United
States beyond the facts of that case, given that the Supreme Court
summarily affirmed the Fifth Circuit’s decision “by an equally divided Court.” United States v. Texas, 136 S. Ct. 2271 (2016) (per
curiam). While an affirmance by an equally divided Supreme
Court typically does not constitute binding precedent, see Eaton
v. Price, 364 U.S. 263, 264 (1960), where the Supreme Court is
equally divided on an issue of subject matter jurisdiction, it has
determined that the proper course is to remand the issue of jurisdiction to a lower court. See Silliman v. Hudson River Bridge Co.,
66 U.S. 582, 584-85 (1861). In other words, if the Supreme Court
were equally divided on whether Texas had standing to challenge
DAPA, it would have remanded that issue to the Fifth Circuit.
The Supreme Court did not, and instead affirmed the Fifth Circuit, indicating that a majority of the Supreme Court decided that
Texas had standing to pursue its APA claim. Certainly, if the Supreme Court had determined that Texas did not have standing,
it would not have had jurisdiction to hear the case. Even if the
affirmance by an equally divided Supreme Court as it relates to
subject matter jurisdiction were not binding, the Court is persuaded by the reasoning of the Fifth Circuit in Texas v. United
States as it pertains to State standing.
78a
funded sources of contraceptive care. The harm to the
States’ fiscs are “intrusions . . . analogous to pressure
to change the law,” id., implicating the States’ quasisovereign interests. See also Alfred L. Snapp & Son,
Inc. v. Puerto Rico, 458 U.S. 592, 607 (1982) (holding
that a State has a “quasi-sovereign interest in the
health and wellbeing—both physical and economic—
of its residents in general.”). The States, then, meet
the two conditions outlined in Massachusetts v. EPA
and shall be accorded special solicitude in the standing
analysis.
2. Article III Standing
While the States are entitled to special solicitude
in the standing analysis, they must nevertheless meet
the “irreducible constitutional minimum of standing”—namely, injury in fact, causation, and redressability. Lujan, 504 U.S. at 560. In its initial challenge
to the IFRs, the Commonwealth satisfied this burden,
see Pennsylvania, 281 F. Supp.3d at 569, and the same
is true of the States’ challenge to the Final Rules. See
also California, 911 F.3d at 571 (finding another group
of States had standing to challenge the IFRs).
First, the Final Rules inflict a direct injury upon
the States by imposing substantial financial burdens
on their coffers. An agency rule that has “a major effect
on the states’ fiscs” is sufficient to find injury in fact.
Texas, 809 F.3d at 152; id. at 155 (“[Texas] satisfied
the first standing requirement by demonstrating that
it would incur significant costs in issuing driver’s licenses to DAPA beneficiaries.”); see also Wyoming v.
Oklahoma, 502 U.S. 437, 448 (1992) (holding that Wyoming had Article III standing because it undisputedly
suffered a “direct injury in the form of a loss of specific
tax revenues”); Danvers Motor Co., Inc. v. Ford Motor
79a
Co., 432 F.3d 286, 291 (3d Cir. 2005) (“While it is difficult to reduce injury-in-fact to a simple formula, economic injury is one of its paradigmatic forms.”). If the
Final Rules go into effect, the States will have to increase their expenditures for State funded programs
that provide contraceptive services. This is not a speculative harm. As Defendants themselves noted in issuing the IFRs, “there are multiple Federal, State, and
local programs that provide free or subsidized contraceptives for low-income women.” 82 Fed. Reg. at
47,803. As more of the States’ women residents are deprived of contraceptive services through their insurance plans and turn to these State funded programs,
the States will be pressed to make greater expenditures to ensure adequate contraceptive care. See Mendelsohn Decl. ¶ 15; Steinberg Decl. ¶¶ 24-25. And although Defendants point out that the States have not
yet identified a woman resident who has lost contraceptive coverage due to the Final Rules, the States
need not sit idly by and wait for fiscal harm to befall
them. See McNair v. Synapse Group Inc., 672 F.3d
213, 223 (3d Cir. 2012) (“When, as in this case, prospective relief is sought, the plaintiff must show that
he is ‘likely to suffer future injury’ from the defendant’s conduct.”) (quoting City of Los Angeles v. Lyons,
461 U.S. 95, 105 (1983) (emphasis added)). At bottom,
just as Texas’ estimated loss due to DAPA supported a
finding that Texas suffered an injury in fact, so too
does the States’ estimated loss due to the Final Rules
support a finding that the States have suffered an injury in fact. See Texas, 809 F.3d at 155.
Second, the States’ financial injury is “fairly traceable” to the issuance of the Final Rules. By their
terms, the Final Rules expand the scope of the existing
80a
religious exemption rule and allow entities a new rationale for refusing to provide employees with contraceptive coverage if the refusal is “based on sincerely
held moral convictions,” 83 Fed. Reg. at 57,593. Thus,
the Final Rules allow more entities to stop providing
contraceptive coverage, which will result in more
women residents seeking contraceptive care through
State-funded programs. See Mendelsohn Decl. ¶ 15;
Steinberg Decl. ¶¶ 24-25. The States have thus shown
a causal connection between the Final Rules and their
financial injury.
As the Court previously explained, Pennsylvania v.
New Jersey, 426 U.S. 660 (1976), is not to the contrary.
See also California, 911 F.3d at 574 (finding Pennsylvania did not bar States’ challenge to the IFRs on a
similar theory of standing). In that case, Pennsylvania
voluntarily gave tax credits to Pennsylvania residents
who paid taxes in New Jersey, and then proceeded to
sue New Jersey, contending that the New Jersey tax
injured Pennsylvania’s fiscs and was constitutionally
impermissible. Pennsylvania, 426 U.S. at 662-63. The
Supreme Court found that Pennsylvania lacked standing because the injuries to its fiscs were “self-inflicted,” resulting, as they did, from a decision of its
state legislature to enact a law that incorporated the
legislative choices of New Jersey. Id. at 664. Here, by
contrast, the States’ laws funding contraceptive care
do not “directly and explicitly” tie the States’ finances
to another sovereign’s law. California, 911 F.3d at 574.
Rather, the States’ described injuries flow from the
unilateral decision by the Agencies to issue the Final
Rules. See id. (finding Pennsylvania did control in an
analogous challenge); cf. Texas, 809 F.3d at 158 (“The
fact that Texas sued in response to a significant
change in the [federal government’s] policies shows
81a
that its injury is not self- inflicted.”). The States have
therefore met the traceability requirement.
Finally, the States have satisfied the redressability
requirement. As to the States’ procedural claims, enjoining the Final Rules could prompt the Agencies “to
reconsider the program, which is all a plaintiff must
show when asserting a procedural right.” Texas, 809
F.3d at 161; see also Massachusetts, 549 U.S. at 518
(noting that where, as here, a litigant is “vested with
a procedural right, that litigant has standing if there
is some possibility that the requested relief will
prompt the injury-causing party to reconsider the decision that allegedly harmed the litigant”). And, as for
the States’ substantive claims, enjoining the Final
Rules “would prevent [the States’] injury altogether.”
Texas, 809 F.3d at 161.
In sum, the States have established the irreducible
constitutional minimum of standing to challenges the
Final Rules in federal court. 13
12F
B. Venue
The next question to address is whether the States’
choice of venue—the Eastern District of Pennsylvania—is proper. Notwithstanding Defendants’ argument to the contrary, it is.
Defendants’ argument is grounded in the structure
of the venue statute, Section 1391(e)(1) of which provides that in a civil action against an officer of the
United States, venue lies “in any judicial district in
which . . . the plaintiff resides if no real property is
13 Because the States have identified an imminent, direct injury
to its state coffers that would result from the Final Rules, there
is no need to address whether they have parens patriae standing.
82a
involved in the action.” 28 U.S.C. § 1391(e)(1). Section
1391(c) defines a party’s residence “[f]or all venue purposes,” and distinguishes between three, and only
three, categories of litigants: “a natural person,” “an
entity with the capacity to sue and be sued in its common name under applicable law, whether or not incorporated,” and “a defendant not resident in the United
States.” Id. at § 1391(c). Because Pennsylvania is neither a natural person nor a non-resident, Defendants
argue it must be treated as an entity for purposes of
determining residency. Section 1391(c)(2) provides
that “if a plaintiff,” an entity “shall be deemed to reside . . . only in the judicial district in which it maintains its principal place of business.” Id. Thus, according to Defendants, Pennsylvania resides only in the
Middle District—the district that encompasses Harrisburg, the state capital—because that is where
Pennsylvania maintains its principal place of business.
While inventive, Defendants’ interpretation of Section 1391(c) is ultimately unpersuasive. See California, 911 F.3d at 570 (rejecting the argument); Alabama v. U.S. Army Corps of Eng’rs, 382 F. Supp.2d
1301, 1328 (N.D. Ala. 2005) (rejecting a similar argument for an earlier version of the venue statute). Defendants’ argument hinges on the assumption that, because Section 1391(c) refers to only three categories of
litigants and because a state is neither a natural person nor a non-resident, a state must necessarily be “an
entity” for purposes of the venue statute. There are,
however, several issues with that assumption.
First, the statute explicitly refers to an entity’s incorporation status, indicating “that the term [entity]
refers to some organization, not a state.” California,
83a
911 F.3d at 570. The legislative history confirms that
Congress was contemplating “unincorporated associations, such as partnerships and labor unions, and
other entities with capacity to sue in their common
name,” when it defined the residency of unincorporated entities in Section 1391(c). H.R. Rep. No. 11210, at 21 (2011). There is no indication, however, that
Congress intended for that provision to dictate the residency of sovereign States by equating a State with an
“unincorporated association[]” like a labor union.
Second, Congress explicitly distinguishes between
States and entities within Section 1391. Compare 28
U.S.C. § 1391(c) (defining the residency of an “entity”),
with id. at § 1391(d) (“Residency of corporations in
States with multiple districts”). “Where Congress includes particular language in one section of a statute
but omits it in another section of the same Act, it is
generally presumed that Congress acts intentionally
and purposely in the disparate inclusion or exclusion.”
Russello v. United States, 464 U.S. 16, 23 (1983) (internal quotation marks and citations omitted). Thus,
courts typically “refrain from concluding . . . that the
differing language in [] two subsections [of a statute]
has the same meaning in each.” Id. Here, Congress’s
differentiation between “an entity” and “States”
within Section 1391 indicates that Congress did not
intend to include the latter within the definition of the
former.
Finally, reading Section 1391 as Defendants suggest would yield an absurd result. As several courts
have observed, an interpretation that “limit[s] residency to a single district in the state would defy common sense,” because “[a] state is ubiquitous throughout its sovereign borders.” California, 911 F.3d at 570;
84a
Alabama, 382 F. Supp.2d at 1329 (“[C]ommon sense
dictates that a state resides throughout its sovereign
borders”). 14
13F
Thus, the Court will follow the lead of the Ninth
Circuit in concluding that “the statute . . . dictates that
a state with multiple judicial districts ‘resides’ in every
district within its borders.” California, 911 F.3d at
570. Venue is therefore proper in the Eastern District
of Pennsylvania. 15
14F
C. Preliminary Injunction
Because the States have established standing to
bring their claims into federal court and that this is a
proper venue to hear those claims, the Court now
14 The unreported district court cases that Defendants rely upon
are not to the contrary. See Gaskin v. Pennsylvania, 1995 WL
154801, at *1 (E.D. Pa. Mar. 30, 1995); Bentley v. Ellam, 1990 WL
63734, at *1 (E.D. Pa. May 8, 1990). Both Gaskin and Bentley
discuss the residency of state agencies or officials, which is different in kind from the residency of a sovereign State itself.
15 Section 1391(e) also provides that venue is proper in a civil ac-
tion against an officer of the United States, where “a substantial
part of the events or omissions giving rise to the claim occurred.”
28 U.S.C. § 1391(e). Because the Court finds Pennsylvania resides throughout the State, it need not address the States’ alternative argument that venue is proper because “a substantial part
of the events” giving rise to their claim occurred here.
Relatedly, New Jersey’s residency does not bear on the question of because “in an action against the federal government or
an agent thereof [t]here is no requirement that all plaintiffs reside in the forum district.” Exxon Corp. v. FTC, 588 F.2d 895, 89990 (3d Cir. 1978); Superior Oil Co. v. Andrus, 656 F.2d 33, 37 n.7
(3d Cir. 1981) (“[O]nly one plaintiff need satisfy the residency requirement of [Section 1391(e)].”).
85a
turns to the merits of the preliminary injunction motion.
1. Legal Standard
A preliminary injunction is an extraordinary remedy; it “should be granted only in limited circumstances.” American Tel. & Tel. Co. v. Winback & Conserve Program, Inc., 42 F.3d 1421, 1426-27 (3d Cir.
1994). “A plaintiff seeking a preliminary injunction
must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the
absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the
public interest.” Winter v. NRDC, 555 U.S. 7, 20
(2008). The first two are the “most critical factors: [a
movant] must demonstrate that it can win on the merits (which requires a showing significantly better than
negligible but not necessarily more likely than not)
and that it is more likely than not to suffer irreparable
harm in the absence of preliminary relief.” Reilly v.
City of Harrisburg, 858 F.3d 173, 179 (3d Cir. 2017),
as amended (June 26, 2017) (internal quotation marks
omitted). “If these gateway factors are met, a court
then considers the remaining two factors and determines in its sound discretion if all four factors, taken
together, balance in favor of granting the requested
preliminary relief.” Id.
2. Likelihood of Success on the Merits
In demonstrating the likelihood of success on the
merits, a plaintiff need not show that it is more likely
than not that it will succeed. Singer Mgmt. Consultants, Inc. v. Milgram, 650 F.3d 223, 229 (3d Cir. 2011)
(en banc). Instead, all a plaintiff must show is “a likelihood of success on the merits (that is, a reasonable
86a
chance, or probability, of winning) to be granted relief.” Id. (emphasis in original).
a. APA Procedural Claim
The States argue that the Final Rules should be enjoined because Defendants failed to comply with the
procedural requirements of the APA.
The APA generally requires that, when promulgating regulations, administrative agencies meet a set of
procedural requirements, called notice-and-comment
rulemaking. See 5 U.S.C. § 553. Agencies must: issue
a general notice of proposed rulemaking, see id. at
§ 553(b); “give interested persons an opportunity to
participate in the rule making through submission of
written data, views or arguments . . .” id. at § 553(c);
and, “[a]fter consideration of the relevant matter presented, . . . incorporate in the rules adopted a concise
general statement of their basis and purpose,” id.
Notice-and-comment rulemaking serves two distinct purposes—it both “give[s] the public an opportunity to participate in the rule-making process,” and
“enables the agency promulgating the rule to educate
itself before establishing rules and procedures which
have a substantial impact on those regulated.” Texaco,
Inc. v. Fed. Power Comm’n, 412 F.2d 740, 744 (3d Cir.
1969). Nevertheless, there are limited exceptions to
the requirement that all rules be issued pursuant to
notice-and-comment rulemaking, such as when an
agency has “good cause” to forgo the strictures of notice-and-comment rulemaking, 5 U.S.C. § 553(b), or
when a subsequent act of Congress abrogates the
APA’s procedural requirements, id. at § 559.
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In issuing the IFRs, the Agencies failed to meet the
various requirements of notice-and- comment rulemaking. See Pennsylvania, 281 F. Supp.3d at 570. Defendants argued, however, that the IFRs were not procedurally invalid because they fell under one (or more)
of the limited exceptions to notice-and-comment rulemaking. Id. at 571. The Court found otherwise and enjoined the IFRs for violating the procedural strictures
of Section 553. Id. at 576; see also California, 281 F.
Supp.3d at 829 (enjoining the IFRs for violating the
procedural requirements of the APA), aff’d in part, vacated in part, California, 911 F.3d at 575 (upholding
the conclusion that the IFRs violated the APA).
While Defendants continue to maintain that the
IFRs were procedurally valid, 16 they now argue that,
even assuming the IFRs were procedurally improper,
the subsequent action taken by the Agencies in promulgating the Final Rules satisfied notice-and-comment
requirements, and thus the Final Rules comply with
the APA. The States’ response is two-fold. First, they
argue that the Agencies notice-and-comment procedures fell short of the APA’s requirements because the
Agencies did not adequately respond to significant
comments in their statement of the basis and purpose
of the Final Rules. Second, the States contend that, no
matter the Agencies’ subsequent actions, the procedural defects that characterized the issuance of the
15F
16 The Court, for the reasons stated in its prior opinion, again
finds the Agencies’ position unpersuasive, see Pennsylvania, 281
F. Supp.3d at 570, and therefore declines Defendants’ invitation
to revisit its prior holding. See Hayman Cash Register Co. v. Sarokin, 669 F.2d 162, 165 (3d Cir. 1982) (“Under the law of the case
doctrine, once an issue is decided, it will not be relitigated in the
same case, except in unusual circumstances.”).
88a
IFRs fatally taint the Final Rules. These arguments
are considered seriatim.
i. Inadequate Response to
Comments
The States argue that the Agencies’ issuance of the
Final Rules failed to meet the requirements of noticeand-comment rulemaking by not responding to all “vital questions[] raised by comments which are of cogent
materiality.” United States v. Nova Scotia Food Prod.
Corp., 568 F.2d 240, 252 (2d Cir. 1977). The APA requires federal agencies to “consider and respond to significant comments received during the period for public comment.” Perez v. Mortg. Bankers Ass’n, 135 S. Ct.
1199, 1203 (2015). The requirement, however, is not
“particularly demanding.” Nazareth Hosp. v. Sec’y
U.S. Dep’t of Health & Human Servs., 747 F.3d 172,
185 (3d Cir. 2014) (quoting Pub. Citizen, Inc. v. FAA,
988 F.2d 186, 197 (D.C. Cir. 1993)). All that is required
is a response that “‘demonstrates that the [agency]
considered and rejected’ the arguments.” Id. (quoting
Covad Commc’ns Co. v. FCC, 450 F.3d 528, 550 (D.C.
Cir. 2006)).
The States contend that the Agencies failed to clear
this relatively low bar, pointing to several examples of
comments that purportedly received an inadequate response: comments that discuss the scientific evidence
of the harm to the health and economic security of
women that would result from the Final Rules, 83 Fed.
Reg. at 57,555-56; comments that assert the broad religious and moral exemptions will cause women to lose
contraceptive coverage, id. at 57,548- 49; comments
that argue the exemptions violate the ACA prohibition
on regulations that create barriers to medical care, id.
at 57,551-52; and, specifically, a comment submitted
89a
by various States—including Pennsylvania and New
Jersey—regarding the medical risks associated with
pregnancy, id. at 57,555.
For each example, however, a review of the Final
Rules demonstrates that the Agencies acknowledged
the comments and provided an explanation as to why
the Agencies did (or did not) amend the Final Rules
based on the comment. See 83 Fed. Reg. at 57,548,
57,551, 57,555. While the Agencies’ explanations are
not always the picture of clarity, they meet the not
“particularly demanding” requirement, Nazareth
Hosp., 747 F.3d at 185, that the Agencies “consider
and respond to significant comments received during
the period for public comment,” Perez, 135 S. Ct. at
1203. Put differently, the Final Rules “demonstrate [to
a commenter] that the [the Agencies] considered and
rejected, the arguments” put forth by a commenter,
which is “all that the [APA] requires.” Nazareth Hosp.,
747 F.3d at 185 (internal quotation marks omitted).
Thus, the States are unlikely to succeed on the
merits of their argument that, in promulgating the Final Rules, the Agencies’ actions failed to meet the requirements of notice- and-comment rulemaking. 17
16F
ii. IFRs Taint the Final Rules
The States maintain that, even if the Agencies complied with the requirements of notice- and-comment
rulemaking in promulgating the Final Rules, the failure to do so in promulgating the IFRs fatally infected
17 The States’ argument is limited to the claim that the Agencies
failed to adequately respond to significant comments. The States
do not argue, for example, that the notice provided was inadequate. See 5 U.S.C. § 552(b).
90a
the process such that the Final Rules should also be
held invalid.
Generally, “the period for comments after promulgation cannot substitute for the prior notice and comment required by the APA.” Sharon Steel. Corp. v.
EPA, 597 F.2d 377, 381 (3d Cir. 1979). The Circuit
courts however, diverge on the procedural validity of a
final rule that follows an IFR promulgated in a procedurally flawed manner—that is, the question of
whether a “procedural defect that taints the original,
interim-final rule carr[ies] over to the succeeding final
rule.” Kristin E. Hickman & Mark Thomson, Open
Minds and Harmless Errors: Judicial Review of Postpromulgation Notice and Comment, 101 Cornell L.
Rev. 261, 267 (2016) (discussing various approaches
taken by the Circuit courts); compare Salman Ranch,
Ltd. v. Comm’r, 647 F.3d 929, 940 (10th Cir. 2011)
(“While the . . . temporary regulations were issued
without notice and comment, now that the regulations
have issued in final form [after notice and comment],
these arguments are moot . . .”) (internal quotation
marks omitted), rev’d on other grounds, Salman
Ranch, Ltd. v. Comm’r, 566 U.S. 971 (2012), with Air
Transp. Ass’n of Am. v. Dep’t of Transp., 900 F.2d 369,
379 (D.C. Cir. 1990) (“Although we have suggested
that there might be circumstances in which ‘defects in
an original notice [could] be cured by an adequate later
notice’ and opportunity to comment, we have emphasized that we could reach such a conclusion only upon
a compelling showing that ‘the agency’s mind remain[ed] open enough at the later stage.’ The FAA has
not come close to overcoming the presumption of
closed-mindedness in this case.”) (quoting McLouth
Steel Prods. Corp. v. Thomas, 838 F.2d 1317, 1323
(D.C. Cir. 1988)), vacated on other grounds, 498 U.S.
91a
1077 (1991). For its part, the Third Circuit has evidenced a deep skepticism towards the curative powers
of post-promulgation notice-and-comment procedures,
see NRDC v. EPA, 683 F.2d 752, 767-68 (3d Cir. 1982);
United States v. Reynolds, 710 F.3d 498, 519 (3d Cir.
2013); accord Sharon Steel. Corp., 597 F.2d at 381,
which warrants a conclusion that the States are likely
to succeed on the claim that the procedural faults that
characterized the issuance of the IFRs fatally tainted
the Final Rules such that the issuance of the Final
Rules violated the APA.
The Third Circuits’ decision most directly on point
is NRDC v. EPA. There, the NRDC challenged EPA
action that indefinitely postponed the effective date of
certain Clean Water Act amendments. NRDC, 683
F.2d at 757. The EPA did not engage in notice-andcomment procedures before acting to postpone the implementation of the amendments. 18 Id. at 756. After
NRDC initiated litigation challenging the agency’s action, the EPA issued a notice of proposed rulemaking,
seeking comments on whether the agency should issue
a rule further postponing the effective date. Id. at 757.
After going through notice-and-comment procedures,
the EPA then issued a final rule implementing some
of the amendments, while further postponing the most
controversial bits. Id. Nevertheless, NRDC maintained its challenge to the EPA’s initial action to postpone the effective date. The Third Circuit rejected the
17F
18 The EPA argued that the initial action to postpone was not a
“rule” under the APA, and thus did not require notice-and-comment procedures. NRDC, 683 F.2d at 761. The Third Circuit rejected that argument, holding the EPA’s action postponing the
effective date qualified as a rule, requiring notice-and-comment
procedures. Id.
92a
EPA’s argument that its notice- and-comment procedures after the initial action to postpone “cured” any
failure to engage in such procedures before the initial
action, and held the initial action postponing the effective date was procedurally invalid. Id. at 767.
Critical to this dispute, however, the Third Circuit
further held that, even though the NRDC did not challenge the final rule—that is, the rule promulgated following notice-and- comment procedures—the final
rule “was likewise invalid.” Id. at 768. The court of appeals explained that the appropriate remedy for the
EPA’s failure to engage in notice-and-comment rulemaking before taking its initial action required holding both the initial action and the subsequent, final
rule “ineffective.” Id. at 767. EPA’s notice-and-comment procedures “could not serve as the procedural
mechanism” for the final rule because “that rulemaking [could not] replace one on the question of whether
the amendments should be postponed in the first
place.” Id. That is, if the EPA had engaged in noticeand-comment procedures before initially acting to
postpone the effective date, then “the question to be
decided in the [subsequent] rulemaking”—the rulemaking that complied with notice-and-comment procedures—“would have been whether the amendments . . . should be suspended, and not whether they
should be further postponed.” Id. The Third Circuit
warned that:
To allow the APA procedures in connection with
the further postponement to substitute for APA
procedures in connection with an initial postponement would allow EPA to substitute post-promulgation notice and comment procedures for prepromulgation notice and comment procedures at
93a
any time by taking an action without complying
with the APA, and then establishing a notice and
comment procedure on the question of whether
that action should be continued We cannot countenance such a result.
Id.
That reasoning applies with equal force here. The
Agencies issued the IFRs without engaging in noticeand-comment rulemaking. As in NRDC, the issuance
of the procedurally defective IFRs fundamentally
changed the “question to be decided in the [subsequent] rulemaking”—instead of asking whether substantial expansions to the exemption and accommodation should be made at all, the Agencies solicited comments on whether those changes should be finalized.
Thus, the subsequent “rulemaking on [finalizing the
IFRs] could not serve as the procedural mechanism,”
for the Final Rules because “that rulemaking [could
not] replace one on the question of whether” the Agencies should broaden the existing exemption and accommodation “in the first place.” Id. The Agencies are, in
essence, engaging in precisely the behavior that the
Third Circuit warned against in NRDC: “substitute[ing] post-promulgation notice and comment procedures for pre-promulgation notice and comment procedures . . . by taking an action without complying
with the APA, and then establishing a notice and comment procedure on the question of whether that action
should be continued.” Id. The Court, like the Third Circuit, “cannot countenance such a result.” Id.
Defendants and Defendant-Intervenor advance
several arguments to the contrary, none of which are
ultimately persuasive. For one, Defendants argue that
94a
NRDC is not on all fours with this case and so “provides no support for the Plaintiffs’ procedural challenge.” Defendants are correct that NRDC differs factually from the case at hand: there the NRDC challenged only the initial action, here the States challenged both the IFRs and the Final Rules. But, even
though the plaintiff did not challenge the final rule in
NRDC, the Third Circuit held both the initial action to
postpone and the subsequent rule procedurally invalid. In reaching that determination, the Third Circuit
rejected the notion—advanced by the Agencies here—
that subsequent notice-and- comment rulemaking procedures “cured” the failure to engage in such procedures “in the first place.” Id. at 767-78. Both the holding and the reasoning given for that holding are binding on this Court. See Tate v. Showboat Marina Casino
P’ship, 431 F.3d 580, 582 (7th Cir. 2005) (Posner, J.)
(“[T]he holding of a case includes, besides the fact and
the outcome, the reasoning essential to that outcome.”); see also IFC Interconsult, AG v. Safeguard
Int’l Partners, LLC, 438 F.3d 298, 311 (3d Cir. 2006)
(quoting Judge Posner’s definition approvingly). Because the Third Circuit’s reasoning invalidating the
subsequent rule was essential to the holding, and because that reasoning applies with equal force to the
promulgation of the Final Rules, that reasoning controls here.
Next, Defendants argue that the States suffered no
procedural injury because they had an opportunity to
submit a comment in response to the IFRs, an opportunity that the States “admit” to taking advantage of.
The problem for Defendants is that the EPA made the
exact argument to the Third Circuit in NRDC, which
the court of appeals flatly rejected. NRDC, 683 F.2d at
768. As the Third Circuit explained, it did not matter
95a
that “notice and comment were provided in connection
with the proposal that the amendments be further
postponed, and NRDC was able to make all of the arguments in connection with the further postponement
that NRDC would have made in connection with the
initial postponement.” Id. The problem was that the
initial, procedurally defective action fundamentally
changed the question to be presented in the subsequent rulemaking, prejudicing NRDC, which “‘must
come hat-in-hand and run the risk that the decisionmaker is likely to resist change.’” Id. at 768 (quoting Sharon Steel, 597 F.2d at 381). Here, the procedurally invalid IFRs similarly changed the question to be
presented in the subsequent rulemaking, prejudicing
the States’ ability to have their comments heard by an
impartial decisionmaker. Cf. Wagner Elec. Corp. v.
Volpe, 466 F.2d 1013, 1020 (3d Cir. 1972) (“Section
[553(b)] of the [APA] requires notice before rulemaking, not after. The right of interested persons to petition for the issuance, amendment or repeal of a rule,
granted in [5 U.S.C. § 553(e)], is neither a substitute
for nor an alternative to compliance with the mandatory notice requirements of [5 U.S.C. § 553(b)].”) (emphasis in original).
Defendant-Intervenor’s attempt to distinguish
away the reasoning of NRDC fares no better. It argues
the court of appeals’ reasoning does not control because, while “unique circumstances” existed in NRDC
“to establish prejudice,” no such circumstances are
present here. Specifically, Defendant-Intervenor argues that the Third Circuit invalidated the final rule
in NRDC because of the “asymmetry between using an
interim rule to repeal a rule promulgated with prior
notice and comment,” whereas, here, the Final Rules
are not “an abrupt change in federal policy” because
96a
the Final Rules do not rescind the Contraceptive Mandate. According to Defendant-Intervenor, that makes
this case “readily distinguishable from NRDC.”
The argument is premised on a misreading of
NRDC. The Third Circuit did not invalidate the EPA
action because of the degree of change affected by the
procedurally invalid action. Rather, it held that the
subsequent notice-and-comment rulemaking “[could
not] replace [a rulemaking] on the question of whether
the amendments should be postponed in the first
place.” NRDC, 683 F.2d at 768. More fundamentally,
the court of appeals did not rest its decision on the existence of any “unique circumstances,” as DefendantIntervenor suggests. Instead, the Third Circuit voiced
a general admonition against the practice of using
post- promulgation procedures to cure pre-promulgation procedural flaws. Id. As discussed, the reasoning
underpinning that warning informs the result here.
Defendant-Intervenor also advances an altogether
different argument. It points out that the Agencies
“created the [Contraceptive] Mandate via a series of
IFRs without notice and comment,” suggesting that
the Final Rules are procedurally valid because the
Agencies followed similar procedures in the past. The
Court rejected a version of this argument last go
around. See Pennsylvania, 281 F. Supp.3d at 573 n.8.
Whether a party could have brought a successful challenge to the procedures followed in the past is not before the Court—what is at issue here is whether the
procedures the Agencies followed in issuing the Final
Rules violated the APA. Id. (explaining that the IFRs
were “not identical to prior regulations” because “they
make significant changes in the law, and the Supreme
Court did not require immediate action”). The same
97a
flawed reasoning characterizes Defendant-Intervenor’s related argument that invalidating the Final
Rules would “cast a pall on thousands of regulations,”
because, according to the Government Accountability
Office, 35% of all major rules were finalized with postIFR notice-and-comment procedures. Obviously, those
regulations are not currently before this Court, and,
accordingly, the Court is not asked—and thus, cannot
decide—whether the specific procedures employed in
promulgating those regulations were defective.
The States are likely to prevail on their claim that
the issuance of the Final Rules violated the procedural
requirements of the APA in that the procedural defect
that characterized the IFRs fatally tainted the issuance of the Final Rules. That is so, regardless of
whether the procedure followed by the Agencies in the
Final Rules may otherwise meet the requirements of
notice-and- comment rulemaking. 19
18F
19 As noted, other courts of appeals employ other approaches
when evaluating whether a procedural defect in an interim-rule
fatally infects a final rule issued after notice-and-comment procedures are followed—one example being the “open mind” approach. See, e.g., Air Transp. Ass’n of Am., 900 F.2d at 379 (employing the “open mind standard”). While it has never adopted
this approach, the Third Circuit in Reynolds indicated that
whether a promulgating agency “maintained a flexible and openminded attitude towards” an interim rule is a relevant consideration in determining whether an APA violation occurred generally. 710 F.3d at 519.
Even under the more flexible “open mind standard,” however,
the States would likely succeed on the merits of their procedural
claim. As the D.C. Circuit has explained, while “defects in an original notice could be cured by an adequate later notice and opportunity to comment,” the remedial measures cure the earlier
lapses only if the promulgating agency makes “a compelling
showing that the agency’s mind remained open enough at the
98a
b. APA Substantive Claim
The States also contend that the Final Rules violate the substantive requirements of the APA. As the
Court has previously noted, the breadth of the exemptions set out in the IFRs, and now the Final Rules, is
remarkable. The Final Religious Exemption allows all
non-profit and for-profit entities, whether closely held
or publicly traded, to deny contraceptive coverage
based on sincerely held religious beliefs. The Final
Moral Exemption allows any non-profit or for- profit
later stage.” Air Transp. Ass’n of Am., 900 F.2d at 379 (internal
quotation marks omitted). That is, “it is the agency’s burden to
persuade the court that it has accorded the comments a full and
fair hearing.” Advocates for Highway & Auto Safety v. Fed. Highway Admin., 28 F.3d 1288, 1292 (D.C. Cir. 1994). Courts that use
this approach have established that an agency can demonstrate
open-mindedness by making changes to a final rule in response
to public comments, or giving careful consideration to comments
submitted in response to a proposed rule. Air Transp. Ass’n of
Am., 900 F.2d at 380; see also Advocates for Highway & Auto
Safety, 28 F.3d at 1292.
Here, the Agencies have not made a “compelling showing”
that they kept an open mind at the later stages of the rulemaking
process. Most notably, while the Agencies made some changes to
the Final Rules based on public comments, those rules were
largely “non-substantial technical revisions,” 83 Fed. Reg. at
57,567, that Defendants concede “do not alter the fundamental
substance of the exemptions set forth in the IFRs.” Indeed, the
Final Rules and the preambles that accompany them “demonstrate[] a single-minded commitment to the substantive result
reached,” Reynolds, 710 F.3d at 519—to wit, expanding the exemption and accommodation. Because the Agencies’ actions indicate closed-mindedness on “the very subject matter about which
[they] w[ere] to keep an ‘open mind,’” id., the States would likely
prevail on their procedural claim even under the more lenient
open mind standard.
99a
organization that is not publicly traded to deny contraceptive coverage for its employees for any sincerely
held moral conviction.
The APA’s substantive requirements command
that an administrative rule must be set aside if it is
“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” or “in excess of statutory jurisdiction, authority, or limitations, or short of
statutory right.” 5 U.S.C. § 706(2)(A), (C). “It is well
settled that an agency may only act within the authority granted to it by statute.” NRDC v. Nat’l Highway
Traffic Safety Admin., 894 F.3d 95, 108 (2d Cir. 2018).
Because “administrative agencies may act only pursuant to authority delegated to them by Congress,” an
agency must “point to something” in a statute that
“gives it the authority” to take the specific action at
issue. Clean Air Council v. Pruitt, 862 F.3d 1, 9 (D.C.
Cir. 2017) (internal quotation marks omitted).
Defendants cite two potential fonts of statutory authority to issue the Final Rules. First, they assert that
the ACA includes a broad delegation of authority to
the Agencies, permitting them to issue the Final
Rules. Second, with specific regard to the Religious Exemption, Defendants assert that RFRA not only authorizes the Agencies to create a religious exemption
to the Contraceptive Mandate, but in fact requires that
the Agencies issue the broad exemption contained
within the Final Religious Exemption.
As explained below, both arguments fail. The Final
Rules—just as the IFRs before them—exceed the scope
100a
of the Agencies’ authority under the ACA, and, further, cannot be justified under RFRA. As a result, the
Final Rules must be set aside. 20
19F
i. The ACA
To reiterate for purposes of clarity, the ACA requires that group health plans and insurance issuers
“shall, at a minimum provide coverage for and shall
not impose any cost sharing requirements for— . . .
with respect to women, such additional preventive
care and screenings . . . as provided for in comprehensive guideline
This text is long and has been trimmed here. Open the source document for the complete record.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.