Franciscan Alliance, Inc. v. Burwell
FRANCISCAN ALLIANCE, INC. v. Sylvia BURWELL, Secretary of the United States Department of Health and Human Services and United States Department of Health and Human Services
Attorneys
Luke Goodrich, Mark Rienzi, The Becket Fund for Religious Liberty, Washington, DC, Austin R. Nimocks, Texas Attorney Generalâs Office, Austin, TX, for Plaintiffs., Adam Anderson Grogg, Bailey Wilson Heaps, Emily Brooke Nestler, U.S. Department of Justice, Washington, DC, for Defendants.
Full Opinion (html_with_citations)
ORDER
Before the Court are Plaintiffsâ Motions for Preliminary Injunction and Briefs and Appendix in Support (ECF Nos. 22-26), filed October 21, 2016; Defendantsâ Response (ECF No. 53), filed November 23, 2016; and Plaintiffsâ Replies (ECF Nos. 56-57), filed December 2, 2016. Additionally, the parties appeared at a hearing on the request for a preliminary injunction and presented oral arguments on December 20, 2016. ECF No. 61.
The Plaintiffs challenge a regulation enacted pursuant to the Patient Protection and Affordable Care Act (âACAâ) that covers nearly every healthcare provider in the country and reaches into one of the most intimate relationships: that between
For the following reasons, the Court concludes that jurisdiction is proper, the regulation violates the Administrative Procedure Act (âAPAâ) by contradicting existing law and exceeding statutory authority, and the regulation likely violates the Religious Freedom Restoration Act (âRFRAâ) as applied to Private Plaintiffs. Accordingly, Plaintiffsâ Motions for Preliminary Injunction should be and are hereby GRANTED.
I. BACKGROUND
The following factual recitation is taken from Plaintiffsâ First Amended Complaint (ECF No. 21) unless stated otherwise.
The Rule implements Section 1557 of the ACA (âSection 1557â), which prohibits discrimination by any health program or activity receiving federal financial assistance on the grounds prohibited under four federal nondiscrimination statutes incorporated by Section 1557. 45 C.F.R. § 92.1. The ground at issue in this case is Section 1557âs incorporation of the prohibited sex discrimination under Title IX of the Education Amendments of 1972 (âTitle IXâ). Plaintiffs challenge the Ruleâs interpretation of discrimination âon the basis of sexâ under Title IX as encompassing âgen
On October 21, 2016, Plaintiffs moved for partial summary judgment, or in the alternative, a preliminary injunction. ECF Nos. 22, 24. To resolve the matter before the Ruleâs insurance provision goes into effect on January 1, 2017, at which time Plaintiffs would be forced to âmake significant, expensive changes to their insurance plans,â the Court set an expedited briefing schedule and held a hearing on the preliminary injunction motions on December 20, 2016. Priv. Pis.â Mot. 2, ECF No. 24; Nov. 1, 2016 Order 7, ECF No, 32; ECF No. 61. Plaintiffsâ motions for preliminary injunction are now ripe for review.
A. The Rule
The challenged Rule was first proposed on September 8, 2015, pursuant to HHSâs authority to implement Section 1557 of the ACA. Am. Compl. 10-11, ECF No. 21. After notice and comment, the final Rule was published on May 18, 2016. Id. The Rule took partial effect on July 18, 2016, and the insurance provisions will be effective on January 1, 2017. 81 Fed. Reg. at 31376. The Rule purports to implement Section 1557 which provides:
[A]n individual shall not, on the ground prohibited under title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.) [âTitle VIâ], title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.) [âTitle IXâ], the Age Discrimination Act of 1975 (42. U.S.C. 6101 et seq.) [âADAâ], or section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794) [âSection 504â], be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any health program or activity, any part of which is receiving Federal financial assistance ....
42 U.S.C. § 18116(a) (emphasis added). Section 1557 does not create new bases of prohibited discrimination, but rather incorporates the grounds of four longstanding federal nondiscrimination statutes: Title VI, Title IX, the ADA, and Section 504. 42 U.S.C. § 18116(a). The implementing Rule claims to merely âclarif[y] and codifiy] existing nondiscrimination requirements,â incorporated in Section 1557. 81 Fed. Reg. at 31376 (emphasis added). A substantial portion of the Rule deals with discrimination on. the basis of disability, but Plaintiffs limit their challenge to the Ruleâs definition of discrimination on the basis of sex. Priv. Pis.â Br. 24, ECF No. 25.
When implementing the Title IX portion of Section 1557, HHS defined discrimination âon the basis of sexâ to include âtermination of pregnancyâ and âgender identity.â 45 C.F.R. § 92.4, The Rule does not define termination of pregnancy but defines gender identity as âan individualâs internal sense of gender, which may be male, female, neither, or a combination of male and female, and which may be different from an individualâs sex assigned at birth.â Id. The Rule explains that the âgender identity spectrum includes an array of possible gender identities beyond male and female.â 81 Fed. Reg. at 31392.
Plaintiffs claim the Ruleâs interpretation of sex discrimination pressures doctors to deliver healthcare in a manner that vio
1. Health Coverage
One of the âdiscriminatory actions prohibitedâ under the Rule is âhav[ing] or implementing] a categorical [insurance] coverage exclusion or limitation for all health services related to gender transition.â 45 C.F.R. § 92.207(b). The Rule declares that categorizations of all transition-related treatment as cosmetic or experimental are now âoutdated and not based on current standards of care.â 81 Fed. Reg. at 31429. The ârange of transition-related servicesâ contemplated by the Rule includes treatment for gender dysphoria
Because the Rule contains no age limitation, Plaintiffs are concerned it may require health insurance coverage of transitions for children and they note that transition-related procedures are viewed by many in the medical community as harmful, including HHSâs own medical experts.
2. Health Services
Plaintiffs also allege the Rule requires doctors or healthcare providers to perform (or refer patients for) transition-related procedures if the entity provides an analogous service in a different context. Am. Compl. 12-13, ECF No. 21. For example, the Ruleâs preamble explains that â[a] provider specializing in gynecological services that previously declined to provide a medically necessary hysterectomy [removal of the uterus] for a transgender man would have to revise its policy to provide the
HHS stressed that some procedures ârelated to gender transitionâ may be required even if not âstrictly identified as medically necessary or appropriate.â Id. at 31435. Plaintiffs interpret this to mean that if a doctor performs mastectomies as part of a medically necessary treatment for breast cancer, he would be forced to perform the same procedure for a gender transition, even if the doctor believed removing healthy breast tissue was contrary to the patientâs medical interest. Am. Compl. 14, ECF No. 21. Private Plaintiffs also perform certain procedures for a miscarriage (such as dilation and curettage) and they fear the Rule will require them to perform those procedures for abortions to avoid discrimination on the basis of âtermination of pregnancy.â Am. Compl. 33, 38-39, ECF No. 21.
Plaintiffs claim the Rule pressures covered entities to perform and provide insurance coverage for abortion- and transition-related procedures. Priv. Pls.â Br. 18-19, ECF No. 25. But Defendants argue the Rule does not require the performance or insurance coverage of any procedure, but merely prohibits policies from âoperating in a discriminatory manner, both in design and implementation.â Defs.â Resp. 27, ECF No. 50. Defendants claim that âneutral nondiscriminatory application of evidence-based criteriaâ can be used to âmake medical necessity or coverage determinationsâ and that âa legitimate nondiscriminatory reasonâ can justify a limitation of services. Defs.â Resp. 55, 24-25, ECF No. 50. At the hearing on this matter however, Defendantsâ Counsel argued it would be âvery difficult to imag[in]eâ any medical justification for a categorical exclusion of health services or coverage of all transition-related procedures. Hrâg Tr. 75:9-12.
3. Enforcement
Although Title IX provides the grounds of prohibited sex discrimination, covered entities who violate the Ruleâs prohibition of sex discrimination are subject to the penalties associated with a violation of Title VI of the Civil Rights Act of 1964. 45 C.F.R. § 92.302(a). Those in violation of the Rule face the loss of federal funding, debarment from doing business with the government, and false claims liability.
4. Plaintiffs
Franciscan and CMDAâs members are covered entities under the Rule because they both receive federal financial assistance and provide employee health insurance.
Franciscan provides all of its standard medical services to every individual, including those who identify as transgender. Am. Compl. 36, ECF No. 21. But Franciscanâs religious beliefs do hot allow them to perform or cover transition-related procedures. Id. at 3.
Franciscan holds religious beliefs that sexual identity is an objective fact rooted in nature as male or female persons. Like the Catholic Church it serves, Franciscan believes that a personâs sex is ascertained biologically, and not by oneâs beliefs, desires, or feelings. Franciscan believes that part of the image of God is an organic part of every man and woman, and that women and men reflect Godâs image in unique, and uniquely dignified, ways.
Am. Compl. 37, ECF No. 21. Indeed, Franciscan tailors care according to the biological differences between men and women and credits this approach as part of the success behind its award-winning heart-health treatment program,
CMDA is the nationâs largest faith-based organization of doctors, including nearly 18,000 members who sign a statement of faith to join and rely on CMDA to advocate on behalf of their religious beliefs and medical judgments in the public square. Am. Compl. 29-30, ECF No. 21; App. 17, Dr. Stevensâ Decl., ECF No. 26. Accordingly, CMDA is bringing suit on behalf of its members. Am. Compl. 6-7, ECF No. 21.
Private Plaintiffsâ religious beliefs also prevent them from being able to participate in, refer for, or cover elective sterilizations or abortion-related procedures. Am. Compl. 33, 38-39, ECF No. 21. Because the Rule prohibits discrimination on the basis of âtermination of pregnancyâ and fails to incorporate the blanket religious and abortion exemptions of Title IX, Private Plaintiffs are concerned that their blanket exclusion of abortion or elective sterilization services and coverage of such procedures puts them at risk of losing federal funding and facing civil liability. See Priv. Pls.â Br. 31, ECF No. 25.
Franciscan and CMDAâs members also provide health insurance coverage for their employees in accordance with their religious beliefs. See Am. Compl., ECF No. 21. For example, both groups exclude coverage for services related to gender transition, sterilizations, and abortions. Id. at 34, 39. Franciscanâs employee health benefit plan specifically excludes coverage for any â[tjreatment, drugs, medicines, services, and supplies related to gender transition; sterilizations; abortions.â Am. Compl. 39, ECF No. 21; Am. Compl. 34, ECF No, 21 (âCMDA has members who currently provide healthcare coverage for employees, coverage which excludes medical transition procedures.â). Private Plaintiffs sincerely believe that participating in, referring for, or providing insurance coverage of gender transitions, sterilizations, or abortions would constitute âimpermissible material cooperation with evil.â Am. Compl. 39, 33, ECF No. 21.
The State Plaintiffs receive billions in federal financial assistance each year, and are subject to the Rule as providers of both health care and health insurance. See id. at 4-6. State Plaintiffs prohibit insurance coverage for abortions and gender transition procedures, but to comply with the Rule, State Plaintiffs must rescind these categorical exclusions. See State Pis.â Reply 17, ECF No. 56. Texas, one of the named State Plaintiffs, is already being forced to comply with an investigation by HHSâs Office of Civil Rights and stands to lose more than $42.4 billion in federal healthcare fundingâjeopardizing the availability of healthcare for the nationâs most vulnerable citizens if it does not change its policies. State Pis.â Reply 16-17, ECF No. 56; Am. Compl. 4, ECF No. 21. State Plaintiffs claim the Rule âundermines the longstanding sovereign power of the States
Together, Plaintiffs claim the Rule violates the Administrative Procedure Act (âAPAâ) because its definition of prohibited sex discrimination is contrary to law and arbitrary and capricious. See Am. Compl, ECF No. 21. Accordingly, the Court begins with the law governing APA claims and the relevant standards in considering a preliminary injunction.
II. LEGAL STANDARDS
A. The Administrative Procedure Act
âThe APA authorizes suit by â[a] person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute.ââ Norton v. S. Utah Wilderness All, 542 U.S. 55, 61, 124 S.Ct. 2373, 159 L.Ed.2d 137 (2004) (quoting 5 U.S.C. § 702). âWhere no other statute provides a private right of action, the âagency actionâ complained of must be final agency action.â Id. at 61-62, 124 S.Ct. 2373 (quoting 5 U.S.C. § 704). An administrative action is âfinal agency actionâ under the APA if: (1) the agencyâs action is the âconsummation of the agencyâs decision making processâ; and (2) âthe action [is] one by which ârights or obligations have been determined,â or from which âlegal consequences will flow.ââ Bennett v. Spear, 520 U.S. 154, 177-78, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997) (quoting Chicago & Southern Air Lines, Inc. v. Waterman S.S. Corp., 333 U.S. 103, 113, 68 S.Ct. 431, 92 L.Ed. 568 (1948); and Port of Boston Marine Terminal Assân. v. Rederiaktiebolaget Transatlantic, 400 U.S. 62, 71, 91 S.Ct. 203, 27 L.Ed.2d 203 (1970)). âIn evaluating whether a challenged agency action meets these two conditions, this court is guided by the Supreme Courtâs interpretation of the APAâs finality requirement as âflexibleâ and âpragmatic.ââ Qureshi v. Holder, 663 F.3d 778, 781 (5th Cir. 2011) (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 149-50, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967)). When final agency actions are presented for judicial review, the APA provides that reviewing courts should âhold unlawful and set aside agency actionâ that is âarbitrary, capricious, an abuse of discretion, or otherwise not in accordance with [the] law.â 5 U.S.C. § 702(2).
B. Preliminary Injunction
The Fifth Circuit set out the requirements for a preliminary injunction in Canal Authority of State of Florida v. Callaway, 489 F.2d 567, 572 (5th Cir. 1974). To prevail on a preliminary injunction, the movant must show: (1) a substantial likelihood that the movant will ultimately prevail on the merits; (2) a substantial threat that the movant will suffer irreparable injury if the injunction is not granted; (3) that the threatened injury to the movant outweighs whatever damage the proposed injunction may cause the opposing party; and (4) that granting the injunction is not adverse to the public interest. Id.; see also Nichols v. Alcatel USA, Inc., 532 F.3d 364, 372 (5th Cir. 2008).
To qualify for a preliminary injunction, the movant must clearly carry the burden of persuasion with respect to all four requirements. Karaha Bodas Co. v. Perusahaan Pertambangan Minyak
The decision to grant or deny preliminary injunctive relief is left to the sound discretion of the district court. Miss. Power & Light Co. v. United Gas Pipe Line Co., 760 F.2d 618, 621 (5th Cir. 1985) (citing Canal, 489 F.2d at 572). A preliminary injunction âis an extraordinary and drastic remedy, not to be granted routinely, but only when the movant, by a clear showing, carries the burden of persuasion.â White v. Carlucci, 862 F.2d 1209, 1211 (5th Cir. 1989) (quoting Holland Am. Ins. Co. v. Succession of Roy, 777 F.2d 992, 997 (5th Cir. 1985)). Even when a movant satisfies each of the four Canal factors, the decision whether to grant or deny a preliminary injunction remains discretionary with the district court. Miss. Power & Light, 760 F.2d at 621.
III. ANALYSIS
Plaintiffs argue the Rule should be enjoined because it violates: (1) the Administrative Procedure Act; (2) the Religious Freedom Restoration Act; (3) the First Amendmentâs Free Speech Clause; and (4) the Spending Clause of Article I. See Priv. Pis.â Mot., ECF No. 25.
Defendants contend that Plaintiffs are not entitled to a preliminary injunction because they are unlikely to succeed, arguing: (1) the Court lacks jurisdiction; (2) the Rule is entitled to Chevron deference; (3) the Rule does not compel or curtail speech; (4) Plaintiffs failed to assert a sufficient facial pre-enforcement vagueness challenge; and (5) Plaintiffs failed to assert a sufficient substantive due process claim. See Defs.â Resp., ECF No. 50. Defendants also argue Plaintiffs are not entitled to a preliminary injunction because (1) Plaintiffs failed to establish irreparable injury and (2) the balance of equities and public interest favor denying injunctive relief. Id.
A. Jurisdiction
The Court must first assess jurisdiction, for âwithout proper jurisdiction, a court cannot proceed at all.â Steel Co. v. Citizens for a Better Envât, 523 U.S. 83, 84, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998).
Article III confines the federal judicial power to actual âcasesâ and âcontroversies.â U.S. Const. Art. Ill, § 2. The case-or-controversy requirement plays a critical role in ensuring the federal judiciary respects âthe properâand properly limitedârole of the courts in a democratic society.â DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 335, 126 S.Ct. 1854, 164 L.Ed.2d 589 (2006) (quoting Allen v. Wright, 468 U.S. 737, 750, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984)). Article III standing enforces the case-or-controversy requirement and must be established by the
1. Standing
To establish standing Plaintiffs must show: (1) an injury in fact; (2) fairly traceable to Defendantsâ challenged conduct; and (3) likely to be redressed by a favorable judicial decision. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). A plaintiff must support each standing element âwith the manner and degree of evidence required at the successive stages of the litigation.â Lujan, 504 U.S. at 561, 112 S.Ct. 2130. But it is not necessary for all Plaintiffs to demonstrate standing; rather, âone party with standing is sufficient to satisfy Article Illâs case-or-controversy requirement.â Texas v. United States, 809 F.3d 134, 151 (quoting Rumsfeld v. Forum for Acad. & Institutional Rights, Inc., 547 U.S. 47, 52 n.2, 126 S.Ct. 1297, 164 L.Ed.2d 156 (2006)).
To establish injury in fact, a plaintiff must show that he or she suffered âan invasion of a legally protected interestâ that is âconcrete and particularizedâ and âactual or imminent, not conjectural or hypothetical.â Spokeo, Inc. v. Robins, â U.S. â, 136 S.Ct. 1540, 1548, 194 L.Ed.2d 635 (2016) (quoting Lujan, 504 U.S. at 560, 112 S.Ct. 2130). For an injury to be particularized it must âaffect the plaintiff in a personal and individual way.â Spokeo, 136 S.Ct. at 1548. In this case, the Rule will affect each of the Plaintiffs in different ways and varying degrees, but each will be required to make changes to their health insurance coverage (to rescind their current categorical exclusion of transitions) or risk the loss of federal funding and face potential civil liability.
Defendants argue Plaintiffs failed to satisfy the first element of standing because their alleged injuries are conjectural and hypothetical. Defs.â Resp. 39-40, ECF No. 50. Defendants also contend CMDA lacks associational standing to sue on behalf of its members because CMDA members would not have standing to sue in their own right and the claims asserted require their individual participation. Id. at 40-42.
Here, the injuries alleged by Plaintiffs are particularized because they distinctly affect each Plaintiff. For example, the Rule will affect how CMDA members communicate with patients, what insurance coverage they offer to their employees, and their hiring prospects because the Rule imposes potential liability on hospitals for a doctorâs discrimination. Priv. Pls.â Br. 44-49, 19, ECF No. 25; 81 Fed. Reg. at 31384. The Rule will affect Franciscanâs ability to continue operations because with no as surance that they will be exempt from the Ruleâs provisions that contradict their religious beliefs, Franciscan must either maintain their current insurance coverage plan that violates the Rule and risk debilitating consequences or violate their religious beliefs. See Priv. Pls.â Br. 22-23, ECF No. 25. Because State Plaintiffs enforce categorical exclusions of transition-related procedures, and have no religious defense to assert, the Rule mandates re
To satisfy the injury in fact requirement, the injury must also be concrete. Spokeo, 136 S.Ct. at 1548. The Supreme Court has emphasized that a concrete injury âmust actually exist,â meaning it is ârealâ and ânot abstract.â Id. When seeking a preliminary injunction, in addition to past injury, a plaintiff must show he or she faces âan imminent threat of future injury,â See Adarand Constructors, Inc. v. PeĂąa, 515 U.S. 200, 210-11, 115 S.Ct. 2097, 132 L.Ed.2d 158 (1995). For example, in Los Angeles v. Lyons, the Supreme Court held the plaintiff lacked standing to seek an injunction against a police chokehold policy because he faced âno realistic threatâ from the policy. 461 U.S. 95, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983). The Supreme Court noted that â[t]he reasonableness of [plaintiffs] fear is dependent upon the likelihood of a recurrence of the allegedly unlawful conduct.â Id. at 107 n.8, 103 S.Ct. 1660.
Here, Plaintiffsâ fear of being subjected to penalties under the challenged Rule is reasonable given they are all covered entities whose insurance plans include a categorical exclusion of transition-related procedures that is forbidden by the Rule.
The second and third elements of standing, causation and redressability, are easily established here because the Plaintiffs are themselves the subject of the challenged government action. Lujan, 504 U.S. at 561-62, 112 S.Ct. 2130 (stating that when a plaintiff challenges the legality of government action or inaction, and is himself an object of the action at issue, âthere is ordinarily little question that the action or inaction has caused him injury, and that a judgment preventing or requiring the action will redress itâ).
Because Plaintiffs bring claims under the APA, in addition to Article III standing requirements, âthe interest [they] assert[ ] must be âarguably within the zone of interests to be protected or regulated by the statuteâ that [they] say[ ] was violated.â Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak, 567 U.S. 209, 132 S.Ct. 2199, 2210, 183 L.Ed.2d 211 (2012) (quoting Assân of Data Processing Serv. Orgs., Inc. v. Camp, 397 U.S. 150, 153, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970)). As covered entities required to make ex
CMDA also asserts associational standing on behalf of its 18,000 members. Am. Compl. 6-7, 59, ECF No. 21. It is well established that an association is permitted to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organizationâs purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit. Hunt v. Wash, State Apple Adver. Commân, 432 U.S. 333, 343, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977). An organization lacks standing if it fails to adequately allege that there is a threat of injury to any individual member of the association and thus fails to identify even one individual member with standing. Funeral Consumers Alliance, Inc. v. Serv. Corp. Intern., 695 F.3d 330, 344 (5th Cir. 2012) (citing Natâl Treasury Emps. Union v. U.S. Depât of Treasury, 25 F.3d 237, 242 (5th Cir. 1994)). The Supreme Court has held that standing cannot be established by âaccepting the organizationâs self-description of the activities of its membersâ and determining that âthere is a statistical probability that some of those members are threatened with concrete injury.â Summers v. Earth Island Inst., 555 U.S. 488, 497, 129 S.Ct. 1142, 173 L.Ed.2d 1 (2009). Plaintiff-organizations must make specific allegations establishing that at least one identified member has suffered or would suffer harm. Id. at 498, 129 S.Ct. 1142.
As to the first prong, Defendants argue CMDA lacks associational standing because its members have not established their âreligious or conscience-based objections to performing [transition or abortion] services.â Defs.â Resp. 40, ECF No. 50. But a plaintiff-organization need only establish that one member would suffer harm under the Rule, and CMDA has satisfied that requirement by providing the declaration of Dr. Hoffman. Priv. Pls.â App. 467-70, Hoffman Deck, ECF No. 26. Dr. Hoffman declared that âCMDAâs ethical statements are consistent with my own medical and religious beliefs.â App. 468, ECF No. 26. Dr. Hoffman currently provides standard medical services to transgender patients and performs a variety of procedures that could be used in connection with a gender transition but that, in light of his medical judgment and religious beliefs, he would not offer for that purpose. Id. at 468-69.
Defendants take no issue with the second prong, and the Court finds that the interests CMDA seeks to protect in this suit are germane to its purpose. Am. Compl. 29, ECF No. 21. As to the third prong, Defendants argue CMDA lacks associational standing as to the asserted RFRA claim because it would require the participation of individual members. Defs.â Resp. 41, ECF No. 50. CMDA is not required to detail the specific religious views of each member however, and the record is sufficiently developed from Dr. Hoffmanâs Declaration, CMDAâs Ethics Statement, and Private Plaintiffsâ briefing, to consider the RFRA claim at the preliminary injunction stage. Because CMDA alleges there is a real and immediate threat that one of its members will be injured by the Rule, it has established standing on behalf of its members.
2. Ripeness
Defendants also argue this suit is not ripe because Plaintiffsâ injuries are speculative, Plaintiffs face no significant hardship in the absence of review, and the issues presented would be significantly
The Court looks primarily at two considerations in determining whether a case is ripe for judicial review: (1) fitness of the issues for judicial decision; and (2) hardship to the parties of withholding court consideration. Abbott Labs., 387 U.S. at 149, 87 S.Ct. 1507. In the same vein, a challenge to administrative regulations is fit for review if (1) the questions presented are âpurely legal one[s],â (2) the challenged regulations constitute âfinal agency action,â and (3) further factual development would not âsignificantly advance [the courtâs] ability to deal with the legal issues presented.â Texas v. United States, 497 F.3d 491, 498-99 (5th Cir. 2007) (quoting Natâl Park Hosp. Assân v. Depât of Interior, 538 U.S. 803, 812, 123 S.Ct. 2026, 155 L.Ed.2d 1017 (2003)).
Because the present case involves primarily questions of law, the Court finds that it would not be significantly aided by further factual development. The parties do not dispute that Plaintiffs are covered entities under the Rule or that they currently exclude all insurance coverage of transition-related procedures. However, the parties disagree as to the Ruleâs exact application and effect on Plaintiffs. Defendants refuse to indicate whether any of the religious defenses cited by the Rule would allow Private Plaintiffs to maintain their categorical exclusions, and insist more facts are needed to determine whether Private Plaintiffsâ insurance policies violate the Rule. Hrâg Tr. 51:20-24, 61:1-62:25. Absent an applicable religious defense, the Rule clearly forbids categorical exclusions of health insurance coverage for transition-related procedures. 45 C.F.R. § 92.207(b)(4); Defs.â Resp. 26, ECF No. 50. As the Rule clearly prohibits categorical exclusions of transition coverage and Private Plaintiffs have articulated their religious beliefs forbidding coverage of transitions in any case, it is not clear what additional facts would aid resolution of the suit, and Defendantsâ counsel struggled to articulate any at the hearing. 45 C.F.R. § 92.207(b)(4); see Hrâg Tr. 61:1-62:25, 93:14-95:16.
But even assuming that Private Plaintiffs would eventually find safe harbor under one of the federal religious protections cited by the Rule, Defendants do not dispute that Private Plaintiffs are covered by the Rule or that it directly affects their conduct. Therefore on January 1, 2017, Private Plaintiffs will be forced to either violate their religious beliefs or maintain their current policies which seem to be in direct conflict with the Rule and risk the severe consequences of enforcement.
Further, even if Defendants eventually agree Private Plaintiffs are covered by one of the referenced religious protections, State Plaintiffs would have no such defense available. The Rule requires State Plaintiffs to rescind their categorical exclusions of transition procedures and evaluate requests for insurance coverage of transitions on a case-by-case basis. See 45 C.F.R. § 92.207(b)(4). The parties do not dispute that State Plaintiffsâ categorical exclusions of transition-related insurance coverage will be in violation of the Rule on January 1, 2017. See Hrâg Tr. 92:4-8. Therefore, the Court finds no further factual development would aid resolution of the case and what little value a more developed factual record would provide is strongly outweighed by the significant hardship Plaintiffs face in the absence of immediate judicial review.
Substantial hardship is typically satisfied when a party is forced to choose between refraining from allegedly lawful activity on engaging in the allegedly lawful activity and risking significant sanctions. Abbott Labs., 387 U.S. at 136, 87 S.Ct. 1507 (finding the suit ripe because denying review would force plaintiffs to undergo sig-
Courts have departed from this general principleâthat this impossible choice imposes a substantial hardship worthy of pre-enforcement reviewâonly when the alleged injury is hypothetical or speculative. See, e.g., Toilet Goods Assân v. Gardner, 387 U.S. 158, 87 S.Ct. 1520, 18 L.Ed.2d 697 (1967); United Public Workers v. Mitchell, 330 U.S. 75, 67 S.Ct. 556, 91 L.Ed. 754 (1947); Renne v. Geary, 501 U.S. 312, 111 S.Ct. 2331, 115 L.Ed.2d 288 (1991), In Toilet Goods, the choice faced by cosmetic manufacturers challenging an FDA regulation was complying and allowing FDA employees to inspect their.facilities or refusing to comply and risking a reviewable suspension of certification services. Toilet Goods, 387 U.S. at 165, 87 S.Ct. 1520. The Supreme Court concluded the case was not ripe for review because the challenged regulation did not immediately impact plaintiffs in âconducting their day-to-day affairsâ and complying required âno advance action.â Id. at 164, 87 S.Ct. 1520. The Court also declined to find ripeness because âno irremediabl[y] adverse consequences flow[ed] from requiring a later challenge.â Id. In this case however, the challenged Rule affects Plaintiffsâ day-today affairsâthe provision of healthcare services for their patients and healthcare coverage for their employees. The Rule requires Plaintiffs to incur significant expense in complying with the Rule and assessing their potential noncompliance. Further, because Private Plaintiffs claim the Rule substantially burdens their exercise of religion in violation of RFRA, the Court finds that irremediable adverse consequences would result from a delay of review.
Claims are often ripe when denying review would place âthe hapless plaintiff between the Scylla of intentionally flouting state law and the Charybdis of forgoing what he believes to be constitutionally protected activity in order to avoid becoming enmeshed in a criminal proceeding.â Steffel, 415 U.S. at 462, 94 S.Ct. 1209, Plaintiffs in the present case face a similar impossible choice: between the Scylla of intentionally defying federal law and the Charybdis of forgoing specific conduct they believe is constitutionally protected to avoid serious financial and civil penalties. The Court finds the impossible choice faced by Plaintiffs constitutes substantial hardship and with the issues fit for review, the case is accordingly ripe.
Defendants also claim Plaintiffsâ alleged injuries are too speculative to warrant injunctive relief because the Rule incorporates âapplicable Federal statutory protections for religious freedom and conscience.â Defs.â Resp. 22-23, ECF No. 50.
The Court addresses Plaintiffsâ RFRA argument below, but the remaining federal protections are insufficient to assure Plaintiffs of either their compliance with the Rule or safety from enforcement proceedings. The Weldon and Coats Amendments deal exclusively with abortions and do not reach religious objections to providing or covering transition-related procedures. The Church Amendment is limited to specific federal funding streams, providing no assurance that the Ruleâs enforcement mechanisms will not be employed to give âmaximum effect to the provision[s] permitted by law.â 45 C.F.R. § 92.2(b)(c); see Hrâg Tr., 19:1-20.
3. Administrative Exhaustion
Defendants also allege that Congress intended to forbid pre-enforcement review of the Rule, as evidenced by the statutory enforcement, scheme enacted by Section 1557. Defs.â Resp. 42-46, ECF No. 50. âThe APA authorizes suit by â[a] person suffering legal wrong because of agency 'action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute.ââ Norton v. S. Utah Wilderness All., 542 U.S. 55, 61, 124 S.Ct. 2373, 159 L.Ed.2d 137 (2004) (quoting 5 U.S.C. § 702). This right of judicial review extends to agency actions âexcept to, the extent thatâ(1) statutes preclude judicial review; or (2) agency action is committed to agency discretion by law.â Heckler v. Chaney, 470 U.S. 821, 828, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985) (quoting 5 U.S.C. § 701(a)). The âstrong presumptionâ favoring judicial review of administrative action âfails when a statuteâs language or structure demonstrates that Congress wanted an agency to police its own conduct.â Mach Mining, LLC v. E.E.O.C., â U.S. â, 135 S.Ct. 1645, 1651, 191 L.Ed.2d 607 (2015). Defendants bear a âheavy burdenâ to establish the Ruleâs unreviewability,- and âwhere substantial doubt about the congressional intent exists, the general presumption favoring judicial review of administrative action is controlling.â Texas v. United States, 809 F.3d 134, 164 (5th Cir. 2015) (quoting Block v. Cmty. Nutrition Inst., 467 U.S. 340, 351, 104 S.Ct. 2450, 81 L.Ed.2d 270 (1984)).
Defendants argue that Section 1557âs âcomprehensive scheme of administrative and judicial reviewâ indicates Congress intended to preclude initial judicial review. Defs.â Resp. 44, ECF No. 50. Section 1557 incorporates Title Viâs enforcement mechanisms for allegations of sex discrimination under the Rule, so Title VI is the relevant statute to evaluate and determine if Congress intended to divest the Court of original federal question jurisdiction over Plaintiffsâ claims.
Further, while Section 1557 establishes a thorough enforcement process for the individuals it seeks to protect, it provides no similar avenue of relief for Plaintiffsâ current claims. Priv. Pis.â Reply 12, ECF No. 57. Plaintiffs must either change course to bring their insurance and physician policies in accordance with the Rule, bearing compliance costs and violating their religious views and medical judgment; or roll the dice and risk the loss of federal funding or massive liability to private parties. The Court finds nothing in the Affordable Care Actâincluding Section 1557âprecludes this action.
Because Plaintiffs have standing and allege ripe claims properly subject to judicial review, the Court next evaluates whether a preliminary injunction is appropriate.
B. Preliminary Injunction
1. Likelihood of Success on the Merits
The first consideration in determining whether to grant Plaintiffsâ motions for preliminary injunction is whether Plaintiffs have shown a likelihood of success on the merits for their claims. This requires Plaintiffs to present a prima facie case. Daniels Health Scis., LLC v. Vascular Health Scis., 710 F.3d 579, 582 (5th Cir. 2013) (citing Janvey v. Alguire, 647 F.3d 585, 595-96 (5th Cir. 2011)). A prima facie case does not mean Plaintiffs must prove they are entitled to summary judgment. Byrum v. Landreth, 566 F.3d 442, 446 (5th Cir. 2009). A party âis not required to prove his case in full at a preliminary injunction hearing.â Univ. of Texas v.
a. Administrative Procedure Act
Plaintiffs claim the Rule violates the APA because it is contrary to law and exceeds statutory authority by (1) interpreting Title IXâs prohibition of sex discrimination to include gender identity; (2) failing to include the religious and abortion exemptions of Title IX; (3) contradicting the commands of Title VII; and (4) attempting to commandeer the states in violation of the Tenth Amendment. Priv. Pis.â Br., ECF No. 25. In response, Defendants argue the Rule is lawful and argue the Ruleâs interpretation of sex discrimination is entitled to Chevron deference.
In evaluating agency action under the APA, courts must âhold unlawful and set asideâ agency actions that are ânot in accordance with the lawâ or âin excess of statutory jurisdiction, authority, or limitations, or short of statutory right.â 5 U.S.C. § 706(2). For âthe authority of administrative agencies is constrained by the language of the statute they administer.â Texas v. United States, 497 F.3d 491, 500-01 (5th Cir. 2007) (citing Massachusetts v. EPA, 549 U.S. 497, 127 S.Ct. 1438, 167 L.Ed.2d 248 (2007)). âNo matter how it is framed, the question a court faces when confronted with an agencyâs interpretation of a statute it administers is always, sim ply, whether the agency has stayed within the bounds of its statutory authority.â City of Arlington, Tex. v. F.C.C., 569 U.S. 290, 133 S.Ct. 1863, 1868, 185 L.Ed.2d 941 (2013) (emphasis in original).
The Court begins analysis of Plaintiffsâ likelihood of success by considering Defendantsâ first and primary defense: whether HHSâs interpretation of sex discrimination is entitled to deference under Chevron,
i Chevron Deference
In reviewing an agencyâs construction of a statute it administers, courts follow the familiar two-step framework articulated in Chevron and ask first whether Congress has directly spoken to the precise question at issue. Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). If so, this is the end of the matter as the court and agency must give effect to Congressâs unambiguously expressed intent. Food and Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 121, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000); City of Arlington, Tex. v. FCC, 569 U.S. 290, 133 S.Ct. 1863, 1874, 185 L.Ed.2d 941 (2013) (quoting Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778). If not, the court must defer to the agencyâs construction of the statute so long as it is permissible. Brown & Williamson, 529 U.S. at 121, 120 S.Ct. 1291.
Step one of Chevron analysis includes both whether the statute confers the agency jurisdiction over an issue, as well as challenges to an agencyâs interpretation of a statute. Texas v. United States, 497 F.3d at 500-01.
Courts use traditional means of statutory interpretation to determine if a statute is ambiguous: the text, its history, and its purpose. Calix v. Lynch, 784 F.3d 1000, 1005 (5th Cir. 2015) (quoting Bellum v. PCE Constructors, Inc., 407 F.3d 734, 739 (5th Cir. 2005)). When the words are unambiguous, the âjudicial inquiry is complete.â Desert Palace, Inc. v. Costa, 539 U.S. 90, 98, 123 S.Ct. 2148, 156 L.Ed.2d 84 (2003) (quoting Rubin v. United States, 449 U.S. 424, 430, 101 S.Ct. 698, 66 L.Ed.2d 633 (1981)). Legislation is ambiguous if it is susceptible to more than one accepted meaning. Calix, 784 F.3d at 1005. But multiple accepted meanings do not exist merely because a statuteâs âauthors did not have the forethought expressly to contradict any creative contortion that may later be constructed to expand or prune its scope.â Id. (citing Moore v. Hannon Food Servs., Inc., 317 F.3d 489, 497 (5th Cir. 2003)).
Because the authority to issue the Rule was given in Section 1557 of the ACA, the Court begins with the language of Section 1557.
Plaintiffs assert that the plain language of Title IX (incorporated by Section 1557) is clear and unambiguously prohibits biological sex discrimination. State Pls.â Br. 10, ECF No. 23. They argue Congress spoke directly to the contested issueâthe meaning and scope of prohibited sex discriminationâand urge the Court to decide this issue at the first step of the Chevron analysis. State Pls.â Reply 12-14, ECF No. 56. Defendants assert that Section 1557âs definition of sex discrimination is ambiguous because it fails to explicitly address
The precise question at issue in this case is: What constitutes Title IX- sex discrimination? The text of Section 1557 is neither silent nor ambiguous as to its interpretation of sex discrimination. Section 1557 clearly adopted Title IXâs existing legal structure for prohibited sex discrimination. 42 U.S.C. § 18116(a). For the reasons set out more fully below, this Court has previously concluded: the meaning of sex in Title IX unambiguously refers to âthe biological and anatomical differences between male and female students as determined at their birth.â Texas v. United States, No. 7:16-cv-00054, 201 F.Supp.3d 810, 833, 2016 WL 4426495, at *14 (N.D. Tex. Aug. 21, 2016); see Johnston v. Univ. of Pittsburgh of Com. Sys. of Higher Educ., 97 F.Supp.3d 657, 674 (W.D. Pa. 2015), appeal dismissed (Mar. 30, 2016) (âTitle IX does not prohibit discrimination on the basis of transgender itself because transgender is not a protected characteristic under the statute.â); see infra III.B.1.a.ii. In promulgating the Rule, HHS revised the core of Title IX sex discrimination under the guise of simply incorporating it.
In addition to the statutory text, the Supreme Court has emphasized a commonsense approach when determining whether Congress was likely to delegate a âpolicy decision of such economic and political magnitude to an administrative agency.â Brown & Williamson, 529 U.S. at 133, 120 S.Ct. 1291. The challenged Rule undoubtedly implicates significant policy questionsânamely, the scope and meaning of sex discrimination prohibited by Title IX and incorporated by Section 1557. If Congress wished to assign that decision to HHS, it surely would have done so expressly. King v. Burwell, â U.S. â, 135 S.Ct. 2480, 2489, 192 L.Ed.2d 483 (2015) (citing Util. Air Regulatory Group v. EPA, â U.S. â, 134 S.Ct. 2427, 2444, 189 L.Ed.2d 372 (2014)).
The Court does not discount Defendantsâ stated goal, question the seriousness of the problem the Rule seeks to address, or weigh into the merits of the issue. But no matter how âimportant, conspicuous, and controversial the issue .,. an administrative agencyâs power to regulate in the public interest must always be grounded in a valid grant of authority from Congress.â Brown & Williamson, 529 U.S. at 161, 120 S.Ct. 1291. Because Congress clearly addressed the question at issue by incorporating Title IXâs existing legal structure, and HHS had no authority to interpret such a significant policy decisionâthe scope of sex discrimination under Title IXâChevron deference does not apply and the Court need not reach step two of the analysis. See Brown & Williamson, 529 U.S. at 160, 121, 120 S.Ct. 1291.
ii. Title IX Sex Discrimination
Because HHS is not entitled to Chevron deference, the Court now considers whether Plaintiffs have demonstrated a likelihood of success on their claim that the Rule violates the APA. Plaintiffs claim the Rule is contrary to law under the APA because its definition of prohibited sex discrimination conflicts with that incorporated by Section 1557. Priv. Pis.â Br., ECF No. 25. Congressâs intent in enacting Section 1557 is clear because the statute explicitly incorporates Title IXâs prohibition of sex discrimination. See 42 U.S.C. § 18116(a). It is also clear from Title IXâs text, structure, and purpose that Congress intended to prohibit sex discrimination on the basis of the biological differences between males and females. See 20 U.S.C. § 1681.
The text of Title IX indicates Congressâs binary definition of âsex.â See 20 U.S.C. § 1681 (referring to âstudents of one sex,â âboth sexes,â âstudents of the other sexâ). When interpreting a statute,
But even if, as Defendants argue, the definition of sex discrimination was determined in 2010 when the ACA incorporated Title IXâs prohibition of sex discrimination, the Court is not persuaded it was passed with the Ruleâs expansive scope in mind because: (1) Congress knew how but did not use language indicating as much, and (2) in 2010 no federal court or agency had interpreted Title IX sex discrimination to include gender identity.
Finally, the governmentâs usage of the term sex in the years since Title IXâs enactment bolsters the conclusion that its common meaning in 1972 and 2010 referred to the binary, biological differences between males and females. Prior to the passage of the ACA in 2010 and for more than forty years after the passage of Title IX in 1972, no federal court or agency had concluded sex should be defined to include gender identity.
Hi Title IX Unincorporated Religious Exemptions
Plaintiffs also claim the Ruleâs failure to incorporate Title IXâs religious exemptions renders the Rule arbitrary, capricious, and contrary to law under the APA. Priv. Pls.â Br. 31, 33, ECF No. 25. Title IX does not apply to covered entities controlled by a religious organization if its application would be inconsistent with the
Defendants argue the Title IX religious and abortion exemptions were not incorporated because Section 1557 was doing a ânew work,â i.e., applying the education statute to the healthcare context, and the other three incorporated statutes had already been applied to the healthcare context. Hrâg Tr. 84:18-21. Defendants argue not incorporating the Title IX exemptions is of no moment because the other religious and abortion exemptions cited by the Rule are available. Defs.â Resp. 56-57, ECF No. 50.
As outlined above, the Court declines to give HHS Chevron deference, and when determining whether the failure to incorporate the exemptions is contrary to law, the Court must examine the text of Section 1557. This examination requires the Court to again apply well settled rules of construction which include giving the statutory text its plain and ordinary meaning, construing the statute as a whole, and giving effect to every word of the statute. Taniguchi v. Kan Pac. Saipan, Ltd., 566 U.S. 560, 132 S.Ct. 1997, 2002, 182 L.Ed.2d 903 (2012); United Savings Assân of Texas v. Timbers of Inwood Forest Assocs., 484 U.S. 365, 371, 108 S.Ct. 626, 98 L.Ed.2d 740 (1988); Corley v. United States, 556 U.S. 303, 314, 129 S.Ct. 1558, 173 L.Ed.2d 443 (2009). The canon disfavoring surplus-age is âone of the most basic interpretive canons.â Corley, 556 U.S. at 314, 129 S.Ct. 1558. In construing a statute, courts are obligated to give effect to all its provisions âso that no part will be inoperative or superfluous, void or insignificant.â Id. at 315, 129 S.Ct. 1558 (quoting Hibbs v. Winn, 542 U.S. 88, 101, 124 S.Ct. 2276, 159 L.Ed.2d 172 (2004)).
The text of Section 1557 prohibits discrimination âon the ground prohibited under ,.. [T]itle IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.) ....â 42 U.S.C. § 18116(a). Congress specifically included in the text of Section 1557 â20 U.S.C. 1681 et seq.â That Congress included the signal âet seq.,â which means âand the following,â after the citation to Title IX can only mean Congress intended to incorporate the entire statutory structure, including the abortion and religious exemptions.
Defendantsâ argument that Section 1557 was ânew workâ does not save this failure. Hrâg Tr. 56:11-57:18. Congress dictated that an entity would be liable under Section 1557 on the ground prohibited by Title IX. 42 U.S.C, § 18116(a). A religious organization that meets the specification of § 1681(a)(3) or any entity seeking the protection of § 1688 would not be liable for discriminating on the basis of sex under Title IX; HHS could not add additional prohibitions simply because it was engaged in ânew work.â Further, HHS knew how to adapt Title IX from the education realm to the healthcare context because it provides that when cross-referencing the provisions of Title IXâs use of âstudent,â the term âindividualâ should be used in the healthcare context. See 45 C.F.R. § 92.101(b)(3)(i). Accordingly, the Court finds the Ruleâs conflict with its incorporated statuteâTitle IXârenders it contrary to law under the APA.
The Court next evaluates in the alternative whether Plaintiffs have established a substantial likelihood of success on their RFRA claim. Private Plaintiffs allege the Rule violates RFRA because it substantially burdens their exercise of religion. Priv. Pls.â Br. 23-32, ECF No. 25. Defendants did not address Plaintiffsâ RFRA claim in their briefing but.asserted at the hearing that more factual development was necessary to evaluate the claim. Hrâg Tr. 61:1-62:25. The Court addressed the argument that more facts are needed above and finds the record is sufficiently developed to consider Private Plaintiffsâ RFRA claim. See supra, III.A.2.
RFRA provides that the â[government may substantially burden a personâs exercise of religion only if it demonstrates that application of the burden to the person ... is the least restrictive means of furthering [a] compelling government interest.â 42 U.S.C. § 2000bb-l(b). RFRA was passed by a broad coalition of legislators in direct response to a Supreme Court decision that Congress viewed as curbing longstanding constitutional protections for religious liberty and was enacted to work a âsubstantive change in constitutional protections.â Tennessee v. Lane, 541 U.S. 509, 520, 124 S.Ct. 1978, 158 L.Ed.2d 820 (2004) (quoting City of Boerne v. Flores, 521 U.S. 507, 532, 117 S.Ct. 2157, 138 L.Ed.2d 624 (1997)); see also Douglas Laycock & Oliver S. Thomas, Interpreting the Religious Freedom Restoration Act, 73 Tex. L. Rev. 209, 210, 244 (1994), Courts evaluating a claim under RFRA must first determine if the challenged rule imposes a âsubstantial burdenâ on plaintiffsâ religious exercise and if so, then whether the rule satisfies strict scrutiny. â
As to the first prong, the Court must (a) identify a sincere religious exercise, and (b) determine whether the government has placed substantial pressure on Plaintiffs to abstain from that religious exercise. Burwell v. Hobby Lobby Stores, Inc., â U.S. â, 134 S.Ct. 2751, 2760, 189 L.Ed.2d 675 (2014). Defendants do not question or contest the sincerity of Private Plaintiffsâ religious beliefs or exercise, and the Court is careful not to weigh or evaluate the relevant doctrines of faith.
In regards to whether the Rule places substantial pressure on Plaintiffs to abstain from religious exercise, the Court findsâand the parties agreeâthat the Ruleâs prohibition of categorical exclusions of transitions and abortions forces Plaintiffs to make an individualized assessment of every request for performance of such procedures or coverage of the same. The Rule therefore places substantial pressure on Plaintiffs to perform and cover transition and abortion procedures. The Ruleâs prohibition of categorical exclusions also forces Plaintiffs to provide the federal government a nondiscriminatory and âexceedingly persuasive justificationâ for their refusal to perform or cover such procedures. 45 C.F.R. § 92.101. Private Plaintiffsâ long-held view that such procedures are immoral and inappropriate in every circumstance is now at odds with the Ruleâs interpretation of sex discrimination because it requires them to remove the categorical exclusion of transitions and abortions (a condition they assert is a reflection of their religious beliefs and an exercise of their religion) and conduct an individualized assessment of every request for those procedures. âA law that âoperates so as to make the practice of ... religious beliefs more expensiveâ in the context of business activities imposes a burden on the exercise of religion.â Hobby Lobby, 134 S.Ct. at 2770 (quoting Braunfeld v. Brown, 366 U.S. 599, 605, 81 S.Ct. 1144, 6 L.Ed.2d 563 (1961)). Accordingly, the Rule imposes a substantial burden on Private Plaintiffsâ religious exercise.
As to the second prong, the government bears the burden to show the Rule satisfies strict scrutinyâi.e., âdemonstrate[ ] that the application of the burden to the person represents the least restrictive means of advancing a compelling interest.â Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 423, 126 S.Ct. 1211, 163 L.Ed.2d 1017 (2006). The Fifth Circuit has held that to satisfy strict scrutiny under RFRA, the government âmust show by specific evidence that [Private Plaintiffsâ] religious practices jeopardize its stated interests.â Merced v. Kasson, 577 F.3d 578, 592 (5th Cir. 2009). Defendants do not provide a compelling interest in their briefing and Private Plaintiffs dispute that one exists. Priv. Pis.â Br. 38-42, ECF No. 25. Although the preamble to the Rule claims broadly that the government has âa compelling interest in ensuring that individuals have nondiscriminatory access to health care and health coverage,â Defendants have failed to brief the basis of its compelling interest, leaving the Court unable to determine whether Private Plaintiffsâ religious practices jeopardize its purpose. See 81 Fed. Reg. at 31380. A compelling interest is one the government would be willing
Nevertheless, the Court assumes the Rule pursues a compelling interest, because even if it does, the government has failed to prove the Rule employs the least restrictive means. The least-restrictive-means standard requires the government to âsho[w] that it lacks other means of achieving its desired goal without imposing a substantial burden on the exercise of religion by the objecting part[y].â Hobby Lobby, 134 S.Ct. at 2780. If the government wishes to expand access to transition and abortion procedures, â[t]he most straightforward way of doing this would be for the government to assume the cost of providing the [procedures] at issue to any [individuals] who are unable to obtain them under their health-insurance policies due to their employersâ religious objections.â Id. The government could also assist transgender individuals in finding and paying for transition procedures available from the growing number of healthcare providers who offer and specialize in those services. The government has failed to demonstrate how exempting Private Plaintiffs pursuant to their religious beliefs would frustrate the goal of ensuring ânondiscriminatory access to health care and health coverage,â and the government has numerous less restrictive means available to provide access and coverage for transition and abortion procedures. See 81 Fed. Reg. at 31380. Accordingly, Private Plaintiffs have demonstrated a substantial likelihood of success on their claim that the challenged Rule violates RFRA.
2. Threat of Irreparable Harm
Next, Plaintiffs must demonstrate they are âlikely to suffer irreparable harm in the absence of preliminary relief.â Winter v. Nat. Res. Def. Council, 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008). â[H]arm is irreparable where there is no adequate remedy at law, such as monetary damages.â Janvey v. Alguire, 647 F.3d at 600 (5th Cir. 2011). An injunction is appropriate only if the anticipated injury is imminent and not speculative. Winter, 555 U.S. at 22, 129 S.Ct. 365.
Defendants argue Plaintiffsâ asserted injuries are speculative because Plaintiffs misunderstand the scope and effect of the Rule and its incorporated religious protections. See Defs.â Resp. 33-36, ECF No. 50. The State Plaintiffs claim they are currently suffering injury under the ongoing HHS investigation into their insurance plans and all Plaintiffs will suf
A state suffers irreparable harm anytime it is prevented from enforcing a statute enacted by representatives of its people. Planned Parenthood of Greater Texas Surgical Health Servs. v. Abbott, 784 F.3d 406, 419 (5th Cir. 2013) (âWhen a statute is enjoined, the State necessarily suffers the irreparable harm of denying the public interest in the enforcement of its laws.â); Maryland v. King, 567 U.S. 1301, 133 S.Ct. 1, 3, 183 L.Ed.2d 667 (2012) (citing New Motor Vehicle Bd. of Cal. v. Orrin W. Fox Co., 434 U.S. 1345, 1351, 98 S.Ct. 359, 54 L.Ed.2d 439 (1977) (â[A]ny time a State is enjoined by a court from effectuating statutes enacted by representatives of its people, it suffers a form of irreparable injury.â)).
Because the Rule is in conflict with state law, one of the State Plaintiffs is already undergoing investigation by the HHSâs OCR, and entities similarly situated to Private Plaintiffs have already been sued under the Rule since it took partial effect on May 18, 2016, the Court finds Plaintiffs have demonstrated that they face a substantial threat of irreparable harm in the absence of an injunction.
3. Balance of Hardships and Public Interest
The Court next considers whether the threatened injury to Plaintiffs outweighs any damage the proposed injunction may cause Defendants and its impact on the public interest.
On the other hand, HHS will suffer no harm from delaying implementation of the challenged portion of the Rule. The agencyâs six-year delay in issuing the Rule strengthens the Courtâs conclusion that the delay imposed by the injunction would work no significant harm on Defendants. The injunction would merely maintain the status quoâallowing HHS to prohibit sex discrimination in healthcare services as defined by Title IX and incorporated by Section 1557. If the Rule is invalid, it will be set aside in its entirety and the public interest will be served by the injunction. But even if the Rule is valid, the injunction will merely delay its implementation, pending final review on the merits.
For the foregoing reasons, the Court finds that Plaintiffs have satisfied all prerequisites for a preliminary injunction.
C. Scope of Injunction
Finally, the Court must determine the scope of the injunction. Plaintiffs seek a nationwide injunction as to the challenged portions of the Ruleâprohibiting discrimination on the basis of âgender identityâ and âtermination of pregnancy.â Priv. Pis.â Reply 24-25, ECF No. 57. Defendants argue the injunction should be limited to Plaintiffs. Defs.â Resp, 49-50, ECF No. 50.
â[District courts enjoy broad discretion in awarding injunctive relief.â Natâl Min. Assân v. U.S. Army Corps of Engârs, 145 F.3d 1399, 1408 (D.C. Cir. 1998). â[T]he Constitution vests the District Court with âthe judicial power of the United States.â That power is not limited to the district wherein the court sits but extends across the country. It is not beyond the power of a court, in appropriate circumstances, to issue a nationwide injunction.â Texas v. United States, 809 F.3d 134, 188 (5th Cir. 2015) (quoting U.S. Const. Art. Ill, § 1). â[T]he scope of in-junctive relief is dictated by the extent of the violation established, not by the geographical extent of the plaintiff class.â Califano v. Yamasaki, 442 U.S. 682, 702, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979). A nationwide injunction is appropriate when a party brings a facial challenge to agency action under the APA. See, e.g., Natâl Mining, 145 F.3d at 1407-08 (invalidating an agency rule and affirming the nationwide injunction); Harmon v. Thornburgh, 878 F.2d 484, 495 n.21 (D.C. Cir. 1989) (âWhen a reviewing court determines that agency regulations are unlawful, the ordinary result is that the rules are vacatedânot that their application to the individual petitioners is proscribed.â).
CMDAâs membership extends across the country and the Rule applies broadly to âalmost all licensed physicians.â
D. Bond
Rule 65(c) provides that â[t]he court may issue a preliminary injunction ... only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any part found to have been wrongfully enjoined or restrained.â Fed. R. Civ. P. 65(c). The amount of security required âis a matter for the discretion of the trial court,â and the Fifth Circuit has held dis
IV. CONCLUSION
For the foregoing reasons, the Court finds that Plaintiffsâ motions for preliminary injunction (ECF Nos. 22, 24) should be and are hereby GRANTED. See Fed. R. Civ. P. 65. Defendants are hereby ENJOINED from enforcing the Ruleâs prohibition against discrimination on the basis of gender identity or termination of pregnancy.
SO ORDERED on this 31st day of December, 2016.
. The challenged regulation defines "gender identityâ as "an individual's internal sense of gender, which may be male, female, neither, or a combination of male and female, and which may be different from an individualâs sex assigned at birth.â 45 C.F.R. § 92.4.
. Page numbers cited throughout the Courtâs Order refer to the page numbers assigned by the Court's electronic docket.
.State Plaintiffs include: (1) the State of Texas; (2) the State of Wisconsin; (3) the State of Nebraska; (4) the State of Kansas; (5) the State of Louisiana; (6) the State of Arizona; (7) the Commonwealth of Kentucky, by and through Governor Matthew G. Bevin; and (8) the State of Mississippi, by and through Governor Phil Bryant. Am. Compl. 4-6, ECF No. 21.
. Gender dysphoria is defined as âa distressed state arising from conflict between a personâs gender identity and the sex the person has or was identified as having at birth.â Merriam-Webster Medical Dictionary (2016) https://www.merriam-webster.com/medical/ gender%20dysphoria.
. See Priv. Pls.â App. 648, ECF No. 26; Centers for Medicare & Medicaid Services, Proposed Decision Memo for Gender Dysphoria and Gender Reassignment Surgery (June 2, 2016) ("Based on a thorough review of the clinical evidence available at this time, there is not enough evidence to determine whether gender reassignment surgery improves health outcomes for Medicare beneficiaries with gender dysphoria. There were conflicting (inconsistent) study resultsâof the best designed studies, some reported benefits while others reported harms.â).
. Franciscan would risk losing $900 million in federal funds; Texas would risk losing more than $42.4 billion in federal funds; and CMDA members would risk losing a significant amount of federal funds. Am. Compl. 7-8, ECF No. 21; Am. Compl. 28-29, ECF No. 21; See Hrâg Tr. 89:10-20, Dec. 20, 2016.
. The Rule applies to "every health program or activity, any part of which receives Federal financial assistance provided or made available by the Department; every health program or activity administered by the Department; and every health program or activity administered by a Title I entity.â 45 C.F.R. § 92.2(a). HHS estimated the Rule would "likely cover almost all licensed physicians because they accept Federal financial assistance ....â 81 Fed. Reg. at 31445.
. Franciscan believes that "optimal patient careâincluding in patient education, diagnosis, and treatmentârequires taking account of the biological differences between men and womenâ and that "optimal prevention of and treatment for heart disease in women requires monitoring for different warning signs, accounting for different risk factors, and providing different counseling than it would for men.â Am. Compl. 37, ECF No. 21.
. Although the Amended Complaint stated CMDA was bringing suit on behalf of itself and its members, Private Plaintiffs indicated at the December 20, 2016 hearing that CMDA is not a covered entity and is bringing suit on behalf of its members only. Am. Compl. 6-7, ECF No. 21; Hrâg Tr, 89:10-20.
. "A covered entity may operate a sex-specific health program or activity [] only if the covered entity can demonstrate an exceedingly persuasive justification, that is, that the sex-specific health program or activity is substantially related to the achievement of an important health-related or scientific objective.â 45 C.F.R. § 92.10l(b)(3)(iv).
. The Rule cites to federal religious protections outside of Title IX and they are discussed at length below. 45 C.F.R. § 92.2(b)(2).
. It is undisputed that this case presents a federal question, giving the Court subject matter jurisdiction pursuant to 28 U.S.C. § 1331. It is also undisputed the Court has authority to review administrative actions pursuant to 5 U.S.C. § 702 of the APA and authority to grant injunctive relief pursuant to Federal Rule of Civil Procedure 65.
. While the Rule cites "[federal statutory protections for religious freedom and conscienceâ potentially available to Plaintiffs, Defendants refused to agree the protections would apply to Private Plaintiffs or that Private Plaintiffs would be able to maintain their current categorical exclusions. 45 C.F.R, § 92.2(b)(2); see Hrâg Tr. 70:10-71:13. Accordingly, Private Plaintiffs must remove their categorical exclusion the Rule declares is "unlawful on its faceâ or roll the dice and risk the withdrawal of federal funding and civil liability. 81 Fed. Reg. at 31429.
. 45 C.F.R. § 92.207(b)(4).
. HHSâs Office for Civil Rights ("OCRâ) contacted Texasâs Health and Human Services Commission on September 29, 2016 to investigate a complaint concerning the Texas Medicaid Program and is currently investigating whether Texas covers "sex change therapy,â who determines the "medical necessityâ for such therapy, and whether there is a different process for determining medical necessity criteria for hormonal fertility treatment and cosmetic surgery. State Pis.â Reply 16, ECF No. 56 (quoting Decl. of Dana Williamson Ex, 1, Dec. 2, 2016).
. The Rule provides that "applicable Federal statutory protections for religious freedom and conscienceâ are available, which Defendants identify as RFRA, the Weldon Amendment, the Coats Amendment, and the Church Amendment. Defs.â Resp. 22-23, ECF No. 50 (quoting 45 C.F.R. § 92.2(b)(2)).
. Plaintiffs discuss Title IX as the applicable enforcement statute. Priv. Pls.â Reply 20, ECF No. 57. But the Rule provides: "The procedural provisions applicable to Title VI apply with respect to administrative enforcement actions concerning discrimination on the basis of race, color, national origin, sex, and
. Defendants rely on authority from the Fourth and Ninth Circuits (Taylor v. Cohen, 405 F.2d 277, 279 (4th Cir. 1968); Bakersfield City Sch. Dist. of Kern Cty. v. Boyer, 610 F.2d 621, 624 (9th Cir. 1979)) for the contention that Title Vi's comprehensive plan of enforcement divests district courts of jurisdiction over pre-enforcement challenges. Defs.â Resp. 44-46, ECF No. 50. The remaining authorities cited by Defendants deal with statutory schemes outside of Title VI (such as Title VII and Title IX). Id.
. See, e.g., Montgomery Improvement Assân, Inc. v. U.S. Dep't of Hous. & Urban Dev., 645 F.2d 291, 297 (5th Cir. 1981) ("[W]e hold that plaintiffs have a private cause of action under ... Title VI ....â); Freed v. Consol. Rail Corp., 201 F.3d 188, 191 (3d Cir. 2000) ("Tide VI ... does not require that plaintiffs exhaust the administrative process before bringing suit.â).
. Defendants also argue Plaintiffs are unlikely to succeed on their First or Fifth Amendment claims, but because the Court is working on an expedited briefing schedule it does not reach Plaintiffsâ constitutional arguments or Defendantsâ constitutional defenses.
. State Plaintiffs refer to the agencyâs purported jurisdiction over the issue as âChevron Step Zeroâ but the Court evaluates both agency jurisdiction and challenges to the agency's interpretation in Chevron step one. State Pis.â Reply 8, ECF No. 56.
. "The [HHS] Secretary may promulgate regulations to implement this section.â 42 U.S.C. § 18116(c).
. "[A]n individual shall not, on the ground prohibited under ... [T]itle IX of the Education Amendments of 1972 ... be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any health program or activity, any part of which is receiving Federal financial assistance ....â 42 U.S.C. § 18116(a).
. See, e.g., American Heritage Dictionary 1187 (1976) ("The property or quality by which organisms are classified according to their reproductive functions.â); Websterâs Third New International Dictionary 2081 (1971) ("The sum of the morphological, physiological, and behavioral peculiarities of living beings that subserves biparental reproduction with its concomitant genetic segregation and recombination which underlie most evolutionary change ... â); 9 Oxford English Dictionary 578 (1961) ("The sum of those differences in the structure and function of the reproductive organs on the ground of which beings are distinguished as male and female, and of the other physiological differences consequent on these.â).
. See, e.g., Robert Stroller (UCLA psychoanalyst who coined the term "gender identityâ) believed "sex was biological but gender was socialâ David Haig, The Inexorable Rise of Gender and the Decline of Sex; Social Change in Academic Titles, 1945-2001, Archives of Sexual Behavior 93 (Apr. 2004); Virginia Prince (Transgender activist who coined the term "transgenderâ) stated that "I, at least, know the difference between sex and genderâ Virginia Prince, Change of Sex or Gender, 10 Transvestia 53, 60 (1969).
. Defendants argued at the hearing that Section 1557âs definition of prohibited sex discrimination determined in 2010 when the ACA was passed. Hrâg Tr. 79:4-7.
But even if the definition of sex discrimination was determined in 2010, promulgation of the proposed Rule five years later included a new and expanded definition, as evidenced by commentatorsâ depictions of the Rule as "groundbreaking.â Lena H. Sun & Lenny Bernstein, U.S. Moves to Protect Women,
. The 2010 legislation defines âgender identityâ as "actual or perceived gender-related characteristics.â 18 U.S.C. § 249(c)(4).
. Defendantsâ briefing and the Ruleâs preamble relied on Price Waterhouse to show that "sexâ discrimination encompasses "gender identity.â See 81 Fed. Reg. at 31387-90; Defs.â Resp. 16, 49, ECF No. 50; Price Waterhouse v. Hopkins, 490 U.S. 228, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989) (holding that Title VIIâs prohibition of sex discrimination includes discrimination based on stereotypical notions of appropriate behavior, appearance, or mannerisms for males and females). But Price Waterhouse dealt with the definition of âsexâ in the Title VII context, not the incorporated statute at issue here: Title IX. Price Waterhouse was decided in 1989, twenty years before the ACA was enacted. If Congress intended to prohibit the newly-expanded version of sex discrimination that Defendants claim includes âgender identityâ it could have incorporated Title VIIâs prohibition of sex discrimination instead of Title IX. But even in Price Waterhouse, the Supreme Court seems to acknowledge the binary nature of sex and focuses mainly on sex stereotypes. 490 U.S. at 251, 109 S.Ct. 1775 (â[i]n forbidding employers to discriminate against individuals because of their sex, Congress intended to strike at the entire spectrum of disparate treatment of men and women resulting from sex stereotypesâ).
. âThe exceptions applicable to Title VI apply to discrimination on the basis of race, color, or national origin under this part. The exceptions applicable to Section 504 apply to discrimination on the basis of disability under this part. The exceptions applicable to the Age Act apply to discrimination on the basis of age under this part.â 45 C.F.R. § 92.101(c),
. Blackâs Law Dictionary (10th ed, 2014).
. The same reasoning also exempts any covered entity from having to provide abortion or abortion-related services.
. Both parties agree that if the Court resolves the APA or RFRA claim, there is no need to reach the remaining constitutional issues. HrâgTr. 57:22-25, 30:1-3.
. See Hernandez v. Comm'r, 490 U.S. 680, 699, 109 S.Ct. 2136, 104 L.Ed.2d 766 (1989)
. While Putative Intervenors proposed several compelling interests in their briefing (including âeradicating all forms of invidious discrimination,â âmaking sure that federal funds are not used to subsidize discrimination,â âmaking sure people are able to access healthcare coverage and services on a nondiscriminatory basis,â and âsafeguarding the public healthâ) it is the governmentâs view that controls. Hobby Lobby, 134 S.Ct. at 2776; Putative Intervenors' Resp. 42, ECF No. 53.
. Priv. Pls.â Br. 37, ECF No. 25 (citing Compl., Prescott v. Rady Childrenâs Hosp. - San Diego, No. 16-2408, 2016 WL 5678358 (S.D. Cal. Sept. 26, 2016); Compl., Dovel v. Pub. Library of Cincinnati and Hamilton Cty., No. 16-955, 2016 WL 5420063 (S.D. Ohio Sept. 26, 2016); Compl., Robinson v. Dignity Health, No. 16-3035, 2016 WL 3154023 (N.D. Cal. June 6, 2016)).
. The Court considers the balance of hardships and public interest factors together as they overlap considerably. Texas v. United States, 809 F.3d 134, 187 (5th Cir. 2015), affâd, â U.S. â, 136 S.Ct. 2271, 195 L.Ed.2d 638 (2016).
. CMDA has members âin all [the] states.â Hr'gTr. 93:5.