226 F. Supp. 3d 7
D.D.C.2016Background
- EEOC promulgated two final rules in May 2016 (ADA rule and GINA rule) permitting employers to offer or impose financial incentives/penalties up to 30% of the cost of self-only coverage to encourage participation in employer wellness programs that collect ADA- or GINA-protected information. Applicability of the rules was deferred to plan anniversary dates beginning Jan. 1, 2017.
- AARP sued under the Administrative Procedure Act on behalf of its members, challenging the rules as arbitrary and capricious and arguing that the 30% incentives effectively coerce disclosure of protected medical and genetic information (thus rendering participation not "voluntary").
- AARP sought a preliminary injunction to block the rules from applying while the merits proceed. The Court conducted an expedited review before the full administrative record was available.
- The government defended on standing and merits grounds, arguing AARP lacked associational standing and that AARP had not met the four-factor preliminary-injunction standard.
- The district court held AARP has associational standing (AARP qualifies as a membership organization and at least one declarant had a substantial probability of injury) but denied the preliminary injunction because AARP failed to show irreparable harm and likelihood of success on the merits, and the public interest weighed against injunctive relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Associational standing | AARP represents members harmed by the rules and can sue on their behalf | EEOC: AARP didn't show traditional indicia of membership or a member with concrete injury | AARP has associational standing (sufficient indicia of membership; at least one member likely injured) |
| Irreparable harm for preliminary injunction | Members will be forced to disclose protected information or be priced out of coverage — harms are imminent and non-monetary | EEOC: harms are economic (remediable), disclosures remain confidential and anti-discrimination protections exist; AARP delayed in suing | No irreparable harm shown: alleged injuries were economic or speculative; delay undermined urgency |
| Likelihood of success on the merits (meaning of "voluntary") | 30% incentives render disclosure involuntary; EEOC’s interpretation is inconsistent with ADA/GINA and coercive | EEOC: statutes ambiguous on incentive level; agency reasonably harmonized its rules with HIPAA/ACA caps and explained change | AARP not likely to succeed: Chevron deference applies, agency offered a facially reasonable justification; full record needed for deeper review |
| Arbitrary-and-capricious claim re reversal of agency position | EEOC reversed longstanding guidance without adequate explanation | EEOC: explained rationale to harmonize with HIPAA/ACA and addressed comments on coercion | Court: explanation facially reasonable; AARP failed to show the change was unexplained or arbitrary on the limited record |
Key Cases Cited
- Hunt v. Washington Apple Advert. Comm’n, 432 U.S. 333 (associational standing factors and indicia of membership)
- Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837 (framework for judicial review of agency statutory interpretation)
- Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (arbitrary-and-capricious / reasoned decisionmaking standard)
- FCC v. Fox Television Stations, Inc., 556 U.S. 502 (agency may change positions but must explain reasoned basis)
- Mazurek v. Armstrong, 520 U.S. 968 (preliminary injunction is extraordinary remedy; movant bears clear burden)
- Winter v. Natural Resources Defense Council, 555 U.S. 7 (standard for preliminary injunction and limits on "sliding scale")
- Stilwell v. Office of Thrift Supervision, 569 F.3d 514 (third-party regulated-party injuries; standing burden when regulation affects third-party conduct)