513 F.Supp.3d 1113
D.N.D.2021Background
- Plaintiffs: Catholic health systems, Catholic Benefits Association (CBA) and members, and the State of North Dakota challenge HHS and EEOC interpretations of Section 1557 (ACA) and Title VII as forcing providers/insurers to perform or cover gender‑transition procedures (and initially abortions).
- Regulatory history: HHS’s 2016 Rule defined “sex” to include "gender identity" and barred categorical exclusions for gender‑transition services; that Rule drew multi‑district litigation and preliminary injunctions.
- HHS issued a narrower 2020 Rule repealing the 2016 definitions, incorporating Title IX religious and abortion‑neutrality exemptions, and limiting scope; Bostock v. Clayton County (Supreme Court) was decided contemporaneously and affected legal interpretation of “sex.”
- Post‑Bostock litigation produced split district‑court preliminary injunctions: some courts reinstated parts of the 2016 Rule (or its definitions), others enjoined parts of the 2020 Rule; the EEOC consistently treats gender‑identity discrimination as sex discrimination under Title VII.
- Procedural posture here: Plaintiffs moved for summary judgment and permanent injunctive relief under RFRA, APA, and the Spending Clause; the court dismissed abortion‑related, APA, and Title IX/other unspecified claims, but held for Plaintiffs on RFRA claims as applied to compelled performance or coverage of gender‑transition procedures.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge HHS interpretation of Section 1557 (gender‑transition claims) | Plaintiffs face credible threat of enforcement and loss of federal funds if they refuse to perform or insure gender‑transition services | HHS says 2016 Rule was vacated/repealed and 2020 Rule narrows coverage, reducing any imminent injury | Plaintiffs (Religious Sisters and CBA members) have standing; CBA has associational standing for members that receive federal funds |
| Standing to challenge EEOC interpretation of Title VII | CBA and members will be compelled by EEOC enforcement to cover gender‑transition services in health plans | Defendants point to lack of prior EEOC enforcement against these specific plaintiffs and argue speculative threat | CBA has associational standing; credible threat exists because EEOC position is longstanding and within plain text of Title VII |
| RFRA: whether interpretations substantially burden religious exercise and, if so, whether government meets strict scrutiny | Plaintiffs: enforcement would impose substantial burden (loss of funds, penalties) and force violation of sincere religious beliefs; less restrictive alternatives exist | Defendants: enforcement furthers anti‑discrimination and access goals and 2020 Rule acknowledges limits; alternatives are infeasible | Court: the interpretations impose a substantial burden; government failed least‑restrictive‑means test; RFRA relief granted as to compelled performance/coverage of gender‑transition procedures |
| Spending Clause (North Dakota): unambiguous notice and coercion | ND: states lacked clear notice that acceptance of federal health funds would require covering gender‑transition procedures and the condition is coercive | Defendants: Section 1557 gave adequate notice and conditions are legitimate restrictions on use of funds, not coercive commandeering | Court: unambiguous notice exists; coercion argument fails; Spending Clause claims not resolved in Plaintiffs’ favor at summary judgment |
Key Cases Cited
- Bostock v. Clayton County, 140 S. Ct. 1731 (U.S. 2020) (Title VII prohibits discrimination based on transgender status)
- Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682 (U.S. 2014) (RFRA requires strict scrutiny for substantial burdens on religious exercise)
- Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418 (U.S. 2006) (RFRA standing and remedy principles)
- Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519 (U.S. 2012) (ACA and Spending Clause context)
- Church of the Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520 (U.S. 1993) (scrutiny for laws burdening religion)
- Sherbert v. Verner, 374 U.S. 398 (U.S. 1963) (least‑restrictive‑means principle in religious‑liberty context)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (U.S. 1992) (standing requirements)
- Franciscan Alliance v. Burwell, 227 F. Supp. 3d 660 (N.D. Tex. 2016) (invalidating portions of 2016 Rule and granting preliminary relief)