Pennsylvania v. Trump, 351 F. Supp. 3d 791

Plaintiffs (Pennsylvania and New Jersey) challenge two 2018 HHS/Treasury/Labor Final Rules (which finalized October 2017 Interim Final Rules) that expand religious and moral exemptions to the ACA contraceptive-coverage mandate and make the accommodation optional and notice-free.
The ACA's Women's Health Amendment requires specified group health plans and issuers to cover HRSA-defined preventive services for women (including contraceptives) without cost-sharing; HRSA set those guidelines in 2011.
Agencies previously created a limited religious employer exemption and an accommodation mechanism (self-certification or insurer notice) after notice-and-comment; Supreme Court decisions (Hobby Lobby, Wheaton College, Zubik) prompted further regulatory revisions and litigation.
The 2017 IFRs broadened exemptions (religious and new moral exemptions), expanded accommodation eligibility, made accommodation optional, and removed notice/certification requirements; the Court enjoined those IFRs previously.
Agencies issued substantively similar Final Rules in Nov. 2018; Plaintiffs moved for a preliminary injunction arguing APA procedural and substantive violations, Title VII, Equal Protection, and Establishment Clause claims.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing	States will incur increased fiscal costs and quasi-sovereign harms from more residents losing contraceptive coverage.	Defendants dispute cognizable injury.	States have Article III standing (special solicitude + injury, causation, redressability).
Venue	Eastern District of PA proper because Pennsylvania "resides" throughout its borders.	Defendants argue state counts as an "entity" and thus resides only in its principal-place district.	Venue is proper; states reside in every district within their borders.
APA procedural (notice-and-comment)	Final Rules fail APA because IFRs were issued without prior notice-and-comment, and that tainted the finalization; post-promulgation comment did not cure prejudice.	Agencies argue they cured defects via later notice-and-comment and/or had good cause for IFRs.	Court likely: plaintiffs will succeed — IFRs' procedural defects fatally taint Final Rules despite later comment.
APA substantive (statutory authority & RFRA)	Final Rules exceed agencies' statutory authority under ACA and sweep beyond what RFRA requires; thus arbitrary/capricious and ultra vires.	Agencies claim ACA delegation plus RFRA permit or require broad religious/moral exemptions.	Court held Final Rules exceed authority under the ACA and cannot be justified by RFRA; likelihood of success for States on merits.

Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682 (Sup. Ct. 2014) (RFRA analysis: contraceptive mandate violated as applied to closely held corporations; accommodation relevant to least-restrictive-means inquiry)
Zubik v. Burwell, 136 S. Ct. 1557 (Sup. Ct. 2016) (per curiam) (declined to decide RFRA merits; remanded to explore ways to provide coverage without burdening religious claimants)
Massachusetts v. EPA, 549 U.S. 497 (Sup. Ct. 2007) (States entitled to special solicitude in standing analysis under certain conditions)
Texas v. United States, 809 F.3d 134 (5th Cir. 2015) (states entitled to special solicitude; standing based on projected fiscal burdens)
NRDC v. EPA, 683 F.2d 752 (3d Cir. 1982) (post-promulgation notice-and-comment does not necessarily cure a procedurally invalid interim action; subsequent final rule may be tainted)
Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837 (Sup. Ct. 1984) (framework for judicial review of agency statutory interpretation)
Lujan v. Defenders of Wildlife, 504 U.S. 555 (Sup. Ct. 1992) (constitutional standing requirements)
MCI Telecommunications Corp. v. AT&T Co., 512 U.S. 218 (Sup. Ct. 1994) (statutory delegation limits; agencies cannot make fundamental changes absent clear congressional authorization)
Califano v. Yamasaki, 442 U.S. 682 (Sup. Ct. 1979) (injunctive relief should be no more burdensome than necessary to provide complete relief)