939 F.3d 1251
11th Cir.2019Background
- The OPTN (operated by the United Network for Organ Sharing) develops organ-allocation policies under HHS authority; 42 C.F.R. § 121.4 sets procedures for OPTN notice-and-comment and for Secretarial review.
- In 2018, at the Secretary’s direction United Network replaced the DSA/Region liver-allocation regime with the Acuity Circles model; the Secretary did not refer that new policy to the Advisory Committee nor publish it in the Federal Register.
- A group of transplant candidates and hospitals sued, arguing HHS violated § 121.4(b)(2) (and the APA and Due Process) by failing to refer and publish the new policy; they sought emergency injunctive relief.
- The district court denied plaintiffs’ TRO (addressing only the § 121.4(b)(2) procedural claim); plaintiffs appealed and obtained an injunction pending appeal; this appeal followed.
- The Eleventh Circuit considered whether § 121.4(b)(2)’s referral/publication requirement applies to all “significant proposed policies” or only to those the OPTN Board recommends to be enforceable or that the Secretary directs, and whether plaintiffs showed a substantial likelihood of success on that claim.
- The court held the Secretary was not required to refer/publish here (adopting defendants’ narrower reading of § 121.4(b)(2)), affirmed the denial of injunctive relief as to that claim, and remanded the remaining arbitrary-and-capricious and Due Process claims for the district court to decide first.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 121.4(b)(2)’s referral and Federal Register publication requirement applies to all “significant proposed policies” or only to (a) policies the OPTN Board "recommends to be enforceable" and (b) policies "as the Secretary directs" | § 121.4(b)(2) requires referral/publication for any "significant" proposed policy; liver policy is plainly "significant" | The referral/publication clause is part of § 121.4(b)(2) and applies only to the two categories identified earlier in the subsection (recommended-to-be-enforceable; as-Secretary-directs) | Court adopts defendants’ narrower reading: referral/publication applies only to those two categories; textual/structural canons support this construction. |
| Whether plaintiffs demonstrated a substantial likelihood of success on the merits of their procedural APA claim (required for a preliminary injunction) | Secretary violated mandatory § 121.4(b)(2) duties by failing to refer/publish; therefore plaintiffs likely to succeed on the merits | Plaintiffs are unlikely to prevail because § 121.4(b)(2) does not compel referral/publication for this policy | Court holds plaintiffs failed to show a substantial likelihood of success on the procedural claim and affirms district court denial of TRO/PI as to that claim. |
| Whether defendants’ reading conflicts with federal contracting/inherently governmental-function limits (FAIR Act/FAR) | Narrow reading lets the OPTN effectively perform inherently governmental functions (impermissible) | The FAIR Act is inapplicable/misunderstood and Secretary retains meaningful oversight (can direct review; § 121.4(d) comment process) | Court rejects plaintiffs’ FAIR Act/FAR argument and finds no basis to invalidate defendants’ reading on that ground. |
| Whether the appellate court should resolve plaintiffs’ remaining APA arbitrary-and-capricious and Fifth Amendment Due Process claims | Plaintiffs seek relief on these alternative grounds now | Defendants argue district court has not addressed those claims and they are fact-bound; they should be decided in the first instance by the district court | Court remands the arbitrary-and-capricious and Due Process claims for the district court to consider in the first instance. |
Key Cases Cited
- Kisor v. Wilkie, 139 S. Ct. 2400 (2019) (Supreme Court guidance on exhausting traditional tools of interpretation before deferring to an agency’s reasonable reading of its own regulation)
- McDonald's Corp. v. Robertson, 147 F.3d 1301 (11th Cir. 1998) (four-factor preliminary injunction standard)
- Chase Bank USA, N.A. v. McCoy, 562 U.S. 195 (2011) (text-and-structure canon in statutory interpretation)
- NLRB v. SW Gen., Inc., 137 S. Ct. 929 (2017) (reliance on clear statutory text over policy/history when text is clear)
- United States v. Endotec, Inc., 563 F.3d 1187 (11th Cir. 2009) (standard of review: abuse of discretion for injunction decisions; legal conclusions de novo)
- Dong v. Smithsonian Inst., 125 F.3d 877 (D.C. Cir. 1997) (test for whether a private entity is an "agency" for APA purposes)
- Edmonson v. Leesville Concrete Co., 500 U.S. 614 (1991) (state-action inquiry for constitutional claims)
- Access Now, Inc. v. Southwest Airlines Co., 385 F.3d 1324 (11th Cir. 2004) (appellate courts reluctant to resolve fact-bound issues not addressed below)