281 F.Supp.3d 806
N.D. Cal.2017Background
- The ACA’s Women’s Health Amendment requires group health plans to cover preventive care, including FDA‑approved contraceptives, without cost‑sharing; HRSA issued guidelines (2011, updated 2016) implementing that requirement.
- Agencies initially issued interim rules (2010, 2011) and later a regulatory accommodation allowing certain religious nonprofit employers to avoid contracting, arranging, paying, or referring for contraceptive coverage while ensuring employees receive separate coverage.
- After Supreme Court decisions (Hobby Lobby, Wheaton, Zubik) and subsequent agency actions, the Departments expanded and adjusted exemptions and an accommodation across several rulemaking rounds.
- On October 6, 2017, the Departments issued two new interim final rules (2017 IFRs): a Religious Exemption IFR broadly expanding religious exemptions and making the accommodation optional, and a Moral Exemption IFR creating a new conscience‑based exemption for moral objections; both were effective immediately and solicited post‑promulgation comments.
- States (California, Delaware, Maryland, New York, Virginia) sued, alleging the agencies violated the Administrative Procedure Act (APA) by issuing the 2017 IFRs without required advance notice and comment, and moved for a nationwide preliminary injunction to halt enforcement and reinstate the pre‑October 6, 2017 regulatory regime.
- The district court found plaintiffs had Article III and statutory APA standing, held the agencies likely violated the APA (no good cause or statutory displacement for bypassing notice and comment), found irreparable harm, and granted a nationwide preliminary injunction restoring the prior regime pending final adjudication.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs have standing to challenge the 2017 IFRs | States suffer procedural injury from denial of notice‑and‑comment and concrete fiscal/health costs from reduced contraceptive access | Agencies contested standing (principal place of business/other contentions) | States have Article III and APA standing based on procedural injury and fiscal harms; venue proper in N.D. Cal. |
| Whether the APA’s notice‑and‑comment requirement applied or was displaced by statute | APA applies; issuance without notice violated statutory procedures | Agencies claimed statutory authority to issue IFRs and thus avoid APA procedures | Statutory grants cited did not clearly displace APA; APA applies. |
| Whether agencies showed good cause to avoid advance notice and comment | No emergency or impossibility; prior comments on different rules don’t justify bypassing APA for materially different IFRs | Agencies argued impracticability, public interest, existing comments, and urgent relief for religious/moral claimants | Good‑cause exception not satisfied under totality of factors; IFRs were not justified as emergency procedure. |
| Remedy and scope of preliminary relief | Immediate nationwide injunction enjoining enforcement of IFRs and reinstating pre‑Oct 6, 2017 regime | Agencies argued different harms and urged narrower relief | Court granted nationwide preliminary injunction and directed maintenance of the prior regulatory regime pending merits. |
Key Cases Cited
- Winter v. Natural Res. Def. Council, 555 U.S. 7 (2008) (standard for preliminary injunctions)
- Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751 (2014) (RFRA decision noting accommodation as less restrictive alternative)
- Zubik v. Burwell, 136 S. Ct. 1557 (2016) (per curiam remand seeking alternative approaches balancing coverage and religious objections)
- Bennett v. Spear, 520 U.S. 154 (1997) (test for final agency action under APA)
- Paulsen v. Daniels, 413 F.3d 999 (9th Cir. 2005) (importance of notice‑and‑comment and caution against implementing rule then seeking comment)