575 F.Supp.3d 701
N.D. Tex.2021Background
- On Nov. 5, 2021 CMS issued an Interim Final Rule (IFR) requiring COVID-19 vaccination for nearly all employees, contractors, trainees, students, and volunteers of 15 categories of Medicare- and Medicaid-certified providers, with initial-dose deadlines in early December 2021.
- Plaintiffs (State of Texas and Texas HHSC) sued Nov. 15, 2021 under the APA and related claims seeking to enjoin the CMS Mandate, alleging exceeded statutory authority, APA procedural defects, arbitrary-and-capricious rulemaking, and constitutional defects (spending/commandeering).
- Procedural history: TRO/PI motion filed; W.D. La. issued a nationwide PI, later narrowed by the Fifth Circuit to 14 states (not Texas); after emergency hearing the Northern District of Texas held a PI hearing and granted a preliminary injunction as to Texas on Dec. 15, 2021.
- Plaintiffs presented affidavits from Texas healthcare facilities and workers alleging concrete harms: exacerbated staffing shortages (especially in rural areas), loss/curtailment of services, and conflict with Texas law banning mandatory vaccination for employees.
- The court determined it had jurisdiction (APA claims not barred by Medicare statutory review scheme) and that Texas had standing with “special solicitude.”
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction / administrative exhaustion | Texas not an "institution or agency" under Medicare review provisions; APA suit is proper | Claims must be funneled through Medicare administrative review (42 U.S.C. §405/h) | Court: Texas may sue under the APA; jurisdiction exists (not barred by §405(h)) |
| Standing | State has quasi-sovereign, proprietary injuries (staffing loss, preemption of state law) and special solicitude | Defendants did not contest standing | Court: Texas has Article III standing (special solicitude applied) |
| Statutory authority (Chevron / major questions) | CMS lacks clear congressional authorization to impose employment-conditioning vaccine rule; statute does not clearly delegate such power | CMS relies on broad SSA provisions (42 U.S.C. §§1302,1395hh) to regulate health and safety | Court: Major questions doctrine applied; CMS likely exceeded statutory authority—plaintiffs likely to succeed on merits |
| APA notice-and-comment / IFR use | No "good cause" to bypass notice-and-comment; agency delayed and could have solicited comments | Agency invoked emergency public-health need to justify IFR/no comment | Court: CMS lacked adequate justification to skip notice-and-comment; plaintiffs likely to succeed |
| Consultation and RIA requirements | CMS failed to consult appropriate state agencies (42 U.S.C.§1395z) and failed to prepare required Regulatory Impact Analysis under §1302(b) | CMS claimed emergency obviated consultation and that IFR was not an NPR triggering RIA | Court: Consultation and RIA requirements likely triggered; plaintiffs likely to succeed on these procedural claims |
| Arbitrary and capricious (substantive rulemaking) | Rule is overbroad, relies on LTC data only, ignores rural staffing impacts, lacks exemptions (natural immunity, testing, minimal-contact workers) | CMS relied on LTC evidence and concluded mandate would raise vaccination rates and protect patients | Court: CMS's reasoning was arbitrary and capricious in several respects; plaintiffs likely to succeed |
| Irreparable harm & public interest | Enforcement would irreparably harm sovereign/proprietary interests, worsen rural staffing, and impair Texas public-health authority | Government asserts public-health benefits from reducing COVID spread in healthcare settings | Court: Plaintiffs showed likely irreparable harm; equities and public interest favor maintaining status quo; injunction granted for Texas |
Key Cases Cited
- Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7 (2008) (preliminary injunction standard)
- Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984) (agency statutory-interpretation framework)
- Util. Air Regul. Grp. v. EPA, 573 U.S. 302 (2014) (major questions doctrine guidance)
- FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000) (limits on agency authority absent clear congressional grant)
- Massachusetts v. EPA, 549 U.S. 497 (2007) (state "special solicitude" standing principle)
- Nat'l Fed'n of Indep. Bus. v. Sebelius, 567 U.S. 519 (2012) (limits on spending power/anti-commandeering concerns)
- Jacobson v. Massachusetts, 197 U.S. 11 (1905) (state police power in public-health regulation)
- Motor Vehicle Mfrs. Ass'n v. State Farm, 463 U.S. 29 (1983) (arbitrary-and-capricious review standard)
- Little Sisters of the Poor Saints Peter & Paul Home v. Pennsylvania, 140 S. Ct. 2367 (2020) (IFR may be treated as NPR depending on content)
- BST Holdings, L.L.C. v. OSHA, 17 F.4th 604 (5th Cir. 2021) (injunction analysis in pandemic-related workplace-mandate context)