The Religious Sisters of Mercy, et al., Plaintiffs, vs. Alex M. Azar II, Secretary of the United States Department of Health and Human Services, et al., Defendants.; Catholic Benefits Association, et al., Plaintiffs, vs. Alex M. Azar II, Secretary of the United States Department of Health and Human Services, et al., Defendants.
Case No. 3:16-cv-00386; Case No. 3:16-cv-00432
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NORTH DAKOTA EASTERN DIVISION
January 19, 2021
In these consolidated cases, a coalition of entities affiliated with the Catholic Church and the State of North Dakota challenge the implementation of Section 1557 of the Patient Protection and Affordable Care Act (“ACA“), a statute that prohibits certain forms of discrimination in healthcare. The Plaintiffs contend that the Department of Health and Human Services (“HHS“) and, derivatively, the Equal Employment Opportunity Commission (“EEOC“) interpret Section 1557 and related antidiscrimination laws in a way that compels them to perform and provide insurance coverage for gender transitions and abortions.
The Catholic Plaintiffs move for summary judgment and injunctive relief under the Religious Freedom Restoration Act of 1993 (“RFRA“). North Dakota joins some of them in an Administrative Procedure Act (“APA“) challenge and separately seeks reprieve under the Spending Clause of the Constitution. For the reasons below, the Court concludes that the RFRA entitles the Catholic Plaintiffs to permanent injunctive relief from the provision or coverage of gender-transition procedures. The other claims either run afoul of jurisdictional limitations or do not warrant summary judgment.
I. BACKGROUND
The Court begins with the statutory framework of Section 1557. Next is an overview of the implementing regulations and resulting litigation. An introduction of the parties follows. Last is a summary of
A. Statutory Framework
Enacted in March 2010, the ACA is “a comprehensive national plan to provide universal health insurance coverage.” Nat‘l Fed‘n of Indep. Bus. v. Sebelius, 567 U.S. 519, 583 (2012). Fundamentally, the ACA is designed to broaden access to healthcare and insurance coverage. King v. Burwell, 576 U.S. 473, 478-79 (2015). Part and parcel with that objective is the ACA‘s ban on discrimination in healthcare.
Codified at
The lone prohibited ground relevant for these cases stems from Title IX, which forbids discrimination “on the basis of sex.”
For enforcement, Section 1557 (by way of Title IX) greenlights administrative agencies to revoke federal funding for an offending health program or activity.
B. Regulations and Litigation
1. The 2016 Rule
More than six years after the ACA became law, HHS promulgated a rule interpreting
Making the incorporation of Title IX plain, the 2016 Rule prohibited discrimination “on the basis of . . . sex.” Id. at 31,469 (formerly codified at 45 C.F.R. § 92.101(a)). HHS then defined that phrase to include “discrimination on the basis of . . . termination of pregnancy, . . . sex stereotyping, and gender identity.” Id. at 31,467 (formerly codified at 45 C.F.R. § 92.4). Drilling down further, the 2016 Rule defined “gender identity” as “an individual‘s internal sense of gender, which may be male, female, neither, or a combination of male and female, and which may be different from an individual‘s sex assigned at birth.” Id. And “sex stereotypes” in part meant “the expectation that individuals will consistently identify with only one gender and that they will act in conformity with the gender-related expressions stereotypically associated with that gender.” Id. at 31,468. The regulation left “termination of pregnancy” undefined.
HHS contextualized those definitions with specific examples of discriminatory conduct. To start, the 2016 Rule prohibited a covered healthcare provider from refusing to offer medical services for gender transitions2 if that provider offered comparable services to others. Id. at 31,471 (formerly codified at 45 C.F.R. § 92.206). HHS used this example: “A provider specializing in gynecological services that previously declined to provide a medically necessary hysterectomy for a transgender man would have to revise its policy to provide the procedure for transgender individuals in the same manner it provides the procedure for other individuals.” Id. at 31,455. The same concept theoretically applied for abortions. So if an obstetrician performed dilation and curettage procedures for miscarriages, then the 2016 Rule barred a later refusal to perform those procedures for abortions. See Doc. No. 95, ¶ 134. As for covered entities’ health plans, HHS declared that any “categorical . . . exclusion or limitation on coverage for all health services related to gender transition is unlawful on its face.” 81 Fed. Reg. at 31,429; see also id. at 31,471-72 (formerly codified at 45 C.F.R. § 92.207(b)(4)-(5)). Put differently, the 2016 Rule prohibited covered insurers and third-party administrators3 (“TPAs“) from offering or administering
Meanwhile, the 2016 Rule imported applicable statutory exceptions for discrimination based on race, color, national origin, age, and disability. 81 Fed. Reg. at 31,470 (formerly codified at 45 C.F.R. § 92.101(c)). For sex discrimination, though, HHS conspicuously omitted Title IX‘s religious and abortion-neutrality exemptions. See id. The agency deflected comments calling for the religious carve-out‘s inclusion by positing that “Section 1557 contains no religious exemption” and that “a blanket religious exemption could result in a denial or delay in the provision of health care and in discouraging individuals from seeking necessary care.” Id. at 31,380.
HHS rejected the abortion-neutrality exemption too, explaining that separate ACA provisions could shield objecting providers and insurers. Id. In particular, HHS cited to Section 1303 of the ACA. That statute provides that a qualified health plan is not required to include abortion coverage as an essential health benefit.
Having jettisoned the Title IX exemptions, HHS settled on a narrower exclusion. The 2016 Rule excepted applications that “would violate applicable Federal statutory protections for religious freedom and conscience.” 81 Fed. Reg. at 31,466 (formerly codified at 45 C.F.R. § 92.2(c)). More specifically, HHS explained that the RFRA “is the proper means to evaluate any religious concerns about the application of Section 1557 requirements.” Id. at 31,380. HHS went on to note that it would evaluate “individualized and fact specific” RFRA claims “on a case-by case basis.” Id. To obtain an exception, in other words, a provider objecting on religious grounds needed to convince HHS that the regulation circumstantially violated the RFRA. Doc. No. 95, ¶ 51. Otherwise, an objecting provider‘s last resort rested in federal court. Id.
The 2016 Rule had implications for employers outside the healthcare context as well. Title VII of the Civil Rights Act of 1964 bans all employers with 15 or more employees—whether receiving federal
Understanding that relationship demands more explanation. Recall that HHS designated health plans with categorical exclusions for gender-transition services as facially discriminatory. Id. at 31,429. That meant health insurers and TPAs receiving federal financial assistance could
not issue or administer such exclusions without potential exposure to Section 1557 liability—even if the entities they contracted with fell entirely outside the regulation‘s scope. Id. at 31,432. As a corollary, employers that wished to exclude coverage for gender-transition services in their group health plans faced a disincentive to do so if contracting with a covered entity. Id.
The situation became especially precarious for TPAs. The Employee Retirement Income Security Act of 1974 (“ERISA“) compels TPAs to administer health plans as written.
That jurisdictional gap is where the EEOC entered the picture. HHS explained the coordinated response this way:
Where, for example, [HHS] lacks jurisdiction over an employer responsible for benefit design, [HHS] typically will refer or transfer the matter to the EEOC and allow that agency to address the matter. The EEOC has informed [HHS] that, provided the filing meets the requirements for an EEOC charge, the date a complaint was filed with [HHS] will be deemed the date it was filed with the EEOC.
Id. By the time HHS promulgated the 2016 Rule, the EEOC had already interpreted Title VII to protect against gender-identity discrimination as an inherent form of sex discrimination. See Macy v. Holder, EEOC Appeal No. 0120120821, 2012 WL 1435995, at *7 (Apr. 20, 2012). In plain terms, then, HHS indicated that the EEOC would pursue Title VII enforcement actions against nonhealthcare employers with gender-transition exclusions in their group health plans. See Doc. No. 97, ¶ 165.
2. Litigation Challenging the 2016 Rule
The 2016 Rule quickly drew legal challenges. One month after the regulation took partial effect, a group of states and
On December 31, 2016, the Franciscan Alliance court entered a nationwide preliminary injunction. 227 F. Supp. 3d 660, 695 (N.D. Tex. 2016). The court‘s order barred enforcement of the 2016 Rule insofar as it prohibited discrimination based on “gender identity” and “termination of pregnancy.” Id. The court first concluded that the regulation violated the APA by impermissibly expanding the scope of sex discrimination under Title IX to encompass gender identity. Id. at 689. Next, the court faulted HHS‘s decision to omit Title IX‘s religious and abortion-neutrality exemptions. Id. at 691. The court then determined that the regulation‘s mandate for healthcare entities to perform and insure gender-transition and abortion procedures imposed a substantial burden on the private plaintiffs’ exercise of religion. Id. at 692. Finally, the court found that HHS failed to show that the 2016 Rule satisfied strict scrutiny under the RFRA. Id. at 693.
In the meantime, this Court stayed enforcement of the 2016 Rule against the named Plaintiffs. Doc. No. 23. The Court later clarified that the stay only prevented enforcement of the regulation‘s “prohibitions against discrimination on the bases of gender identity and termination of pregnancy.” Doc. No. 36. Further, the Court acknowledged the extant nationwide preliminary injunction in Franciscan Alliance.
With key aspects of the 2016 Rule on hold and the onset of a new presidential administration, HHS resolved to return to the drawing board. In late May 2017, the Defendants requested a voluntary remand and stay in these cases to permit the agency “to assess the reasonableness, necessity, and efficacy” of the challenged regulation. Doc. No. 45. HHS also expressed a desire “to address certain issues identified by” the Franciscan Alliance court in its preliminary injunction decision.
Over a year passed while a draft of a new proposed rule circulated through the federal bureaucracy. See Doc. Nos. 57, 58, 59, 61, 62, 64. Then in December 2018, the Franciscan Alliance litigation restarted. Case No. 7:16-cv-00108, Doc. No. 126 (N.D. Tex. Dec. 17, 2018). The plaintiffs in that case promptly moved for summary judgment and permanent injunctive relief. See, e.g., id., Doc. No. 136 (N.D. Tex. Feb. 4, 2019).
In June 2019, while those motions remained pending, HHS issued a Notice of Proposed Rulemaking that sought to revise the 2016 Rule. See Nondiscrimination in Health and Heath Education Programs or Activities, 84 Fed. Reg. 27,846 (proposed June 14, 2019) (“NPRM“). Among other things, the NPRM proposed to repeal the 2016 Rule‘s definition of “on the basis of sex” in its entirety. Id. at 27,857. But HHS then pointed out that the United States Supreme Court had recently granted three petitions for writs of certiorari—consolidated and later decided as Bostock v. Clayton County, 590 U.S. ___, 140 S. Ct. 1731 (2020)—in part to determine whether Title VII‘s proscription of sex discrimination equated to a bar on gender-identity discrimination. 84 Fed. Reg. at 27,855; see also 139 S. Ct. 1599 (2019) (mem.) (granting certiorari and consolidating cases). The NPRM acknowledged that “[b]ecause Title IX adopts the substantive and legal standards of Title VII, a holding by the U.S. Supreme Court on the definition of ‘sex’ under Title VII will likely have ramifications for the definition of ‘sex’ under Title IX.” 84 Fed. Reg. at 27,855 (footnote omitted). With Bostock looming, HHS declined to propose a new definition of “sex” in the NPRM. Id. at 27,857. The agency instead demurred to “allow the Federal courts, in particular, the U.S. Supreme Court, to resolve any dispute about” that term‘s “proper legal interpretation.” Id. at 27,873.
Four months after HHS rolled out the NPRM, the Franciscan Alliance court granted summary judgment for the plaintiffs. 414 F. Supp. 3d 928 (N.D. Tex. 2019). The court adhered to the reasoning in its preliminary injunction decision and concluded that the 2016 Rule violated both the RFRA and the APA. Id. at 942-43. Yet the court stopped short of entering a nationwide permanent injunction against enforcement of the 2016 Rule‘s prohibitions on discrimination based on gender identity and termination of pregnancy. Id. at 946. Instead, the court elected to vacate those portions of the regulation and remand to HHS for further consideration. Id. Neither party appealed on the merits. But the plaintiffs appealed the denial of injunctive relief to the Fifth Circuit Court of Appeals, where briefing wrapped up in early December. See Franciscan All., Inc. v. Azar, USCA No. 20-10093 (5th Cir. Jan. 24, 2020).
3. The 2020 Rule
HHS finalized a new rule interpreting Section 1557 on June 12, 2020. See Section 1557 of the Patient Protection and Affordable Care Act, U.S. Dep‘t of Health & Human Servs., https://www.hhs.gov/civil-rights/for-individuals/section-1557/index.html (last visited Jan. 19, 2021). Publication in the Federal Register occurred one week later. Nondiscrimination in Health and Health Education Programs or Activities, 85 Fed. Reg. 37,160 (June 19, 2020) (“2020 Rule“). The 2020 Rule marks a significant shift from HHS‘s original Section 1557 interpretation.
In scope, the 2020 Rule applies more narrowly than its predecessor in two respects. First, HHS redefined “health program or activity” to eliminate blanket regulatory application to entities “principally or otherwise engaged in the business of providing health insurance.”
True to the NPRM, the 2020 Rule repealed the definition of “on the basis of sex” in full. Id. at 37,167. HHS reverted to stating that discrimination is barred on the ground prohibited by Title IX without supplemental definition. See
In a similar vein, HHS dispensed with the 2016 Rule‘s prohibition on categorical gender transition exclusions in covered entities’ health plans. Id. at 37,201. The agency asserted a lack of “statutory authority to require the provision or coverage of such procedures under Title IX protections from discrimination on the basis of sex.” Id. at 37,198. HHS further concluded that the coverage mandate had improperly preempted legitimate medical debate, explaining that “the medical community is divided on many issues related to gender identity, including the value of various ‘gender-affirming’ treatments for gender dysphoria.” Id. at 37,187.
The 2020 Rule also expanded and clarified available exceptions to Section 1557. Id. at 37,204. Namely, HHS incorporated the Title IX religious and abortion-neutrality exemptions. See
4. Bostock and Litigation Challenging the 2020 Rule
On June 15, 2020, the Supreme Court decided Bostock—just three days after HHS finalized the 2020 Rule.5 The Court held that firing an employee for being homosexual or transgender constitutes sex discrimination under Title VII because such a decision “necessarily and intentionally discriminates against that individual in part because of sex.” Bostock, 140 S. Ct. at 1744. In so holding, the Court assumed that “sex” referred “only to biological distinctions between male and female.” Id. at 1739. Even with that assumption, the Court deemed it “impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.” Id. at 1741.
Bostock arrived with caveats, however. The Court warned that its decision did not “prejudge” any “other federal or state laws that prohibit sex discrimination.” Id. at 1753. Indeed, a dissent from Justice Alito went so far as to identify Section 1557 as having the potential to “emerge as an intense battleground under the Court‘s holding.” Id. at 1781 (Alito, J., dissenting). And the Court separately expressed continued
A flurry of litigation commenced in the wake of Bostock. Almost immediately, five cases sprung up seeking to prevent enforcement of the 2020 Rule and to revive various aspects of the 2016 Rule. See Whitman-Walker Clinic, Inc. v. U.S. Dep‘t of Health & Human Servs., Case No.
1:20-cv-01630 (D.D.C. June 22, 2020); Walker v. Azar, Case No. 1:20-cv-02834 (E.D.N.Y. June 26, 2020); Boston All. of Gay, Lesbian, Bisexual & Transgender Youth v. U.S. Dep‘t of Health & Human Servs., Case No. 1:20-cv-11297 (D. Mass. July 9, 2020); Washington v. U.S. Dep‘t of Health & Human Servs., Case No. 2:20-cv-01105 (W.D. Wash. July 16, 2020); New York v. U.S. Dep‘t of Health & Human Servs., Case No. 1:20-cv-05583 (S.D.N.Y. July 20, 2020). Briefing on dispositive motions is ongoing in two of those cases, while district courts have decided preliminary injunction motions in the other three.
In Boston Alliance and New York, where dispositive motions remain pending, the plaintiffs challenge the 2020 Rule‘s repeal of specific protections against discrimination based on gender identity and termination of pregnancy, as well as its incorporation of Title IX‘s religious and abortion-neutrality exemptions. See Case No. 1:20-cv-11297, Doc. No. 1, ¶¶ 166-80 (D. Mass. July 9, 2020); Case No. 1:20-cv-05583, Doc. No. 1, ¶ 86 (S.D.N.Y. July 20, 2020). As for Washington, the court denied a preliminary injunction motion and dismissed that case for lack of standing. CASE NO. C20-1105JLR, --- F. Supp. 3d ----, 2020 WL 5095467 (W.D. Wash. Aug. 28, 2020). The court centrally reasoned that, after Bostock, the plaintiffs failed to show an imminent risk of injury because the 2020 Rule possibly protected against gender-identity discrimination under a straightforward reading of Title IX‘s “on the basis of sex” language—even without the 2016 Rule‘s definitional provision. Id. at *7.
In the two remaining cases, the district courts entered partially overlapping preliminary injunctions. Walker v. Azar, Case No. 20-CV-2834 (FB) (SMG), --- F. Supp. 3d ----, 2020 WL 4749859, at *10 (E.D.N.Y. Aug. 17, 2020); Whitman-Walker Clinic, Inc. v. U.S. Dep‘t of Health & Human Servs., Civil Action No. 20-1630 (JEB), --- F. Supp. 3d ----, 2020 WL 5232076, at *45 (D.D.C. Sept. 2, 2020). Both courts determined that the 2020 Rule violated the APA by failing to consider Bostock prior to publication. See Walker, 2020 WL 4749859, at *9; Whitman-Walker, 2020 WL 5232076, at *26. Yet the chosen remedies differed slightly.
The Walker court‘s order reinstates the 2016 Rule‘s definition of “on the basis of sex” to encompass “gender identity” and “sex stereotyping.” 2020 WL 4749859, at *10. The court also later enjoined the repeal of the former 45 C.F.R. § 92.206, which essentially repeats the prohibition against discrimination based on gender identity in the provision of health services. Walker v. Azar, Case No. 20-CV-2834 (FB) (SMG), 2020 WL 6363970, at *4 (E.D.N.Y. Oct. 29, 2020).
By contrast, the preliminary injunction entered by the Whitman-Walker court revives only the 2016 Rule‘s “sex stereotyping” definition. 2020 WL 5232076, at *26. Even so, the court found that definition broad enough to protect against discrimination
All other aspects of the 2020 Rule remain in effect today. The two courts that granted preliminary injunction motions passed up invitations to enjoin the regulation in total. Walker, 2020 WL 6363970, at *1; Whitman-Walker, 2020 WL 5232076, at *45. So incorporation of the Title IX abortion-neutrality exemption is still effective, as are the repeal of “termination of pregnancy” from the definition of sex discrimination, the repeal of the insurance coverage mandate for gender-transition services, the inclusion of specific overriding religious freedom and conscience protections, and the narrower scope of application to health insurers. See Walker, 2020 WL 6363970, at *2-3 (enumerating provisions in 2020 Rule not subject to injunctions). Also worth noting, HHS recently appealed both adverse preliminary injunction decisions. See Walker v. Azar, USCA No. 20-3827 (D.C. Cir. Nov. 10, 2020); Whitman-Walker Clinic, Inc. v. U.S. Dep‘t of Health & Human Servs., USCA No. 20-5331 (2d Cir. Nov. 9, 2020).
Throughout the last four and a half years of fluid regulatory interpretations and litigation surrounding Section 1557, the EEOC‘s interpretation of Title VII as applied to employers’ group health plans has stayed static. Doc. No. 97, ¶ 160. The EEOC—before and after Bostock—has taken the consistent position that Title VII protects against discrimination based on gender identity. Compare Doc. No. 97-7 (EEOC guidance document on protections for LGBT workers from December 2016), with What You Should Know: The EEOC and Protections for LGBT Workers, U.S. Equal Emp‘t Opportunity Comm‘n, https://www.eeoc.gov/laws/guidance/what-you-should-know-eeoc-and-protections-lgbt-workers (last visited Jan. 19, 2021) (contemporary EEOC guidance document on protections for LGBT workers). In line with that stance, the EEOC has pursued enforcement actions against nonhealthcare employers that categorically exclude coverage for gender transitions from their health plans. See Doc. No. 97, ¶¶ 156-59.
C. Introduction of Parties
Four Catholic organizations and the State of North Dakota comprise the Plaintiffs in Religious Sisters of Mercy. In Catholic Benefits Association, the Plaintiffs consist of the namesake organization and three of its members, all affiliated with the Catholic Church. The Defendants are agencies and appointed officials of the United States government responsible for promulgating and enforcing the challenged interpretations of federal law.
1. Religious Sisters of Mercy Plaintiffs
Plaintiff Religious Sisters of Mercy is a Catholic order of religious sisters devoted to works of mercy, including offering healthcare to the underserved. Doc. No. 96-2, ¶ 2. Located in Alma, Michigan, the Religious Sisters of Mercy is a nonprofit corporation officially approved by the Vatican. Id. ¶ 3. The sisters choose to follow their faith by offering care to those suffering from physical, psychological, intellectual, and spiritual ailments. Id. ¶ 4. As part of that mission, some sisters serve as licensed healthcare professionals. Id. ¶ 5; see also Doc. No. 96-5, ¶ 2.
Plaintiff SMP Health System is a nonprofit health system sponsored by another Catholic religious order, the Sisters of Mary of the Presentation. Doc. No. 96-3, ¶ 4. Headquartered in Valley City, North Dakota, SMP Health System operates healthcare facilities in North Dakota and Illinois. Id. ¶ 3. It places special emphasis on providing services to the poor and elderly, including Medicare and Medicaid patients. Id. ¶ 4. The Sisters of Mary of the Presentation operate SMP Health System in a manner that abides by the Ethical and Religious Directives for Catholic Healthcare Services issued by the United States Conference of Catholic Bishops. Id. ¶ 5.
Plaintiff University of Mary (“University“) is a Roman Catholic, Benedictine higher education institution with its main campus in Bismarck, North Dakota. Doc. No. 96-4, ¶¶ 5-6. While welcoming students of all faiths and backgrounds, the University upholds Catholic teaching in its programs and services. Id. ¶ 6. The University offers a nursing program and operates a student health clinic that each receive funding from HHS. Id. ¶¶ 8, 10.
Consistent with their Catholic faith, each of these Plaintiffs believes “that every man and woman is created in the image and likeness of God, and that they reflect God‘s image in unique—and uniquely dignified—ways.” Doc. Nos. 96-2, ¶ 9; 96-3, ¶ 6; 96-4, ¶ 9. When providing medical services, these Plaintiffs serve every person who needs and qualifies for care, including transgender individuals. Doc. Nos. 96-2, ¶ 7; 96-3, ¶ 7; 96-6, ¶ 4. Nonetheless, they believe that performing gender-transition procedures would violate their medical judgment by potentially causing harm to patients. Doc. Nos. 96-2, ¶ 11; 96-5, ¶ 9. They also believe that performing gender-transition, abortion, and sterilization services would violate their religious beliefs regarding human sexuality and procreation. Doc. Nos. 96-2, ¶ 12; 96-3, ¶¶ 8-10; 96-4, ¶ 10. Finally, these Plaintiffs offer health benefits to their eligible employees, and they object for religious reasons to providing insurance coverage for abortions, sterilizations, and gender transitions. Doc. Nos. 96-2, ¶ 15; 96-3, ¶ 11; 96-4, ¶ 13.
Plaintiff North Dakota oversees and controls several state agencies that receive financial assistance from HHS. Doc. No. 95, ¶ 12. For example, the North Dakota Department of Human Services received nearly $900 million in Medicaid funding in the most recent fiscal year. Doc. No. 96-8, ¶ 4. Additionally, North Dakota operates a State Hospital in Jamestown that provides psychiatric and chemical dependency treatment in part through HHS-administered funds. Doc. No. 95, ¶ 12. The state‘s Medicaid program excludes coverage for abortions (with exceptions for rape, incest, or to save the life of the mother) and gender reassignment surgeries. Medical Servs. Div., N.D. Dep‘t of Human Servs., General Information for Providers: North Dakota Medicaid and Other Medical Assistance Programs 85 (2021). North Dakota‘s employee health plan excludes coverage for similar services. Doc. No. 95, ¶ 165. The
2. Catholic Benefits Association Plaintiffs
Plaintiff Catholic Benefits Association (“CBA“) is a nonprofit corporation and Catholic ministry. Doc. No. 97-1, p. 1. Among other purposes, the CBA is organized “[t]o support Catholic employers . . . that, as part of their religious witness and exercise, provide health or other benefits to their respective employees in a manner that is consistent with Catholic values.” Id. at 2. The CBA‘s membership includes over 1,030 employers and 5,100 Catholic parishes within more than 60 dioceses and archdioceses, collectively covering more than 90,000 employees and their families. Doc. No. 97, ¶¶ 53-54. Membership in the CBA is limited to Catholic employers that commit to providing benefits or services consistent with Catholic values. Doc. No. 97-2, p. 4. Many CBA members offer healthcare or health-related services that receive funding from Medicare, Medicaid, or other HHS-administered programs. Doc. No. 97, ¶¶ 54-56. And some employer members, including Catholic dioceses and archdioceses, offer employee health benefits in conjunction with health insurers and TPAs that receive federal financial assistance. Id. ¶ 57.
The three remaining Plaintiffs are CBA members. Plaintiff Diocese of Fargo (“Diocese“) carries out the spiritual, educational, and social service mission of the Catholic Church in eastern North Dakota. Id. ¶ 11. The Diocese employs more than 15 individuals and operates a self-insured health plan for its employees. Id. ¶¶ 14, 19. Many Catholic parishes and affiliated ministries within the Diocese participate in that plan as well. Id. ¶ 23. The Diocese has engaged Blue Cross Blue Shield of North Dakota (“BCBSND“)—an entity that receives federal financial assistance through an ACA exchange—as a TPA to administer its health plan. Id. ¶¶ 19-20. BCBSND has required the Diocese to enter into an indemnification agreement for decisions related to health plan design, such as the exclusion of gender-transition and abortion coverage. Id. ¶ 22.
Plaintiff Catholic Charities North Dakota (“Catholic Charities”) serves the poor, elderly, and disabled through critical social service programs. Id. ¶ 24. Its programs include disaster relief, individual and family counseling, adoption services, pregnancy counseling, and guardianship services for adults with special needs. Id. Catholic Charities employs more than 15 individuals. Id. ¶ 26. To provide benefits to its employees, Catholic Charities contracts with an insurer that receives federal financial assistance from HHS. Id. ¶¶ 28-29.
Plaintiff Catholic Medical Association (“CMA”) is a national, physician-led community of healthcare professionals that strives to uphold the principles of the Catholic faith in the science and practice of medicine. Id. ¶ 30. Member physicians must promise to adhere to Catholic moral principles, particularly those related to bio-medical ethics. Id. ¶ 32. Consistent with their faith, CMA members do not provide gender-transition services, but some do perform procedures like hysterectomies and mastectomies that other physicians perform as part of gender transitions. Id. ¶ 34. Some CMA members also offer health benefits for employees that exclude coverage for gender transitions and abortion. Id. ¶ 37.
3. Defendants
Defendant United States Department of Health and Human Services is the federal agency tasked with implementing and enforcing
D. Recent Procedural Developments
On November 6, 2020, the Plaintiffs moved to lift the stay. Doc. No. 92. The Court granted the motion and set deadlines for amended complaints and responses. Doc. No. 93. On November 23, 2020, the Plaintiffs timely filed amended complaints and contemporaneously moved for partial summary judgment and permanent injunctive relief. Doc. Nos. 95-98.
Invoking the RFRA, the APA, and the Spending Clause of the Constitution, the Religious Sisters of Mercy Plaintiffs seek relief from HHS’s current interpretation of Section 1557. Doc. No. 96. The Catholic Benefits Association Plaintiffs, relying exclusively on the RFRA, request relief from the same interpretation of Section 1557, as well from parallel interpretations of Title VII, Title IX, or any other federal laws. Doc. No. 98. In the alternative, all the Plaintiffs move for a preliminary injunction. Doc. No. 96-1, p. 2; Doc. No. 104, p. 29.
The Defendants responded in opposition to the motions on December 23, 2020. Doc. No. 111. Accompanying the response, the Defendants moved to dismiss both cases in their entirety for lack of jurisdiction. Doc. No. 112. The Plaintiffs submitted final briefing on January 6, 2021. Doc. Nos. 116-119. The Court held a hearing on the motions on January 14, 2021. Doc. No. 123.
II. JURISDICTION
Federal courts must possess jurisdiction before reaching the merits of a case. Va. House of Delegates v. Bethune-Hill, 587 U.S. ___, 139 S. Ct. 1945, 1950 (2019).
A. Standing
Standing requires (1) an injury in fact, (2) causation, and (3) redressability. Hughes v. City of Cedar Rapids, 840 F.3d 987, 992 (8th Cir. 2016). An injury in fact is “the actual or imminent invasion of a concrete and particularized legal interest.” Kuehl v. Sellner, 887 F.3d 845, 850 (8th Cir. 2018) (citations omitted). Plaintiffs seeking declaratory and injunctive relief “must show they are experiencing an ongoing injury or an immediate threat of injury.” Webb ex rel. K.S. v. Smith, 936 F.3d 808, 815 (8th Cir. 2019) (citation omitted). Causation is satisfied when the injury is “fairly traceable to the challenged action of
The party invoking federal jurisdiction bears the burden to establish standing. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). Courts “assume that on the merits the plaintiffs would be successful in their claims” when analyzing standing. Am. Farm Bureau Fed’n v. EPA, 836 F.3d 963, 968 (8th Cir. 2016) (citation omitted). Plaintiffs “must demonstrate standing separately for each form of relief sought.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 185 (2000) (citations omitted).
The Plaintiffs contend that HHS’s current interpretation of Section 1557 will cause imminent injury by forcing them to choose between performing and providing insurance coverage for gender transitions and abortions or risking the loss of federal funding and other penalties. The Catholic Benefits Association Plaintiffs also raise the prospect of injury from interpretations of Title VII, Title IX, and other federal laws that might compel the same actions. The Defendants counter that the judicial vacatur and later administrative repeal of the 2016 Rule abate any risk of injury from Section 1557. They further respond that the lack of imminent EEOC enforcement dooms the Title VII claims.
1. Section 1557
Some claims against HHS’s interpretation of Section 1557 appear to center on the notion that recent court decisions have fully reinstated the 2016 Rule. Not so. Much of the 2020 Rule remains operative, including provisions that obviate several asserted harms. Insofar as the 2020 Rule alleviated their injuries prior to submission of the most recent amended complaints, the Plaintiffs lack standing. With that said, HHS’s interpretation of Section 1557—as influenced by Bostock and the two nationwide preliminary injunctions against the 2020 Rule—provokes a credible threat of enforcement for refusal to provide or insure gender-transition procedures.
At the outset, though, any claims regarding forced abortion services and insurance coverage falter.6 The 2020 Rule repealed “termination of pregnancy” from the regulatory definition of sex discrimination. See
Trying to sidestep that reality, the Plaintiffs hint at the specter of future injury, highlighting the pending Boston Alliance and New York cases that look to eliminate incorporation of the abortion-neutrality exemption. But HHS opposes those lawsuits, and how other district courts may resolve them is plainly inappropriate
Turning to the claims regarding compelled gender-transition procedures and insurance coverage, the initial task is to separate the wheat from the chaff. Despite consolidation, cases joined together under
A closer look at the two cases here reveals a preliminary difference for standing purposes. “When a statute is challenged by a party who is a target or object of the statute’s prohibitions, ‘there is ordinarily little question that the [statute] has caused him injury.’” St. Paul Area Chamber of Com. v. Gaertner, 439 F.3d 481, 485 (8th Cir. 2006) (alteration in original) (quoting Minn. Citizens Concerned for Life v. FEC, 113 F.3d 129, 131 (8th Cir. 1997)). The Religious Sisters of Mercy Plaintiffs, as entities that operate health programs receiving federal financial assistance from HHS, qualify as objects of Section 1557 and its implementing regulations. Conversely, “when the plaintiff is not himself the object of the government action . . . he challenges, standing is not precluded, but it is ordinarily ‘substantially more difficult’ to establish.” Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009) (quoting Lujan, 504 U.S. at 562). Section 1557 does not apply directly to the named Catholic Benefits Association Plaintiffs. They assert instead that the statute causes them secondhand injury by mandating their insurers and TPAs to offer and administer health plans that cover gender-transition procedures.
But HHS’s interpretation of Section 1557 no longer does that. The 2016 Rule applied to all operations of an entity principally engaged in the provision of health insurance. 81 Fed. Reg. at 31,467 (formerly codified at
Precisely so here. None of the Catholic Benefits Association Plaintiffs aver that their own health plans receive federal funding. For those health plans, then, the
Attempting to show otherwise, the CBA points out that “[a]s a result of the 2016 Rule, two CBA members already have been required to cover gender-transition services for their employees.” Doc. No. 119, p. 2. And the Diocese “has been forced to indemnify its TPA against liability for exclusion of . . . gender-transition services from its health plan.” Id. at 3. Yet those harms emanate from since-repealed regulations, not existing HHS policy. Past injuries alone cannot confer standing to pursue declaratory and injunctive relief. Frost v. Sioux City, 920 F.3d 1158, 1162 (8th Cir. 2019). Without controlling regulations, if insurers and TPAs continue to pressure the Catholic Benefits Association Plaintiffs to cover gender-transition procedures or enter into indemnification agreements, such actions are not attributable to HHS. See Balogh, 816 F.3d at 543. Those Plaintiffs thus lack standing to challenge Section 1557 in their own capacities.
Still, the CBA alternatively asserts the ability to sue on behalf of its members. Associational standing inheres when “(1) the individual members would have standing to sue in their own right; (2) the organization’s purpose relates to the interests being vindicated; and (3) the claims asserted do not require the participation of individual members.” Sierra Club v. U.S. Army Corps of Eng’rs, 645 F.3d 978, 986 (8th Cir. 2011) (citations omitted). An organizational plaintiff “need not establish that all of its members would have standing to sue individually so long as it can show that ‘any one of them’ would have standing.” Iowa League of Cities v. EPA, 711 F.3d 844, 869 (8th Cir. 2013) (quoting Warth, 422 U.S. at 511). Members on whose behalf suit is brought may remain unnamed. Disability Rights Wis., Inc. v. Walworth Cnty. Bd. of Supervisors, 522 F.3d 796, 802 (7th Cir. 2008); Doe v. Stincer, 175 F.3d 879, 882 (11th Cir. 1999).
The CBA easily satisfies the second and third requirements for associational standing. The CBA’s purpose of supporting Catholic employers that wish to provide employee benefits consistent with their religious beliefs is certainly germane to a lawsuit that challenges regulations affecting members’ health plans. See Doc. No. 97-1, p. 2. And where an organizational plaintiff “seeks only declaratory and prospective injunctive relief, the participation of individual [members] . . . is not required.” Heartland Acad. Cmty. Church v. Waddle, 427 F.3d 525, 533 (8th Cir. 2005).
As for the ability of individual members to sue, the CBA’s verified second amended complaint confirms that its membership includes Catholic hospitals and other healthcare entities “that receive Medicaid and Medicare payments and participate in HHS-funded programs.” Doc. No. 97, ¶¶ 55-56. That places at least some CBA members on equal footing with the Religious Sisters of Mercy Plaintiffs. The unified question then becomes whether those Plaintiffs—and, by implication, the similarly situated CBA members—possess standing.
When challenging threatened government action, plaintiffs need not wait for actual enforcement to satisfy the injury-in-fact requirement. Susan B. Anthony List v. Driehaus, 573 U.S. 149, 158 (2014). Instead, they must demonstrate only “an intention to engage in a course of conduct arguably affected with a constitutional interest, but proscribed by a statute, and there exists a credible threat of prosecution thereunder.” Babbitt v. United Farm Workers Nat’l Union, 442 U.S. 289, 298 (1979). Here, that standard is met.
First, the Plaintiffs’ conduct implicates constitutional interests. The Catholic healthcare entities’ refusal to perform or cover gender-transition procedures is predicated on an exercise of their religious beliefs protected by the
Second, Section 1557 “arguably proscribe[s]” the Plaintiffs’ refusal to perform or cover gender-transition procedures. Driehaus, 573 U.S. at 162. True enough, HHS tried to repeal the 2016 Rule’s explicit prohibition on gender-identity discrimination, firmly stating that “extension of sex-discrimination protections to encompass gender identity was contrary to the text of Title IX.” 85 Fed. Reg. at 37,168. But that repeal never took effect. Rather, two district courts entered partially overlapping preliminary injunctions that collectively reinstate the prior definition of “on the basis of sex” to include “gender identity” and “sex stereotyping.” Walker, 2020 WL 4749859, at *10; Whitman-Walker, 2020 WL 5232076, at *45. The Whitman-Walker court further enjoined incorporation of the Title IX religious exemption. Id. As the Defendants readily acknowledge, “persons subject to an injunctive order issued by a court with jurisdiction are expected to obey that decree until it is modified or reversed.” GTE Sylvania, Inc. v. Consumers Union of U.S., Inc., 445 U.S. 375, 386 (1980). Construing the same definitions that now control once again, HHS previously classified the categorical refusal to perform or cover gender-transition procedures as unlawfully discriminatory. 81 Fed. Reg. at 31,471-72 (formerly codified at
What is more, the Plaintiffs face potential consequences from the 2020 Rule even without the injunctions. That is so because HHS declined to promulgate a new regulatory definition for “sex,” instead leaving the door open to “application of the [Bostock] Court’s construction.” 85 Fed. Reg. at 37,168. The Supreme Court later held that Title VII proscribes discrimination based on transgender status under a plain reading of the statute’s prohibition on sex discrimination. Bostock, 140 S. Ct. at 1744. HHS admitted that such a holding would “likely have ramifications for the definition of ‘on the basis of sex’ under Title IX” and, in turn, Section 1557. 85 Fed. Reg. at 37,168. Case law vindicates that prediction. Relying on Bostock, the Fourth and Eleventh Circuits recently held that Title IX protects against discrimination based on gender identity. Grimm v. Gloucester Cnty. Sch. Bd., 972 F.3d 586, 616 (4th Cir. 2020); Adams ex rel. Kasper v. Sch. Bd. of St. Johns Cnty., 968 F.3d 1286, 1305 (11th Cir. 2020). The Washington court, when
Third, a credible threat of enforcement endures. Such a threat arises “when a course of action is within the plain text of a statute.” Alexis Bailly Vineyard, Inc. v. Harrington, 931 F.3d 774, 778 (8th Cir. 2019) (citing North Dakota v. Heydinger, 825 F.3d 912, 917 (8th Cir. 2016)). As just explained, Section 1557 is amenable to an interpretation that would expose the Plaintiffs to liability for declining to provide or insure gender-transition services. And here “there is no ‘evidence—via official policy or a long history of disuse—that authorities’ have ‘actually’ refused to enforce” the statute. Jones v. Jegley, 947 F.3d 1100, 1104 (8th Cir. 2020) (quoting 281 Care Comm. v. Arneson, 638 F.3d 621, 628 (8th Cir. 2011)). To the contrary, HHS has undertaken two rulemakings to refine enforcement parameters in the ten years following Section 1557’s enactment. Most recently, HHS vowed in the 2020 Rule’s preamble to “vigorously enforce the prohibitions on discrimination based on . . . sex.” 85 Fed. Reg. at 37,175. That is more than sufficient to establish a credible threat of enforcement. The Plaintiffs satisfy the injury-in-fact requirement.
Finally, HHS’s responsibility to enforce Section 1557 supplies a sufficient causal relationship to the asserted injuries, which declaratory and injunctive relief will likely redress. For a pre-enforcement constitutional challenge to a statute, “the causation element of standing requires the named defendants to possess authority to enforce the complained-of provision.” Calzone v. Hawley, 866 F.3d 866, 869 (8th Cir. 2017) (quoting Dig. Recognition Network v. Hutchinson, 803 F.3d 952, 957-58 (8th Cir. 2015)). HHS and Secretary Azar fit that bill for Section 1557. Redressability is likewise plain because a favorable decision “will relieve a discrete injury” of threatened enforcement. Massachusetts v. EPA, 549 U.S. 497, 525 (2007) (citation omitted).
The Defendants attempt to attack standing from several angles, but to no avail. They first contend that the Franciscan Alliance court’s vacatur of the 2016 Rule and the ensuing promulgation of the 2020 Rule cured the Plaintiffs’ injuries altogether. But since the Supreme Court decided Bostock and two district courts followed with preliminary injunctions against parts of the 2020 Rule, Section 1557 presents the Plaintiffs with a renewed threat of financial sanctions, civil enforcement proceedings, and even criminal penalties.
Next, the Defendants underscore that HHS has appealed the adverse preliminary injunction decisions, apparently suggesting that the outcome of those proceedings could avert the need for this litigation. Yet a standing inquiry focuses exclusively on the facts that existed at the time of the operative complaint. Conners v. Gusano’s Chicago Style Pizzeria, 779 F.3d 835, 840 (8th Cir. 2015). How HHS’s appeals might turn out in the future is irrelevant to whether the Plaintiffs faced an injury in fact when they submitted their amended complaints.
This line of argument calls to mind the long-running litigation contesting the ACA’s contraceptive mandate. There, religious organizations challenged HHS regulations that required employers to cover certain forms of contraceptives in their health plans. See Little Sisters of the Poor Saints Peter & Paul Home v. Pennsylvania, 591 U.S. ___, 140 S. Ct. 2367, 2376 (2020) (collecting cases). The Eighth Circuit determined that the mandate violated the RFRA and affirmed injunctive relief. Sharpe Holdings, Inc. v. U.S. Dep’t of Health & Human Servs., 801 F.3d 927, 945-46 (8th Cir. 2015), vacated on other grounds sub nom. U.S. Dep’t of Health & Human Servs. v. CNS Int’l Ministries, No. 15-775, 2016 WL 2842448 (U.S. May 16, 2016). HHS later issued new regulations in an effort to repeal the mandate. See Little Sisters of the Poor, 140 S. Ct. at 2377-78. Two district courts then preliminarily enjoined the repeal rules under the APA. California v. U.S. Dep’t of Health & Human Servs., 281 F. Supp. 3d 806, 832 (N.D. Cal. 2017); Pennsylvania v. Trump, 281 F. Supp. 3d 553, 585 (E.D. Pa. 2017).
In reaction, religious organizations renewed their RFRA claims against the restored mandate. District courts across the country—this one among them—exercised jurisdiction and granted injunctive relief. See Christian Emps. All. v. Azar, Case No. 3:16-cv-309, 2019 WL 2130142, at *5-6 (D.N.D. May 15, 2019); see also DeOtte v. Azar, 393 F. Supp. 3d 490, 514-15 (N.D. Tex. 2019); Sharpe Holdings, Inc. v. U.S. Dep’t of Health & Human Servs., No. 2:12 CV 92 DDN, 2018 WL 1520031, at *4 (E.D. Mo. Mar. 28, 2018); Reaching Souls Int’l v. Azar, Case No. CIV-13-1092-D, 2018 WL 1352186, at *2 (W.D. Okla. Mar. 15, 2018). Each court acted while the two preliminary injunctions against the repeal rules went up and down the appellate ladder. See, e.g., Pennsylvania v. President United States, 930 F.3d 543 (3d Cir. 2019); California v. U.S. Dep’t of Health & Human Servs., 941 F.3d 410 (9th Cir. 2019); California v. Azar, 911 F.3d 558 (9th Cir. 2018). Indeed, the Supreme Court had the last word: The repeal rules did not violate the APA. Little Sisters of the Poor, 140 S. Ct. at 2386. Despite the possibility of an appellate court reaching that conclusion all along, not one of the district courts that issued RFRA injunctions against the judicially restored contraceptive mandate discovered a lack of jurisdiction. The similar posture in those cases reinforces the conclusion that standing is present here.
As a last effort, the Defendants contend that HHS has evinced an intent to refrain from enforcing the challenged interpretation of Section 1557 against the Plaintiffs. They point specifically to the 2020 Rule’s express incorporation of the Title IX religious exemption, the RFRA, and other federal conscience laws. See
See Franciscan All., 227 F. Supp. 3d at 683 (concluding that identical conscience laws “do not reach religious objections to providing or covering transition-related procedures”). All told, the Defendants’ arguments in opposition to standing fail.
The Religious Sisters of Mercy Plaintiffs have standing to challenge HHS’s interpretation of Section 1557 that requires them to perform and provide insurance coverage for gender-transition procedures. So too would the Catholic hospitals and other healthcare entities that count themselves as CBA members. The CBA therefore possesses associational standing to sue on behalf of its members, including the Diocese, Catholic Charities, and the CMA.
2. Title VII
By the same token, the CBA has associational standing to pursue RFRA claims against the EEOC’s interpretation of Title VII.9 Again, the CBA’s organizational purpose is relevant to religious freedom claims pertaining to members’ health plans. The participation of individual members remains unnecessary to obtain declaratory and injunctive relief. Heartland Acad. Cmty. Church, 427 F.3d at 533. Moreover, individual CBA members like the Diocese and Catholic Charities have standing to sue in their own right.
Akin to the Section 1557 claims, the three-part injury-in-fact standard articulated in Babbitt continues to control. Applying that standard, the Catholic Benefits Association Plaintiffs’ refusal to cover gender-transition procedures in their health plans stems from a
This case is stronger than both United Food and Bryant. The EEOC has never disavowed an intent to enforce Title VII’s prohibition on gender-transition exclusions in health plans against the CBA or its members. At the same time, the EEOC has enforced that very interpretation against other employers. See Doc. No. 97, ¶¶ 157-59. Because the CBA members’ “course of action is within the plain text” of Title VII, a credible threat of enforcement persists. Alexis Bailly Vineyard, 931 F.3d at 778 (citing Heydinger, 825 F.3d at 917).
The CBA members satisfy the causation and redressability elements as well. The EEOC shoulders enforcement responsibility for Title VII, and declaratory and injunctive relief will likely redress the threat of enforcement. See Massachusetts, 549 U.S. at 525. Accordingly, the CBA possesses associational standing for the claims against the EEOC’s interpretation of Title VII.
3. Title IX and Other Federal Laws
Beyond challenges to Section 1557 and Title VII, the Catholic Benefits Association Plaintiffs seek to prospectively bar interpretations of Title IX or any other federal laws that may compel them to perform or cover gender transitions and abortions. But that is a bridge too far.
To the extent Title IX even applies to those Plaintiffs, the statutory scheme explicitly exempts religious organizations.
Almost needless to say, the CBA and its members cannot pursue religious freedom claims against as yet unimagined interpretations of federal laws they do not even identity. If that were possible, anyone could stroll in with a list of religious beliefs and enjoin the government from ever adopting laws that might violate them. Federal courts lack such sweeping authority. Flast v. Cohen, 392 U.S. 83, 96 (1968) (citation omitted) (“[T]he oldest and most consistent thread in the federal law of justiciability is that the federal courts will not give advisory opinions.”).
The Catholic Benefits Association Plaintiffs have not shown a credible threat of enforcement for conduct arguably proscribed by Title IX or other unnamed federal laws. They therefore lack an injury in fact necessary to support standing. Only their RFRA claims challenging the interpretations of Section 1557 and Title VII may proceed.
B. Judicial Comity
Shifting from standing, the Defendants separately contend that considerations of judicial comity prevent the exercise of jurisdiction. They specifically assert that injunctive relief in these cases would directly conflict with the preliminary injunctions entered in Walker and Whitman-Walker. In part, the Court agrees.
A district court may “in its discretion dismiss a declaratory or injunctive suit if the same issue is pending in litigation elsewhere.” Abbott Lab’ys v. Gardner, 387 U.S. 136, 155 (1967) (citations omitted). “Generally, principles of comity and judicial economy make courts reluctant to exercise jurisdiction over claims involving the orders of coordinate courts.” Zambrana v. Califano, 651 F.2d 842, 844 (2d Cir. 1981) (citations omitted); see also West Gulf Mar. Ass’n v. ILA Deep Sea Local 24, 751 F.2d 721, 728 (5th Cir. 1985). “Prudence requires that whenever possible, coordinate courts should avoid issuing conflicting orders.” Feller v. Brock, 802 F.2d 722, 728 (4th Cir. 1986) (citations omitted). “When an injunction sought in one federal proceeding would interfere with another federal proceeding, considerations of comity require more than the usual measure of restraint, and such injunctions should be granted only in the most unusual cases.” Bergh v. Washington, 535 F.2d 505, 507 (9th Cir. 1976) (citation omitted).
The APA claims run headlong into this barrier. The Religious Sisters of Mercy Plaintiffs move for injunctive relief because, in their view, HHS violated the APA “by misinterpreting Section 1557” to prohibit gender-identity discrimination and by “failing to incorporate a statutorily mandated religious exemption from Title IX.” Doc. No. 96, p. 2. The Walker and Whitman-Walker decisions stand in diametric opposition. In Walker, the court determined that HHS’s interpretation of Section 1557 violated the APA because the 2020 Rule contravened Bostock by taking the position that the statute did not protect against discrimination based on gender identity. 2020 WL 4749859, at *9. The court then partially enjoined repeal of the 2016 Rule and reinstated the definition of “on the basis of sex” to encompass “gender identity” and “sex stereotyping.” Id. at *10. Two weeks later, the Whitman-Walker court found similar APA violations and halted repeal of the “sex stereotyping” definition and incorporation of the Title IX religious exemption. 2020 WL 6363970, at *45. Both orders apply nationwide. See id. at *6, *44.
In defense, the Plaintiffs try to paint comity among federal district courts as a doctrine narrowly applicable to overlapping suits presenting identical issues between the same parties. See Missouri ex rel. Nixon v. Prudential Health Care Plan, Inc., 259 F.3d 949, 954 (8th Cir. 2001) (“Plaintiffs may not pursue multiple federal suits against the same party involving the same controversy at the same time.”). But the principle extends more broadly. See Hartford Fire Ins. Co. v. California, 509 U.S. 764, 817 (1993) (Scalia, J., dissenting) (discussing “the comity of courts, whereby judges decline to exercise jurisdiction over matters more appropriately adjudged elsewhere”); Feller, 802 F.2d at 728 (declaring “comity” a misnomer in a similar context, but explaining that “whatever its label, there is an underlying policy of judicial administration which counsels against the creation of conflicts such as the one at bar”); Spencer E. Amdur & David Hausman, Nationwide Injunctions and Nationwide Harm, 131 Harv. L. Rev. 49, 52 n.22 (2017) (noting that “the principle of comity . . . normally counsels against issuing a conflicting injunction”). Invoking judicial comity, several district courts have either vacated or abstained from issuing injunctions that posed conflicts with orders of coordinate courts. See California ex rel. Lockyer v. U.S. Dep’t of Agric., 710 F. Supp. 2d 916, 921-23 (N.D. Cal. 2008); Fund for Animals v. Norton, 323 F. Supp. 2d 7, 10-11 (D.D.C. 2004); Exxon Corp. v. U.S. Dep’t of Energy, 594 F. Supp. 84, 89-90 (D. Del. 1984); Common Cause v. Jud. Ethics Comm., 473 F. Supp. 1251, 1253-54 (D.D.C. 1979).
Endorsing the Religious Sisters of Mercy Plaintiffs’ proposed APA relief would inevitably conflict with decisions of other district courts and simultaneously subject HHS to inconsistent legal obligations. The Court believes that route is improper and unwise. In the exercise of its discretion, the Court declines to adjudicate the APA claims.
Nevertheless, the RFRA and Spending Clause claims do not evoke the same concerns. The Walker and Whitman-Walker preliminary injunction orders dealt solely with APA challenges to HHS’s interpretation of Section 1557. What the Plaintiffs ask for now are essentially exceptions to the agency’s interpretation in the aftermath of those decisions. The Catholic Plaintiffs insist that HHS’s prevailing interpretation should not apply to them for religious freedom reasons. North Dakota professes entitlement to an exemption on
C. Ripeness and Mootness
In a final attempt to defeat jurisdiction, the Defendants raise ripeness and mootness hurdles. Ripeness tests “the fitness of the issues for judicial resolution” and “the hardship to the parties of withholding court consideration.” Pac. Gas & Elec. Co. v. State Energy Res. Conservation & Dev. Comm’n, 461 U.S. 190, 201 (1983) (citation omitted). The party seeking judicial review “must necessarily satisfy both prongs to at least a minimal degree.” Neb. Pub. Power Dist. v. MidAmerican Energy Co., 234 F.3d 1032, 1039 (8th Cir. 2000). “A claim is not ripe for adjudication if it rests upon contingent future events that may not occur as anticipated, or indeed may not occur at all.” Texas v. United States, 523 U.S. 296, 300 (1998) (citations and internal quotation marks omitted).
The Plaintiffs’ surviving claims against the interpretations of Section 1557 and Title VII satisfy both ripeness prongs. “Fitness rests primarily on whether a case would benefit from further factual development.” City of Kennett v. EPA, 887 F.3d 424, 433 (8th Cir. 2018) (citation omitted). These cases present “purely legal questions“—whether the challenged interpretations of federal law violate the RFRA and the Spending Clause—and need no additional factual development. Iowa League of Cities, 711 F.3d at 867. Although HHS has appealed the preliminary injunctions against the 2020 Rule, the “chance of a change” is not enough to render claims based on current law unfit for review. City of Kennett, 887 F.3d at 434. Meanwhile, “[t]he hardship prong asks whether delayed review ‘inflicts significant practical harm’ on the plaintiffs.” Parrish v. Dayton, 761 F.3d 873, 875 (8th Cir. 2014) (quoting Ohio Forestry Ass’n, Inc. v. Sierra Club, 523 U.S. 726, 733 (1998)). Practical harm is manifest here because the Plaintiffs must either alter their policies for providing and covering gender-transition procedures (which the Catholic Plaintiffs assert will violate their religious beliefs and North Dakota its sovereign interests) or risk the loss of critical federal healthcare funding along with potential civil and criminal penalties. Therefore, these cases are sufficiently ripe for review.
Resisting ripeness for the Title VII claims in particular, the Defendants cite to Standing Rock Housing Authority v. EEOC, 585 F. Supp. 2d 1112 (D.N.D. 2008). There, another court in this district dismissed as unripe a declaratory judgment suit that sought to nullify an EEOC administrative subpoena regarding sexual harassment allegations. 585 F. Supp. 2d at 1121. The court found a lack of final agency action11 because “mere issuance of an
Mootness occurs when “changed circumstances already provide the requested relief and eliminate the need for court action.” McCarthy v. Ozark Sch. Dist., 359 F.3d 1029, 1035 (8th Cir. 2004). Courts recurrently describe mootness as “the doctrine of standing set in a time frame: The requisite personal interest that must exist at the commencement of the litigation (standing) must continue throughout its existence (mootness).” Arizonans for Official English v. Arizona, 520 U.S. 43, 68 n.22 (1997) (citation omitted).
Simply put, neither case is moot because nothing has changed since the Plaintiffs submitted their amended complaints. They remain subject to the interpretations of Section 1557 and Title VII that spurred them to move for relief. The Plaintiffs possess standing to pursue some of their claims, and the challenged legal regime has stayed constant since this litigation recommenced. These cases are not moot as a result.
In sum, the Court will exercise jurisdiction over the Plaintiffs’ RFRA and Spending Clause claims challenging the interpretations of Section 1557 and Title VII that compel them to perform and provide insurance coverage for gender transitions. The abortion-related claims, the APA claims, and the claims challenging Title IX and other unidentified federal laws call for dismissal.
III. SUMMARY JUDGMENT
With jurisdiction resolved, the Court addresses the merits. Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
A. Religious Freedom Restoration Act
Congress enacted the RFRA “to provide very broad protection for religious
1. Substantial Burden
The RFRA initially queries whether the challenged implementations of Section 1557 and Title VII impose a substantial burden on the Catholic Plaintiffs’ exercise of religion. The analysis poses two different questions. “First, would non-compliance have substantial adverse practical consequences?” Little Sisters of the Poor, 140 S. Ct. at 2389 (Alito, J., concurring) (citing Hobby Lobby, 573 U.S. at 720-23). “Second, would compliance cause the objecting party to violate its religious beliefs, as it sincerely understands them?” Id. (emphasis omitted) (citing Hobby Lobby, 573 U.S. at 723-26).
In this instance, adverse practical consequences abound. Under the prevailing interpretations of Section 1557 and Title VII, refusal to perform or cover gender-transition procedures would result in the Catholic Plaintiffs losing millions of dollars in federal healthcare funding and incurring civil and criminal liability. An “imposition of significant monetary penalties” indisputably qualifies as a substantial burden. Sharpe Holdings, 801 F.3d at 937; see also Priests for Life v. U.S. Dep’t of Health & Human Servs., 808 F.3d 1, 16 n.3 (D.C. Cir. 2015) (Kavanaugh, J., dissenting from denial of reh’g en banc) (“There has never been a question that such a direct penalty imposes a substantial burden on the exercise of religion“).
Just as clearly, compliance with the challenged laws would violate the Catholic Plaintiffs’ religious beliefs as they sincerely understand them. The RFRA broadly defines “exercise of religion” as “any exercise of religion, whether or not compelled by, or central to, a system of religious belief.”
2. Compelling Interest
With a substantial burden present, the government must demonstrate that the challenged implementations of federal law advance “interests of the highest order.” Church of the Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520, 546 (1993) (citations and internal quotation marks omitted). The Defendants never attempt to make that showing here. In the 2020 Rule, HHS conceded to lacking a “compelling interest in forcing the provision, or coverage, of these medically controversial [gender-transition] services by covered entities.” 85 Fed. Reg. at 37,188.
That aside, even the interests advanced prior to the 2020 Rule likely fall short. The 2016 Rule, for example, proffered a compelling interest in ensuring nondiscriminatory access to healthcare. 81 Fed. Reg. at 31,380. Similarly, the EEOC has previously asserted that Title VII furthers a “compelling interest in combating discrimination in the workforce.” EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., 884 F.3d 560, 591 (6th Cir. 2018), aff‘d, 140 S. Ct. 1731 (2020). But the Supreme Court has instructed to look “beyond broadly formulated interests.” O Centro, 546 U.S. at 431. Rather, courts must “scrutinize the asserted harm of granting specific exemptions to particular religious claimants and to look to the marginal interest in enforcing the challenged government action in that particular context.” Holt v. Hobbs, 574 U.S. 352, 363 (2015) (cleaned up). Neither HHS nor the EEOC has articulated how granting specific exemptions for the Catholic Plaintiffs will harm the asserted interests in preventing discrimination.
Also cutting against the Defendants, “a law cannot be regarded as protecting an interest of the highest order . . . when it leaves appreciable damage to that supposedly vital interest unprohibited.” 281 Care Comm. v. Arneson, 766 F.3d 774, 787 (8th Cir. 2014) (cleaned up). A mandate for entities subject to Section 1557 and Title VII to perform and cover gender-transition procedures still leaves gaps, including in the government‘s own healthcare programs. See Franciscan All., 227 F. Supp. 3d at 692-93. In short, the Court harbors serious doubts that a compelling interest exists. This issue need not be resolved, however, because the Defendants fail to meet the rigors of the least-restrictive-means test. See Hobby Lobby, 573 U.S. at 728.
3. Least Restrictive Means
To satisfy the least-restrictive-means test, the government must “come forward with evidence” to show that its policies “are the only feasible means . . . to achieve its compelling interest.” Sharpe Holdings, 801 F.3d at 943. “If a less restrictive means is available for the Government to achieve its goals, the Government must use it.” Holt, 574 U.S. at 365 (cleaned up). In the RFRA context, “a regulation may constitute the least restrictive means of furthering the government‘s compelling interests if ‘no alternative forms of regulation’ would accomplish those interests without infringing on a claimant‘s religious-exercise rights.” Sharpe Holdings, 801 F.3d at 943 (quoting Sherbert v. Verner, 374 U.S. 398, 407 (1963)).
Here, the Defendants possess many less restrictive alternatives beyond forcing the Catholic Plaintiffs to perform and cover gender-transition procedures in violation of their religious beliefs. If the aim is to expand financial support, then “[t]he most
In response, the Defendants have “not shown that these alternatives are infeasible.” Sharpe Holdings, 801 F.3d at 945. They therefore fail to demonstrate that their policies use the least restrictive means to burden the Catholic Plaintiffs’ exercise of religion. As applied, the challenged interpretations of Section 1557 and Title VII violate the RFRA. Summary judgment is appropriate as a consequence.
B. Spending Clause
The Spending Clause empowers Congress “to pay the Debts and provide for the . . . general Welfare of the United States.”
(1) the legislation must be in pursuit of the general welfare, (2) conditions on the state‘s receipt of federal funds must be set out unambiguously so that the state‘s participation is the result of a knowing and informed choice, (3) conditions on federal funds must be related to the federal interest in particular national projects or programs, (4) conditions must not be prohibited by other constitutional provisions, and finally, (5) the circumstances must not be so coercive that “pressure turns into compulsion.”
Van Whye v. Reisch, 581 F.3d 639, 649-50 (8th Cir. 2009) (citing South Dakota v. Dole, 483 U.S. 203, 207-11 (1987)).
From North Dakota‘s perspective, Section 1557 transgresses two of those boundaries. First, North Dakota contends that Congress failed to unambiguously inform the states that they must perform and provide insurance coverage for gender-transition procedures as a condition of continued federal healthcare funding. Second, the state assails that condition as unconstitutionally coercive. Neither theory is persuasive.
1. Unambiguous Notice
The Supreme Court often characterizes Spending Clause legislation
North Dakota asserts that performing and covering gender transitions was not part of the deal when first accepting Medicaid funding in 1965. But the inquiry properly focuses on when the objectionable condition took effect, not when Congress originally enacted the spending program.12 See South Dakota v. Dole, 483 U.S. 203, 208 (1987) (finding unambiguous notice satisfied based on 1984 amendments to Federal Aid Highway Act rather than original statute); Bennett, 470 U.S. at 670 (noting that “the legal requirements in place when the grants were made” under 1970 amendments to Title I of the Elementary and Secondary Education Act controlled Spending Clause analysis). The correct question is accordingly whether Section 1557, as enacted in 2010, “furnishes clear notice regarding the liability at issue.” Osseo Area Schs., Indep. Sch. Dist. No. 279 v. M.N.B. ex rel. J.B., 970 F.3d 917, 922 (8th Cir. 2020) (quoting Arlington Cent. Sch. Dist. Bd. of Educ. v. Murphy, 548 U.S. 291, 296 (2006)).
The answer is yes. Section 1557 unambiguously informed North Dakota that liability could attach from engaging in sex discrimination when using federal healthcare funds. See
Furthermore, even if 1965 were the right starting point, Congress expressly reserved “[t]he right to alter, amend or repeal any provision” of the Medicaid program from day one.
Lastly, North Dakota‘s reliance on Smith v. Rasmussen, 249 F.3d 755 (8th Cir. 2001), is misplaced. In that case, the Eighth Circuit held that a state‘s “prohibition on funding of sex reassignment surgery is both reasonable and consistent with the Medicaid Act.” 249 F.3d at 761. Smith is wholly silent, however, on the federal government‘s ability to enact new laws and regulations requiring states to cover gender-transition procedures. North Dakota is left exposed to that outcome because “participating States are to comply with requirements imposed by the [Medicaid] Act and by the Secretary of Health and Human Services.” Atkins v. Rivera, 477 U.S. 154, 157 (1986) (citations omitted). Perceived lack of unambiguous notice does not entitle North Dakota to summary judgment.
2. Coercion
The Spending Clause‘s coercion backstop is closely linked to the Tenth Amendment concept that the federal government may not commandeer the states “to enact or administer a federal regulatory program.” New York v. United States, 505 U.S. 144, 188 (1992); see also Nat‘l Fed‘n of Indep. Bus., 567 U.S. at 577-78 (discussing Tenth Amendment limitations on the spending power). To that end, conditions on federal funds cannot “be so coercive as to pass the point at which ‘pressure turns into compulsion.‘” Dole, 483 U.S. at 211 (quoting Steward Machine Co. v. Davis, 301 U.S. 548, 590 (1937)).
North Dakota contends that Section 1557 improperly compels the provision and coverage of gender-transition procedures by threatening to withhold all federal healthcare funding. The state accepts HHS funds for two distinct purposes: to provide healthcare services and to administer a Medicaid program. Doc. Nos. 95, ¶ 12; 96-8, ¶ 4. In these circumstances, conditions on funds for either purpose do not implicate the coercion doctrine.
Insofar as North Dakota provides federally funded healthcare services, Spending Clause protection is precluded because HHS regulates private entities in an identical manner. “The anticommandeering doctrine does not apply when Congress evenhandedly regulates an activity in which both States and private actors engage.” Murphy v. Nat‘l Collegiate Athletic Ass‘n, 584 U.S. ___, 138 S. Ct. 1461, 1478 (2018); see also Reno v. Condon, 528 U.S. 141, 150-51 (2000); South Carolina v. Baker, 485 U.S. 505, 514-15 (1988); Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 554-56 (1985). North Dakota offers healthcare services alongside private entities, meaning the state must accept the universally applicable regulations that follow.
Administering a Medicaid program, on the other hand, is unique to the states. To be sure, constitutionally impermissible coercion may occur when “conditions take the form of threats to terminate other significant independent grants . . . as a means of pressuring the States to accept policy changes.” Nat‘l Fed‘n of Indep. Bus., 567 U.S. at 580 (emphasis added). But the coercion doctrine is inapposite where Congress “condition[s] the receipt of funds on the States’ complying with restrictions on the use of those funds, because that is the means by which Congress ensures that the funds are spent according to its view of the ‘general Welfare.‘” Id. (emphasis added); see also Dole, 483 U.S. at 210 (“We have also held that a perceived Tenth Amendment limitation on congressional regulation of state affairs did not concomitantly limit the range of conditions legitimately placed on federal grants.“); Oklahoma v. U.S. Civ. Serv. Comm’n, 330 U.S. 127, 143 (1947) (explaining that the federal government “does have the power to fix the terms upon which its money allotments to states shall be disbursed“). Section 1557 is a direct restriction on how North Dakota may utilize federal healthcare funding, not an indirect inducement to enact new policies at congressional behest. Because Congress retains the prerogative to impose conditions on the use of federal funds, North Dakota‘s coercion argument falls flat. Summary judgment on the Spending Clause claims is therefore unwarranted.13
IV. INJUNCTIVE RELIEF
The Catholic Plaintiffs have demonstrated an entitlement to permanent injunctive relief. An RFRA violation is comparable to the deprivation of a First Amendment right. See Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114, 1146 (10th Cir. 2013), aff‘d, 573 U.S. 682 (2014); cf. Opulent Life Church v. City of Holly Springs, 697 F.3d 279, 298 (5th Cir. 2012). So with actual success on the RFRA claims established, “the other requirements for obtaining a[n] . . . injunction are generally deemed to have been satisfied.” Minn. Citizens Concerned for Life, Inc. v. Swanson, 692 F.3d 864, 870 (8th Cir. 2012) (citation omitted).
Touching briefly on the remaining factors, intrusion upon the Catholic Plaintiffs’ exercise of religion is sufficient to show irreparable harm. See Child Evangelism Fellowship of Minn. v. Minneapolis Special Sch. Dist. No. 1., 690 F.3d 996, 1000 (8th Cir. 2012) (deeming meritorious First Amendment claim “likely enough, standing alone, to establish irreparable harm“). The balance of harms tilts decisively in their favor too. Absent an injunction, they will either be “forced to violate their sincerely held religious beliefs” by performing and covering gender-transition procedures “or to incur severe monetary penalties for refusing to comply.” Sharpe Holdings, 801 F.3d at 945. An injunction will also advance the public interest because the protection of constitutional rights is “always in the public interest.” Carson v. Simon, 978 F.3d 1051, 1061 (8th Cir. 2020) (citation omitted). Finally, injunctive relief should extend to the Catholic Plaintiffs’ present and future members to avoid “continuous litigation and . . . a waste of judicial resources.” Christian Emps. All., 2019 WL 2130142, at *5. Having weighed the pertinent factors, the Court will permanently enjoin the Defendants from enforcing the successfully challenged interpretations of federal law against the Catholic Plaintiffs.
V. CONCLUSION
The Court has reviewed the record, the parties’ filings, and the relevant legal authority. For the reasons above, the Defendants’ motion to dismiss for lack of jurisdiction (Doc. No. 112) is GRANTED IN PART and DENIED IN PART. The abortion-related claims, the APA claims, and the claims challenging Title IX and other unidentified federal laws are hereby DISMISSED WITHOUT PREJUDICE. The Plaintiffs’ motions for partial summary judgment and injunctive relief (Doc. Nos. 96, 98) are GRANTED as to the RFRA claims challenging the interpretations of Section 1557 and Title VII that require the Catholic Plaintiffs to perform and provide insurance coverage for gender-transition procedures and DENIED in all other respects.
The Court DECLARES that HHS‘s interpretation of Section 1557 that requires the Catholic Plaintiffs to perform and provide insurance coverage for gender-transition procedures14 violates their sincerely held religious beliefs without satisfying strict scrutiny under the RFRA. Accordingly, the Court PERMANENTLY ENJOINS AND RESTRAINS HHS, Secretary Azar, their divisions, bureaus, agents, officers, commissioners, employees, and anyone acting in concert or participation with them, including their successors in office, from interpreting or enforcing Section 1557 of the ACA,
The Court further DECLARES that the EEOC‘s interpretation of Title VII that requires the CBA and its members to provide insurance coverage for gender-transition procedures violates their sincerely held religious beliefs without satisfying strict scrutiny under the RFRA. Accordingly, the Court PERMANENTLY ENJOINS AND RESTRAINS the EEOC, Chair Dhillon, their divisions, bureaus, agents, officers, commissioners, employees, and anyone acting in concert or participation with them, including their successors in office, from interpreting or enforcing Title VII of the Civil Rights Act of 1964,
The relief provided in this order shall be restricted to the Catholic Plaintiffs, their present and future members, anyone acting in concert or participation with them, and their respective health plans and any insurers or TPAs in connection with such health plans. To come within the scope of this order, a CBA member must meet the following criteria:
- The employer is not yet protected from interpretations of Section 1557 and Title VII that require the provision or coverage of gender transitions by any other judicial order;
- The CBA has determined that the employer meets the CBA‘s strict membership criteria;
- The CBA‘s membership criteria have not changed since the CBA filed its initial complaint on December 28, 2016; and
- The employer is not subject to an adverse ruling on the merits in another case involving interpretations of Section 1557 and Title VII that require the provision or coverage of gender transitions.
The Court will set a status conference with the parties in the coming days to discuss resolution of the remaining claims.
IT IS SO ORDERED.
Dated this 19th day of January, 2021.
/s/ Peter D. Welte
Peter D. Welte, Chief Judge
United States District Court