RANDALL CALLAHAN, KATRYNA GRISSON, CANDICE SEAMAN, MICHAEL WINGATE, EMORY UNIVERSITY, d.b.a. Emory University Hospital, HENRY FORD HEALTH SYSTEM, INDIANA UNIVERSITY HEALTH, OREGON HEALTH & SCIENCE UNIVERSITY, PIEDMONT HEALTHCARE, THE RECTOR AND VISITORS OF THE UNIVERSITY OF VIRGINIA, on behalf of its Medical Center, THE REGENTS OF THE UNIVERSITY OF MICHIGAN, on behalf of its academic medical center, Michigan Medicine, SAINT LUKE‘S HOSPITAL OF KANSAS CITY, UNIVERSITY OF IOWA, UNIVERSITY OF KANSAS HOSPITAL AUTHORITY, a body politic and corporate and an independent instrumentality of the State of Kansas, UNIVERSITY OF KENTUCKY, VANDERBILT UNIVERSITY MEDICAL CENTER, VIRGINIA COMMONWEALTH UNIVERSITY HEALTH SYSTEM AUTHORITY, THE WASHINGTON UNIVERSITY, BARNES-JEWISH HOSPITAL, Plaintiffs - Appellants, versus UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, through ALEX M. AZAR II in his official capacity as Secretary of the United States Department of Health and Human Services, UNITED NETWORK FOR ORGAN SHARING, Defendants - Appellees, SUSAN JACKSON, CHARLES BENNETT, Intervenor Appellees.
No. 19-11876
IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT
September 25, 2019
D.C. Docket No. 1:19-cv-01783-AT [PUBLISH]
Appeal from the United States District Court for the Northern District of Georgia
(September 25, 2019)
Before WILSON and NEWSOM, Circuit Judges, and COOGLER,* District Judge.
The liver is one of the human body‘s most vital and versatile organs. Among its 500-some-odd functions, the liver cleans the blood, regulates amino acids, produces critical proteins, manages blood clotting, and facilitates digestion. But that‘s when things go right. Far too often—and due to a variety of causes—things can go wrong, and when they do modern medicine has to step in. For minor liver complications, medication and dietary changes will usually do the trick. When liver failure sets in, though—when things go really wrong—there is often only one long-term solution: transplant.
This case centers on the high-stakes rules that determine which patients—among the more than 12,000 currently on the national waiting list—receive the liver transplants they need. In December 2018, a private nonprofit entity tasked by the Department of Health and Human Services (HHS) with coordinating the nation‘s organ-transplant system adopted a new policy for allocating donated livers. This suit followed. Plaintiffs, four liver-transplant candidates and more than a dozen transplant hospitals, challenged the policy in federal district court on a variety of grounds and moved for preliminary injunctive relief barring the policy‘s implementation. The district court denied the motion, and plaintiffs filed an interlocutory appeal.
I
Before diving into the merits, we first need to canvass the statutory and regulatory landscape, some factual background, and the case‘s procedural posture. Fair warning: This gets complicated.
A
In the United States, organ transplants are a public-private affair. The
While the Act describes the OPTN‘s duties in broad strokes, HHS‘s implementing regulation—the “Final Rule“—covers the nitty-gritty, from the OPTN‘s Board of Directors to its record-maintenance policy. See
We‘ll get way down into the regulatory weeds in due time, complete with a dense block quote of the Final Rule‘s pertinent text—but for now it‘s enough to summarize the Rule‘s key features. As an initial matter, the Final Rule states that whenever the OPTN proposes any new policy, its Board of Directors must give OPTN members and other “interested parties” an opportunity to comment on it, and the Board must “take [those comments] into account” in developing and adopting the policy.
Final Rule requires the Secretary to refer “significant
B
An organization called the United Network for Organ Sharing has served as the OPTN for the past 35 years. In 2013, United Network approved and implemented the liver-allocation policy that remains in place today. The current policy distributes livers based on two geographic criteria: “Regions“—11 groups of states—and “Donation Service Areas” (DSAs)—58 smaller, geographically irregular areas (within and among states) that surround the entities that United Network has tasked with collecting donated organs.2
In recent years, the use of DSAs has come under fire. Critics of the DSA-based system contend that because DSAs are neither geographically uniform nor designed to minimize transit of donated organs, reliance on them can lead to bizarre allocation results. They argue, for instance, that organs can end up
traveling greater distances to less-sick patients.3 Defenders of the DSA-based system, by contrast, insist that aligning organ allocation with the organ-procurement organizations encourages communication between the entities that collect organs and those that perform transplants.
By 2016, United Network had decided that things needed to change. After more than a year of exploring alternatives, United Network approved a new liver-allocation policy in December 2017. That policy—which retained DSAs but reduced their impact on allocation decisions—was set to take effect in December 2018. In May 2018, however, a group of patients awaiting liver transplants filed a comment with the Secretary pursuant to
United Network went back to the drawing board, but it faced an extremely tight timeline. The Secretary‘s July 2018 instruction imposed a December 3, 2018 deadline for promulgating the new liver-allocation policy. By September, the Liver and Intestinal Transplantation Committee—a specialized group within United Network that makes recommendations to the Board—had homed in on two alternative,
United Network‘s Board, however, went the other way. On December 3, 2018—the HHS-imposed deadline—the Board adopted the Acuity Circles model. This model, the Board found, would result in “lower waitlist mortality rate[s]” and “more equity in access” for liver-transplant candidates. United Network later set the policy‘s implementation date for April 30, 2019.
Up to this point, HHS had remained on the sidelines. Of course, the Secretary had initiated the process by directing United Network to adopt a new, DSA-less allocation policy. But once the new policy‘s development began, HHS didn‘t actively intervene. As particularly relevant here, consistent with HHS‘s treatment of prior organ-allocation policies, the Secretary didn‘t refer the new policy to the Advisory Committee on Organ Transplantation or publish it in the Federal Register for public comment.
The new policy‘s detractors, however, brought HHS into the mix. Just as critics of the December 2017 policy had done, a group of hospitals that opposed the new policy filed a comment with the Secretary asking him to suspend the new policy‘s implementation until something better could be developed. This time, though, the policy survived the challenge. Acting on the Secretary‘s behalf, the Administrator of HHS‘s Health Resources and Services Administration responded to the comment, announcing that no further action was warranted and that the new policy would take effect as scheduled.
C
On April 22, 2019—eight days before the new policy‘s official implementation date—a collection of hospitals and individual patients sued HHS and United Network in the United States District Court for the Northern District of Georgia.6 Plaintiffs’ complaint challenged the new liver-allocation policy on three grounds: (1) that HHS failed to follow legally required procedures during the development of the new policy, in violation of the Administrative Procedures Act (APA); (2) that HHS‘s and United Network‘s actions were—both substantively and procedurally—arbitrary, capricious, and otherwise not in accordance
Following HHS‘s agreement to delay implementation by two weeks, the district court received expedited briefing and held a hearing on plaintiffs’ TRO motion. On May 13, 2018, the district court—in an order that addressed only plaintiffs’ first claim—denied the motion. The following day, the new liver-allocation policy went into effect for the first time. Its force, however, was short lived. Plaintiffs immediately noticed this appeal and sought an injunction pending
its disposition, which the district court granted. As a result, HHS reinstated the prior (and once again current) policy.
So here we are. After years of development, thousands of public comments, and several revisions, the nation‘s policy for allocating donated livers hangs in the balance.
II
The standard for obtaining preliminary injunctive relief is a familiar one. Such relief is appropriate if—but only if—the movant shows “(1) substantial likelihood of success on the merits; (2) irreparable injury will be suffered unless the injunction issues; (3) the threatened injury to the movant outweighs whatever damage the proposed injunction may cause the opposing party; and (4) if issued, the injunction would not be adverse to the public interest.” McDonald‘s Corp. v. Robertson, 147 F.3d 1301, 1306 (11th Cir. 1998). Because a preliminary injunction “is an extraordinary and drastic remedy,” relief may not be granted “unless the movant clearly established the burden of persuasion as to the four requisites.” Id. (internal quotation marks and citation omitted).8
Our task on appeal is to determine whether the district court erred in concluding that plaintiffs failed to satisfy their burden and were therefore ineligible
for preliminary injunctive relief. We begin (and for now find that we can end) with plaintiffs’ first claim—the only one that the district court addressed. In particular, the district court concluded that plaintiffs had failed to demonstrate a substantial likelihood of success on the merits of their contention that HHS neglected to follow legally required procedures during the new liver-allocation policy‘s development. We hold that the district court was right in so concluding, if not quite for the right reasons. As for plaintiffs’ second and third claims—respectively, that defendants’ actions in adopting the new policy were arbitrary and capricious and deprived plaintiffs of due process—we will remand so that the district court can consider them in the first instance.
A
Now, for the promised deep dive into
(b) The [OPTN] Board of Directors shall: (1) Provide opportunity for the OPTN membership and other interested parties to comment on proposed policies and shall take into account the comments received in developing and adopting policies for implementation by the OPTN; and
(2) Provide to the Secretary, at least 60 days prior to their proposed implementation, proposed policies it recommends to be enforceable under § 121.10 (including allocation policies). These policies will not be enforceable until approved by the Secretary. The Board of Directors shall also provide to the
Secretary, at least 60 days prior to their proposed implementation, proposed policies on such other matters as the Secretary directs. The Secretary will refer significant proposed policies to the Advisory Committee on Organ Transplantation established under § 121.12, and publish them in the Federal Register for public comment. The Secretary also may seek the advice of the Advisory Committee on Organ Transplantation established under § 121.12 on other proposed policies, and publish them in the Federal Register for public comment. . . .
Plaintiffs’ first claim centers on a single sentence of
Defendants see it differently. They argue that, properly understood,
OPTN‘s Board “recommends to be enforceable“—we‘ll call this (more than a little clunkily) the “recommends to be enforceable” sentence—or (2) when the policy at issue is one that relates to “such other matters as the Secretary directs“—here, the “as the Secretary directs” sentence. Because it‘s undisputed that neither of those two conditions obtained here, defendants contend, the Secretary wasn‘t required to refer the policy to the Advisory Committee or publish it in the Federal Register.
Boiled to its bare essence, then, the interpretive question we face is whether
The district court answered this question in defendants’ favor. Deferring to HHS‘s interpretation of
10–11. We agree with the district court‘s bottom-line conclusion—and we therefore affirm that court‘s decision that plaintiffs haven‘t shown the requisite substantial likelihood of success on their first claim—but we arrive at that conclusion by a different route. As the Supreme Court recently held in Kisor v. Wilkie, 139 S. Ct. 2400, 2414 (2019),9 deference “is not the answer to every question of interpreting an agency‘s rules.” Id. This case illustrates the truth and wisdom of that observation. Here, we hold that the “traditional tools of construction“—which Kisor directs reviewing courts to “exhaust” before resorting to principles of deference, id. at 2415—provide a clear answer: Defendants’ reading of
1
a
We begin, as always—and as Kisor reiterates we should—with “text [and] structure.” Id.; see also Chase Bank USA, N.A. v. McCoy, 562 U.S. 195, 204 (2011). To orient ourselves, let‘s start with the big(ish) picture—a bird‘s-eye view.
Section 121.4(b)‘s two subsections lay out two possible paths for the review and development of proposed organ-transplant policies. Path number one—
Even before getting into the details—and addressing the significant-proposed-policies sentence and its placement in subsection (b)(2)—we should pause to consider what § 121.4(b)‘s two-path architecture indicates. It seems, we think, to imply a “default-and-extra“-style regime, with subsection (b)(1) being the “default” and subsection (b)(2) being the “extra.” In other words, it suggests—not
definitively so, but
With that structural context in mind, let‘s zoom back in to take a closer look at
First, and most fundamentally, there‘s the “scope-of-subparts” canon, pursuant to which, at least as a general proposition, “[m]aterial within an indented subpart relates only to that subpart.” Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 156 (2012); see also, e.g., Lary v. Trinity Physician Fin. & Ins. Servs., 780 F.3d 1101, 1105–06 (11th Cir. 2015) (“Ordinarily, the scope of a subpart is limited to that subpart . . . .“). Under this interpretive principle, the significant-proposed-policies sentence‘s placement within subsection (b)(2) indicates that it goes with, relates to, and is limited by the
other sentences in that subsection, including the recommends-to-be-enforceable and as-the-Secretary-directs sentences.10
Second, we think that is the most natural—and most coherent—reading of
comfortably with the sentences that come before and after it—all links in a continuous chain of administrative review.
Finally, defendants’ reading isn‘t just natural, it‘s also sensible. As just explained,
If (as plaintiffs insist) HHS had meant for the significant-proposed-policies sentence to apply beyond the two types of policies flagged at the outset of
subsection (b)(2), surely it would have given some textual indication. HHS could, for instance, have placed the significant-proposed-policies sentence before the recommends-to-be-enforceable and as-the-Secretary-directs sentences. That might have signaled that the significant-proposed-policies sentence applied to all proposed policies, rather than only a subset of them. HHS also could have created a separate subsection for the significant-proposed-policies sentence. A clear break from the recommends-to-be-enforceable and as-the-Secretary-directs sentences would have communicated that the significant-proposed-policies sentence embodies a distinct, stand-alone requirement. It might (?) even have been possible for HHS to keep the significant-proposed-policies sentence in its current location but to say, straight out, that its referral and publication requirements apply to proposed policies beyond those identified in the recommends-to-be-enforceable and as-the-Secretary-directs sentences—something like, “The Secretary will consider all policies proposed by the OPTN and will refer those that he deems significant . . . .”
But HHS didn‘t do any of those things. Instead, it chose to place the significant-proposed-policies sentence immediately following the recommends-to-be-enforceable and as-the-Secretary-directs sentences. Given that choice, the significant-proposed-policies sentence is read most naturally—and in accordance
with the scope-of-subparts canon and common sense—as being modified and limited by those two preceding sentences.
b
Against all of this, plaintiffs raise two textual arguments—neither of which convinces us. First, plaintiffs point out that when the significant-proposed-policies sentence is read alone, it more naturally supports their reading than defendants’. Maybe so—there is nothing within the four corners of the significant-proposed-policies sentence itself that clearly limits its application to the policies referenced in the recommends-to-be-enforceable and as-the-Secretary-directs sentences. But as enticingly straightforward as plaintiffs’ argument may be, it is just not how we read law—tidbits and fragments in isolation. See, e.g., Strickland v. Water Works & Sewer Bd. of City of Birmingham, 239 F.3d 1199, 1204–05 (11th Cir. 2001) (refusing to construe regulatory terms “absent their context“); Scalia & Garner, supra, at 167 (“Context is a primary determinant of meaning.“). And for reasons we’ve explained in detail already, when read in toto—and in context—
Second, plaintiffs invoke the presumption of consistent usage. Under this canon of construction, a word or phrase is presumed to bear the same meaning throughout a text. See Scalia & Garner, supra, at 170. Plaintiffs assert that
* * *
Based on the preceding analysis, we hold that defendants’ interpretation of
2
Because
The Final Rule (codified in relevant part at
First, the 1998 Rule. Plaintiffs seize on language from HHS’s 1998 statement, which they insist demonstrates an intent to require broad agency review of OPTN policies: “The Secretary also recognizes the need for additional public participation in the development of some OPTN policies, such as fundamental revisions to organ allocation policies.” 63 Fed. Reg. 16,301. And later: “While we believe that the comment process administered by the OPTN itself is invaluable in obtaining technical advice, it does not reach all of the affected public . . . or otherwise provide the functions and protections accorded by the impartial review by the Secretary.” Id. at 16,310.
But as defendants emphasize, the same HHS statement also appears to give the Secretary broad discretion to determine
What, then, of the 1999 amendments? Plaintiffs contend that increased oversight of OPTN policies was a primary motivation behind the new version of the Final Rule, and to be sure, there’s evidence for that proposition in HHS’s statement accompanying the amended rule. See, e.g., 64 Fed. Reg. 56,656. The statement notes, for example, that HHS decided to establish “an independent scientific review board“—the Advisory Committee on Organ Transplantation—in order to “help [e]nsure that policies and procedures are evidence-based and guided by the best available scientific and medical precepts.” Id. at 56,652. And, the statement continues, HHS amended
But if you keep reading, HHS’s statement makes it clear that, even with the 1999 revisions, the Secretary’s discretion remains largely intact—the Secretary is only required to consult the Advisory Committee in a few circumstances. When HHS’s statement refers to Secretarial review of “recommend[ed] to be enforceable” policies—which, again, the new liver-allocation policy is not—it uses mandatory language that mirrors that in
In the end, the regulatory history is—at best—a mixed bag for plaintiffs. There is, as plaintiffs point out, language in the 1998 and 1999 HHS statements that speaks generally about the importance of oversight of OPTN policies. But there is also language consistently recognizing that the Secretary has broad discretion when it comes to the review of non-“recommend[ed] to be enforceable” OPTN policies, like the liver-allocation policy at issue here.11
In the end, to the extent they are discernible,
3
There’s one last interpretive issue for us to tackle. Plaintiffs contend that defendants’ reading of
First, it’s not clear why the OPTN would have an affirmative obligation to ensure its policies’ compliance with federal law under one reading of
Second, even under defendant’s more constrained reading of
Contrary to plaintiffs’ suggestions, therefore, defendants’ interpretation of
* * *
The bottom line: Defendants’ interpretation of
B
What of plaintiffs’ remaining claims? In its order denying plaintiffs’ motion for temporary injunctive relief, the district court didn’t address plaintiffs’ alternative contentions that HHS’s and United Network’s actions in adopting the new liver-allocation policy (1) were both arbitrary and capricious and (2) violated the Fifth Amendment’s Due Process Clause. We are wary of diving head-first into claims that the district court hasn’t yet considered, and we are especially wary of doing so with respect to these claims—both of which will likely turn on fact- and context-intensive questions that the district court is better equipped to decide in the first instance.
Plaintiffs’ arbitrary-and-capricious claim, for instance, depends in part on the premise that United Network constitutes an “agency” within the meaning of the APA.
And beyond those threshold issues, more fact-dependent questions await. For
We think that these questions, which are unavoidably fact-sensitive, should be addressed first by the district court. See Access Now, Inc. v. Southwest Airlines Co., 385 F.3d 1324, 1331 (11th Cir. 2004) (noting that this Court is particularly hesitant to address “fact-bound issues” not considered by the district court). We are, after all, a court of review, not a court of first view. See, e.g., Bartholomew v. AGL Res., Inc., 361 F.3d 1333, 1341 n.5 (11th Cir. 2004). We therefore remand plaintiffs’ remaining claims to the district court for its consideration.
III
For the foregoing reasons, we hold that plaintiffs have not shown a substantial likelihood of success on the merits of their first claim—their allegation that the Secretary failed to follow legally required procedures under