I. BACKGROUND
A. Statutory and Regulatory Background
1. Title X
The Public Health Service Act ("PHSA"), an expansive statutory scheme that consolidated existing public health laws and established various agencies and grant programs to support health care and research, was enacted in 1944. In 1970, Congress amended the PHSA to add "Title X-Population Research and Voluntary Family Planning Programs." Pub. L. No. 91-572, § 6,
a. to assist in making comprehensive voluntary family planning services readily available to all persons desiring such services;
b. to coordinate domestic population and family planning research with the present and future needs of family planning programs;
c. to improve administrative and operational supervision of domestic family planning services and of population research programs related to such services;
d. to enable public and nonprofit private entities to plan and developcomprehensive programs of family planning services;
e. to develop and make readily available information (including educational materials) on family planning and population growth to all persons desiring such information;
f. to evaluate and improve the effectiveness of family planning service programs and of population research; [and]
g. to assist in providing trained manpower needed to effectively carry out programs of population research and family planning services....
Pub. L. No. 91-572 § 2,
Per Section 1008 of the PHSA, "[n]one of the funds appropriated under [Title X] shall be used in programs where abortion is a method of family planning." 42 U.S.C. § 300a-6.
2. The 1971 Regulations, 1981 Guidance, 1988 Regulations, and Rust v. Sullivan
Consistent with Section 1008, HHS has never permitted Title X grantees to use Title X funds to perform or subsidize abortions. See
That policy was reversed in 1988 when HHS promulgated new regulations to provide " 'clear and operational guidance' to grantees about how to preserve the distinction between Title X programs and abortion as a method of family planning."
The thrust of the 1988 regulations was reflected in three main provisions. First, they provided that a "Title X project may not provide counseling concerning the use of abortion as a method of family planning or provide referral for abortion as a method of family planning," even in response to a client's specific request.
The 1988 regulations were subject to legal challenge, and were upheld by the Supreme Court against a facial challenge by Title X grantees in Rust v. Sullivan ,
The Supreme Court found none of these claims availing. It rejected the plaintiffs' first statutory claim after applying Chevron deference to the Secretary's construction of Title X. The Court determined that statutory text and legislative history of Title X were ambiguous regarding abortion counseling and referral as well as the separation of Title X and non-Title X services.
Rust further held that the regulations did not "violate the First Amendment by impermissibly discriminating based on viewpoint" because "[t]he Government can, without violating the Constitution, selectively fund a program to encourage certain activities it believes to be in the public interest, without at the same time funding
Lastly, the Court ruled that the 1988 regulations did not impermissibly burden a woman's Fifth Amendment right to choose whether to terminate her pregnancy. Citing the principle that "the Due Process Clauses generally confer no affirmative right to governmental aid," the Court held that "[t]he Government has no constitutional duty to subsidize an activity merely because the activity is constitutionally protected and may validly choose to fund childbirth over abortion."
3. 1993 Suspension of the 1988 Regulations and Promulgation of the 2000 Regulations
Although they survived legal challenges, the 1988 regulations were never fully implemented. The Secretary suspended the regulations in 1993 "based, in part, upon her conclusion that the 'Gag Rule' is an inappropriate implementation of the Title X statute because it unduly restricts the information and other services provided to individuals under this program."
In 2000, HHS formally issued new regulations "revoking the regulations published on February 2, 1988" and largely restoring the 1981 regulatory scheme.
If a Title X grantee can demonstrate by its financial records, counseling and service protocols, administrative procedures, and other means that-within the identified set of Title X-supported activities-promotion or encouragement of abortion as a method of family planning does not occur, then it is hard to see what additional statutory protection is afforded by the imposition of a requirement for "physical" separation. Indeed, in the light of the enforcement history noted above, it is not unreasonable to say that the standard of "physical" separation has, as a practical matter, had little relevance or applicability in the Title X program to date. Moreover, the practical difficulty of drawing lines in this area, both as experienced prior to 1988 and as evident in the history of the Gag Rule itself, suggests that this legal interpretation is not likely ever to result in an enforceable compliance policy that is consistent with the efficient and cost-effective delivery of family planning services.
4. Statutory Developments
Two statutory developments since Rust are germane to this case. First, in every year since 1996, Congress has specified in HHS appropriations acts (part of annual omnibus appropriations acts containing a subsection specific to HHS funding) that "amounts provided to [Title X] projects under such title shall not be expended for abortions, [and] that all pregnancy counseling shall be nondirective. " E.g. , Department of Defense and Labor, Health and Human Services, and Education Appropriations Act, 2019 and Continuing Appropriations Act, Pub. L. No. 115-245, Div. B, Tit. II, 132 Stat 2981, 3070-71 (2018) (emphasis added).
Second, in Section 1554 of the Affordable Care Act ("ACA"), enacted in 2010, Congress directed that HHS:
shall not promulgate any regulation that-
(1) creates any unreasonable barriers to the ability of individuals to obtain appropriate medical care;
(2) impedes timely access to health care services;
(3) interferes with communications regarding a full range of treatment options between the patient and the provider;
(4) restricts the ability of health care providers to provide full disclosure of all relevant information to patients making health care decisions;
(5) violates the principles of informed consent and the ethical standards of health care professionals; or
(6) limits the availability of health care treatment for the full duration of a patient's medical needs.
On March 4, 2019, HHS promulgated the Final Rule that is the subject of this suit.
1. Restrictions on Abortion Counseling and Referrals
The Final Rule contains several overlapping provisions regarding abortion counseling. It directs that Title X grantees may "[n]ot provide, promote, refer for, or support abortion as a method of family planning."
However, when a Title X client is confirmed to be pregnant, the Final Rule requires that the client "shall be referred to a health care provider for medically necessary prenatal health care." § 59.14(b)(1). Such referral is mandated even if the client has decided not to carry the pregnancy to term. The "Title X provider may"-but is not required to-provide "[n]ondirective pregnancy counseling."
The Final Rule forbids Title X grantees from making referrals for abortion services. See § 59.5(a)(5) (A Title X project "must.... [n]ot provide, promote, refer for, or support abortion as a method of family planning."); § 59.14(a) ("A Title X project may not ... refer for ... abortion as a method of family planning, nor take any other affirmative action to assist a patient to secure such an abortion."). Even if a client specifically requests a referral to an abortion provider, the Title X project can at most provide "[a] list of licensed, qualified, comprehensive primary health care providers (including providers of prenatal care)." § 59.14(b)(1)(ii), (c)(2). The list cannot include specialty clinics that do not also provide comprehensive primary health care. Further, the referral list "may be limited to those that do not provide abortion." § 59.14(c)(2). If the referral list includes abortion providers, those providers may not comprise "the majority" of the providers on the list, and "[n]either the list nor project staff may identify which providers on the list perform abortion."
These counseling and referral restrictions represent a sharp break from the 2000 regulations, as well as the prior 1981 guidelines effective since 1993. Until now, Title X grantees have been required
2. Requirement of Physical and Financial Separation
Under the Final Rule, "[a] Title X project must be organized so that it is physically and financially separate ... from activities which are prohibited under section 1008 of the Act and §§ 59.13, 59.14, and 59.16 of these regulations from inclusion in the Title X program." § 59.15. "In order to be physically and financially separate, a Title X project must have an objective integrity and independence from prohibited activities," and "[m]ere bookkeeping separation of Title X funds from other monies is not sufficient."
The new separation requirements again represent a marked departure from the current rule. Under the 2000 regulations, grantees' abortion activities were required to be financially separate from their Title X activities, but "[c]ertain kinds of shared facilities [we]re permissible, so long as it [wa]s possible to distinguish between the Title X supported activities and non-Title X abortion-related activities."
3. Removal of Requirement that Family Planning Methods and Services be "Medically Approved"
Previous Title X regulations required projects to "[p]rovide a broad range of acceptable and effective medically approved family planning methods ... and services."
4. Encouragement of Family Participation
The Final Rule requires Title X grantees to "[e]ncourage family participation in the decision to seek family planning services; and, with respect to each minor patient, ensure that the records maintained document the specific actions taken to encourage such family participation (or the specific reason why such family participation was not encouraged)." § 59.5(a)(14).
The 2000 regulations contained no such requirement, although Title X itself provides that "[t]o the extent practical, entities which receive grants or contracts under this subsection shall encourage family participation in projects assisted under this subsection."
C. Procedural Background
The motions currently before the Court arise from two lawsuits. The first is brought by the State of California ("California"). See State of California v. Azar et al. , No. 3:19-cv-1184-EMC,
California and Essential Access filed their respective motions for preliminary injunction on March 21, 2019. California Docket No. 26 ("California Mot."); Essential Access Docket No. 25 ("Essential Mot."). Defendants filed a consolidated opposition on April 8, 2019. California Docket No. 61 ("Opp."). Plaintiffs filed replies on April 11, 2019. California Docket No. 84 ("California Reply"); Essential Access Docket No. 63 ("Essential Reply"). The Court held a hearing on the motions on April 18, 2019.
II. LEGAL STANDARD
A preliminary injunction is a matter of equitable discretion and "an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief." Winter v. Natural Res. Def. Council, Inc. ,
A party seeking a preliminary injunction must meet one of two variants of the same standard. The traditional Winter standard requires the movant to show "that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest." Winter ,
III. DISCUSSION
A. Likelihood of Irreparable Harm, the Balance of Equities, and the Public Interest
The record evidence establishes that the irreparable injury, balance of hardships, and public interest factors tip sharply in Plaintiffs' favor. All. for the Wild Rockies ,
1. Harm to California's Public Health and Essential Access's Organizational Mission
Plaintiffs are likely to suffer several forms of irreparable harm unless the Final Rule is enjoined pending resolution of this case on the merits. The first type of harm is to California's public health and to Essential Access's organizational mission to promote access to high-quality healthcare. See State v. Bureau of Land Mgmt. ,
California's efforts to advance its public health objectives by "provid[ing] women and men a means by which they decide for themselves the number, timing, and spacing of their children," Cantwell Decl. ¶ 3, and Essential Access's mission "to champion and promote quality sexual and reproductive health care for all," Rabinovitz Decl. ¶ 3, are in accord. Both will be undermined by the Final Rule qualitatively and quantitatively.
First , the Final Rule will directly compromise providers' ability to deliver effective care and force them to obstruct and delay patients with pressing medical needs. Abortion is a time-sensitive procedure; the medical risks and costs associated with it "increase with any delay." Kost Decl. ¶ 93. Yet, the Final Rule erects barrier after barrier between patients trying to make an informed decision about whether to continue their pregnancies and their clinicians. A clinician must refer a pregnant patient to prenatal care that focuses on carrying the pregnancy to term, even if the patient has made clear her decision to terminate her pregnancy. Id. ¶¶ 87, 91. The clinician cannot refer the patient to a provider of abortion services, even if the patient specifically requests such a referral. Id. ¶ 88. At most the clinician may provide a referral list. Most of the list must be non-abortion providers-in other words, most of the list must
Second , the Final Rule threatens to drastically reduce access to the wide array of services provided by Title X projects by driving large numbers of providers out of the program. Compliance with the physical separation requirement, which in many cases effectively requires providers to establish "mirror" facilities and staff, would be cost-prohibitive for many providers in California's Title X network. See Rabinovitz Decl. ¶ 43; Nestor Decl. ¶ 13; McKinney Decl. ¶ 10; Forer Decl. ¶ 31. In addition, a significant number of Title X projects have indicated that they will likely drop out of the program because they believe the Final Rule compels them to compromise the quality of care they provide and violate their ethical obligations. Sub-recipients of Essential Access's Title X funds representing 233 clinic sites serving over 774,000 patients "would leave or consider leaving" Title X if they are prohibited from referring patients for abortion services. Rabinovitz Decl. ¶ 42. Sub-recipients representing 194 clinic sites serving over 682,000 patients "will leave or consider leaving" if they are required by the Final Rule to encourage family involvement where an adolescent patient seeks confidential services. Id.; see, e.g. , Nestor Decl. ¶¶ 11-12; McKinney Decl. ¶ 9. Likewise, "Planned Parenthood affiliates and their health centers"-which serve over 40% of all Title X patients nationwide-"would be forced to discontinue their participation in Title X if the Proposed Rule takes effect." Rich Decl., Exh. M at 15-16.
The net effect of so many providers leaving Title X will be a significant reduction in the availability of important medical services. The substantial Title X funding Essential Access currently receives-approximately $ 20 million per year-provides "comprehensive sexual and reproductive health care for more than 1 million" patients in California annually. Rabinovitz Decl. ¶¶ 1, 13-15. Essential Access has submitted evidence that the vast majority of its sub-recipients-85 percent-would be forced to lay off staff, cut training, and reduce outreach and education activities without that funding. Id. ¶ 44. A third would have to reduce clinic hours. Id. Some would have to shut down core services and programs entirely. See, e.g. , Thomas Decl. ¶¶ 11-13 (Fresno Economic Opportunities Commission "will not be able to operate" HEARTT, its family planning and reproductive health service for youth, without Title X funds); Nestor Decl. ¶¶ 5-10, 14 (Without Title X funds, the San Francisco Department of Public Health will have to "substantially curtail" its training programs, public education and outreach projects, and "special projects to address emerging public health challenges"); Marshall Decl. ¶ 28 ("Without Title X funding, CommuniCare will not run the outreach services that inform young
If Title X funding is reduced, patients in California accordingly stand to lose access to a wide range of "vital health services," many of which have nothing to do with abortion, since Title X providers "serve as a trusted entry point for medical care generally." California Mot. at 24; see, e.g. , Rabinovitz Decl. ¶ 12 ("In 2017 alone, Essential Access sub-recipients ... provided more than 1.6 million family planning visits" and administered "more than 148,000 Pap tests, more than 118,000 clinical breast exams, more than 642,000 chlamydia screenings, more than 700,000 gonorrhea screenings, and more than 341,000 HIV tests."); Brindis Decl. ¶¶ 59-60; Tuttle Decl. ¶ 8; McCarthy Decl. ¶ 7; Wilburn Decl. ¶¶ 17-19. In particular, "[i]n less populous regions, the Rule will create 'contraceptive deserts' where women in need of Title X-funded contraceptive services will be unable to find an affordable, well-qualified provider within their county." California Mot. at 21. Nationwide, in one-fifth of U.S. counties the only safety-net family planning center is a Title X site. Kost Decl. ¶ 78. Should any of these sites drop out of the Title X program as a result of the Final Rule, many individuals would have no access to high-quality, affordable family planning care in their counties at all. Id. In California specifically, eighteen counties would be left without a single Title X-funded health center if all the family planning providers that perform abortions were to close. Rabinovitz Decl. ¶ 43.
Even among providers who remain in Title X, service capacity will decrease because the requirement that pregnancy counseling can only be provided by physicians and APPs excludes "vast numbers of medical professionals" who currently provide such counseling. Rabinovitz Decl. ¶ 52; McKinney Decl. ¶ 11; Kost Decl. ¶ 86. This will compound an already "severe crisis in physician and nurse practitioner availability," creating even more critical shortages in counseling resources. Castellano-Garcia Decl. ¶ 11. Many Title X grantees do not have enough physicians and APPs on staff to serve their patients, so those patients will have to either wait for much longer to receive counseling that is often time-sensitive, or simply will not receive the family-planning information they need. See, e.g. , McKinney Decl. ¶ 11; Forer Decl. ¶ 30.
Third , the quality of Title X services will be compromised. Patients served by Title X-funded providers use more effective contraceptive methods at higher rates than those served by non-Title X-funded providers. Rabinovitz Decl. ¶ 46. Title X patients "are more likely [than non-Title X patients] to adopt or continue using long-acting and reversible contraceptive methods ('LARCs')," which "are highly effective [in preventing pregnancy] because they obviate the need for daily administration or use at the time of intercourse." Id. ; see also Kost Decl. ¶¶ 119-121 (describing a 35 percent reduction in women using LARCs after Texas "made a series of changes to its family planning program ..., which included disqualifying agencies providing abortion"). "Diminishing access to LARCs may result in a greater number of unintended pregnancies." Rabinovitz Decl. ¶ 46. Moreover, the Final Rule's separation provision requires health centers to maintain duplicate records systems. Such non-integrated records systems threaten patient health by increasing the risk of error due to "incomplete medical histories, missing data, lost test results, incorrect
Ultimately, the consequence of the reduced availability and quality of health services is worse health outcomes for patients and the public as a whole. The number of unintended pregnancies will increase, which is "likely to result in premature births, low birth weight infants, and congenital defects." Cantwell Decl. ¶¶ 24, 29; Brindis Decl. ¶¶ 52-55. Indeed, the Final Rule could have the perverse effect of increasing abortion rates, since "[o]ver half of unintended pregnancies end in miscarriage or abortion." California Mot. at 23; Tosh Decl. ¶ 25 (citing report documenting that 45% of unintended pregnancies result in abortion, and another 13% result in miscarriages). Instances of STIs and other conditions that would otherwise be diagnosed by Title X-funded testing will also likely increase. See Brindis Decl. ¶¶ 59-65 (citing study estimating that in 2017, Title X-funded testing "averted approximately 90 to 400 cases of HIV and 47,740 to 56,670 other STIs," diagnosed "many pelvic inflammatory disease (PID) cases, ectopic pregnancies, ... infertility cases" and "reproductive cancers"); Kost Decl. ¶ 82.
In short, there is substantial evidence in the record before the Court which establishes that California's public health and Essential Access's mission to promote quality sexual and reproductive care will be irreparably harmed unless the Final Rule is enjoined.
2. Economic Harm to California
Next, the economic harms that flow from the Final Rule's detrimental effects on public health also constitute irreparable harm to California. See California v. Health & Human Servs. ,
California's state Medicaid program, Medi-Cal, "is the primary funder for low-income Californians' healthcare services." Cantwell Decl. ¶ 28. Via Medi-Cal, the Final Rule's impact on public health translates to substantial financial and administrative burdens for California. For example, Medi-Cal insures 64% of unplanned births in the state. Tosh Decl. ¶¶ 26, 44. It is estimated that each unintended pregnancy in California costs the public fisc $ 6,557 in medical, welfare, and other social service costs.
3. Economic Harm to Essential Access
Essential Access will also suffer irreparable economic harm if the Final Rule's physical separation requirement becomes effective. Because that requirement is so stringent, Essential Access estimates that it "will be forced to spend exorbitant sums to construct a 'mirror' office," at the cost of $ 325,000 in the first year and $ 212,500 every year thereafter. Essential Reply at 13; Rabinovitz Decl. ¶ 66. Its sub-recipients estimate that compliance with the separation requirement will cost an average of $ 119,000 per
4. Defendants' Responses to Plaintiffs' Evidence of Irreparable Harm
Defendants attack Plaintiffs' assertions of irreparable harm on several grounds.
First , Defendants do not dispute that damage to public health can constitute irreparable harm, but instead claim that the public health impact California is describing depends on the response of regulated third parties-i.e. , recipients of Title X funding-to the Final Rule, and therefore that the "chain of events necessary to create these speculative harms" is too "attenuated." Opp. at 43 (citing Lujan v. Defs. Of Wildlife ,
To begin with, Defendants ignore that the Final Rule's harm to Title X patients described above directly undermines California's public health objectives. Moreover, uncontroverted record evidence Plaintiffs have submitted shows that the harms they describe are not speculative; they are "likely in the absence of an injunction." Winter ,
Equally unambiguous are the adverse health consequences that will follow from the mass departure of Title X providers. The inverse correlation between the availability of publicly-funded contraceptives and the rate of unintended pregnancies is well-documented in the record. See Brindis Decl., Exh. B at 11, 12 n.73 (citing a 2015 report showing that 286,700 unintended pregnancies were averted in California in a single year as a result of publicly funded contraceptive services); Rich Decl., Exh. L at 31-32 ("Title X-funded services helped women avert an estimated 822,300 unintended pregnancies in 2015 alone, thus preventing 387,200 unplanned births and 277,800 abortions. Without services provided by these providers, the U.S. unintended pregnancy rate would have been 31% higher."). Plaintiffs have also cited three case studies documenting the adverse health consequences that directly resulted when family planning services providers that offer abortion-related services were excluded from public funding. See Brindis Decl., Exh. B at 6-7 (Indiana county that cut funding to Planned Parenthood facility almost immediately
Moreover, there is already a "severe" shortage of physician and nurse practitioner availability, so implementation of the Final Rule's physician and APP requirement will directly exacerbate patients' lack of access to pregnancy counseling. Castellano-Garcia Decl. ¶ 11; McKinney Decl. ¶ 11; Forer Decl. ¶ 30. The resulting shortfall in service capacity caused would manifest immediately, before any final decision on the merits in this case will be reached. See 11A Charles Alan Wright et al., Federal Practice and Procedure § 2948.1 (3d ed. 2013) ("Perhaps the single most important prerequisite for the issuance of a preliminary injunction is a demonstration that if it is not granted the applicant is likely to suffer irreparable harm before a decision on the merits can be rendered."). Nothing about this chain of causation is attenuated.
What is speculative is Defendants' assurance that any gap left by an exodus in current Title X providers will be fully filled by new providers entering the program. Defendants point to HHS's claim in the Final Rule that it "does not anticipate that there will be a decrease in the overall number of facilities offering [Title X] services, since it anticipates other, new entities will apply for funds, or seek to participate as subrecipients, as a result of the final rule."
Second , Defendants insist that the claimed harm to Essential Access is not imminent. Opp. at 43-44. This argument is unavailing for the same reason that the expected harm to California is not speculative-Plaintiffs' evidence demonstrates that access to and the quality of family planning services will be adversely affected as soon as the Final Rule goes into effect. With respect to compliance costs, the process for establishing a physically and financially separate "mirror" office would "requir[e] Essential Access to expend resources on planning and implantation of operational changes immediately
Third , Defendants argue that the alleged harm to Essential Access's sub-recipients and Title X patients is not harm to Essential Access itself. See Opp. at 43. This argument misses the point. As noted above, Essential Access's organizational mission is to "promote quality sexual and reproductive health care for all." Rabinovitz Decl. ¶ 3. It works toward this mission in part by distributing Title X funds to its sub-recipients to facilitate their provision of family planning services to patients. Id. ¶ 6. Thus, the potentially detrimental impact the Final Rule will have on those sub-recipients' capacities to provide services to Title X patients is just one manifestation of the harm that Essential Access will suffer with respect to its organizational mission.
Fourth , Defendants recite the proposition that "ordinary compliance costs are typically insufficient to constitute irreparable harm." Opp. at 45 (quoting Freedom Holdings, Inc. v. Spitzer ,
Accordingly, Plaintiffs have satisfied the irreparable harm prong of the preliminary injunction inquiry.
B. The Balance of Equities and the Public Interest
Where the government is a party to a case in which a preliminary injunction is sought, the balance of the equities and public interest factors merge. Drakes Bay Oyster Co. v. Jewell ,
On Plaintiffs' side is their interest in averting the "potentially dire public health and fiscal consequences from the implementation of the Final Rules," HHS ,
On the other hand, Defendants identify no substantiated harm if a preliminary injunction were to issue. They have not documented any substantial abuse of Title X funds. See Part III.C.2.b., infra. The only harm Defendants currently assert is that which the government will suffer "if it 'is enjoined by a court from effectuating statutes enacted by representatives of its people.' " Opp. at 46 (quoting Maryland v. King ,
Hence, the balance of hardships and the public interest tip sharply in favor of Plaintiffs. Although injunctive relief is thus warranted "if [Plaintiffs] can only show that there are 'serious questions going to the merits,' " All. for the Wild Rockies ,
C. Likelihood of Success on the Merits/Serious Questions Going to the Merits
California argues that it is likely to succeed on its APA claims because the Final Rule is not in accordance with law and exceeds statutory authority, in violation of
1. The Final Rule is Not in Accordance with Law
The APA requires a reviewing court to "hold unlawful and set aside agency action" that is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."
a. The Nondirective Counseling Provision
The most recent "Department of Defense and Labor, Health and Human Services, and Education Appropriations Act" provides:
For carrying out the program under title X of the PHS Act to provide for voluntary family planning projects, $ 286,479,000: Provided , That amounts provided to said projects under such title shall not be expended for abortions, that all pregnancy counseling shall be nondirective , and that such amounts shall not be expended for any activity (including the publication or distributionof literature) that in any way tends to promote public support or opposition to any legislative proposal or candidate for public office.
Pub. L. No. 115-245, Div. B, Tit. II, 132 Stat 2981, 3070-71 (2018) (emphasis added). This "Nondirective Counseling Provision" has been included in HHS appropriations acts ("Appropriations Acts") every year since 1996 in substantially similar form. See, e.g. , Omnibus Consolidated Rescissions and Appropriations Act of 1996, Pub. L. No. 104-134,
According to Plaintiffs, the provisions of the Final Rule that restrict abortion counseling and referral conflict with the Nondirective Counseling Provision. See California Mot. at 11-12; Essential Mot. at 13-14. Defendants in their briefing initially took this to mean that Plaintiffs were arguing that "the nondirective provision implicitly repealed section 1008 and Rust ," Opp. at 14, because Rust upheld similar provisions in the 1988 regulations as a permissible construction of Section 1008. However, Defendants subsequently recognized that the doctrine of implied repeal is not apposite here because the Nondirective Counseling Provision and Section 1008 are not in irreconcilable conflict. See Radzanower v. Touche Ross & Co. ,
The question is whether the Final Rule, as one interpretation of Section 1008, is inconsistent with the Appropriations Acts' mandate that "pregnancy counseling" be "nondirective." HHS does not dispute that it has an obligation to comply with the Nondirective Counseling Provision. It wrote in the notice of proposed rulemaking for the Final Rule that "[s]ince it originally created the Title X program in 1970, Congress has, from time to time, imposed additional requirements on it," including "the annual Title X appropriation includes the provisos that 'all pregnancy counseling shall be nondirective.' "
As Defendants see it, however, the Final Rule is not inconsistent with the Nondirective Counseling Provision because § 59.14(b)(1) of the Final Rule allows a Title X provider to "choose to provide ... [n]ondirective pregnancy counseling" to a pregnant patient. Plaintiffs contend, on the other hand, that the Final Rule is inconsistent with the Nondirective Counseling Provision because it mandates referrals to prenatal care while categorically barring referrals for "abortion as a method of family planning," and imposes unreasonable restrictions on the provision of referral lists for patients seeking an abortion. Plaintiffs also argue that even without the referral prohibition and restrictions, the Final Rule "effectively prohibits nondirective counseling ... by issuing a vague prohibition on providers who 'encourage' or 'promote' abortion." California Mot. at 11. Plaintiffs believe this "unclear guidance will likely cause providers to forgo discussions altogether for fear of violating the Rule." Id. at 12.
i. "Nondirective Counseling" Includes Referrals
The first part of the parties' dispute focuses on whether "nondirective counseling" under the Appropriations Acts encompasses referrals. It does, as indicated by statute, regulations, and industry practice. First, Congress expressed its understanding in the PHSA that "nondirective counseling" includes referral. See 42 U.S.C. § 254c-6(a)(1)
Second, as a matter of regulatory law, HHS itself characterizes referrals as part of counseling throughout the Final Rule. See id. at 7730 ("[N]ondirective pregnancy counseling can include counseling on adoption, and corresponding referrals to adoption agencies."); 7733-34 ("Title X providers may provide adoption counseling, information, and referral as a voluntary family planning service for non-pregnant
Third, the accepted usage within the medical field of "nondirective counseling" supports Plaintiffs' position. See Louisiana Pub. Serv. Comm'n v. F.C.C. ,
That Congress intended "nondirective counseling" include nondirective
Defendants counter by relying on general dictionary definitions to urge that " '[c]ounseling' does not, in its common usage, necessarily include within its definition the act of 'referral.' " Opp. at 17 (quoting Black's Law Dictionary (10th ed. 2014)). But the Court need not resort to indications of common usage because there is ample statutory, regulatory, and industry guidance on the meaning of "counseling" in the specific context of medical services at issue here. See United States v. Lettiere ,
Next, Defendants point to various instances in the Final Rule where the phrase "counseling and referral" is used. See, e.g. ,
Finally, Defendants cite a 1992 bill that expressly sought to "reverse[ ] the regulations issued in 1988 and upheld by the Supreme Court in 1991 to restrict the provision of information on abortion to Title-Ten patients." Opp. at 17 (quoting H.R Rep. No. 102-204, at 1 (1991)). The bill, which was passed by Congress but vetoed by President George H. W. Bush, defined "pregnancy management options" to mean "nondirective counseling and referrals." S. 323, 102nd Cong. § 2 (1992). Defendants contend that Congress' later enactment of the Nondirective Counseling Provision without specific mention of "referral" as in the 1992 bill signifies that Congress intended to exclude referral from the scope of nondirective counseling mandated by the subsequent Appropriations Acts. See Opp. at 18. This argument ignores important context. The 1992 bill was introduced in the immediate wake of and as an explicit
Although Defendants invoke the proposition that "[f]ew principles of statutory construction are more compelling than the proposition that Congress does not intend sub silentio to enact statutory language that it has earlier discarded in favor of other language," United States v. Novak ,
In sum, the Court finds that the statutory language, PHSA, Title X regulations, and usage within the medical field all indicate that nondirective counseling includes nondirective referrals.
ii. The Final Rule's Referral Restrictions Violate the Nondirective Counseling Provision
Applying this definition, sections 59.14(a), 59.14(b)(1), and 59.14(c)(2) of the Final Rule likely violate the Nondirective Counseling Provision. "Nondirective pregnancy counseling is the meaningful presentation of options where the [medical professional] is not suggesting or advising one option over another."
The categorical prohibition on providing referrals for abortion in § 59.14(a) is not nondirective because it prevents Title X projects from presenting abortion on an equal basis with other pregnancy options.
Defendants also acknowledged that the referral list restrictions in § 59.14(c)(2) stand and fall together with the prohibition on abortion referrals in § 59.14(a). Section 59.14(c)(2) allows Title X projects to provide a client with a referral list "limited to those that do not provide abortion," even if the client specifically requests an abortion referral. It further prevents projects from providing a referral list on which "the majority" of the providers perform abortion services, and from "identify[ing] which providers on the list perform abortion." Far from meaningfully presenting a patient with her medical options, such a "non-referral referral list" (as Plaintiffs' counsel labels it) is likely to cause confusion and delay in her attempt to obtain care. The patient would have to spend time working through the list to determine which referrals actually provide the services she asked for-time she may not have given the time-sensitive nature of decisions about pregnancy and related care. Imposing these onerous restrictions only on abortion information does not place abortion on an equal basis with all other courses of action.
iii. The Final Rule's Counseling Restrictions Violate the Nondirective Counseling Provision Apart From Referrals
There is also merit to Plaintiffs' contention that, the referral prohibition aside, the Final Rule one-sidedly chills counseling regarding abortion. Sections 59.5(a)(5) and 59.14(a) bar providers from doing anything to "promote" or "support" abortion. See also § 59.16(a)(1) ("A Title X project may not encourage, promote or advocate abortion as a method of family planning."). At oral argument, Defendants' counsel struggled to draw a clear boundary between mentioning or describing abortion as a pregnancy option within the permissible scope of nondirective counseling and "promoting" or "supporting" abortion impermissible under §§ 59.5(a)(5) and 59.14(a). Essentially, counsel was only able to offer a circular definition: A provider can avoid "promoting" or "supporting" abortion by counseling nondirectively, and a provider can counsel nondirectively by not "promoting" or "supporting" abortion. This interpretive murkiness is telling. It suggests that providers desiring to explain the abortion option have to walk on eggshells to avoid a potential transgression of the Final Rule, whereas those describing the option of continuing the pregnancy face no comparable risk. This lack of symmetry created by §§ 59.5(a)(5) and 59.14(a) is likely to chill discussions of abortion and thus inhibits neutral and unbiased counseling.
Accordingly, Plaintiffs have established a likelihood of success on the merits of their claim that sections 59.14(a), 59.14(b)(1), and 59.14(c)(2) violate the Nondirective Counseling Provision of the Appropriations Acts and are thus not in accordance with law.
b. Section 1554 of the ACA
Plaintiffs next argue that the Final Rule violates Section 1554 of the ACA. See California Mot. at 12-13; Essential Mot. at 10-13. Section 1554 provides:
Notwithstanding any other provision of this Act, the Secretary of Health and Human Services shall not promulgate any regulation that-
(1) creates any unreasonable barriers to the ability of individuals to obtain appropriate medical care;
(2) impedes timely access to health care services;
(3) interferes with communications regarding a full range of treatment options between the patient and the provider;
(4) restricts the ability of health care providers to provide full disclosure of all relevant information to patients making health care decisions;
(5) violates the principles of informed consent and the ethical standards of health care professionals; or
(6) limits the availability of health care treatment for the full duration of a patient's medical needs.
i. Defendants' Threshold Arguments Do Not Foreclose Plaintiffs' Section 1554 Claim
Before proceedings to the merits of Plaintiffs' Section 1554 claim, the Court first addresses several threshold issues raised by Defendants.
(a) Plaintiffs' Section 1554 Claim Has Not Been Waived
First, Defendants argue that Plaintiffs have waived any challenge based on Section 1554 because they did not raise the issue with HHS during the notice and comment period. Opp. at 19. It is a "general rule" that courts "will not review challenges to agency action raised for the first time on appeal." Portland Gen. Elec. Co. v. Bonneville Power Admin. ,
In reviewing whether these comments are sufficient to overcome waiver, the Court heeds the Ninth Circuit's guidance that "the exhaustion requirement should be interpreted broadly." Nat'l Parks & Conservation Ass'n v. Bureau of Land Mgmt. ,
Applying this permissive standard, the Court finds that, although it is a close call, Plaintiffs have raised at least a serious question as to whether their Section 1554 claim has been adequately exhausted. The record suggests that commenters raised issues pertaining to Section 1554 with sufficient clarity to provide notice to HHS. Several comments specifically contend the Final Rule violates the ACA. See, e.g. , California Docket No. 97 ¶ 2 ("The proposed definition of what would be considered a 'medically approved' family planning method ... would effectively limit access and coverage of reproductive health choices expanded upon in the ACA...."), ¶ 4 ("This proposed change is ... contrary to the Affordable Care Act....").
In themselves, these comments may not be specific enough to suggest that the
The comments raising concerns regarding medical ethics and informed consent per § 1554(5) are particularly specific. Compare § 1554(5) ("... violates the principles of informed consent and the ethical standards of health care professionals"), with California Docket No. 97 ¶ 26 ("The Proposed Rule requires physicians to disregard their Code of Medical Ethics...."), ¶ 27 ("The Proposed Rule directly conflicts with the recommendations of major medical professional associations, including the American College of Obstetricians and Gynecologists and the American College of Physicians...."), ¶ 31 ("[T]he rule's proposed ban on abortion referral and its chilling effect (or possibly an effective ban) on abortion counseling are repudiations of ethical and professional standards around informed consent...."). The terms "ethical standards" and "informed consent" are commonly understood within the medical field to refer to established standards, including those published by the American College of Physicians ("ACP") and the American College of Obstetricians and Gynecologists ("ACOG"). HHS has long referenced these ethical standards in connection with Title X, including throughout its QFP Guidelines. See, e.g. , QFP Guidelines at 13;
To be sure, these comments did not explicitly reference Section 1554, but the Ninth Circuit has repeatedly emphasized that commenters "need not state their claims in precise legal terms" to exhaust them, Nat'l Parks ,
That HHS dismissed the concerns raised in these comments, which were couched in the same terms as Section 1554's prohibitions, indicates that the commenters "raise[d] [the] issue with sufficient clarity to allow the decision maker to understand and rule on the issue raised," Nat'l Parks ,
Accordingly, the Court concludes that Plaintiffs have raised a serious question that their Section 1554 claim was not waived.
(b) Section 1554 Limits the Secretary's Authority under Title X
Second, Defendants argue that Section 1554 does not affect the scope of HHS's rulemaking authority under Title X. Defendants reason that the prefatory language in Section 1554, "[n]otwithstanding any other provision of this Act," limits the scope of Section 1554 to the ACA.
However, the plain text of Section 1554 does not limit its application to the ACA. "Notwithstanding any other provision of this Act" simply means that the Secretary cannot engage in the type of rulemaking proscribed by Section 1554 even if another provision of the ACA could be construed to permit it-the directive of Section 1554 is to be given primacy. This meaning is underscored by the expansive second clause of Section 1554: "the Secretary of Health and Human Services shall not promulgate any regulation ...."
That Section 1554 has application beyond the ACA is neither surprising nor unusual; surrounding provisions do too. See, e.g. ,
Defendants invoke two other principles of statutory interpretation to argue that Section 1554 does not apply to Title X. Neither advances Defendants' cause. The first is the "principle that Congress 'does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions.' " Opp. at 20 (quoting Whitman v. Am. Trucking Associations ,
The second principle is that "the specific [statute] governs the general." Opp. at 22 (quoting Morales v. Trans World Airlines, Inc. ,
Because there is no "irreconcilable conflict" between the two statutes, Defendants' contention that Plaintiffs' claim relies on the premise that Section 1554 impliedly repealed Section 1008 is likewise inapposite. See Opp. at 20; Radzanower ,
(c) Section 1554 is Not Unreviewably Broad
Third, Defendants suggest that Section 1554 is so "open-ended" that "it is a substantial question whether section 1554 claims are reviewable under the APA at all." Opp. at 22. Defendants cite Citizens to Pres. Overton Park, Inc. v. Volpe ,
(d) The Constitutional Reasoning in Rust Does Not Foreclose Plaintiffs' Section 1554 Claim
Finally, Defendants, citing reasoning from Rust , made a further suggestion at oral argument that Plaintiffs' Section 1554 claim is meritless because, even if the Final Rule impeded patients' access to care, "[t]he difficulty that a woman encounters when a Title X project does not provide abortion counseling or referral leaves her in no different position than she would have been if the Government had not enacted Title X." Rust ,
As a legal matter, Defendants are importing language from Rust 's constitutional holding in an attempt to extinguish Plaintiffs' statutory claim. The Rust Court decided that the 1988 regulations did not impermissibly burden a woman's Fifth Amendment right to choose whether to terminate her pregnancy because "Congress' refusal to fund abortion counseling and advocacy leaves a pregnant woman with the same choices as if the Government had chosen not to fund family-planning services at all."
Moreover, as a factual matter, the Final Rule's referral list restrictions go far beyond anything in the 1988 regulations. The new restrictions: (1) permit a Title X project to give a patient who specifically requests a referral for abortion a referral list
ii. The Final Rule Violates Section 1554
Having found that Plaintiffs' claim under Section 1554 is not foreclosed, the Court must determine whether the Final Rule in fact violates that provision of the ACA. Plaintiffs assert that the Final Rule's restrictions on counseling and referral and requirement for providers to encourage family participation in family planning decisions are contrary to Section 1554. The Court agrees.
The Court has already detailed extensively the ways in which the Final Rule's overlapping restrictions on pregnancy counseling (including referral and referral lists) obfuscate and obstruct patients from receiving information and treatment for their pressing medical needs. See Parts III.A.1 and III.C.1.a., supra ; Kost Decl. ¶¶ 88-93; Rabinovitz Decl. ¶ 50; Marshall Decl. ¶ 22. There is no question that these restrictions "create[ ] ... unreasonable barriers to the ability of individuals to obtain appropriate medical care," "impede[ ] timely access to health care services," "interfere[ ] with communications regarding a full range of treatment options between the patient and the provider," and "restrict[ ] the ability of health care providers to provide full disclosure of all relevant information to patients making health care decisions" in violation of subparts (1)-(4) of Section 1554. Defendants do not even contest this.
Separately, the Final Rule's prohibition on providing abortion referrals, restrictions on the content of referral lists, and mandate on referrals for prenatal care are also squarely at odds with established ethical standards and therefore Section 1554(5). Indeed, they are inconsistent with HHS's own QFP Guidelines, which provide that once a patient receives a positive pregnancy test:
Referral to appropriate providers of follow-up care should be made at the request of the client, as needed. Every effort should be made to expedite and follow through on all referrals. For example, providers might provide a resource listing or directory of providers to help the client identify options for care. Depending upon a client's needs,the provider may make an appointment for the client, or call the referral site to let them know the client was referred.
QFP Guidelines at 14. The QFP Guidelines further instruct that "[p]roviders of family planning services should offer pregnancy testing and counseling services as part of core family planning services, in accordance with recommendations of major professional medical organizations, such as the American College of Obstetricians and Gynecologists (ACOG)." Id. at 13. In turn, ACOG explains that physicians have an ethical obligation to "provide a pregnant woman who may be ambivalent about her pregnancy full information about all options in a balanced manner, including raising the child herself, placing the child for adoption, and abortion." Rich Decl., Exh. G at 6.
Clearly, the Final Rule's blanket prohibition on abortion referrals does not comport with providers' ethical obligation to provide "[r]eferral to appropriate providers of follow-up care ... at the request of the client." QFP Guidelines at 14. And § 59.14(c)(2)'s restrictions that prevent Title X from providing any abortion referrals to a patient who specifically requests such a referral, and from identifying which providers on a referral list perform abortion services, do not "help the client identify options for care." Id. Comments in the record show that associations of medical professionals overwhelmingly agree that the Final Rule's counseling and referral restrictions violate principles of medical ethics and informed consent. See, e.g. , Rich Decl., Exh. B at 4-5 (California Medical Association stating that restrictions "directly conflict[ ] with the requirements of medical professional associations, including [ACOG]."); Exh. D at 4 (American Academy of Nursing stating that restrictions "violate[ ] basic ethics of the profession," including the Code of Ethics for Nurses); Exh. E at 7 (Guttmacher Institute stating that restrictions "constitute[ ] an unacceptable repudiation of the doctrine of informed consent by denying Title X patients factual, unbiased information on abortion"); Exh. G at 3-6 (ACOG stating that restrictions violate its Code of Professional Ethics); Exh. I at 3 (American Medical Association stating restrictions "are contrary to the AMA's Code of Medical Ethics"); Exh. K at 2 (American Public Health Association stating that "[t]he gag rule violates core ethical standards"); Exh. N at 3 (American Academy of Pediatrics stating that restrictions "conflict[ ] with medical practice guidelines, including those of the American Academy of Pediatrics."); Exh. P at 4-5 (American College of Physicians stating that restrictions violate "the ethical principle of respect for patient autonomy"); see also Marshall Decl. ¶ 15; Spirtos Decl. ¶ 18; Kost Decl. ¶¶ 84-85.
The requirement in § 59.14(b)(1) that all pregnant Title X clients "shall be referred to a health care provider for medically necessary prenatal health care," even if it goes against a patient's wishes, violates ethical standards. As ACOG explains, this provision "require[s] the provision of counseling, information, and referral for services that the patient has clearly stated she does not wish to receive." Rich Decl., Exh. G at 3, 6.
Moreover, as the American Public Health Association details, § 59.14(b)(1) also violates ethical principles because while it allows Title X providers to abstain from providing nondirective counseling due to moral or religious reasons, "it does not contain any requirement that those providers advise patients of their refusal." Rich Decl., Exh. K at 2. "Therefore, patients will not even know if they are getting complete information." Id.
Finally, the Final Rule's "family participation" requirement also violates ethical
Accordingly, Plaintiffs have demonstrated that they are likely to succeed on the merits of their claim that §§ 59.5(a)(5), 59.5(a)(14), 59.14(a), 59.14(b)(1), 59.14(c)(2), and 59.16(a)(1) of the Final Rule are not in accordance with Section 1554.
2. The Promulgation of the Final Rule was Arbitrary and Capricious
Under the APA, agency action must be set aside if it is arbitrary or capricious.
In particular, an agency which changes its position must give a reasoned
"Normally, an agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise." State Farm ,
a. Plaintiffs' Arbitrary and Capricious Claims are Not Foreclosed by Rust
Defendants contend Plaintiffs' arbitrary and capricious claims are foreclosed by Rust . See Opp. at 24-26. This argument is meritless. When it decided Rust in 1991, the Supreme Court found that "the Secretary amply justified his change of interpretation [from the pre-1988 regulations] with a 'reasoned analysis,' " based on "critical reports of the General Accounting Office (GAO) and the Office of the Inspector General (OIG), that prior policy failed to implement properly the statute." Rust ,
The justifications supporting the 1988 regulations upheld in Rust cannot insulate the Final Rule from review now, almost three decades later. In promulgating the Final Rule, HHS did not purport to rely on the 1988 regulations. See Michigan v. E.P.A. , --- U.S. ----,
As another threshold issue, Defendants contended at oral argument that Plaintiffs' arbitrary and capricious claims are foreclosed by the Chevron analysis in Rust. According to Defendants, the mere fact that the 1988 regulations were a permissible interpretation of Title X alone supplies the reasoned basis HHS needs to justify the Final Rule under the APA. This argument is belied by Rust itself. If a reasonable and permissible statutory interpretation was all that was needed for the 1988 regulations to pass muster under arbitrary and capricious review, the Supreme Court would have said so. Although the ambiguous language of Section 1008 and equivalent legislative history of Title X might arguably have sustained the 1988 regulations, as noted above, the Court nevertheless scrutinized the evidentiary basis given for the 1988 regulations to ensure that they were the product of a "reasoned analysis." Rust ,
On this point, Defendants overlook important differences between Chevron and arbitrary-and-capricious review. As the Ninth Circuit has delineated, "Chevron ... analyzes the reasonableness of an agency's interpretation [of a statute], while 'arbitrary and capricious' review under the APA focuses on the reasonableness of an agency's decision-making processes. " CHW W. Bay v. Thompson ,
Accordingly, the Court proceeds to the merits of Plaintiffs' arbitrary and capricious claims to determine whether the Final Rule is supported generally by a reasoned analysis, and in particular to the extent the Final Rule represents a change in position which requires a "more detailed justification," whether HHS sufficiently justified its change in position.
b. The Physical Separation Requirement is Arbitrary and Capricious
Plaintiffs contend the physical separation requirement in § 59.15 is arbitrary and capricious. See California Mot. at 17; Essential Mot. at 15-17. The record reveals that Plaintiffs are likely correct. HHS relied on speculative fears of theoretical abuse of Title X funds to justify imposing the physical separation requirement and turned a blind eye to voluminous evidence documenting the significant adverse impact the requirement would have on the Title X network and patient health. The agency's actions fell short of reasoned decisionmaking.
i. Defendants Relied on Speculative Justifications Belied by the Record
The Final Rule cites the following justification for requiring physical separation:
[S]hared facilities create a risk of the intentional or unintentional use of Title X funds for impermissible purposes, the co-mingling of Title X funds, the appearance and perception that Title X funds being used in a given program may also be supporting that program's abortion activities, and the use of Title X funds to develop infrastructure that is used for the abortion activities of Title X clinics. Even with the strictest accounting and charging of expenses, a shared facility greatly increases the risk of confusion and the likelihood that a violation of the Title X prohibition will occur.
Defendants' repeated use of words like "risk," "likelihood," "prophylactic," and "specter" is telling; Defendants fail to point to any evidence in the record of actual co-mingling or misuse of Title X funds. HHS primarily relies on two sources to justify its concerns about insufficient separation. The first is an "anecdotal story" from 2007 about a California clinic's community outreach activities.
Title X expressly distinguishes between a Title X grantee and a Title X project. The grantee, which normally is a health-care organization, may receive funds from a variety of sources for a variety of purposes. The grantee receives Title X funds, however, for the specific and limited purpose of establishing and operating a Title X project.... The Title X grantee can continue to perform abortions, provide abortion-related services, and engage in abortion advocacy; it simply is required to conduct those activities through programs that are separate and independent from the project that receives Title X funds.
Defendants advance another argument: they believe that "the collocation of a Title X clinic with an abortion clinic permits the abortion clinic to achieve economies of scale" and therefore "support[s] abortion as a method of family planning" with Title X funds.
In sum, the asserted fear of misuse of Title X funds purporting to animate HHS's decision to fundamentally depart from its current regulations and impose an onerous physical separation requirement are not substantiated by the record. To the contrary, HHS reported as recently as October 2018 that "family planning projects that receive Title X funds are closely monitored to ensure that federal funds are used appropriately and that funds are not used for prohibited activities, such as abortion." Angela Napili, Congressional Research Service Report for Congress: Family Planning Program Under Title X of the Public Health Service Act , at 14 (Oct. 15, 2018), https://fas.org/sgp/crs/misc/R45181.pdf.
Defendants contend they do not need to justify the Final Rule by reference to an extant problem, because "agencies can ... adopt prophylactic rules to prevent potential problems before they arise."
Likewise here, HHS purports to rely on its predictive judgment that Title X funds will be misused without the physical separation requirement, but the Final Rule provides no evidence that indicates this projection is anything but speculation. Quite the opposite, the projection is at odds with the agency's repeated assurances from as early as 2000 and as recently as 2018 that the existing separation requirements are sufficient to prevent abuse within the Title X program. Accordingly, HHS has failed to "articulate a satisfactory explanation" for the physical separation requirement as required by the APA, and is thus arbitrary and capricious. State Farm ,
ii. HHS Failed to Provide a "More Detailed Justification" for Its Change in Policy
The arbitrary nature of the change in policy becomes even more clear when HHS's decisionmaking is measured against its obligation to supply "a more detailed justification" for adding the physical separation requirement; a detailed justification is required because its decision relied "upon factual findings that contradict those which underlay its prior policy" and because "its prior policy has engendered serious reliance interests." Fox Television ,
HHS clearly set forth the factual findings underlying its decision in 2000 to rescind the physical separation requirement in the 1988 regulations. It noted, on the one hand, that mandating physical separation conferred no discernible benefits. The agency reasoned that it had "traditionally viewed" financial separation-"demonstrate[d] by [a Title X grantee's] financial records, counseling and service protocols, administrative procedures, and other means"-as sufficient.
By contrast, in reinstating the physical separation requirement in the Final Rule, HHS stated that "it no longer believes financial separation is sufficient without physical separation."
The prior separation policy also engendered "serious reliance interests" with respect to regulated entities, including Plaintiffs. Essential Access has detailed the significant investment it has made in its physical infrastructure, programming, and records systems over the years in reliance on the longstanding rule that financial separation between its Title X and non-Title X activities complies with Section 1008. For example, core to Essential Access's mission of promoting quality reproductive care is its training arm, the Learning Exchange, which "trained more than 6,000 clinicians and allied health professionals from forty-nine states on providing quality sexual and reproductive health care" in 2017. Rabinovitz Decl. ¶ 61. Based on the current regulations, the Learning Exchange programming includes "training on pregnancy options, including how to provide patients with medically accurate, unbiased, non-judgmental information about abortion, adoption, and parenting." Id. ¶ 62. Similarly, Essential Access provides "extensive" non-Title X-funded public education and awareness programming, reaching over 650,000 adolescents, about comprehensive sexual and reproductive health. Id. ¶ 64. The Final Rule would require Essential Access to completely overhaul this programming and reallocate its resources in order to comply with the new requirement that any activities relating to abortion must be conducted "with a separate staff, under a separate roof, using separate workstations, email addresses, and phone numbers." Id. ¶ 65. This entails "extraordinary expenses." Id. ¶ 66.
Essential Access sub-recipients likewise would need to revamp their "medical record systems and financial records, undertake
The reliance interests these Title X grantees have demonstrated are similar to those recognized by the Supreme Court as warranting a more detailed explanation of an agency's change in policy. See Encino Motorcars ,
At bottom, HHS has not demonstrated there are "good reasons" for the physical separation requirement or provided a "more detailed justification" for the change in policy.
iii. HHS Failed to Provide Any Explanation for Its Estimates of Compliance Costs
The promulgation of the physical separation requirement is arbitrary and capricious for a second, independent reason. During the notice-and-comment period, commenters provided HHS with substantial evidence that imposing a physical separation requirement on Title X grantees would create significant (and in many cases, prohibitive) compliance costs, drastically reduce access to Title X services, and lead to serious disruptions in care for Title X patients. Instead of engaging with these concerns, HHS summarily dismissed them, maintaining that "overall, the final rule will contribute to more clients being served, gaps in services being closed, and improved client care that better focuses on the family planning mission of the Title X program."
With respect to compliance costs, HHS's analysis at every stage of the rulemaking has been mystifying. Initially, the Proposed Rule "estimate[d] that an average of between $ 10,000 and $ 30,000, with a central estimate of $ 20,000, would be incurred [by each affected Title X site] to come into compliance with physical separation requirements in the first year following publication of a final rule."
Many Title X grantees submitted detailed comments explaining that their compliance costs would be much higher than
Notwithstanding these comments, the Final Rule changed very little after receiving these comments. HHS revised its central estimate from $ 20,000 per affected site to $ 30,000. See
HHS also ignored consequential costs of compliance. Numerous commenters explained to HHS that because compliance with the physical separation requirement would be "prohibitive in terms of cost and feasibility" large numbers of Title X providers would be forced to leave the program. Rich Decl., Exh. L at 16-17, Exh. C at 16-17, Exh. G at 11-12, Exh. H at 10-11, Exh. M at 32-34. Plaintiffs have provided ample evidence demonstrating that without Title X funding, these providers would be able to serve far fewer clients, including evidence that Title X funds services for more than 1 million patients in California every year, and that 85 percent of Essential Access subrecipients will have to lay off staff and cut services and programming without Title X funding. See Part III.A.1., supra ; Rabinovitz Decl. ¶¶ 1, 14-15. The withdrawal of Planned Parenthood alone would create a massive vacuum in services as its health centers currently serve more than 40% of all Title X patients. Rich Decl., Exh. M at 15-16. "[O]ther types of Title X sites would need to increase their client caseloads by 70 percent" just to make up for the shortfall created by Planned Parenthood's departure. Id. at 16. "[T]he departure of a large number of Title X-funded providers ... would reduce access to family planning care with attendant negative impacts on health outcomes and population health." Id. at 33. The "adverse health consequences" to patients would include "unintended
Instead, in response, HHS cites only a "Christian Medical Association and Freedom2Care poll conducted on May 3, 2011, which found that 91 percent of physicians who practiced medicine based on the principles of their faith said they would be forced to leave medicine if coerced into violating the faith tenets and medical ethics principles that guide their practice of medicine."
HHS's conclusory response to commenters' evidence-backed concerns about the serious problems the physical separation requirement will cause flies in the face of established APA principles. See McDonnell Douglas Corp. v. U.S. Dep't of the Air Force ,
c. The Counseling and Referral Restrictions are Arbitrary and Capricious
Plaintiffs next challenge the promulgation of the Final Rule's restrictions on abortion counseling and referral as arbitrary and capricious. See California Mot. at 17-18; Essential Mot. at 17-18.
Defendants' justification for reinstating restrictions on abortion counseling and referrals is that "the 2000 regulations are not consistent with federal conscience laws," including "the Church Amendment, Coats-Snowe Amendment and the Weldon Amendment."
First, as noted above, there are already HHS regulations on the books that ensure Title X's implementation is consistent with the conscience laws. In 2008, the agency announced that it "would not enforce [the abortion counseling and referral] requirement on objecting grantees or applicants."
Second, the conscience laws prohibit federal, state, and local governments "from engaging in discrimination against a health care entity on the basis that it does not, among other things, refer for abortion."
d. The "Physician or APP" Requirement is Arbitrary and Capricious
Plaintiffs further contend that the requirement in § 59.14(b)(1)(i) that nondirective pregnancy counseling can only be "provided by physicians or advanced practice providers" is arbitrary and capricious, because there is a "complete absence of justification" for the requirement. Essential Mot. at 18; California Mot. at 18-19. Defendants offer two responses, both of which make little sense. First, Defendants point out that the Final Rule is more permissive than the Proposed Rule, because the Proposed Rule restricted pregnancy counseling to physicians only, whereas the Final Rule allows physicians and APPs to take on counseling duties. Opp. at 32-33. This observation is neither here nor there, because neither the Proposed Rule nor the Final Rule explains why pregnancy counseling should be limited to physicians or APPs. The physician-and-APP limitation, while more permissive than the physician-only limitation initially proposed, is just as arbitrary.
Second, Defendants claim that "HHS considered which types of health care professionals to include [as qualified to provide pregnancy counseling], and reasonably drew the line at APPs, who have 'advanced medical degrees, licensing, and certification requirements.' "
The APA requires an agency to "articulate a satisfactory explanation for its action." State Farm ,
e. The Removal of the "Medically Approved" Requirement is Arbitrary and Capricious
The 2000 regulations required Title X projects to "[p]rovide a broad range of acceptable and effective medically approved family planning methods ... and services."
HHS provided one justification for removing the "medically approved" language. According to the agency, "[t]he 'medically approved' language risked creating confusion about what kind of approval is required for a method to be deemed 'medically approved.' "
The only confusion evinced anywhere in the record is of the agency's own creation. In the Final Rule, instead of citing its QFP Guidelines, HHS hypothesized: "Family planning methods and services are often provided through licensed health care professionals. Thus, it is true of all family
HHS further feigned ignorance in the Final Rule when it wrote that "[t]he Department also does not understand, and commenters fail to explain, what the addition of 'medically approved' to the definition would mean in practice."
Accordingly, HHS "offered an explanation for its decision" to remove the "medically approved" language from § 59.5(a)(1) "that runs counter to the evidence before the agency," rendering its action arbitrary and capricious. State Farm ,
f. HHS's Cost-Benefit Analysis is Arbitrary and Capricious
Plaintiffs further contend that the Final Rule as a whole is arbitrary and capricious because HHS conducted and relied upon a deeply flawed cost-benefit analysis. It cited benefits that the Final Rule would confer without any evidentiary basis while disregarding or discounting costs that were supported by the record. See California Mot. at 14-18; Essential Mot. at 16-19; see also Docket No. 48-1 (amicus brief of the Institute for Policy Integrity at the New York University School of Law).
"As a general rule, the costs of an agency's action are a relevant factor that the agency must consider before deciding whether to act," and "consideration of costs is an essential component of reasoned decisionmaking under the Administrative Procedure Act." Mingo Logan Coal Co. v. Envtl. Prot. Agency ,
HHS's cost-benefit analysis is thus subject to review under the APA. Although such review is deferential, Am. Trucking Ass'ns, Inc. v. Fed. Motor Carrier Safety Admin. ,
i. HHS Did Not Adequately Consider Costs to Patient and Public Health
In response to the Proposed Rule, commenters submitted ample evidence to HHS that the Final Rule's costs on patients and the public will be substantial.
As previously noted, commenters provided substantial evidence that the Final Rule will drive a significant number of current Title X grantees out of the program. Planned Parenthood, whose health centers serve over 40% of all Title X patients, "would be forced to discontinue [its] participation in Title X if the Proposed Rule takes effect." Rich Decl., Exh. M at 15-16. Further, "a number of state grantees, including Washington, New York, Hawaii, and Oregon have already put the Department on notice that they would be forced to exit the program if the proposed regulations are finalized, along with other direct grantees." Id. at 15. These states combined serve 427,000 Title X patients. Id. The loss of Title X funding will force providers to significantly scale down their service capacity or shut down altogether. See id. , Exh. C at 5-6. Indeed, the Guttmacher Institute recently estimated that the exit of Planned Parenthood could lead to 1.6 million women losing access to the Title X-funded contraceptive care they currently receive. Id. ; see also Part III.A.1., supra (detailing how California providers' capacities will be diminished without Title X funding).
In response, HHS proclaims that it "does not anticipate that there will be a decrease in the overall number of facilities offering [Title X] services, since it anticipates other, new entities will apply for funds, or seek to participate as subrecipients, as a result of the final rule." Id. at 7782. As previously discussed, however, this pronouncement is wholly conclusory and unsupported. See Part III.A.1., supra. HHS provides no evidence to indicate that there are new grantees waiting in the wings to join Title X, much less enough new grantees to fill the vacuum left by the impending exodus.
Commenters also alerted HHS that the decreased access to reproductive health
At three different places in the Final Rule, HHS offers three different, seemingly conflicting responses to this evidence. All three are baseless. First, HHS claims that the Final Rule "is likely to decrease unintended pregnancies ... because clients are more likely to visit clinics that respect their views and beliefs and to use methods that they desire and that fit their individual circumstances."
Second, HHS insists that "[c]ommenters offer no compelling evidence that this rule will increase unintended pregnancies or decrease access to contraception."
Third, HHS offers an excuse for disregarding the costs associated with higher instances of unintended pregnancies:
[T]he Department is not aware, either from its own sources or from commenters, of actual data that could demonstrate a causal connection between the type of changes to Title X regulationscontemplated in this rulemaking and an increase in unintended pregnancies, births, or costs associated with either, much less data that could reliably calculate the magnitude of that hypothetical impact. Therefore, the Department concludes that those are not likely or calculable impacts for the purpose of the Executive Order.
For one thing, "[t]he mere fact that the ... effect[ ] [of a rule] is uncertain is no justification for disregarding the effect entirely." Pub. Citizen v. Fed. Motor Carrier Safety Admin. ,
Commenters also informed HHS that the exodus of Title X providers will reduce patients' access to health services beyond family planning, and give rise to attendant health costs. "Apart from the delivery of family planning care, Title X providers have come to play an essential and important role in providing any number of other vital health services for low-income Americans," including "screenings for cervical cancer, diabetes, high blood pressures, and sexually transmitted infections (STIs), among a range of other services aimed at primary prevention and referral." Brindis Decl., Exh. B at 3.
In response to this evidence, HHS wrote:
Based on the Department's best estimates, it anticipates that the net impact on those seeking services from current grantees will be zero , as any redistribution of the location of facilities will mean that some seeking services will have shorter travel times and others seeking services will have longer travel times to reach a facility. Additionally, as a result of this final rule, the Department anticipates expanded competition that will engender new and/or additional grantees who will serve previously unserved or underserved areas, likely expanding coverage and patient access to services.
The agency did not explain how it arrived at its "best estimates,"
HHS similarly failed to take account of the costs that will result from its decision to remove the requirement in § 59.5(a)(1) that the family planning methods and services provided under Title X be "medically approved." Commenters notified the agency that this change "could reduce access to the safest, effective, and medically approved contraceptive methods, increase risks associated with promoting medically unreliable methods, place political ideology over science, and undermine recommendations jointly issued by OPA and the CDC on Quality Family Planning."
ii. HHS Did Not Adequately Consider Compliance Costs
HHS's assessment of the costs to regulated entities of complying with the Final Rule is also inadequate, for the reasons discussed in Part III.C.2.b., supra.
iii. The Claimed Benefits are Unsubstantiated and Speculative
On the other side of the cost-benefit equation, HHS contends that the Final Rule is expected to "[e]nhance[ ] compliance
On the whole, the determination by HHS that the asserted but unsubstantiated, undocumented, and speculative benefits of the Final Rule outweigh its likely substantial costs indicates the agency "put a thumb on the scale by [over]valuing the benefits and [under]valuing the costs." Ctr. for Biological Diversity v. Nat'l Highway Traffic Safety Admin. ,
3. HHS Did Not Violate Notice and Comment Procedures
Essential Access makes one final claim under the APA. It contends that Defendants did not comply with the APA's notice and comment requirements because the "comprehensive primary care provider" and "physician and APP" requirements in the Final Rule are not logical outgrowths of the proposed rule. See Essential Mot. at 19-20.
The APA generally requires an agency to engage in notice and comment as part of its rulemaking process. See
a. The "Comprehensive Primary Care Provider" Requirement is a Logical Outgrowth of the Proposed Rule
According to Essential Access, the requirement in § 59.14(b)(1)(ii) of the Final
Essential Access has not cited any authority for the proposition that "comprehensive primary care" is meaningfully different from "comprehensive care," such that interested parties could not have anticipated that the Final Rule would incorporate the former term. Essential Access insists that language in the Final Rule "contemplates that 'comprehensive' health care services can be 'primary' or 'prenatal.' " Essential Reply at 8 (citing
b. The "Physician or APP" Requirement is a Logical Outgrowth of the Proposed Rule
Essential Access also argues the requirement in § 59.14(b)(1) of the Final Rule that any nondirective pregnancy counseling under Title X can only be "provided by physicians or advanced practice providers" is not a logical outgrowth of the Proposed Rule. Essential Mot. at 20. It is true, as Essential Access points out, that the term "advanced practice provider" does not appear anywhere in the Proposed Rule. But that is because the Proposed Rule was more restrictive than the Final Rule; under the former, only physicians were permitted to provide pregnancy counseling:
[A] doctor, though not required to do so, would be permitted to provide nondirective counseling on abortion. Such nondirective counseling would not be considered encouragement, promotion, or advocacy of abortion as a method of family planning, as prohibited under section 59.16 of this proposed rule. Moreover, a doctor would also be permitted to provide a list of licensed, qualified, comprehensive health service providers, some (but not all) of which provide abortion in addition to comprehensive prenatal care.
The Proposed Rule signaled that the agency was considering limiting counseling responsibilities to individuals with advanced medical degrees, so it cannot be said that the Final Rule "finds no roots in the agency's proposal." Envtl. Integrity Project v. E.P.A. ,
Accordingly, Essential Access has not shown that a likelihood that § 59.14(b)(1) of the Final Rule is not a logical outgrowth of the Proposed Rule.
4. Plaintiffs' Remaining Claims
Because the Court finds that Plaintiffs have established that they are likely to succeed on the merits of their "not in accordance with law" and "arbitrary and capricious" claims under the APA, the Court will not reach their constitutional claims at this time.
D. Scope of Injunction
Plaintiffs have made a strong showing on each of the Winter factors, and accordingly are entitled to preliminary relief. They ask the Court to grant a nationwide injunction. California Mot. at 25; Essential Mot. at 33-35. Defendants respond that any injunctive relief should be limited to Plaintiffs, i.e. , to the state of California. Opp. at 46-50.
The recent Ninth Circuit ruling in California v. Azar ,
Plaintiffs have supplied ample evidence of the Final Rule's anticipated impact within California. See Part III.A., supra. They offer three reasons why a nationwide injunction is necessary to afford them adequate relief. First, they assert that any violation of the APA "compel[s]" a nationwide injunction. Essential Reply at 14. Notably, however, Azar found that the plaintiffs there had shown a likelihood of success on their APA claims, and nonetheless ruled that a nationwide injunction was overbroad. See
Plaintiffs' second argument is that they have provided sufficient evidence of the Final Rule's nationwide impact to support a broad injunction, and in particular cite to the Kost and Brindis declarations. See Essential Reply at 15 (citing Kost Decl. ¶¶ 76-78; Brindis Decl. ¶¶ 80-93). While
Third, Plaintiffs argue that "Title X funding recipients draw from a single pool of funding, such that '[t]he conditions imposed on one can impact the amounts received by others.' " California Reply at 15 (quoting City of Chicago v. Sessions ,
Accordingly, Plaintiffs' motions for preliminary injunction are GRANTED and the Final Rule is ENJOINED as to enforcement in the state of California.
This order disposes of California Docket No. 26 and Essential Access Docket No. 25.
IT IS SO ORDERED .
Notes
Unless otherwise indicated, all citations in the form of "§ ___" are to the Final Rule published at
An exception is made for grantees with moral and religious objections to abortion. See
Given the lack of evidence that new grantees will enter the Title X program, it is hardly surprising that Defendants do not appear to have considered how much time it would take these hypothetical new grantees to become operational Title X providers, and what the impact on patients might be from even a temporary disruption in services.
The Final Rule sets a compliance date for the physical separation requirement of March 4, 2020.
California's complaint also alleges that the Final Rule denies women equal protection of the laws in violation of the Fifth Amendment. See California Docket No. 1 ¶¶ 221-29. However, California does not rely on that claim in its preliminary injunction motion.
Apart from the brief period when the 1988 regulations were effective, HHS has consistently interpreted Section 1008 to allow nondirective pregnancy counseling.
Section 254c-6(a)(1) was enacted in 2000, four years after the Nondirective Counseling Provision was first enacted. As noted above, the Nondirective Counseling Provision has been included in every HHS Appropriations Act since 1996, including from 2000 to 2019.
The OPA website continues to refer providers of family planning services to these guidelines. See HHS Office of Population Affairs, Quality Family Planning, https://www.hhs.gov/opa/guidelines/clinical-guidelines/quality-family-planning/index.html (last visited April 2, 2019) ("The QFP provide recommendations for use by all reproductive health and primary care providers with patients who are in need of services related to preventing or for achieving pregnancy.").
Understanding referral to be a part of the counseling process also conforms to common sense. A patient would presumably be rather taken aback if, for instance, upon receiving an initial diagnosis of cancer from her doctor, the doctor then refuses to provide a referral for further testing and medically appropriate treatment.
The overlapping prohibition on abortion referrals in § 59.5(a)(5) violates the Nondirective Counseling Provision for the same reason. See § 59.5(a)(5) (Title X projects may "[n]ot provide, promote, refer for, or support abortion as a method of family planning.").
Notably, HHS specifically discussed Section 1554 in a concurrent rulemaking. See
After it received commenters' objections that the referral restrictions "will deprive women of the information they need about abortion or where to obtain one," HHS offered a rather astonishing response: "[I]n the Department's view, it is not necessary for women's health that the federal government use the Title X program to ... give to women who seek abortion the names of abortion providers. Information about abortion and abortion providers is widely available and easily accessible, including on the internet. "
Courts have long recognized that "in matters concerning sexual conduct, minors frequently are reluctant, either because of embarrassment or fear, to inform their parents of medical conditions relating to such conduct, and consequently that there is a considerable risk that minors will postpone or avoid seeking needed medical care if they are required to obtain parental consent before receiving medical care for such conditions." Am. Acad. of Pediatrics v. Lungren ,
To the extent there may have been isolated instances of misuse or co-mingling of Title X funds in the past that were not cited in the Final Rule, there is no indication they escaped detection from the financial audits conducted under the 2000 regulations.
HHS's own "Guidelines for Regulatory Impact Analysis" ("HHS Guidelines") set forth in ample detail how the agency should estimate the costs for "[r]egulated entities ... to comply with regulatory requirements." U.S. Dep't of Health and Human Services, Guidelines for Regulatory Impact Analysis at 32 (2016), https://aspe.hhs.gov/system/files/pdf/242926/HHS_RIAGuidance.pdf. These costs explicitly include "purchasing computers and software to support administrative tasks," "installing or retrofitting new equipment," "capital expenditures to acquire buildings or land," and "annual costs of labor, utilities, and other resources." Id. at 32-33. The HHS Guidelines teach that "analysts generally use market data to estimate such costs." Id. Here, HHS referenced no data, market or otherwise, as the basis for its compliance cost estimates.
Notably, the HHS Guidelines specifically list changes in "the type or quality of information available and its dissemination" effectuated by an agency action as a type of cost that is difficult to quantify but that HHS must nevertheless analyze. HHS Guidelines at 48. Absent from the Final Rule, however, is any substantive discussion of how the Final Rule's counseling and referral restrictions might create informational costs.
HHS itself trumpets these benefits of the current Title X program. See Office of Population Affairs, Title X Family Planning Annual Report 2017 Summary ES-2, (August 2018) ("Title X-funded cervical and breast cancer screening services are necessary for early detection and treatment," and "Title X-funded STD and HIV services provide testing necessary for preventing disease transmission and adverse health consequences.").
The HHS Guidelines expressly describe "reductions in government payments to hospitals" as a type of "transfer cost" that "should be addressed in the benefit-cost analysis, if significant," because "the affected hospitals may accept fewer patients or use less expensive treatments, in turn affecting health outcomes." HHS Guidelines at 23.