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SCOTUS Remands Contraceptives Regulation Cases to Uncertain Future

Posted in Agency Authority, Judicial Process, Judicial Review & Remedies

USSC SealThe United States Supreme Court (SCOTUS) on Monday remanded to the lower courts its docket of cases raising the question of whether the Department of Health and Human Services (HHS) sufficiently accommodated religiously affiliated non-profits in its exception from the contraceptives mandate.  The SCOTUS orders in Zubik v. Burwell and its dozen fellow travelers make clear only one thing – resolution of the question presented is unlikely in the near future, if at all, unless the issue returns to SCOTUS or HHS amends its regulations, or both.

Background:  Obamacare (Patient Protection and Affordable Care Act or PPACA) authorized the HHS to set minimum health insurance standards.  HHS’s regulations included contraceptive services – the “contraceptive mandate” – and provided a mechanism for some religious and religious affiliated organizations to except themselves by filing a form with HHS.  The general issue here is whether HHS’s regulations comply with the Religious Freedom Restoration Act (RFRA) requirement that the government not substantially burden a person’s exercise of religion unless that burden is the least restrictive means to further a compelling governmental interest.  HHS’s current regulations responded to a prior SCOTUS decision in Burwell v. Hobby Lobby Stores, Inc. (a for profit company) and an order in Wheaton College as a further attempt to accommodate the non-profit religious institution under the RFRA.  In Zubik and its fellow travelers, the United States Court of Appeals for the Third Circuit, Fifth Circuit, Tenth Circuit, and District of Columbia Circuit each determined that the HHS regulations comported with the RFRA, although the analysis to reach those decisions differed.  After granting certiorari and thereby extending the lengthy history of complicated problems, briefing, and oral argument, SCOTUS posed further questions for the parties to brief – which caused further clarification and shifting in the parties’ positions.

Disposition:  On Monday, SCOTUS unanimously vacated and remanded the entire Zubik v. Burwell series of cases for further proceedings:

Given the gravity of the dispute and the substantial clarification and refinement in the positions of the parties, the parties on remand should be afforded an opportunity to arrive at an approach going forward that accommodates petitioners’ religious exercise while at the same time ensuring that women covered by petitioners’ health plans “receive full and equal health coverage, including contra­ceptive coverage.”

SCOTUS also granted certiorari, and vacated and remanded the judgments (GVR) in a half dozen other pending cases raising the same issues as Zubik – including cases from the Fifth Circuit, Seventh Circuit and Eighth Circuit, the latter cases upholding preliminary injunctions from which the Solicitor General sought certiorari.  In short, SCOTUS vacated both sides of the intercircuit conflict.

No View”?”  In any number of situations, SCOTUS may remand cases in light of changes in position, but these 13 cases (total) are more problematic than just a change in position by the parties.  On substance,

The Court expresses no view on the merits of the cases.  In particular, the Court does not decide whether petition­ers’ religious exercise has been substantially burdened, whether the Government has a compelling interest, or whether the current regulations are the least restrictive means of serving that interest.

In short, SCOTU expresses no view on the merits of the application of the RFRA standards.  Moreover,  SCOTUS preserved both the government’s program and the de minimus notice that objectors might provide from its prior orders, but from the litigation itself:

Nothing in this opinion, or in the opinions or orders of the courts below, is to affect the ability of the Government to ensure that women covered by petitioners’ health plans “obtain, without cost, the full range of FDA approved contraceptives.”  Wheaton College v. Burwell, 573 U. S. ___, ___ (2014) (slip op., at 1).  Through this litigation, petitioners have made the Government aware of their view that they meet “the requirements for exemption from the contraceptive coverage requirement on religious grounds.”  Id., at ___ (slip op., at 2).  Nothing in this opin­ion, or in the opinions or orders of the courts below, “pre­cludes the Government from relying on this notice, to the extent it considers it necessary, to facilitate the provision of full contraceptive coverage” going forward.  Ibid.  Be­cause the Government may rely on this notice, the Gov­ernment may not impose taxes or penalties on petitioners for failure to provide the relevant notice.

The order requires the courts below to parse potentially conflicting instructions.  In one sense, the order seems to suggest that courts should not interfere further with the extant regulations, but some have entered preliminary injunctions.  On the other hand, the notion that the litigation itself has given the government sufficient notice in the judicial view might also suggest that the cases may be moot.  Indeed, the last sentence suggests that very result – the government may not proceed against these parties.  Perhaps the only issue that is clear may be that applying the orders to the individual cases is likely to spawn even more litigation.

Multiple Avenues:  Graphing out the various organizational and insurance structures presented by the contraceptive mandate opponents renders impossible a single answer.  For example, some affiliated non-profits may self-insure, with or without a third party administrator, which may or may not itself be an affiliate of a religious institution and therefore may or may not be exempt.  Some non-profits may now switch to “church plans” in response to joinder of the issue.  The 13 cases likely never presented a potential for a homogenous answer, and the shift set in motion by SCOTUS’ post-argument questions exacerbated the dissonance.

Solution, Somewhere:  At bottom, any shift in the regime presently embodied in HHS regulations constitutes a loss for the Administration.  The Administration cannot simply ignore its own regulations to reach individual solutions or settlements.  The Administration continues to face the problem unique to any finding that a regulation does not comport with a statute – a court must “hold unlawful and set aside” in the parlance of the Administrative Procedure Act (APA) or “vacate” in the remedial parlance of the courts, such regulations.  Only one such adverse resolution is required to set aside or vacate a regulation and the Department of Justice (DOJ) faces the daunting task of defending in multiple fora and acquiring and maintaining a “no loss” record in more than 13 cases before more than six circuits.  DOJ may thus seek to fret individual cases by agreeing to injunctions against enforcement of the regulations against a named party.  Some losing party, without question, will seek to return to SCOTUS.

HHS must eventually (though perhaps not soon) amend its regulations to conform to the net results of this morass of litigation.  Until litigation remedies form a regular pattern, conformity is likely impossible, and once conformed, expect the aggrieved to again commence litigation challenging the regulations.