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Final HHS Preventive Contraceptives Rule and a New Circuit Decision: A Clearer Path for Judicial Review

Posted in Constitutional Issues in Regulations, Judicial Process, Judicial Review & Remedies

Two recent events relating to the Department of Health and Human Services (HHS) and sister agencies’ requirement that employers provide preventive contraceptive services to women through insurance and without co-pay bring several legal issues closer to resolution:

  1. HHS published its much anticipated – by courts and litigants – final rule, and
  2. the United States Court of Appeals for the Tenth Circuit issued the latest in a string of complex decisions – in this case setting the stage for another single-employer injunction.

The path to legal resolution contains many bumps, but that path is now much clearer – and may lead to the United States Supreme Court (SCOTUS).

Tenth Circuit Decision:  The United States Court of Appeals for the Tenth Circuit, sitting en banc, ruled in Hobby Lobby v. Sebelius, that

  • plaintiff has Article III standing to challenge the Department of Health and Human Services (HHS) rule requiring that employers provide contraceptive services within their health care coverage without a co-pay and that the Anti-Injunction Act does not apply (unanimous);
  • the district court erred in concluding the plaintiffs had not demonstrated a likelihood of success on plaintiffs’ Religious Freedom Restoration Act (RFRA); and
  • plaintiffs satisfied the irreparable harm prong of the preliminary injunction standard.

A four-judge plurality would have resolved the other balance of equities and public interest in plaintiffs’ favor and remand with instructions to enter a preliminary injunction, but four was not a majority of the eight-sitting judges, and the court remanded to the district court for further evaluation of the two remaining preliminary injunction factors.  The ripeness of judicial review of the rule – pending revision – did not lead the court to hold the case in abeyance with instructions to the government to report intermittently on the rule’s progress, as has been the case in some courts, such as the D.C. Circuit.

The remand (and immediate issuance of mandate) makes clear that the decision is not ready to seek certiorari from the United States Supreme Court (SCOTUS) – further proceedings in the district court are necessary to resolve even the preliminary or interim relief pending completion of the litigation.  The court of appeals holdings do, however, establish the law of the case and these issues are final.  This remand is not like the asymmetrical court of appeals jurisdiction from a district court remand order – a generally disfavored petition for certiorari before judgment to SCOTUS on these limited issues would be ill advised.   The proliferation of district court and court of appeals decisions on the wide range of issues presented in this rights / regulatory litigation has yet to result in a direct intercircuit conflict.

State of Litigation:  As discussed several times in this blog, not-for-profit religious institutions have not succeeded on dislodging the existing rules because of the pending revisions, the courts dismissing the suits finding the issues to not be ripe.  In other cases, non-profit religious institution suits and appeals have held in abeyance and the Department of Justice (DOJ) required to report the progress of the rule to the court.

On the for-profit side, a number of individuals who own businesses and aver that they operate their businesses in conformity with their religious beliefs – and those beliefs staunchly oppose contraception – have succeeded in acquiring preliminary injunctions against application of the rules to those specific businesses.  Other attempts have not succeeded.

The cases are becoming legion – some 60 by one count – and pose substantial issues of federal law about which there may be conceptual conflicts among the courts.  These cases have not, however, yet coalesced into an intercircuit conflict, procedurally or substantive, for review by SCOTUS.  Coagulation may be about to occur.

TimingHobby Lobby came one day after the Internal Revenue Service, Department of the Treasury; Employee Benefits Security Administration, Department of Labor; and Centers for Medicare & Medicaid Services, Department of Health and Human Services, HHS submitted, and a day before OMB completed review of and the Office of the Federal Register released on public inspection, a final Coverage of Certain Preventive Services Under the Affordable Care Act – the promised revision that has been the basis for a number of judicial decisions that litigation challenging the original rule was not ripe for review.

Final Rule:  The final rule extends the safe harbor provision to the end of this year – a fixed and certain date.  From the final rule official summary:

These final regulations simplify and clarify the religious employer exemption.  These final regulations also establish accommodations with respect to the contraceptive coverage requirement for group health plans established or maintained by eligible organizations (and group health insurance coverage provided in connection with such plans), as well as student health insurance coverage arranged by eligible organizations that are institutions of higher education.  These regulations also finalize related amendments to regulations concerning Affordable Insurance Exchanges.

If the summary is vague, the applicability statement is not:

With the exception of the amendments to the religious employer exemption, which apply to group health plans and health insurance issuers for plan years beginning on or after August 1, 2013, these final regulations apply to group health plans and health insurance issuers for plan years beginning on or after January 1, 2014.

The agencies received more than 400,000 comments on the proposed rule, admittedly many being form letters.  The only changes, aside from timing, appear to be to shift the cost of preventative care from a self-certifying non-profit religious organization to the pool of other participants in a health insurance plan, but the definition of a religious organization is not changed at all.  This lack of change in the definition of a religious organization would appear to leave to each organization the task of seeking an injunction against enforcement of the rules against it – the very approach taken by Hobby Lobby.  Some may consider the agencies to be somewhat disingenuous in their statement that:

The Departments are unaware of any court granting a religious exemption to a for-profit organization, and decline to expand the definition of eligible organization to include for-profit organizations.

The preamble to the final rule addresses – in summary fashion – questions of conflict with the United States Constitution First Amendment’s freedom of religion clause and the RFRA.  The preamble does not, however, provide more than conclusory statements that the rule does not violate either the First Amendment or the RFRA.  The medical evidence cited by the rule in support of its conclusions contrasts sharply with the paucity of citation to legal interpretation of the Constitution and the RFRA.  Nowhere does the preamble provide any explanation of how the rule fits within the tests developed by judicial precedent in past litigation, or specifically address any of the more than 60 cases currently being litigated in relation to the final rule previously published.  A cursory review suggests that the final rule violates the Administrative Procedure Act (APA) because of this failure to consider critical information.

With the rule scheduled for publication on July 2, 2013, all of the cases previously held in abeyance by the courts can proceed, although at least some will require intervening briefing before the district courts and courts of appeals.  The stage is now set for serious litigation over whether the preventive care / contractive rule violates a religious organization, or an privately held business owner of religious convictions, rights under the First Amendment and the RFRA.  The lack of responsiveness of the agencies to the debate clearly defined in pending litigation against the lead agency in the preamble to the final rule raises additional APA issues that the courts may be required to address before reaching the First Amendment issues under the doctrine of constitutional avoidance – a case should be decided on statutory grounds if doing so would avoid reaching a constitutional issue.  Proponents of the litigation may wish to avoid APA compliance issue and they may be able to evade briefing the APA issue initially, but the courts may require them to address the APA.

As an aside, footnote 1 of the preamble to the final rule poses an additional interesting point for approximately one-half of the population:  “1 The HRSA Guidelines [which set specific services in coverage under the rule] exclude services relating to a man’s reproductive capacity, such as vasectomies and condoms.”