California v. Health & Human Servs.

• Decision Date: 13 January 2019
• Docket Number: Case No. 17-cv-05783-HSG
• Court: U.S. District Court — Northern District of California
• Parties: State of CALIFORNIA, et al., Plaintiffs, v. HEALTH AND HUMAN SERVICES, et al., Defendants.

351 F.Supp.3d 1267

State of CALIFORNIA, et al., Plaintiffs,

v.HEALTH AND HUMAN SERVICES, et al., Defendants.

Case No. 17-cv-05783-HSG

United States District Court, N.D. California.

Signed January 13, 2019

Christina Bull Arndt, Attorney General of CA, Michele Li Wong, Ofc. Attorney General, Los Angeles, CA, Kathleen M. Boergers, Attorney General's Office, Oakland, CA, Neli Nima Palma, CA DOJ Office of the Attorney General, R. Matthew Wise, Office of the Attorney General Department of Justice, Karli Ann Eisenberg, Office of the Attorney General - CA Department of Justice, Sacramento, CA, Nimrod Pitsker Elias, California State Attorney General's Office, San Francisco, CA, Jessica M. Willey, David Jay Lyons, Delaware Department of Justice, Wilmington, DE, Samuel Towell, Richmond, VA, Kimberly S. Cammarata, Steven Marshall Sullivan, Maryland Office of the Attorney General, Baltimore, MD, Elizabeth Chesler, Sara Haviva Mark, New York State Attorney General's Office, New York, NY, Anna Patricia Crane, Pro Hac Vice, Illinois Attorney General, Chicago, IL, Alicia Young, Pro Hac Vice, Attorney General of Washington, Olympia, WA, Jeffrey T. Sprung, Pro Hac Vice, Washington State Attorney General, Seattle, WA, Jacob Daniel Campion, Pro Hac Vice, Office of Minnesota Attorney General, Saint Paul, MN, Maura Murphy Osborne, CT Attorney General's Office, Hartford, CT, Erin Naomi Lau, Pro Hac Vice, Dept. of the Attorney General, State of Hawaii, Honolulu, HI, Michael W. Field, Pro Hac Vice, Providence, RI, for Plaintiffs.

Justin Michael Sandberg, Ethan Price Davis, Rebecca M. Kopplin, U.S. Department of Justice, Christen Michelle Price, Pro Hac Vice, Gregory Baylor, Pro Hac Vice, Alliance Defending Freedom, Washington, DC, Brian Ricardo Chavez-Ochoa, Attorney at Law, Valley Springs, CA, Kenneth John Connelly, Jr., Pro Hac Vice, Kevin Hayden Theriot, Alliance Defending Freedom, Scottsdale, AZ, Jeanne Nicole DeFever, Oregon Dept of Justice, Portland, OR, for Defendants.

ORDER GRANTING PLAINTIFFS' MOTION FOR A PRELIMINARY INJUNCTION

Re: Dkt. No. 174

HAYWOOD S. GILLIAM, JR., United States District Judge

Pending before the Court is Plaintiffs' motion for a preliminary injunction. See Dkt. No. 174. In short, Plaintiffs seek to prevent the implementation of rules creating a religious exemption (the "Religious Exemption") and a moral exemption (the "Moral Exemption") to the contraceptive mandate contained within the Affordable Care Act ("ACA"). See id. at 1; Religious Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 83 Fed. Reg. 57,536 (Nov. 15, 2018) ("Religious Exemption"); Moral Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 83 Fed. Reg. 57,592 (Nov. 15, 2018) ("Moral Exemption") (collectively, "the 2019 Final Rules" or "Final Rules"). Plaintiffs are the States of California, Connecticut, Delaware, Hawaii, Illinois, Maryland, Minnesota (by and through its Department of Human Services), New York, North Carolina, Rhode Island, Vermont, and Washington, the Commonwealth of Virginia, and the District of Columbia.¹ Federal Defendants are Alex M. Azar, II, in his official capacity as Secretary of the Department of Health and Human Services; the Department of Health and Human Services ("HHS"); Alexander Acosta, in his official capacity as Secretary of the Department of Labor; the Department of Labor; Steven Mnuchin, in his official capacity as Secretary of the Department of the Treasury; and the Department of the Treasury. Two additional parties were previously granted the right to enter this case as permissive intervenors: Little Sisters of the Poor, Jeanne Jugan Residence ("Little Sisters") and March for Life Education and Defense Fund ("March for Life"). See Dkt. Nos. 115, 134. Little Sisters is "a religious nonprofit corporation operated by an order of Catholic nuns whose faith inspires them to spend their lives serving the sick and elderly poor." Motion to Intervene, Dkt. No. 38 at 2. March for Life is a "non-religious non-profit advocacy organization" founded in response to the Supreme Court's 1973 decision in Roe v. Wade. Motion to Intervene, Dkt. No. 87 at 3. Its stated purpose is "to oppose the destruction of human life at any stage before birth, including by abortifacient methods that may act after the union of a sperm and ovum." Id.

For the reasons set out below, the motion is granted to maintain the status quo pending resolution of Plaintiffs' claims, and the enforcement of the Final Rules in the Plaintiff States is preliminarily enjoined.

I. BACKGROUND

Before turning to the Plaintiffs' challenge to the Final Rules, the Court begins by recounting the sequence of relevant events, beginning with the enactment of the Affordable Care Act in 2010. Although much of this background was already recounted in the Court's prior order, the Court reiterates it here for the sake of clarity. See California v. Health & Human Servs. , 281 F.Supp.3d 806 (N.D. Cal. 2017), aff'd in part, vacated in part, remanded sub nom. California v. Azar , 911 F.3d 558 (9th Cir. 2018).

A. The Affordable Care Act

In March 2010, Congress enacted the Affordable Care Act. The ACA included a provision known as the Women's Health Amendment, which states:

A group health plan and a health insurance issuer offering group or individual health insurance coverage shall, at a minimum provide coverage for and shall not impose any cost sharing requirements for ... with respect to women, such additional preventive care and screenings ... as provided for in comprehensive guidelines supported by the Health Resources and Services Administration for purposes of this paragraph.

42 U.S.C. § 300gg-13(a)(4).

About two years later, the Senate rejected a so-called "conscience amendment" to the Women's Health Amendment that would have allowed health plans to decline to provide coverage "contrary to" an insurer or employer's asserted "religious beliefs or moral convictions." See 158 Cong. Rec. S538–39 (Feb. 9, 2012) (text of proposed bill); id. S1162–73 (Mar. 1, 2012) (debate and vote); see also Burwell v. Hobby Lobby Stores, Inc. , 573 U.S. 682, 134 S.Ct. 2751, 2789–90, 189 L.Ed.2d 675 (2014) (Ginsburg, J., dissenting) (recognizing that rejection of the "conscience amendment" meant that "Congress left health care decisions—including the choice among contraceptive methods—in the hands of women, with the aid of their health care providers").

B. The 2010 IFR and Subsequent Regulations

On July 19, 2010, under the authority of the Women's Health Amendment, several federal agencies (including HHS, the Department of Labor, and the Department of the Treasury) issued an interim final rule ("the 2010 IFR"). See 75 Fed. Reg. 41,726. It required, in part, that health plans provide "evidence-informed preventive care" to women, without cost sharing and in compliance with "comprehensive guidelines" to be provided by HHS's Health Resources and Services Administration ("HRSA"). Id. at 41,728.

The agencies found they had statutory authority "to promulgate any interim final rules that they determine[d were] appropriate to carry out the" relevant statutory provisions. Id. at 41,729 –30. The agencies also determined they had good cause to forgo the general notice of proposed rulemaking required under the Administrative Procedure Act ("APA"), 5 U.S.C. § 553. Id. at 41,730. Specifically, the agencies determined that issuing such notice would be "impracticable and contrary to the public interest" because it would not allow sufficient time for health plans to be timely designed to incorporate the new requirements under the ACA, which were set to go into effect approximately two months later. Id. The agencies requested that comments be submitted by September 17, 2010, the date the IFR was scheduled to go into effect.

On September 17, 2010, the agencies first promulgated regulations pursuant to the 2010 IFR. See 45 C.F.R. § 147.310(a)(1)(iv) (HHS); 29 C.F.R. § 2590.715-2713 (Department of Labor); 26 C.F.R. § 54.9815-2713 (Department of the Treasury).² As relevant here, the regulations were substantively identical to the 2010 IFR, stating that HRSA was to provide "binding, comprehensive health plan coverage guidelines."

C. The 2011 HRSA Guidelines

From November 2010 to May 2011, a committee convened by the Institute of Medicine met in response to the charge of HHS's Office of the Assistant Secretary for Planning and Evaluation: to "convene a diverse committee of experts" related to, as relevant here, women's health issues. Inst. of Med., Clinical Preventive Services for Women: Closing the Gaps , 1, 23 (2011), https://www.nap.edu/read/13181/chapter/1. In July 2011, the committee issued a report recommending that private health insurance plans be required to cover all contraceptive methods approved by the Food and Drug Administration ("FDA"), without cost sharing. Id. at 102–10.

On August 1, 2011, HRSA issued its preventive care guidelines ("2011 Guidelines"), defining preventive care coverage to include all FDA-approved contraceptive methods. See Health Res. & Servs. Admin., Women's Preventive Services Guide lines, https://www.hrsa.gov/womens-guidelines/index.html.³

D. The 2011 IFR and the Original Religious Exemption

On August 3, 2011, the agencies issued an IFR amending the 2010 IFR. See 76 Fed. Reg. 46,621 ("the 2011 IFR"). Based on the "considerable feedback" they received regarding contraceptive coverage for women, the agencies stated that it was "appropriate that HRSA, in issuing [its 2011] Guidelines, take[ ] into account the effect on the religious beliefs of certain religious employers if coverage of contraceptive services were required." Id. at 46,623. As such, the agencies provided HRSA with the "additional discretion to exempt certain religious employers from the [2011] Guidelines where contraceptive services are concerned." Id. They defined a "religious employer" as one that:

(1) [h]as the inculcation of

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