Johnson v. U.S. Office of Pers. Mgmt.
| Decision Date | 14 April 2015 |
| Docket Number | No. 14–2723.,14–2723. |
| Citation | 783 F.3d 655 |
| Parties | Ron JOHNSON and Brooke Ericson, Plaintiffs–Appellants, v. UNITED STATES OFFICE OF PERSONNEL MANAGEMENT and Katherine Archuleta, Director of the Office of Personnel Management, Defendants–Appellees. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Richard M. Esenberg, Milwaukee, WI, Paul D. Clement, Attorney, David Zachary Hudson, Attorney, Bancroft PLLC, Washington, DC, for Plaintiffs–Appellants.
Alisa B. Klein, Mark B. Stern, Attorney, Department Of Justice, Washington, DC, for Defendants–Appellees.
Gregory G. Katsas, Jones Day, Washington, DC, for amicus curiae, Judicial Education Project, Members of the United States Congress.
Before BAUER, FLAUM, and WILLIAMS, Circuit Judges.
The Office of Personnel Management (“OPM”) negotiates and regulates health benefit plans that are offered to federal employees. Most federal employees receive these benefits through the Federal Employee Health Benefits Program (“FEHBP”). Prior to the passage of the Patient Protection and Affordable Care Act (“ACA”), Pub.L. No. 111–148 (2010), members of the U.S. Senate and House of Representatives, as well as their staff members, were eligible for FEHBP insurance plans, just like other federal employees. A provision of the ACA, however, limited the health care options available to members of Congress and their staffs, mandating that the only health plans that the federal government could make available to those individuals were plans created under the ACA or offered through a health insurance exchange established under the ACA; they could no longer receive insurance through the FEHBP.See 42 U.S.C. § 18032(d)(3)(D).
Following the passage of the ACA, OPM conducted notice-and-comment rulemaking to implement this provision of the ACA, and issued the final rule, 78 Fed.Reg. 60653–01, that is at issue in this case. The plaintiffs, United States Senator Ron Johnson, of Wisconsin, and his legislative counsel, Brooke Ericson, filed suit in federal court to enjoin the enforcement and implementation of the OPM rule. They contend that the rule is contrary to the ACA and other law because it allows the government to make pre-tax employer contributions to non-FEHBP plans and makes members of Congress and their staffs eligible for an ACA insurance exchange reserved for small businesses.
The defendants—OPM and its director, Katherine Archuleta (collectively, “OPM”)—moved to dismiss, arguing that the plaintiffs lack standing to bring this suit. The district court granted the motion, finding that the plaintiffs had not identified a judicially cognizable injury that is traceable to the aspects of the OPM regulation that they challenge. We affirm.
The federal government offers employer-sponsored group health insurance to its employees pursuant to the Federal Employees Health Benefits Act of 1959 (“FEHBA”), 5 U.S.C. § 8901 –8914. See Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 682, 126 S.Ct. 2121, 165 L.Ed.2d 131 (2006). That insurance is provided through the FEHBP. The FEHBA “assigns to OPM responsibility for negotiating and regulating health-benefits plans for federal employees.” Id. at 683, 126 S.Ct. 2121. The government pays for up to seventy-five percent of the premiums for plans provided through the FEHBP, 5 U.S.C. § 8906(b)(1)-(2), and those contributions, like all employer contributions to employer-sponsored group health insurance, are tax free.
Members of Congress and their staffs (collectively, “Members”) are among those defined by the FEHBA as federal employees, 5 U.S.C. § 8901(1)(B)-(C), and, prior to the 2010 enactment of the ACA, those individuals were eligible for health plans offered through the FEHBP. The ACA, though, changed the status quo by mandating that Members are now eligible only for health plans created under the ACA or offered through an ACA health insurance exchange:
42 U.S.C. § 18032(d)(3)(D)(i). The statute defines “Member of Congress” as “any member of the House of Representatives or the Senate” and defines “congressional staff” as “all full-time and part-time employees employed by the official office of a Member of Congress, whether in Washington, DC or outside of Washington, DC.” § 18032(d)(3)(D)(ii). According to the plaintiffs, this provision “was passed so that Members of Congress and their staffs would be subject to the ACA in the same way as Members' constituents” and to preclude Members from receiving government contributions. Congress took this action, they say, “to address criticisms that it was reserving special ‘Cadillac’ benefits for itself or was unwilling to live with the health insurance it was mandating on the rest of the Nation.”
OPM was charged with the task of implementing this statutory provision. It conducted notice-and-comment rule-making and issued a final rule, 78 Fed.Reg. 60653–01 (the “OPM Rule” or “Rule”) on October 2, 2013. The Rule adopts the statutory definitions of “Member of Congress” and “congressional staff.” 5 C.F.R. § 890.101. The implementing regulation states:
5 C.F.R. § 890.102(c)(9). A congressional staff member that is not “determined to meet the definition of congressional staff member” remains eligible for FEHBP benefits. A “SHOP” is a Small Business Health Options Program; the Director determined the “appropriate SHOP” for Members to be the DC Health Link Small Business Market (“DC SHOP”), which is an exchange created by the ACA. The ACA limits participation in SHOPs to businesses with up to 100 employees. 42 U.S.C. § 18024(b)(2). The plaintiffs argue that this limitation would seem to make Members' employer—either “Congress” or “the federal government,” according to the plaintiffs—ineligible for a SHOP exchange. However, the Centers for Medicare and Medicaid Services—which is not a party to this suit—authored a memorandum clarifying that “offices of the Members of Congress, as qualified employers, are eligible to participate in a SHOP regardless of the size and offering requirements set forth in the definition of ‘qualified employer’ in the Exchange final rule.” Memorandum from the Ctr. for Consumer Info. & Ins. Oversight, Ctrs. for Medicare & Medicaid Servs., Affordable Insurance Exchange Guidance (Sept. 30, 2013), available at http://cms.gov/CCIIO/Resources/Fact- Sheets-and-FAQs/Downloads/members–of–congress–faq–9–30–2013.pdf (last visited Apr. 13, 2015, as were all websites in this opinion). OPM further determined that the government would continue to provide pre-tax health insurance contributions for Members who purchase certain plans from the DC SHOP, and that those contributions would be calculated in the same manner as for plans provided through the FEHBP. 5 C.F.R § 890.501(h).
Plaintiffs filed suit against OPM in the Eastern District of Wisconsin, seeking a declaration that the OPM Rule is unlawful and void under the Administrative Procedure Act, 5 U.S.C. §§ 701 –06. First, they argue that OPM lacks statutory authority to grant pre-tax employer contributions to plans offered through ACA exchanges. According to the plaintiffs, the FEHBA only gives OPM authority to make contributions for plans offered through the FEHBP; this authority, they argue, does not extend to the plans available to Members. Second, they argue that the Rule violates the ACA because it allows Members' employer—which the plaintiffs claim does not qualify as a small employer—to participate in a SHOP exchange. Third, and finally, the plaintiffs argue that the regulation violates their “statutory and constitutional entitlement to equal treatment” with Senator Johnson's constituents who purchase insurance on individual ACA exchanges.
In response to the plaintiffs' complaint, OPM filed a motion to dismiss, arguing that the district court lacked subject matter jurisdiction because the plaintiffs do not have standing to bring this suit. The district court granted the motion to dismiss. Given that the plaintiffs' suit alleges that the OPM Rule allows them to receive more favorable treatment than they believe they are entitled to—specifically, a pre-tax healthcare contribution from the government and insurance purchased from a SHOP exchange—the district court reasoned that they “receive, at worst, a benefit ” from the regulation. Therefore, the court concluded, the plaintiffs suffered no injury that was traceable to the challenged regulation and do not have standing. Plaintiffs now appeal the district court's dismissal on standing grounds.
The jurisdiction of federal courts is limited to “Cases” and “Controversies,” U.S. Const. art. III, § 2, and no “Case” or “Controversy” exists if the plaintiff lacks standing to challenge the defendant's alleged misconduct. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). To establish standing, a plaintiff must show that he has suffered (or is...
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