Massachusetts v. U.S. Dep't of Health & Human Servs.

• Decision Date: 15 January 2021
• Docket Number: Civil Action No. 17-11930-NMG
• Citation: 513 F.Supp.3d 215
• Parties: Commonwealth of MASSACHUSETTS, Plaintiff, v. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, et al., Defendants.
• Court: U.S. District Court — District of Massachusetts

513 F.Supp.3d 215

Commonwealth of MASSACHUSETTS, Plaintiff,

v.UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, et al., Defendants.

Civil Action No. 17-11930-NMG

United States District Court, D. Massachusetts.

Signed January 15, 2021

Julia E. Kobick, Elizabeth C. Carnes Flynn, Office of the Attorney General, Boston, MA, Jonathan T. Burke, Attorney General's Office, Worcester, MA, for Plaintiff.

Daniel Riess, Christopher R. Healy, U.S. Department of Justice, Washington, DC, Jason C. Weida, US Attorney's Office, Boston, MA, for Defendants United States Department of Health and Human Services, United States Department of the Treasury, Steven T. Mnuchin, United States Department of Labor, R. Alexander Acosta, Eric Hargan.

Daniel Riess, Christopher R. Healy, U.S. Department of Justice, Washington, DC, for Defendant Alex Azar.

MEMORANDUM & ORDER

GORTON, United States District Judge

This case involves a dispute about the validity of two interim final rules ("IFRs") and the subsequent final rules ("Final Rules") issued by the United States Department of Health and Human Services, the United States Department of the Treasury and the United States Department of Labor (collectively "defendants" or "the Departments"). The Final Rules adopt the IFRS, which expanded the religious exemption to the contraceptive mandate of the Affordable Care Act ("ACA") and created a new moral exemption to that mandate. The Commonwealth of Massachusetts ("plaintiff" or "the Commonwealth") filed the instant action seeking to enjoin the implementation of the rules and to declare them invalid.

Pending before the Court are plaintiff's motion for summary judgment and defendants’ cross-motion to dismiss or for summary judgment. Because the Commonwealth has not established that the Final Rules are statutorily or constitutionally invalid, defendants’ motion for summary judgment will be allowed and plaintiff's motion will be denied.

I. Background

Many of the relevant facts are described in detail in the opinion of this Court allowing defendants’ previous motion for summary judgment. See Massachusetts v. United States HHS, 301 F. Supp. 3d 248 (D. Mass. 2018). Because there have been important supervening developments since the issuance of that opinion and for the sake of completeness, the Court provides the following summary of facts relevant to the pending motions.

A. The Contraceptive Mandate

The Patient Protection and Affordable Care Act generally requires that employer-sponsored healthcare plans include a range of preventive care services on a no-cost basis. See 42 U.S.C. §§ 18022 & 300gg-13. That requirement mandates no-cost coverage

with respect to women, ... as provided for in comprehensive guidelines supported by the Health Resources and Services Administration ["HRSA"].

42 U.S.C. § 300gg-13(a)(4).

After soliciting recommendations from an expert panel at the Institute of Medicine ("IOM"), HRSA promulgated its Women's Preventive Services Guidelines in August, 2011. Under those guidelines, non-exempt employers were required to provide

coverage, without cost sharing, [for] [a]ll Food and Drug Administration-approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity.

("the contraceptive mandate"). Those guidelines went into effect in August, 2012. The HRSA updated the Women's Preventive Services Guidelines in December, 2016, reaffirming that the Guidelines should continue to require full coverage for contraceptive care and services.

B. Accommodations for Religious Objections to the Contraceptive Mandate

In 2011 and 2012, the Departments issued regulations automatically exempting churches and their integrated auxiliaries, conventions and associations of churches and the exclusively religious activities of religious orders from the contraceptive mandate. The "Church Exemption" corresponds to a category of employers defined in the Internal Revenue Code. See 77 Fed. Reg. 8725, 8726 (citing 26 U.S.C. §§ 6033(a)(3)(A)(i) and (iii) ). The Departments recognized that "certain non-exempted, non-profit organizations" also had religious objections to covering contraceptive services but determined that exempting such employers was not required by the Religious Freedom Restoration Act ("RFRA") and was inconsistent with the ACA. 77 Fed. Reg. 8725, 8728. Internal church decisions are, as the Departments explained in later regulations, afforded a "particular sphere of autonomy" that does not extend to other religious employers. 80 Fed. Reg. 41,318, 41,325.

In 2013, the Departments issued regulations providing an accommodation for objecting religious, non-profit organizations and institutions of higher education. The accommodation created a system whereby insurers and third parties paid the full cost of contraceptive care and employees received seamless coverage ("the accommodation process"). That process was expanded to cover closely-held, for-profit companies in response to the decision in Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682, 134 S. Ct. 2751, 189 L.Ed.2d 675 (2014), in which the United States Supreme Court ("Supreme Court") ruled that the contraceptive mandate violated RFRA for certain closely-held, for-profit employers. The Court held that the "HHS contraceptive mandate substantially burden[ed] the exercise of religion." Id. at 2775 (internal quotation omitted) (citing 42 U.S.C. § 2000bb–1(a) ). The accommodation process was purportedly a "less restrictive means" of furthering the government interest and thus RFRA required that the accommodation be expanded to include certain closely-held corporations. Id. at 2780-82.

In a separate series of cases, organizations such as religiously-affiliated universities and healthcare providers that did not perform "exclusively religious activities" challenged the legality of the accommodation process itself. See Zubik v. Burwell, 578 U.S. 403, 136 S. Ct. 1557, 194 L.Ed.2d 696 (2016). In May, 2016, those cases were remanded to their respective circuit courts for further consideration of whether the accommodation process could be amended to address the religious employers’ concerns while still providing seamless contraceptive coverage. In January, 2017, after reviewing more than 50,000 comments, the Departments announced that the short answer to the comprehensive question was "No." No alternative, the Departments explained, would pose a lesser burden on religious exercise while ensuring contraceptive coverage.

C. The Interim Final Rules and the Final Rules

In October, 2017, the Departments issued the two IFRs at issue in this case. See 82 Fed. Reg. 47,792 ("Religious Exemption IFR") ; 82 Fed. Reg. 47,838 ("Moral Exemption IFR").

The IFRs created an expanded religious exemption, in part, to address the concerns of the managers of some entities who believed the accommodation rendered them complicit in the provision of contraceptive coverage. See 82 Fed. Reg. 47,792 ("We know ... that many religious entities have objections to complying with the accommodation based on their sincerely held religious beliefs."); Little Sisters of the Poor Saints Peter & Paul Home v. Pennsylvania, ––– U.S. ––––, 140 S. Ct. 2367, 2376-78, 207 L.Ed.2d 819 (2020). The HRSA exempts objecting entities "from any guidelines’ requirements that relate to the provision of contraceptive services." 45 C.F.R. § 147.132(a). The Religious Exemption IFR expanded the definition of objecting entities to include any non-governmental plan sponsor that objects to

establishing, maintaining, providing, offering, or arranging (as applicable) coverage, payments, or a plan that provides coverage or payments for some or all contraceptive services, based on its sincerely held religious beliefs.

45 C.F.R. § 147.132(a)(2).

The religious exemption also applies to institutions of higher education in their arrangement of student health insurance coverage to the extent of that institution's sincerely held religious beliefs. 45 C.F.R. § 147.132(a)(ii). It exempts all employers with a religious objection, as opposed to the prior Church Exemption which covered churches, associations of churches and the exclusively religious activities of religious orders. It also affects religious non-profit organizations in that objecting organizations, formerly subject to the accommodation process, may now apply for the exemption.

Under the preceding Administration, no moral exemption to the contraceptive mandate existed in any form. The Moral Exemption IFR provided an exemption for nonprofit organizations and for-profit entities with no publicly traded ownership interests that object to

establishing, maintaining, providing, offering, or arranging (as applicable) coverage or payments for some or all contraceptive services, or for a plan, issuer, or third party administrator that provides or arranges such coverage or payments, based on its sincerely held moral convictions.

45 C.F.R. § 147.133(a)(2).

The IFRs were superseded by the Final Rules issued in November, 2018, which became effective in January, 2019. See 83 Fed. Reg. 57,536 ("Religious Exemption Rule") ; 83 Fed. Reg. 57,592 ("Moral Exemption Rule"). The Final Rules maintain and formally codify the expanded exemptions adopted in the IFRs without substantive change.

D. The Supreme Court's Decision in Little Sisters

In January, 2020, the Supreme Court granted certiorari to review a decision by the Third Circuit Court of Appeals ("Third Circuit") to uphold a lower court ruling which enjoined the implementation of the Final Rules. Shortly thereafter, the parties in the instant action sought, and this Court granted, a stay of the proceedings pending the Supreme Court's decision because it was anticipated that the ruling would have a significant, if not dispositive, effect on the claims raised in this case.

In Little Sisters of the Poor Saints Peter & Paul Home v. Pennsylvania, ––– U.S. ––––, 140 S. Ct. 2367, 207 L.Ed.2d 819 (2020) (" Little Sisters"), the Supreme Court held...