State v. Azar

• Decision Date: 13 December 2018
• Docket Number: No. 18-15255,No. 18-15144, No. 18-15166,18-15144
• Citation: 911 F.3d 558
• Parties: State of CALIFORNIA; State of Delaware; Commonwealth of Virginia; State of Maryland; State of New York, Plaintiffs-Appellees, v. Alex M. AZAR II, Secretary of the United States Department of Health and Human Services; U.S. Department of Health & Human Services; R. Alexander Acosta, in His Official Capacity as Secretary of the U.S. Department of Labor; U.S. Department of Labor; Steven Terner Mnuchin, in His Official Capacity as Secretary of the U.S. Department of the Treasury; U.S. Department of the Treasury, Defendants, and The Little Sisters of the Poor Jeanne Jugan Residence, Intervenor-Defendant-Appellant. State of California; State of Delaware; Commonwealth of Virginia; State of Maryland; State of New York, Plaintiffs-Appellees, v. Alex M. Azar II, Secretary of the United States Department of Health and Human Services; U.S. Department of Health & Human Services; R. Alexander Acosta, in His Official Capacity as Secretary of the U.S. Department of Labor; U.S. Department of Labor; Steven Terner Mnuchin, in His Official Capacity as Secretary of the U.S. Department of the Treasury; U.S. Department of the Treasury, Defendants, and March for Life Education and Defense Fund, Intervenor-Defendant-Appellant. State of California; State of Delaware; Commonwealth of Virginia; State of Maryland; State of New York, Plaintiffs-Appellees, v. Alex M. Azar II, Secretary of the United States Department of Health and Human Services; U.S. Department of Health & Human Services; R. Alexander Acosta, in His Official Capacity as Secretary of the U.S. Department of Labor; U.S. Department of Labor; Steven Terner Mnuchin, in His Official Capacity as Secretary of the U.S. Department of the Treasury; U.S. Department of the Treasury, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

911 F.3d 558

State of CALIFORNIA; State of Delaware; Commonwealth of Virginia; State of Maryland; State of New York, Plaintiffs-Appellees,
v.
Alex M. AZAR II, Secretary of the United States Department of Health and Human Services; U.S. Department of Health & Human Services; R. Alexander Acosta, in His Official Capacity as Secretary of the U.S. Department of Labor; U.S. Department of Labor; Steven Terner Mnuchin, in His Official Capacity as Secretary of the U.S. Department of the Treasury; U.S. Department of the Treasury, Defendants,
and
The Little Sisters of the Poor Jeanne Jugan Residence, Intervenor-Defendant-Appellant.

State of California; State of Delaware; Commonwealth of Virginia; State of Maryland; State of New York, Plaintiffs-Appellees,
v.
Alex M. Azar II, Secretary of the United States Department of Health and Human Services; U.S. Department of Health & Human Services; R. Alexander Acosta, in His Official Capacity as Secretary of the U.S. Department of Labor; U.S. Department of Labor; Steven Terner Mnuchin, in His Official Capacity as Secretary of the U.S. Department of the Treasury; U.S. Department of the Treasury, Defendants,
and
March for Life Education and Defense Fund, Intervenor-Defendant-Appellant.

State of California; State of Delaware; Commonwealth of Virginia; State of Maryland; State of New York, Plaintiffs-Appellees,
v.
Alex M. Azar II, Secretary of the United States Department of Health and Human Services; U.S. Department of Health & Human Services; R. Alexander Acosta, in His Official Capacity as Secretary of the U.S. Department of Labor; U.S. Department of Labor; Steven Terner Mnuchin, in His Official Capacity as Secretary of the U.S. Department of the Treasury; U.S. Department of the Treasury, Defendants-Appellants.

No. 18-15144
No. 18-15166
No. 18-15255

United States Court of Appeals, Ninth Circuit.

Argued and Submitted October 19, 2018 San Francisco, California
FILED DECEMBER 13, 2018

OPINION

WALLACE, Circuit Judge:

911 F.3d 566

The Affordable Care Act (ACA) and the regulations implementing it require group health plans to cover contraceptive care without cost sharing. Federal agencies issued two interim final rules (IFRs) exempting employers with religious and moral objections from this requirement. Several states sued to enjoin the enforcement of the IFRs, and the district court issued a nationwide preliminary injunction. We have jurisdiction under 28 U.S.C. § 1292, and we affirm in part, vacate in part, and remand.

I.

A.

To contextualize the issues raised on appeal, we briefly recount the history of the ACA's contraceptive coverage requirement. The ACA provides that:

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 [HRSA]....

42 U.S.C. § 300gg–13(a)(4). HRSA established guidelines for women's preventive services that include any "[FDA] approved contraceptive methods, sterilization procedures, and patient education and counseling." Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventive Services Under the Patient Protection and Affordable Care Act, 77 Fed. Reg. 8,725 -01, 8,725 (Feb. 15, 2012). The three agencies responsible for implementing the ACA—the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury (collectively, agencies)—issued regulations requiring coverage of all preventive services contained in HRSA's guidelines. See, e.g. , 45 C.F.R. § 147.130(a)(1)(iv) (DHSS regulation).

The agencies also recognized that religious organizations may object to the use of contraceptive care and offering health insurance that covers such care. For those organizations, the agencies provided two avenues. First, group health plans of certain religious employers, such as churches, are categorically exempt from the contraceptive coverage requirement. Coverage of Certain Preventive Services Under the Affordable Care Act, 78 Fed. Reg. 39,870, 39,874 (July 2, 2013). Second, nonprofit

911 F.3d 567

"eligible organizations" that are not categorically exempt can opt out of having to "contract, arrange, pay, or refer for contraceptive coverage." Id. To be eligible, the organization must file a self-certification form stating (1) that it "opposes providing coverage for some or all of any contraceptive services required to be covered under [the regulation] on account of religious objections," (2) that it "is organized and operates as a nonprofit entity," and (3) that it "holds itself out as a religious organization." Id. at 39,892. The organization sends a copy of the form to its insurance provider, which must then provide contraceptive coverage for the organization's employees and cannot impose any charges related to the coverage. Id. at 39,876. The regulations refer to this second avenue as the "accommodation," and it was designed to avoid imposing on organizations' beliefs that paying for or facilitating coverage for contraceptive care violates their religion. Id. at 39,874.

The agencies subsequently amended the accommodation in response to several legal challenges. First, certain closely-held for-profit organizations became eligible for the accommodation. Coverage of Certain Preventive Services Under the Affordable Care Act, 80 Fed. Reg. 41,318 -01, 41,343 (July 14, 2015); see also Burwell v. Hobby Lobby Stores, Inc. , ––– U.S. ––––, 134 S.Ct. 2751, 2785, 189 L.Ed.2d 675 (2014). Second, instead of directly sending a copy of the self-certification form to the insurance provider, an eligible organization could simply notify the Department of Health and Human Services in writing, and the agencies then would inform the provider of its regulatory obligations. 80 Fed. Reg. at 41,323 ; see also Wheaton Coll. v. Burwell , ––– U.S. ––––, 134 S.Ct. 2806, 2807, 189 L.Ed.2d 856 (2014).

Various employers then challenged the amended accommodation as a violation of the Religious Freedom Restoration Act (RFRA). Zubik v. Burwell , ––– U.S. ––––, 136 S.Ct. 1557, 1559, 194 L.Ed.2d 696 (2016) (per curiam). The actions reached the Supreme Court, but, instead of deciding the merits of the claims, the Supreme Court vacated and remanded to afford the parties "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." Id. (internal quotation marks and citation omitted). The agencies solicited comments on the accommodation in light of Zubik , but ultimately declined to make further changes to the accommodation. Dep't of Labor, FAQS ABOUT AFFORDABLE CARE ACT IMPLEMENTATION PART36, at 4, www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/aca-part-36.pdf.

B.

On May 4, 2017, the President issued an executive order directing the secretaries of the agencies to "consider issuing amended regulations, consistent with applicable law, to address conscience-based objections to" the ACA's contraceptive coverage requirement. Promoting Free Speech and Religious Liberty, Exec. Order No. 13,798, 82 Fed. Reg. 21,675, 21,675 (May 4, 2017). On October 6, 2017, the agencies effectuated the two IFRs challenged here, without prior notice and comment. The religious exemption IFR expanded the categorical exemption to all entities "with sincerely held religious beliefs objecting to contraceptive or sterilization coverage" and made the accommodation optional for such entities.

911 F.3d 568

Religious Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 82 Fed. Reg. 47,792, 47,807 –08 (Oct. 13, 2017). The moral exemption IFR expanded the categorical exemption to "include additional entities and persons that object based on sincerely held moral convictions." Moral Exemptions and Accommodations for Coverage of Certain Preventive Services Under the Affordable Care Act, 82 Fed. Reg. 47,838, 47,849 (Oct. 13, 2017). It also "expand[ed] eligibility for the accommodation to include organizations with sincerely held moral convictions concerning contraceptive coverage" and made the accommodation optional for those entities. Id.

California, Delaware, Maryland, New York, and Virginia sued the agencies and their secretaries in the Northern District of California. The states sought to enjoin the enforcement of the IFRs, alleging that they are invalid under the Administrative Procedure Act (APA), the Fifth Amendment equal protection component of the Due Process Clause, and the First Amendment Establishment Clause. The district court held that venue was proper and that the states had standing to challenge the IFRs. The district court then issued a nationwide preliminary injunction based on the states' likelihood of success on their APA claim—that the IFRs were procedurally invalid for failing to follow notice and comment rulemaking. After issuing the injunction, the district court allowed Little Sisters of the Poor, Jeanne Jugan Residence (Little Sisters) and March for Life Education and Defense...