May 21, 2019
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN
DISTRICT OF PENNSYLVANIA (E.D. Pa. No. 2:17-cv-04540)
District Judge: Hon. Wendy Beetlestone
Michael J. Fischer [ARGUED] Aimee D. Thompson Office of
Attorney General of Pennsylvania, Glenn J. Moramarco Office
of Attorney General of New Jersey Department of Law &
Public Safety, Division of Law Richard J. Hughes Justice
Complex, Counsel for Appellees Commonwealth of Pennsylvania
and State of New Jersey.
V. Sturgill, Jr. United States Department of Justice, Civil
Division, Hashim M. Moopan [ARGUED] United States Department
of Justice, Karen Schoen United States Department of Justice
Civil Division, Appellate Section, Counsel for Appellants
President United States of America, Secretary United States
Department of Health & Human Services, United States
Department of Health & Human Services, United States
Department of Treasury, Secretary United States Department of
Treasury, United States Department of Labor, Secretary United
States Department of Labor, and United States of America.
L. Rienzi [ARGUED] Lori H. Windham Becket Fund for Religious
Liberty, Nicholas M. Centrella Conrad O'Brien, Counsel
for Appellee-Intervenor Little Sisters of the Poor Saints
Peter and Paul Home.
R. LaFond Office of Attorney General of Texas, Counsel for
Amici Curiae in Support of Appellants States of Texas,
Alabama, Arkansas, Georgia, Idaho, Louisiana, Missouri,
Nebraska, Oklahoma, South Carolina, and West Virginia.
Elizabeth N. Dewar Office of Attorney General of
Massachusetts, Counsel for Amici Curiae States of
Massachusetts, California, Colorado, Connecticut, Delaware,
Hawaii, Illinois, Iowa, Maine, Maryland, Michigan, Minnesota,
Nevada, New Mexico, New York, North Carolina, Oregon, Rhode
Island, Vermont, Virginia, Washington and the District of
Dariely Rodriguez Lawyers' Committee for Civil Rights
Under Law, Counsel for Amici Curiae Center for Reproductive
Rights, Lawyers Committee for Civil Rights Under Law,
California Womens Law Center, GLBTQ Legal Advocates and
Defenders, LatinoJustice PRLDEF, Lawyers for Civil Rights,
Legal Momentum, Legal Voice, Mississippi Center for Justice,
National Center for Lesbian Rights, and Women's Law
J. Rose American Civil Liberties Union Counsel for Amici
Curiae American Civil Liberties Union, Anti Defamation
League, Leadership Conference on Civil and Human Rights, and
National Urban League.
W. Hazlett Stephen J. Kastenberg Counsel for Amici Curiae
Public Interest Law Center of Philadelphia, Washington
Lawyers Committee for Civil Rights and Urban Affairs, Chicago
Lawyers Committee for Civil Rights, Lawyers Committee for
Civil Rights of the San Francisco Bay Area, and Public
Jeffrey Blumenfeld Lowenstein Sandler, Counsel for Amici
Curiae National Womens Law Center, National Latina Institute
for Reproductive Health, Sisterlove Inc., and National Asian
Pacific American Women Forum.
Dunn Gibson Dunn & Crutcher, Counsel for Amicus Curiae
Religious Sisters of Mercy.
Coleman Nelson Mullins Riley & Scarborough, Counsel for
Amici Curiae Ronald J. Colombo, Richard Epstein, Carl H.
Esbeck, David F. Forte, Richard W. Garnett, Esq., Professor
Robert P. George, Mary Ann Glendon, Michael P. Moreland,
Stacy Scaldo, and Michael Uhlmann.
H. Schneider Stroock Stroock & Lavan, Counsel for Amici
Curiae American Nurses Association, American College of
Obstetricians and Gynecologists, American Academy of Nursing,
American Academy of Pediatrics, and Physicians for
Reproductive Choice and Health.
J. Arffa Melina M. Meneguin-Layerenza Sierra Robart Paul
Weiss Rifkind Wharton & Garrison, Counsel for Amici
Curiae Planned Parenthood Federation of America, National
Health Law Program, and National Family Planning &
Reproductive Health Association.
Priscilla J. Smith Yale Law School RRJP Clinic, Counsel for
Amicus Curiae Program for the Study of Reproductive Justice.
Bruno Dentons US, Jeffrey S. Feldman The Feldman Firm,
Counsel for Amici Curiae United States Women's Chamber of
Commerce and National Association for Female Executives.
A. Matz Kaplan Hecker & Fink, Counsel for Amicus Curiae
Church State Scholars.
Rhiannon N. Batchelder Jamie A. Levitt, Counsel for Amici
Curiae American Association of University Women and Service
Employees International Union.
Richard B. Katskee Americans United for Separation of Church
& State, Counsel for Amicus Curiae Americans United for
Separation of Church and State
Before: McKEE, SHWARTZ, and FUENTES, Circuit Judges.
SHWARTZ, CIRCUIT JUDGE
Women's Health Amendment to the Affordable Care Act
("ACA") mandated that women's health insurance
include coverage for preventive health care. Through the
Amendment, Congress directed the Health Resources and
Services Administration ("HRSA"), a component of
the Department of Health and Human Services
("HHS"), to issue guidelines setting forth the
preventive health care services that women should be
provided. Among the services HRSA identified was
contraceptive care. Nowhere in the enabling statute did
Congress grant the agency the authority to exempt entities
from providing insurance coverage for such services nor did
Congress allow federal agencies to issue regulations
concerning this coverage without complying with the
Administrative Procedure Act.
Congress's directives, in 2017, HHS and the Departments
of Labor and Treasury (collectively, "the
Agencies") promulgated regulations that expanded the
entities that could invoke an exemption to the requirement
that group health insurance plans cover contraceptive
services as a form of women's preventive health care.
Because the state plaintiffs are likely to succeed in proving
that the Agencies did not follow the APA and that the
regulations are not authorized under the ACA or required by
the Religious Freedom Restoration Act ("RFRA"), we
will affirm the District Court's order preliminarily
enjoining the rules' enforcement nationwide.
as a part of the ACA, Pub. L. No. 111-148, 124 Stat. 119
(2010), the Women's Health Amendment mandates 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 . . . preventive care and
screenings [for women] . . . as provided for in comprehensive
guidelines supported by the [HRSA]." 42 U.S.C. §
300gg-13(a), (a)(4). HRSA commissioned an expert panel from
the Institute of Medicine to recommend covered services. In
2011, HRSA adopted the Institute's recommendations and
issued guidelines defining preventive care to include all
"Food and Drug Administration approved contraceptive
methods, sterilization procedures, and patient education and
counseling for all women with reproductive capacity,"
"as prescribed" by a woman's health care
provider. HRSA, Women's Preventive Services
guidelines/index.html (last visited May 8, 2019). This
statutory and regulatory scheme was deemed the
"Contraceptive Mandate." Several regulations and
same day that the Guidelines were issued, the Agencies
promulgated an interim final rule ("IFR"), followed
by a final rule in 2013, to exempt certain religious
employers- namely, churches and similar entities-from the
Contraceptive Mandate. Group Health Plans and Health
Insurance Issuers Relating to Coverage of Preventive Services
Under the Patient Protection Affordable Care Act, 77 Fed.
Reg. 8, 725 (Feb. 15, 2012) (the "Church
Exemption"); Group Health Plans and Health Insurance
Issuers Relating to Coverage of Preventive Services Under the
Patient Protection and Affordable Care Act, 76 Fed. Reg. 46,
621 (Aug. 3, 2011). As the Agencies later explained, the
"exemption for churches and houses of worship is
consistent with their special status under longstanding
tradition in our society and under federal law."
Coverage of Certain Preventive Services Under the Affordable
Care Act, 80 Fed. Reg. 41, 318, 41, 325 (July 14, 2015).
2013 final rule also separately provided that a nonprofit
religious employer who "(1) [o]pposes providing coverage
for some or all of the contraceptive services required to be
covered . . . on account of religious objections; (2) is
organized and operates as a nonprofit entity; (3) holds
itself out as a religious organization; and (4)
self-certifies that it satisfies the first three
criteria," 78 Fed. Reg. at 39, 874, is entitled to an
accommodation to avoid "contracting, arranging, paying,
or referring for contraceptive coverage," id.
at 39, 875. This accommodation process (the
"Accommodation") permits an employer to send a
self-certification form to its insurance issuer, which then
excludes contraceptive coverage, either in full or in part,
from the group health plan and in turn "provide[s]
payments for contraceptive services for plan participants and
beneficiaries, separate from the group health plan, without
the imposition of cost sharing, premium, fee, or other charge
on plan participants or beneficiaries or on the eligible
organization or its plan." Id. at 39, 876. A
third party administrator ("TPA") may also be used
as a claims or plan administrator "solely for the
purpose of providing payments for contraceptive services for
participants and beneficiaries in a self-insured plan of an
eligible organization at no cost to plan participants or
beneficiaries or to the eligible organization."
Id. at 39, 879. By invoking the Accommodation, the
employer was no longer responsible for providing coverage for
legal challenges followed. First, in Burwell v. Hobby
Lobby Stores, Inc., 573 U.S. 682 (2014), the Supreme
Court held that the Accommodation must be extended to
closely-held for-profit corporations with sincere religious
objections to the provision of contraceptive coverage so that
their religious beliefs were not substantially burdened under
RFRA, 42 U.S.C. § 2000bb-1. Id. at 724-26. The
Court observed that use of the Accommodation process was a
less restrictive means to ensure access to cost-free
contraceptives. Id. at 730-31. Days later, in
Wheaton College v. Burwell, 573 U.S. 958 (2014), the
Court concluded that Wheaton College, who also lodged a
religious objection to providing insurance for services
covered by the Contraceptive Mandate, did not have to use the
Accommodation self-certification form, known as the ESBA Form
700, but could instead rely on its notification to HHS to
satisfy the Accommodation's prerequisites. Id.
ensure compliance with these rulings, the Agencies
promulgated another IFR and final rule. Coverage of
Certain Preventive Services Under the Affordable Care Act, 80
Fed. Reg. 41, 318 (July 14, 2015). The rule "extend[ed]
the [A]ccommodation to a for-profit entity that is not
publicly traded, is majority-owned by a relatively small
number of individuals, and objects to providing contraceptive
coverage based on its owners' religious beliefs."
Id. at 41, 324. The rule also "allow[ed]
eligible organizations to choose between using [the] ESBA
Form 700 or the alternative process [of notifying HHS in
writing of a religious objection to covering contraceptive
services] consistent with the Wheaton interim
order." Id. at 41, 323.
Zubik v. Burwell, 136 S.Ct. 1557 (2016) (per
curiam), the Supreme Court addressed the petitioners'
assertions that "submitting [the Accommodation] notice
substantially burden[ed] the exercise of their religion, in
violation of [RFRA]." Id. at 1559. The Court
did not reach the merits of this claim but rather 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 . . .
contraceptive coverage." Id. at 1560 (internal
quotation marks and citation omitted).
response to the Court's direction in Zubik, the
Agencies solicited comments regarding the current procedure
and possible alternatives to the Accommodation. Coverage for
Contraceptive Services, 81 Fed. Reg. 47, 741 (July 22, 2016).
The Agencies reviewed the comments and found that "no
feasible approach has been identified at this time that would
resolve the concerns of religious objectors while still
ensuring that the affected women receive full and equal
health coverage, including contraceptive coverage."
Dep't of Labor, FAQs About Affordable Care Act
Implementation Part 36, at 4 (Jan. 9, 2017), available
activities/resource-center/faqs/aca-part-36.pdf. As a result,
the Accommodation remained unchanged.
2017, President Donald Trump issued an executive order
directing the Agencies to "consider issuing amended
regulations, consistent with applicable law, to address
conscience-based objections to the preventive-care mandate
promulgated under [42 U.S.C. § 300gg-13(a)(4)]."
Exec. Order No. 13, 798 § 3, 82 Fed. Reg. 21, 675 (May
9, 2017). In response, and without issuing a notice of
proposed rulemaking or soliciting public comment, the
Agencies issued two new IFRs: the Religious IFR and the Moral
IFR. These IFRs expanded the existing exemption and
Accommodation framework, made the Accommodation process
voluntary, and offered similar protections to organizations
with moral objections to contraceptives. See
Religious Exemptions and Accommodations for Coverage of
Certain Preventive Services Under the Affordable Care Act, 82
Fed. Reg. 47, 792 (Oct. 13, 2017); Moral Exemptions and
Accommodations for Coverage of Certain Preventive Services
Under the Affordable Care Act, 82 Fed. Reg. 47, 838 (Oct. 13,
2017). This litigation followed.
Commonwealth of Pennsylvania filed suit against various
governmental entities and sought to enjoin the enforcement of
the IFRs. Little Sisters of the Poor Saints Peter and Paul
Home ("Little Sisters") intervened. The District
Court granted Pennsylvania's request to preliminarily
enjoin the IFRs. See generally Pennsylvania v.
Trump, 281 F.Supp.3d 553 (E.D. Pa. 2017). The Court held
that Pennsylvania was likely to succeed on its procedural and
substantive challenges under the APA. Id. at 576,
581. The Government appealed, and the District Court granted
a stay pending appeal.
the appeal of the order preliminarily enjoining the IFRs was
pending, the Agencies promulgated two Final Rules, which are
virtually identical to the Religious and Moral IFRs.
See Religious Exemptions and Accommodations for
Coverage of Certain Preventive Services Under the Affordable
Care Act, 83 Fed. Reg. 57, 536 (Nov. 15, 2018); 45 C.F.R.
§ 147.132 ("Religious Rule" or "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); 45 C.F.R.
§ 147.133 ("Moral Rule" or "Moral
Exemption") (collectively, "the Rules" or
"the Exemptions"). Like the Religious IFR, the
Final Rule creating the Religious Exemption expanded the
categories of employers who are permitted to invoke the
exemption from the Contraceptive Mandate to include all
nonprofit, for-profit, and publicly-held companies. The
Religious Exemption also made participation in the
process completely voluntarily, relieving employers from the
need to "file notices or certifications of their
exemption." 83 Fed. Reg. at 57, 558; see also
id. at 57, 537, 57, 562. The Final Rule creating the
Moral Exemption offered the same exemption and voluntary
accommodation process to nonprofit organizations and
non-publicly traded organizations "with sincerely held
moral convictions opposed to coverage of some or all
contraceptive or sterilization methods." Id. at
Pennsylvania's request, the District Court lifted the
stay, and Pennsylvania filed an amended complaint, joined New
Jersey as a plaintiff,  added challenges to the Final Rules and
moved to enjoin them.
District Court held hearings and received evidence regarding
the Rules. Specifically, the States submitted evidence from
health care professionals and state insurance regulators
about the Rules' impact. The evidence addressed the
relationship between costs and contraceptive use and the
impact the Rules would have on state-funded healthcare
a significant barrier to contraceptive use and access. The
most effective forms of contraceptives are the most
expensive. After the ACA removed cost barriers, women
switched to the more effective and expensive methods of
contraception. Because the Rules allow employers to opt
out of providing coverage for contraceptive services, some
women may no longer have insurance to help offset the cost
for these and other contraceptives.
and New Jersey have state-funded programs that provide family
planning and contraceptive services for eligible individuals.
For example, Pennsylvania
and New Jersey's FamilyCare cover all health care for
childless adults, pregnant women, and parents with incomes up
to 138% and up to 215% of the federal poverty level,
respectively. Pennsylvania's Family Planning Services
Program also covers all family planning-related services,
including contraceptives, for individuals with incomes up to
215% of the federal poverty level even if they have private
insurance, and New Jersey's Plan First program offers the
same for individuals with incomes up to 205% of the federal
who lack contraceptive coverage and who meet certain income
levels may also turn to Title X family planning clinics which
"provide access to contraceptive services, supplies, and
information to all who want and need them" with priority
to low-income persons. Office of Population Affairs,
Funding History, HHS,
(last visited May 12, 2019). State and federal governments
fund Title X clinics, but recently, federal funding has
States expect that when women lose contraceptive insurance
coverage from their employers, they will seek out these
state-funded programs and services. The States further assert
that women who do not seek or qualify for state-funded
contraceptives may have unintended pregnancies. Public funds
are used to cover the costs of many unintended
pregnancies. Accordingly, the States expect to spend
more money due to the Rules.
addition to this evidence, the Agencies presented spread
sheets that listed the organizations and companies that were
previously involved in ACA Contraceptive Mandate litigation.
The Agencies offered this evidence to demonstrate the likely
universe of employers whom they contend may seek to invoke
the Rules and opt out of covering contraceptive care.
the Final Rules were set to go into effect, January 14, 2019,
the District Court issued a nationwide injunction enjoining
their enforcement. Pennsylvania v. Trump, 351
F.Supp.3d 791 (E.D. Pa. 2019). The Court found that the
States had standing to challenge the Final Rules and
established a likelihood of success on the merits of their
APA claims. First, the Court held that the States are likely
to succeed on their procedural APA claims because the
Agencies failed to comply with the notice-and-comment
requirement and this defect tainted the Final Rules.
Id. at 813. Second, the Court held that the States
were likely to succeed on their substantive APA challenges
because neither the ACA nor RFRA authorized the Agencies to
create exemptions. Specifically, the unambiguous language of
the ACA's Women's Health Amendment only authorized
the Agencies to decide what services would be covered, not
who provides them, id. at 821, and RFRA did not
require or authorize such broad exemptions, particularly
given RFRA's remedial function that places the
responsibility for adjudicating religious burdens ...