Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania

Issues

(1) When a party has intervened to defend an administrative rule that protects their interests, does that party lack standing to appeal a decision invalidating the rule if the party is already protected by an injunction issued by another court?

(2) Are the administrative rules exempting religious objectors from covering contraceptive care for their employees procedurally and substantively valid?

Oral argument:

May 6, 2020

Court below:

United States Court of Appeals for the Third Circuit

The Supreme Court consolidated Trump v. Pennsylvania and Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania, two cases challenging the Trump Administration rules allowing employers to opt out of contraceptive-care coverage for their employees. Petitioners Donald J. Trump, President of the United States, et al. (“Government”) and Little Sisters of the Poor Saints Peter and Paul Home (“Little Sisters”) assert that the final rules are procedurally and substantively valid because the Departments of Health and Human Services, Labor, and the Treasury (“the Agencies”) can circumvent the notice-and-comment requirements under the Administrative Procedure Act (“APA”) when, as in here, they have “good cause.” Furthermore, the Government and Little Sisters assert that the Agencies were authorized to make such exemptions under the Patient Protection and Affordable Care Act (“ACA”) and the Religious Freedom Restoration Act (“RFRA”). Respondents, the States of Pennsylvania and New Jersey (“Pennsylvania”), counter that the final rules are procedurally and substantively invalid because the Agencies violated the APA’s notice-and-comment requirement. Furthermore, Pennsylvania argues that the power to make such exemptions lies solely with Congress and the Court, and that the Agencies had no authority under the ACA or RFRA. On the second issue in front of the Court, Little Sisters asserts that it has standing in this appeal because it is at risk of harm under the preliminary injunction in question, irrespective of an injunction from the District Court of Colorado. Pennsylvania counters that Little Sisters does not have standing in this appeal because the Colorado District Court’s injunction protects Little Sisters from any harm caused by the preliminary injunction in question. The outcome of this case has heavy implications for the separation of powers, religious freedom, and individual rights.

Questions as Framed for the Court by the Parties

(1) Whether a litigant who is directly protected by an administrative rule and has been allowed to intervene to defend it lacks standing to appeal a decision invalidating the rule if the litigant is also protected by an injunction from a different court; and (2) whether the federal government lawfully exempted religious objectors from the regulatory requirement to provide health plans that include contraceptive coverage.

Facts

In 2010, Congress passed the Patient Protection and Affordable Care Act (“ACA”), which included the Women’s Health Amendment mandating that insurance issuers cover women’s preventive health care. Pennsylvania v. President U.S. at 555. The Health Resources and Services Administration (“HRSA”), with assistance from the Institute of Medicine, (“the Institute”), 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.” Id. at 555–56. The guidelines were collectively deemed the “Contraceptive Mandate.” Id. at 556.

At the same time, the Departments of Health and Human Services, Labor, and the Treasury (collectively, “the Agencies”) promulgated an interim final rule (“IFR”) to exempt certain religious employers from the Contraceptive Mandate. Id. The Agencies adopted the IFR as a final rule in 2013, creating an “Accommodation” to the Contraceptive Mandate. Id. at 556–57. The Accommodation can be provided to a (1) nonprofit (2) religious organization that (3) opposes some or all contraceptives based on religious objections and (4) self-certifies to the prior three requirements. Id. The self-certification form must be sent to the organization’s insurance issuer, which may then exclude contraceptive coverage from the health plan either in full or in part. Id. The insurance issuer must “provide payments for contraceptive services” apart from the group plan without imposing any fee. Id.

After two Supreme Court cases, Burwell v. Hobby Lobby Stores, Inc. (which extended the Accommodation to closely held organizations with religious objections) and Wheaton College v. Burwell (which allowed a notification to HHS to substitute for the Accommodation form), the Agencies promulgated another IFR followed by a final rule. Id. at 557–58. The new final rule extended the Accommodation option to non-public, for-profit entities that are “majority-owned” by a small number of people and have religious objections to the Contraceptive Mandate. Id. at 558.

In 2017, President Donald Trump signed an executive order directing the Agencies to “consider issuing amended regulations” for “conscience-based objections” to the Contraceptive Mandate. Id. The Agencies then issued two more IFRs without a notice-and-comment period. Id. The new IFRs—known as the “Religious IFR” and the “Moral IFR”—expanded the existing Accommodation, made the Accommodation process voluntary, and offered a similar exemption to organizations with moral objections. Id.

In response to the new IFRs, the Commonwealth of Pennsylvania filed a federal lawsuit seeking a preliminary injunction to stop enforcement of the IFRs on the grounds that the Agencies did not follow Administrative Procedure Act (“APA”) requirements in promulgating them and that the ACA does not authorize, nor does the Religious Freedom Restoration Act (“RFRA”), require these rules. Id. at 556, 558–59. After Pennsylvania filed suit, Little Sisters of the Poor Saints Peter and Paul Home (“Little Sisters”) intervened on the ground that the litigation threatened Little Sisters’ exemption. Id. at 559. Later, the District Court for the District of Colorado permanently enjoined enforcement of the Contraceptive Mandate for the benefit plans Little Sisters utilizes. Id. The district court in this case granted the preliminary injunction Pennsylvania sought and the Government appealed. Id.

During the appeals process, the Agencies adopted final rules. Id. The “Religious Exemption” expanded the employers eligible to invoke the exemption to include all nonprofit, for-profit, and publicly held companies and made the Accommodation process voluntary. Id. The “Moral Exemption” granted the exemption and voluntary Accommodation process to nonprofit and non-publicly traded entities with moral objections to the Contraceptive Mandate. Id. Later, Pennsylvania filed an amended complaint adding new challenges, seeking to enjoin the final rules, and adding New Jersey as a plaintiff. Id. at 559–60. On January 14, 2019, the district court issued a nationwide injunction to enjoin the final rules. Id. at 561. On appeal, the United States Court of Appeals for the Third Circuit affirmed the district court’s decision. Id. at 576.

Little Sisters petitioned the United States Supreme Court for certiorari, which the Court granted, consolidating the case with Trump v. Pennsylvania, on January 17, 2020. Brief for Petitioner, Little Sisters of the Poor Saints Peter and Paul Home at 3.

Analysis

PROCEDURAL VALIDITY OF THE FINAL RULES

Petitioners Donald J. Trump, President of the United States, et al. (the “Government”) and Little Sisters of the Poor Saints Peter and Paul Home (“Little Sisters”) assert that the final rules are procedurally valid because the Agencies properly bypassed the notice-and-comment requirements under the APA for the IFRs. Brief for Petitioners, Donald J. Trump, President of the United States, et al. at 31; Brief for Petitioner, Little Sisters of the Poor Saints Peter and Paul Home at 45. Little Sisters notes that while the APA requires agencies to go through a notice-and-comment period, this requirement can be overlooked where agencies show “good cause.” Brief for Little Sisters at 45. Little Sisters and the Government assert that, here, the Agencies had good cause to bypass the APA requirements because the IFRs were issued to halt ongoing violations of civil rights under RFRA and to eliminate uncertainty over the Contraceptive Mandate caused by conflicting lower-court decisions. Brief for Little Sisters at 47; Brief for the Government at 42.

Alternatively, Little Sisters posits that the procedural validity of the IFRs is immaterial in this case because the Agencies did put the final rules—the rules being challenged here—through a notice-and-comment period. Brief for Little Sisters at 47. Little Sisters asserts that putting the final rules through the notice-and-comment period cured any defects that the previous procedures may have had. Id. Little Sisters further argues that the Third Circuit incorrectly concluded that, because there were no material changes between the IFRs and the final rules, the Agencies lacked “open-mindedness” to the comments and therefore the procedural defects in the final rules were not cured by the post-promulgation comments. Id. at 48. To the contrary, Little Sisters contends that “open-mindedness” is a nebulous concept that cannot be gauged simply from the degree of change between the IFRS and the final rules. Id. Therefore, Little Sisters concludes, the final rules are procedurally valid. See id. at 45, 48.

Respondents Commonwealth of Pennsylvania and State of New Jersey (“Pennsylvania”) counter that the final rules are procedurally invalid because the Agencies violated the APA’s notice-and-comment requirement. Brief for Respondents at 18. Pennsylvania concedes that the APA’s notice-and-comment period requirement can be bypassed for “good cause.” Id. at 22. Pennsylvania contends, however, that uncertainty caused by pending litigation is not “good cause,” as claimed by the Petitioners, because every rule is promulgated to eliminate some sort of uncertainty. Id. Similarly, Pennsylvania argues that ongoing violations of civil rights cannot serve as “good cause” because the Agencies have the power to create a “safe harbor” from the Contraceptive Mandate to protect religious objectors while promulgating the final rules through proper procedures. Id. at 23. Therefore, Pennsylvania concludes, none of the reasons put forth by Little Sisters qualify as “good cause” to override the APA requirements. Id. at 22.

Furthermore, according to Pennsylvania, the purpose of APA’s notice-and-comment procedure is to give affected parties “an opportunity to be heard” regarding a proposed rule and to ensure that agencies “make a more informed decision.” Id. at 25. Pennsylvania argues that the notice-and-comment period between the promulgation of the IFRs and final rules here does not satisfy that purpose because the final rules are simply an extension of the invalid IFRs—a fact Pennsylvania asserts is proven by the lack of any material change between the IFRs and the final rules. Id. at 27. Pennsylvania contends that such an absence of any meaningful change signifies that the final rules lack the open-mindedness that the APA’s notice-and-comment requirement aims for. Id. Therefore, Pennsylvania concludes, the final rules are procedurally invalid because the Agencies violated the APA’s notice-and-comment requirement and this violation was not cured by the post-promulgation notice-and-comment period. See id. at 29.

AUTHORIZATION FOR THE EXEMPTIONS

The Government and Little Sisters assert that both the ACA and RFRA authorize the Agencies to create exemptions from the Contraceptive Mandate. Brief for the Government at 15; Brief for Little Sisters at 28. The Government argues that the ACA’s plain text authorizes the Agencies to decide who should be exempted from ACA’s preventive-care coverage. Brief for the Government at 15–16. The Government points out that, while the Agencies cannot decide who falls under the ACA’s various other coverage categories, there is a clear difference in wording between other categories of coverage and the preventive-care category. Id. at 16. The Government posits that this difference in wording acknowledges the religious sensitivity towards contraception and permits the Agencies to create exemptive rules from the preventive-care category. Id.

Additionally, the Government argues that RFRA authorizes the Agencies to create the challenged exemptions. Id. at 27. The Government explains that RFRA aims to prevent the imposition of unnecessary substantial burdens on religious exercise. Id. at 27–28. The Government continues that when an agency determines that it has substantially and unnecessarily burdened religious exercise, the agency has a duty to revise its laws to comply with RFRA. Id. According to the Government, the Contraceptive Mandate, even with the Accommodation, burdens religious exercise because religious objectors must either notify their objection, which creates alternative provisions for contraception coverage, or risk facing fines. Id. at 23. The Government contends that the final rules promulgated by the Agencies alleviate this burden and bring the ACA in conformity with RFRA. Id. at 25. Alternatively, the Government points out that while RFRA creates private rights of action, there is nothing in RFRA that prevents Agencies from rectifying violations of it. Id. at 29–30. Therefore, the Government concludes, RFRA permits the Agencies to promulgates the rules in question. Id. at 27.

Pennsylvania counters that the ACA does not authorize the Agencies to create exemptions from the Contraceptive Mandate. Brief for Respondents at 29. Pennsylvania asserts that the ACA only empowers the Agencies to decide what services are covered under preventive care—not who has to comply with the ACA. Id. While there is a difference in the wordings between the preventive-care category and other coverage categories in the ACA, Pennsylvania explains that this difference arises from the timing of formulation of the supporting guidelines and not from a Congressional intent to grant the Agencies additional powers. Id. at 31–32. Moreover, Pennsylvania points out, Congress already considered and rejected the very exemption promulgated by the final rules when creating the ACA. Id. at 33.

Pennsylvania likewise contends that RFRA does not allow the Agencies to create exemptions and, furthermore, that the Contraceptive Mandate does not violate RFRA. Id. at 36. According to Pennsylvania, RFRA does not confer any power to create exemptive rules; rather, it simply creates a private right of action. Id. at 48. Under RFRA, Pennsylvania asserts, only courts have the power to decide whether a law unconstitutionally burdens the religious freedoms of the parties. Id. at 25. Thus, Pennsylvania argues that the Agencies cannot pronounce that the Accommodation burdens religious objectors and creates an exemption to the ACA based on the Agencies’ own finding. Id. at 49. Moreover, Pennsylvania asserts that the Accommodation itself brings the ACA in compliance with RFRA. Id. at 38–40. Pennsylvania explains that the Accommodation allows religious objectors to notify the government of their objections and remove contraceptive care from their coverage plans. Id. Therefore, Pennsylvania concludes, neither the ACA nor RFRA grant the Agencies power to create the exemptions in question. Id. at 25.

DOES LITTLE SISTERS HAVE STANDING TO CHALLENGE THE PRELIMINARY INJUNCTION?

Little Sisters asserts that it has Article III standing to challenge the preliminary injunction against the final rules because the preliminary injunction affects Little Sisters in a “personal and individual way,” even with a separate injunction from another court purportedly protecting Little Sisters. Brief for Little Sisters at 24. Little Sisters asserts that it has a stake in this appeal because it has been litigating against the Contraceptive Mandate for years and the final rules provide the permanent relief Little Sisters seeks. Id. Furthermore, Little Sisters argues that the separate injunction from the District Court of Colorado will not protect it from the preliminary injunction here because the district court’s injunction only exempts Little Sisters’ current health plan—any change in that plan will bring them back under the Contraceptive Mandate and its Accommodation. Id. Lastly, Little Sisters contends that it intervened merely to support the Government and “sought the same relief” as the Government; therefore, the lower court need not inquire into Little Sisters’ standing because such an inquiry is necessary only when the intervenor seeks relief separate of the primary party. Id. at 25–26. As such, Little Sisters concludes that it has Article III standing in the current appeal before the Supreme Court. Id. at 23.

Pennsylvania counters that Little Sisters has no standing because of the injunction from the District Court of Colorado. Brief for Respondents at 55. Pennsylvania asserts that the separate injunction entered in the district court exempts Little Sisters from the Contraceptive Mandate and therefore renders Little Sisters unaffected by the preliminary injunction against the final rules. Id. at 55–56. Pennsylvania contends that simply having personal grievances against the outcome in the lower court is not enough to grant Little Sisters standing because federal courts do not exist for mere “ventilation of public grievances.” Id. Furthermore, Pennsylvania argues that Little Sisters’ claim that it may be harmed by the preliminary injunction in question if it decides to change its health plans is forfeited because Little Sisters failed to raise that claim in the lower court. Id. at 56. Lastly, Pennsylvania points out that Little Sisters is not merely “supporting” the Government in its claim for relief; rather, Little Sisters filed a separate appeal which led to one of the consolidated cases here. Id. Therefore, Pennsylvania concludes, Little Sisters does not have standing in this appeal. Id. at 55.

Discussion

SEPARATION OF POWERS AND AGENCY AUTHORITY CONCERNS

The New Civil Liberties Alliance (“NCLA”), in support of the Government and Little Sisters, opines that both the Contraceptive Mandate and the final rules in this case are unconstitutional delegations of legislative authority by Congress to the Agencies, but that in such a situation, courts should uphold the agency action that least restrains individual liberty. Brief of Amicus Curiae The New Civil Liberties Alliance, in Support of Petitioners at 8–9. The NCLA contends that the final rules are the least restrictive because, by expanding religious exemptions, the final rules decrease the impact of the Contraceptive Mandate. Id. at 9. The NCLA further contends that interpreting the ACA to allow the Agencies to impose restraints without the ability to provide relief from those restraints would deprive Americans of their constitutional right to be bound by laws made by elected representatives and subject them to the harsh rule of bureaucratic agencies. Id. at 17. The Center for Constitutional Jurisprudence (“CCJ”) agrees, adding that the First Amendment was meant to protect the right to exercise religion “according to the dictates of the individual’s conscience.” Brief of Amicus Curiae Center for Constitutional Jurisprudence, in Support of Petitioners at 12. The CCJ thus contends that to permit the Contraceptive Mandate without an exemption for conscious-based objections is possibly an unconstitutional violation of the First Amendment. See id. at 14.

Child USA et. al., in support of Pennsylvannia, argues that the new rulemaking to avoid the Accommodation process violates separation of powers principles by permitting the Executive branch expansive authority over the interpretation of the law. Brief of Amici Curiae Child USA et. al., in Support of Respondents at 20. Child USA further contends that RFRA was not implemented to permit religious observers to avoid the law by permitting federal agencies to enact far-reaching rules that take the place of judicial case-by-case determination. Id. at 23. Moreover, Child USA notes that such an interpretation of RFRA violates the Establishment Clause because it allows the government to preference religious objectors over other individuals. Id. Child USA posits that such an interpretation could have the expansive effects of allowing the Executive Branch to infringe on other branches’ constitutionally granted powers and permitting religious entities a unilateral exemption from a law. Id. at 24. Furthermore, the Yale Law School Program for the Study of Reproductive Justice, also in support of Pennsylvania, contends that the agency rulemaking was not statutorily authorized and would expressly violate Congress’ intent in passing the ACA of “combat[ing] sex discrimination.” Brief of Amicus Curiae Yale Law School Program for the Study of Reproductive Justice, in Support of Respondents at 21.

BALANCING RELIGIOUS FREEDOM AND WOMEN’S RIGHTS

Christian Business Owners Supporting Religious Freedom (“Christian Business Owners”), in support of the Government and Little Sisters, argues that forcing Little Sisters to file for the Accommodation violates Little Sisters’ religious beliefs by making it complicit in the act of providing contraceptive services to individuals. Brief of Amicus Curiae Christian Business Owners Supporting Religious Freedom (“Christian Business Owners”), in Support of Petitioners at 12, 14. Christian Business Owners further contends that access to contraceptives could be handled differently without requiring Little Sisters to file for an Accommodation. Id. at 18. Christian Business Owners note that women could gain access to contraceptives through government grants, for instance, rather than forcing employers to cooperate with the Accommodation requirement. Id. Additionally, the Christian Legal Society and National Association of Evangelicals, also in support of the Government and Little Sisters, argue that religious beliefs and practices must be free from governmental definition because the government determining what religious beliefs and practices are permissible violates the First Amendment. Brief of Amici Curiae Christian Legal Society and National Association of Evangelicals, in Support of Petitioners at 20. A group of Constitutional Law Scholars agrees, noting that disallowing religious exemptions would allow the government a larger role in individual religious choices, violating the requirement of separation of church and state. Brief of Amicus Curiae Constitutional Law Scholars, in Support of Petitioners at 20.

The American Civil Liberties Union et. al. (“ACLU”), in support of Pennsylvania, counters that the exemption would invoke religion to deny equal treatment to women, which itself violates the First Amendment by favoring religious organizations over others. Brief of Amicus Curiae American Civil Liberties Union et. al., in Support of Respondents at 9. Specifically, the ACLU notes that religious exemptions would directly burden third parties by permitting employers and universities to discriminate based on gender. Id. at 12, 15. Additionally, the Center for Health Law and Policy Innovation of Harvard Law School, et. al. (“Center for Health Law”), also in support of Pennsylvania, contends that the exemptions would have expansive effects on individual health care needs. Brief of Amici Curiae Center for Health Law and Policy Innovation of Harvard Law School et. al., in Support of Respondents at 7. For example, the Center for Health Law explains that contraceptive access allows people with chronic illnesses to avoid detrimental health issues that could occur through pregnancy. Id. Planned Parenthood Federation of America et. al. (“Planned Parenthood”) agrees, adding that although some individuals could obtain contraceptive coverage through other methods, such as Title X providers, most individuals would still have out-of-pocket costs and many may not qualify for any discounts. Brief of Amici Curiae Planned Parenthood Federation of America, et. al., in Support of Respondents at 12. Lastly, Planned Parenthood notes that Medicaid will not be able to fill the gap for contraceptive coverage that individuals would lose through these exemptions because of “restrictive eligibility requirements.” Id. at 12, 15.