Am. Coll. of Pediatricians v. Becerra

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AMERICAN COLLEGE OF PEDIATRICIANS, et al., Plaintiffs, v. XAVIER BECERRA, in his official capacity as Secretary of the United States Department of Health and Human Services, et al., Defendants.

No. 1:21-cv-195

United States District Court, E.D. Tennessee, Chattanooga

November 18, 2022

Magistrate Judge Susan K. Lee

MEMORANDUM OPINION

TRAVIS R. MCDONOUGH, UNITED STATES DISTRICT JUDGE

Before the Court is Defendants' motion to dismiss Plaintiffs' complaint (Doc. 51), which challenges various actions taken by Defendant United States Department of Health and Human Services (“HHS”). For the following reasons, the Court will GRANT the motion (Doc. 51).

I. BACKGROUND

A. Section 1557 Implementing Regulations

Congress has largely forbidden discrimination on the basis of sex in healthcare. Section 1557 of the Affordable Care Act (“ACA”) [hereinafter “Section 1557”] provides that

an individual shall not, on the ground prohibited under title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.) . . . be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any health program or activity, any part of which is receiving Federal financial assistance....

42 U.S.C. § 18116(a). Title IX of the Education Amendments of 1972, 20 U.S.C. 1681 et seq., prohibits discrimination “on the basis of sex” in “any education program or activity receiving Federal financial assistance....” 20 U.S.C. § 1681(a). Title IX also contains a religious exemption, which states that “this section shall not apply to an educational institution which is controlled by a religious organization if the application of this subsection would not be consistent with the religious tenets of such organization[.]” Id.

i. 2016 Rule and Subsequent Litigation

On May 18, 2016, HHS promulgated a final rule that defined discrimination “on the basis of sex” to include discrimination on the basis of gender identity. Nondiscrimination in Health Programs and Activities, 81 Fed.Reg. 31,375-01, 31,467 (May 18, 2016) (formerly codified at 45 C.F.R. § 92.4) [hereinafter the “2016 Rule”]. According to that rule, “[o]n the basis of sex includes, but is not limited to, discrimination on the basis of pregnancy, false pregnancy, termination of pregnancy, or recovery therefrom, childbirth or related medical conditions, sex stereotyping, and gender identity.” Id.

The 2016 Rule also defines “gender identity,” “gender expression,” and “transgender”:

Gender identity means an individual's internal sense of gender, which may be male, female, neither, or a combination of male and female, and which may be different from an individual's sex assigned at birth. The way an individual expresses gender identity is frequently called “gender expression,” and may or may not conform to social stereotypes associated with a particular gender. A transgender individual is an individual whose gender identity is different from the sex assigned to that person at birth.

Id. The 2016 Rule incorporates these definitions into its provisions that prohibit discrimination on the basis of sex:

(ii) A covered entity may not, directly or through contractual or other arrangements, utilize criteria or methods of administration that have the effect of subjecting individuals to discrimination on the basis of sex, or have the effect of defeating or substantially impairing accomplishment of the objectives of the program with respect to individuals on the basis of sex.

(iii) In determining the site or location of a facility, a covered entity may not make selections that have the effect of excluding individuals from, denying them the benefits of, or subjecting them to discrimination under any programs to which this regulation applies, on the basis of sex; or with the purpose or effect of defeating or substantially impairing the accomplishment of the objectives of the program or activity on the basis of sex.

Id. at 31,470 (formerly codified at 45 C.F.R. § 92.101). An additional provision specifically requires medical providers to treat patients consistent with their gender identity and to allow equal access to gendered medical services regardless of an individual's sex assigned at birth or gender identity:

A covered entity shall provide individuals equal access to its health programs or activities without discrimination on the basis of sex; and a covered entity shall treat individuals consistent with their gender identity, except that a covered entity may not deny or limit health services that are ordinarily or exclusively available to individuals of one sex, to a transgender individual based on the fact that the individual's sex assigned at birth, gender identity, or gender otherwise recorded is different from the one to which such health services are ordinarily or exclusively available.

Id. at 31,472 (formerly codified at 45 C.F.R. § 92.206).

The 2016 Rule also expressly states that HHS would not interpret Title IX's religious exemption to have been incorporated into Section 1557. Id. at 31,380. HHS reasoned that incorporating Title IX's “blanket” religious exemption could result in denial, delay, or discouragement of individuals seeking necessary medical care and that “Section 1557 itself contains no religious exemption. In addition, Title IX and its exemption are limited in scope to educational institutions, and there are significant differences between the educational and healthcare contexts that warrant different approaches.” Id. Nonetheless, the 2016 Rule stated that “[i]nsofar as the application of any requirement under this part would violate applicable Federal statutory protections for religious freedom and conscience, such application shall not be required.” Id. at 31,466 (formerly codified at 45 C.F.R. § 92.2).

In Franciscan Alliance, Inc. v. Burwell, 227 F.Supp.3d 660 (N.D. Tex. 2016) [hereinafter “Franciscan Alliance I”], the district court held that the 2016 Rule's expansion of sex discrimination to include gender-identity and termination-of-pregnancy discrimination violated the Administrative Procedures Act (“APA”), 5 U.S.C. § 533, et seq. The court reasoned that Title IX, which is incorporated by reference into Section 1557 of the ACA, unambiguously excluded gender-identity and termination-of-pregnancy discrimination from its definition of sex discrimination. 227 F.Supp.3d at 689-691. In a later decision in the same case, the court concluded that the 2016 Rule also violated the Religious Freedom Restoration Act (“RFRA”), 42 U.S.C. § 2000bb, et seq. Franciscan All., Inc. v. Azar, 414 F.Supp.3d 928, 943 (N.D. Tex. 2019) [hereinafter “Franciscan Alliance II”]. The court came to this conclusion after finding that: (1) the 2016 Rule placed substantial pressure on the plaintiffs to perform, refer, or cover gender-transition and abortion procedures, which imposed a substantial burden on their religious exercise; (2) the Government did not advance any compelling interest to justify such a burden, and the plaintiffs disputed that one existed; and (3) even if the Government had a compelling interest, it failed to show that the 2016 Rule employed the least restrictive means to advance such an interest. Id.

As a result, the court in Franciscan Alliance II vacated relevant portions of the 2016 Rule^[1]-defining sex discrimination to include gender-identity and termination-of-pregnancy discrimination-and remanded the rule to HHS for further consideration in light of the opinion. Id. at 945. However, the Franciscan Alliance II court declined to enter a nationwide permanent injunction against HHS's enforcement of the 2016 Rule, because it doubted such an injunction would have any meaningful practical effect independent of the outright vacatur of that rule. Id. at 945-46. Instead, the court “invit[ed] Plaintiffs to return if further relief independent of vacatur is later warranted.” Id. at 946. The Franciscan Alliance II opinion was entered on October 15, 2019. The religious-medical-provider plaintiffs in Franciscan Alliance II appealed the decision insofar as it denied permanent injunctive relief. Franciscan All., Inc. v. Becerra, 843 Fed.Appx. 662, 662 (5th Cir. 2021) [hereinafter “Franciscan Alliance III”].

ii. 2020 Rule and Subsequent Litigation

a. 2020 Rule

On June 19, 2020, HHS promulgated a final rule that rescinded the 2016 Rule's provisions that defined sex discrimination as including pregnancy, false pregnancy, termination of pregnancy, or recovery therefrom, childbirth or related medical conditions, sex-stereotyping, and gender identity. Nondiscrimination in Health Education Programs or Activities, Delegation of Authority, 85 Fed.Reg. 37,160-01, 37,162 (June 19, 2020) [hereinafter the “2020 Rule”]. The 2020 Rule “decline[d] to replace [the 2016 Rule definition of sex discrimination] with a new regulatory definition. Instead, the final rule reverts to, and relies upon, the plain meaning of the term in the statute.” Id. at 37,178. The 2020 Rule's language regarding discrimination on the basis of sex mirrors Section 1557, simply incorporating Title IX by reference:

(a) . . . [A]n individual shall not, on any of the grounds set forth in paragraph (b) of this section, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any health program or activity, any part of which is receiving Federal financial assistance (including credits, subsidies, or contracts of insurance) provided by the U.S. Department of Health and Human Services or under any program or activity administered by the Department under such Title; or under any program or activity administered by any entity established under such Title.

(b) The grounds are the grounds prohibited under the following statutes:

(1) Title VI of the Civil Rights Act of

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