Louisiana v. Biden

55 F.4th 1017

State of LOUISIANA; State of Indiana; State of Mississippi, Plaintiffs—Appellees,

v.Joseph R. BIDEN, Jr., in his official capacity as President of the United States; United States of America; Federal Acquisition Regulatory Council; General Services Administration ; Robin Carnahan, in her official capacity as Administrator of General Services, et al., Defendants—Appellants.

No. 22-30019

United States Court of Appeals, Fifth Circuit.

FILED December 19, 2022

Elizabeth Baker Murrill, Esq., Assistant Attorney General, Office of the Attorney General, for the State of Louisiana, Baton Rouge, LA, for Plaintiffs-Appellees.

David Peters, U.S. Department of Justice, Civil Division, Washington, DC, Jerry Edwards, Jr., U.S. Attorney's Office, Western District of Louisiana, Shreveport, LA, Anna O. Mohan, U.S. Department of Justice, Civil Division, Appellate Section, Washington, DC, for Defendants-Appellants.

Henry Charles Whitaker, Office of the Attorney General, for the State of Florida, Tallahassee, FL, for Amici Curiae State of Florida, State of Alaska, State of Arizona, State of Arkansas, State of Georgia, State of Idaho, State of Iowa, State of Kansas, State of Kentucky, State of Missouri, State of Montana, State of Nebraska, State of Ohio, State of Oklahoma, State of South Carolina, State of Tennessee, State of Texas, State of Utah, State of West Virginia.

Scott A. Keller, Lehotsky Keller, L.L.P., Austin, TX, for Amicus Curiae Chamber of Commerce of the United States of America.

Before Graves, Willett, and Engelhardt, Circuit Judges.

Kurt D. Engelhardt, Circuit Judge:

The President asks this Court to ratify an exercise of proprietary authority that would permit him to unilaterally impose a healthcare decision on one-fifth of all employees in the United States. We decline to do so. Thus, we AFFIRM the preliminary injunction issued by the district court.

I. Background

As part of his efforts to combat the COVID-19 pandemic, President Biden issued a series of sweeping vaccination mandates. This Court has had occasion to consider at least two of them – namely, the OSHA-issued mandate which covered private employers with more than 100 employees, heard in BST Holdings, L.L.C. v. Occupational Safety & Health Admin., United States Dep't of Lab. , 17 F.4th 604 (5th Cir. 2021),¹ and the President's mandate covering government employees (which this Court recently heard en banc in Feds for Medical Freedom v. Biden , Case No. 22-40043). This case concerns another mandate that would, with limited exceptions, require the government to include in its contracts a clause that would require federal contractors to ensure that their entire workforce is fully vaccinated against COVID-19.

This challenge concerns four actions that together constitute the "federal contractor mandate." The first is an Executive Order issued by the President on September 9, 2021.² President Biden ordered that "in order to promote economy and efficiency in procurement by contracting with sources that provide adequate COVID-19 safeguards for their workplace," government contracts must include a clause specifying "that the contractor and any subcontractors ... shall, for the duration of the contract, comply with all guidance for contractor or subcontractor workplace locations published by the Safer Federal Workforce Task Force [the "Task Force"] ..., provided that the Director of the Office of Management and Budget ... approves the Task Force Guidance."³

The second challenged action consists of guidance issued by the Task Force on September 24, 2021, which required "[c]overed contractors [to] ensure that all covered contractor employees are fully vaccinated for COVID-19, unless the employee is legally entitled to an accommodation[,] ... no later than December 8, 2021."⁴ The Task Force guidance was not self-executing; rather, it required ratification by the Office of Management and Budget ("OMB") to take effect.

As required by the Executive Order, the OMB Director issued a short finding that the Task Force guidance "will improve economy and efficiency by reducing absenteeism and decreasing labor costs for contractors and subcontractors working on or in connection with a Federal Government contract."⁵ This finding was issued on September 28, 2021. Shortly after this lawsuit was filed, OMB rescinded its initial finding and issued instead a longer finding (the "OMB Determination") which reached the same conclusion with far more support.⁶ This latter OMB Determination constitutes the third action herein challenged.

The fourth challenged action is a memorandum issued by members of the Federal Acquisition Regulation (FAR) Council (the "FAR Memo") in which federal agencies were urged to "act expeditiously to issue ... deviations [to their prescribed contractual clauses] so that their contracting officers may begin to apply the clause on or before October 15[, 2021]."⁷ In line with the President's Executive Order, the example clause suggested in the FAR Memo requires the signatory to "comply with all guidance, including guidance conveyed through Frequently Asked Questions, as amended during the performance of this contract, ... published by the Safer Federal Workforce Task Force."⁸

Together, these four actions require nearly all federal contractors, either immediately (in the case of new contracts or by consented-to changes to old contracts) or at the soonest opportunity, to consent to a contractual clause obliging them to follow guidance from the Task Force. The primary element of that guidance – at least for the moment, as the guidance is subject to amendment – is a mandate that contractors ensure that their employees become fully vaccinated against COVID-19.

The President's Executive Order purports to exercise authority given to the President under the Federal Property and Administrative Services Act of 1949, known as the "Procurement Act."⁹ The Procurement Act states that its purpose "is to provide the Federal Government with an economical and efficient system" for procurement, contracting, and other related activities.¹⁰ It also enables the President to "prescribe policies and directives that the President considers necessary to carry out this subtitle," provided that "[t]he policies must be consistent with this subtitle."¹¹

The Congressionally-created FAR Council, meanwhile, "assist[s] in the direction and coordination of Government-wide procurement policy and Government-wide procurement regulatory activities in the Federal Government."¹² Generally speaking, the FAR Council has exclusive authority to "issue and maintain ... a single Government-wide procurement regulation, to be known as the Federal Acquisition Regulation."¹³ Finally, the Procurement Policy Act generally requires that "a procurement policy, regulation, procedure, or form ... may not take effect until 60 days after it is published for comment" unless "urgent and compelling circumstances make compliance with the requirements impracticable."¹⁴

II. Procedural History

Three states – Louisiana, Indiana, and Mississippi (the "Plaintiff States") – brought suit in the Western District of Louisiana against President Biden in his official capacity to seek invalidation of this mandate. These states brought suit in their capacities as federal contractors themselves. They sought and were granted a preliminary injunction and stay by the district court.

In evaluating the request for a preliminary injunction, the district court first found that the states had Article III standing as they faced a choice between complying with the mandate and potentially losing members of their workforce or becoming ineligible to bid on or renew federal contracts.

Next, the district court reviewed the familiar four factors which govern grants of a preliminary injunction: "(1) a likelihood of success on the merits; (2) a substantial threat of irreparable injury; (3) that the threatened injury if the injunction is denied outweighs any harm that will result if the injunction is granted; and (4) that the grant of an injunction will not disserve the public interest." Ladd v. Livingston , 777 F.3d 286, 288 (5th Cir. 2015) (quoting Trottie v. Livingston , 766 F.3d 450, 451 (5th Cir. 2014) ).

In finding that the states' suit was likely to succeed, the district court first expressed its concern "that EO 14042 conflicts with the Tenth Amendment," as " EO 14042, although supported upon a nexus of economy and efficiency, was clearly and unequivocally motivated by public health policy first and foremost." "Our Constitution principally entrusts ‘[t]he safety and the health of the people’ to the politically accountable officials of the states." S. Bay United Pentecostal Church v. Newsom , ––– U.S. ––––, 140 S. Ct. 1613, 207 L.Ed.2d 154 (2020) (mem.) (Roberts, C.J., concurring) (quoting Jacobson v. Massachusetts , 197 U.S. 11, 38, 25 S.Ct. 358, 49 L.Ed. 643 (1905) ). Thus, the district court explained, this mandate falls afoul of the Tenth Amendment's reservation of such power to the states.

The district court also found that the elements of the mandate are procedurally invalid. First, the district court found that there were no "urgent and compelling circumstances"¹⁵ to justify dispensing with the otherwise required notice-and-comment period. Even assuming, arguendo , that the notice-and-comment requirement could be overruled, the district court held that the FAR Memo "clearly and unequivocally appl[ied] beyond EO 14042's authorized scope" and was thus unlawful. And while the OMB Determination included a shortened notice-and-comment period which arguably "adhere[d] to the text" of the statute, the district court found that since "[c]ompliance requires action by employees weeks before the effective date to obtain a fully vaccinated status," "the actions of the OMB circumvent the protections envisioned under the APA."

The district court then held that the states had shown irreparable harm in the form of "nonrecoverable compliance costs," Texas v....