Mont. Med. Ass'n v. Knudsen

591 F.Supp.3d 905

MONTANA MEDICAL ASSOCIATION, et al., Plaintiffs,andMontana Nurses Association, Plaintiff-Intervenor,

v.Austin KNUDSEN, et al., Defendants.

CV 21-108-M-DWM

United States District Court, D. Montana, Missoula Division.

Signed March 18, 2022

Attorneys for Plaintiffs: Justin K. Cole, Kathryn Mahe, GARLINGTON LOHN & ROBINSON, PLLP, Missoula, MT.

Attorney for Intervenor Plaintiff: Raphael Graybill, Graybill Law Firm, PC, Great Falls, MT.

Attorneys for Defendants: Alwyn Lansing, Brent Adam Mead, David M.S. Dewhirst, Christian B. Corrigan, Montana Department of Justice, Helena, MT, Emily E. Jones, JONES LAW FIRM, PLLC, Billings, MT.

OPINION and ORDER

Donald W. Molloy, District Judge

This case challenges parts of Mont. Code Ann. §§ 49–2–312 and 49–2–313. In short, the former statute prohibits persons and entities—with limited exceptions—from withholding goods, services, or employment "based on the person's vaccination status or whether the person has an immunity passport."¹ The latter statute then exempts certain facilities from § 49–2–312, such as licensed nursing homes, long-term care facilities, or assisted living facilities (collectively, "Exempted Facilities"). In light of this statutory scheme, multiple parties sued Austin Knudsen, in his official capacity as the Montana Attorney General, and Laurie Esau, in her official capacity as the Montana Commissioner of Labor and Industry (collectively "Defendants"). The plaintiffs include multiple private physician offices, the Montana Medical Association, and multiple individuals. The Montana Nurses Association ("the Nurses") appeared in this case as a plaintiff-intervenor, (the plaintiffs and the Nurses are collectively referred to as "Plaintiffs"). Plaintiffs now seek to preliminarily enjoin enforcement of §§ 49–2–312 and 49–2–313. A motion hearing and argument occurred on March 3, 2022. For the reasons stated below, the motion for a preliminary injunction is granted in part and denied in part.

BACKGROUND

I. Montana's Statutory Scheme

In early 2021, the Montana Legislature passed Montana House Bill 702. (Doc. 14 at ¶ 3.) House Bill 702 is codified at §§ 49–2–312 and 49–2–313. Section 49–2–312 is entitled "Discrimination based on vaccination status or possession of immunity passport prohibited – definitions." In sum, it makes it "an unlawful discriminatory practice" for any person, governmental entities, or public accommodation to deny benefits or services or condition such benefits or services "based on a person's vaccination status or whether the person has an immunity passport." § 49–2–312(1). An "immunity passport" is "a document, digital record, or software application indicating that a person is immune to a disease, either through vaccination or infection and recovery" while " ‘vaccination status’ means an indication of whether a person has received one or more doses of a vaccine." § 49–2–312(5). The statute specifically exempts schools from its requirements, and it permits "health care facility[ies], as defined in 50–5–101" to ask an employee or volunteer for their vaccination status, but the employee or volunteer need not answer such inquiry. § 49–2–312(2), (3). For the purposes of § 49–2–312, a "health care facility" is a term that "does not include offices of private physicians, dentists, or other physical or mental health care workers regulated under Title 37, including licensed addiction counselors." § 50–5–101(26) (emphasis added). A non-answer to a vaccine inquiry may be treated as an indication that an employee or volunteer is not vaccinated, and that indication may inform an employer's decision to implement reasonable accommodations. § 49–2–312(3). The statute also prohibits private employers and others from imposing the requirement of any vaccine that is authorized under an "emergency use" designation. § 49–2–312(4).

The Exempted Facilities are included in § 49–2–313. Exempted Facilities are "exempt from compliance with 49–2–312 during any period of time that compliance with 49–2–312 would result in a violation of regulations or guidance issued by the centers for medicare and medicaid services or the centers for disease control and prevention." § 49–2–313.

II. Federal Regulation

The Centers for Medicare and Medicaid Services ("CMS") is the agency responsible for establishing health and safety standards with which healthcare facilities must comply in order to receive federal Medicare and Medicaid funding.² 86 Fed. Reg. 61,555, 61,556 (Nov. 5, 2021). "CMS contracts ... with State Survey Agencies to conduct surveys (inspections) for these oversight and compliance determinations." (Doc. 51-1 at ¶ 4.) These surveys are unannounced, and they include investigations of the facility—including a review of books and records—and interviews of staff and patients. (Id. ¶ 8.) The findings from state surveys are certified to CMS, and when a facility is found to be out of substantial compliance with one or more of the applicable federal regulations, a "Statement of Deficiencies" issues detailing the findings of non-compliance. (Id. ¶ 10.) The noncompliant facility then has ten days to respond with a "Plan of Correction" for each deficiency, and if the facility fails to come into compliance with the relevant CMS regulation, CMS determines the appropriate penalty. ( Id. )

In November 2021, the CMS issued an interim final rule entitled "Medicare and Medicaid Programs; Omnibus COVID-19 Health Care Staff Vaccination" ("Interim Final Rule"). The Interim Final Rule "requires most Medicare- and Medicaid-certified providers and suppliers to ensure that their staff are fully vaccinated for COVID-19." 86 Fed. Reg. at 61,568.³ The Interim Final Rule notes that employers must comply with federal anti-discrimination and civil rights protections, and they must "provide appropriate accommodations, to the extent required by Federal law, for employees who request and receive exemption from vaccination because of a disability, medical condition, or sincerely held religious belief, practice, or observance." Id. at 61,568 –69. Two groups of states⁴ challenged the Interim Final Rule, and district courts in Louisiana and Missouri enjoined it. Biden v. Missouri , ––– U.S. ––––, 142 S. Ct. 647, 651, 211 L.Ed.2d 433 (2022) (per curiam). The Fifth and Eighth Circuits denied the government's request for a stay of the preliminary injunction, and the government successfully appealed the denial of the stay to the Supreme Court. Id.

The Supreme Court determined that the Secretary of Health and Human Services did not exceed his authority in promulgating the Interim Final Rule and determined that the Secretary issued the Interim Final Rule based on his "determin[ation] that a COVID-19 vaccine mandate will substantially reduce the likelihood that healthcare workers will contract the virus and transmit it to their patients." Id. at 652. The Court also cited "conditions of participation" that are routinely imposed on healthcare workers. See id. at 653. The Court noted that "[v]accination requirements are a common feature of the provision of healthcare in America: Healthcare workers are ordinarily required to be vaccinated for diseases such as hepatitis B, influenza, and measles, mumps, or rubella." Id.

Subsequently, on January 14, 2022, CMS issued a memorandum titled "Guidance for the Interim Final Rule" ("the Guidance"). (Doc. 44-1.) The initial page of the memorandum explicitly states that the "guidance in th[e] memorandum specifically applies" to a number of states, including Montana. (Id. at 1.) The Guidance establishes benchmarks for compliance on 30-day, 60-day, and 90-day intervals. (Id. at 3–4.) It also states the penalties for non-compliance. Given that the Guidance was issued on January 14, 2022, the 30-day deadline for compliance was February 13, 2022. To be in compliance with the 30-day benchmark, facilities must demonstrate two things: (1) policies and procedures are in place "for ensuring all facility staff, regardless of clinical responsibility or patient or resident contact are vaccinated for COVID-19" and (2) "100% of staff have received at least one dose of COVID-19 vaccine, or have a pending request for, or have been granted qualifying exemption, or identified as having a temporary delay as recommended by the CDC." (Id. at 3.) If either the first or second requirement is not met, the facility is not in compliance with the Interim Final Rule. (Id. ) If a facility fails to meet the 30-day benchmark—or the 60- or 90-day benchmarks—the facility is subject to "enforcement actions" that include "plans of correction, civil monetary penalties, denial of payment, [or] termination" depending on the extent of the violation and the type of facility. (Id. )

In the week after the Guidance issued, surveys were conducted on seven facilities in Montana: six long-term care facilities and one home health agency. (Doc. 51-1 at ¶ 11.) Five of these facilities were found to be compliant with the Interim Final Rule, while two of the facilities were noncompliant with respect to vaccination deficiencies. (Id. ¶ 13.)

III. Procedural Posture

Previously, Defendants filed a motion to dismiss Plaintiffs’ claims, and that motion was mostly denied. (See Doc. 35.) Subsequently, Plaintiffs filed amended complaints that are materially the same as the previous complaints, but they omit the claims that were dismissed and add an additional claim ("Count VIII"). (Docs. 37, 38.) Count VIII alleges that § 49–2–312 is preempted by 42 C.F.R. Part 482, of which the Interim Final Rule is part, so that § 49–2–312 is invalid and unenforceable as a consequence of the Supremacy Clause of the United States Constitution. (See Doc. 37 at 23–25; see also Doc. 38 at 23–26.)

Plaintiffs now seek relief by joint motion for a preliminary injunction. (Doc. 42.) They argue that a preliminary injunction of §§ 49–2–312 and 49–2–313 is warranted because the Interim Final Rule preempts § 49–2–312. Plaintiffs also argue that an injunction is...