Municipio Autónomo De Ponce v. United States Office of Management & Budget , 809 F.3d 28 ( 2015 )

United States Court of Appeals
For the First Circuit
No. 14-2287
MUNICIPIO AUTÓNOMO DE PONCE; CENTRO DEAMBULANTES CRISTO POBRE,
INC.; LUCHA CONTRA EL SIDA, INC.; INICIATIVA COMMUNITARIA, INC.;
ITCIA HERNÁNDEZ-LABOY; JORGE ORTIZ-TORRES; JOSÉ ALVAREZ-MEDINA;
HOGAR CREA POSADA LA ESPERANZA,
Plaintiffs, Appellees,
v.
UNITED STATES OFFICE OF MANAGEMENT AND BUDGET; BRIAN DEESE,
Acting Director, United States Office of Management and Budget;
UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES; SYLVIA
MATHEWS BURNWELL, Secretary, United States Department of Health
and Human Services; UNITED STATES HEALTH RESOURCES AND SERVICES
ADMINISTRATION; MARY WAKEFIELD, Administrator, Health Resources
and Services Administration,
Defendants, Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. José Antonio Fusté, U.S. District Judge]
Before
Kayatta, Stahl, and Barron,
Circuit Judges.
Jeffrey A. Clair, Attorney, Civil Division, Department of
Justice, with whom Michael S. Raab, Attorney, Civil Division,
Department of Justice, Benjamin C. Mizer, Principal Deputy
Assistant Attorney General, Civil Division, Department of Justice,
and Rosa Emilia Rodríguez-Vélez, United States Attorney, were on
brief, for appellants.
Edgar Hernández Sánchez, with whom Cancio, Nadal, Rivera &
Díaz, P.S.C., was on brief, for appellees.
December 22, 2015
KAYATTA, Circuit Judge. This lawsuit concerns the Ryan
White Comprehensive AIDS Resources Emergency Act ("Ryan White Act"
or the "Act"), Pub. L. No. 101–381, 104 Stat. 576 (1990) (codified
at 42 U.S.C. § 300ff et seq.). Under "Part A" of the Act, the
U.S. Department of Health and Human Services ("HHS") disburses
funding to combat HIV/AIDS infection in metropolitan areas that
are home to more than a specified number of individuals who have
AIDS. 42 U.S.C. § 300ff-11(a). This lawsuit arose because HHS
recently determined that the Ponce metropolitan area no longer has
enough AIDS cases to qualify for continued Part A funding. Joined
by several community health groups, Ponce claims that HHS has
unfairly drawn the boundaries of Ponce's metropolitan area too
narrowly, and that the addition of three adjoining communities
would raise the total number of AIDS cases enough to qualify for
continued funding. Confronted with what it correctly recognized
as largely unhelpful briefing by the parties, the district court
agreed with Ponce in part and declared that the boundaries of the
Ponce area were "unlawful as they now stand." Municipio Autónomo
de Ponce v. U.S. Office of Mgmt. & Budget, 40 F. Supp. 3d 222, 234
(D.P.R. 2014), reconsideration denied, No. 3:14-CV-01502 JAF, 2014
WL 4639896 (D.P.R. Sept. 16, 2014) ("Ponce"). Because we agree
with HHS that Congress can reasonably be said to have dictated
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that HHS use the boundaries that it uses in defining the Ponce
metropolitan area, we reverse.1
I. BACKGROUND
The Act originally defined "metropolitan area" to be "an
area referred to in the HIV/AIDS Surveillance Report of the Centers
for Disease Control and Prevention as a metropolitan area." 42
U.S.C. § 300ff-17(2) (1992); see also id. § 300ff-19(d)(3)
(explicitly adopting the § 300ff-17 definitions for the subsection
relevant to Ponce). When Congress enacted this definition, the
CDC used the Office of Management and Budget's ("OMB") delineations
of geographical Metropolitan Statistical Areas ("MSAs") in its
Surveillance Reports. See Ctr. Disease Control, Dept. Health &
Human. Servs., HIV/AIDS Surveillance Report 21 (Jan. 1990).
Accordingly, the practical effect of the manner in which Congress
defined "metropolitan area" was to require HHS to use as its
metropolitan areas under the Act the MSAs developed by OMB, unless
and until CDC started using some other definition in its
surveillance reports. And CDC has in fact continued to use OMB's
MSAs in its surveillance reports. See, e.g., Ctr. Disease Control,
Dept. Health & Human Servs., HIV/AIDS Surveillance Report 18
1We have expedited this appeal because, according to HHS:
"Funding decisions are typically made by January 15th of each year,
and funds are typically awarded on or about March 1st. Moreover,
once funds are disbursed, HHS's practical ability to recoup
erroneous awards and redistribute them to eligible grantees is
exceedingly limited."
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(July 1993) (hereinafter, "1993 Surveillance Report"); Ctr.
Disease Control, Dept. Health & Human Servs., HIV/AIDS
Surveillance Report 14 (2013).
For its own purposes, OMB has delineated the boundaries
of MSAs (under various names) since the 1940s. See 2010 Standards
for Delineating Metropolitan and Micropolitan Statistical Areas,
75 Fed. Reg. 37,246, 37,246 (June 28, 2010) (hereinafter "2010 MSA
Standards"). OMB's standards for arriving at the delineations and
the MSAs themselves are published decennially in the Federal
Register. See Revised Standards for Defining Metropolitan Areas
in the 1990's, 55 Fed. Reg. 12154-01 (Mar. 30, 1990) (hereinafter,
"1990 MSA Standards"). The delineations are issued according to
OMB's general statutory mandate to "develop and oversee the
implementation of Governmentwide [sic] policies, principles,
standards, and guidelines concerning--(A) statistical collection
procedures and methods; (B) statistical data classification; (C)
statistical information presentation and dissemination; [etc.]."
44 U.S.C. § 3504(e)(3); see also 31 U.S.C. § 1104(d) (overlapping,
similar statutory mandate).
OMB has made it clear that it developed the MSAs to be
used "solely for statistical purposes" and they might not be
suitable for allocating funding. 2010 MSA Standards at 37,246.2
2
See also, e.g., Office of Mgmt. & Budget Bull. No. 15-01,
Revised Delineations of Metropolitan Statistical Areas,
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The CDC, though, does not make the Ryan White Act funding
decisions. Nor did it "select" OMB's MSAs to be used for that
purpose. The CDC uses the MSAs as they were intended: for the
purpose of gathering statistics. It did so before and when the
Act was enacted; and there is no hint in the Act at all that the
CDC needed to set aside its own purposes in selecting how to define
"metropolitan areas."
Under OMB's 1993 delineation used by CDC in its 1993
Report and, thus, used by HHS to award Part A grants in fiscal
year 1994, Puerto Rico was divided into four "metropolitan areas":
the "Combined Metropolitan Area" of San Juan, which includes 38 of
the island's 78 communities, and three other "Metropolitan
Statistical Areas," one of which is comprised of Ponce and five
other communities. As thus delineated, Ponce initially qualified
as eligible to receive funding under the Act. In 1996, however,
Micropolitan Statistical Areas, and Combined Statistical Areas,
and Guidance on Uses of the Delineations of These Areas 3 (2015),
available at https://www.whitehouse.gov/sites/default/files/omb/
bulletins/2015/15-01.pdf ("These areas should not serve as a
general-purpose geographic framework for nonstatistical
activities, and they may or may not be suitable for use in program
funding formulas."); Office of Mgmt. & Budget Bull. No. 13-01,
Revised Delineations of Metropolitan Statistical Areas 3 (2013)
(same language); Standards for Defining Metropolitan and
Micropolitan Statistical Areas, 65 Fed. Reg. 82,228, 82,228 (Dec.
27, 2000) ("Programs that base funding levels or eligibility on
whether a county is included in a Metropolitan or Micropolitan
Statistical Area may not accurately address issues or problems
faced by local populations . . . .").
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Congress raised the eligibility requirements,3 enough so that
Ponce's number of AIDS cases no longer rendered it eligible.
Nevertheless, for a decade Ponce continued to receive funding as
if it were eligible based on a grandfathering provision included
in the 1996 legislation. 42 U.S.C. § 300ff-11(d) (2000), as
amended by Ryan White CARE Act Amendments of 1996, Pub. L. No.
104-146, § 3(d), 110 Stat. 1346, 1347 (1996) (amended 2006, 2009).
In 2006 Congress removed the grandfathering provision,
but Ponce still managed to receive funding under the newly-created
category of "transitional [grant] area[s]." Ryan White HIV/AIDS
Treatment Modernization Act of 2006, Pub. L. No. 109-415, §§ 101,
2609, 120 Stat. 2767, 2768, 2781–83 (2006) (codified in part at 42
U.S.C. § 300ff-19 (2012) (amended 2009)). A transitional grant
area is defined as a metropolitan area "for which there has been
reported to and confirmed by the Director of the Centers for
Disease Control and Prevention a cumulative total of at least
1,000, but fewer than 2,000, cases of AIDS during the most recent
period of 5 calendar years . . . ." Id. Under the current amended
statute, a metropolitan area ceases to be eligible as a
transitional grant area if, in each of three consecutive years, it
fails to have more than 1,000 and less than 2,000 reported AIDS
cases in the preceding five years, id. § 300ff-19(c)(2)(A)(i), and
3 42 U.S.C. §§ 300ff-11(a); (c)(1) (2000).
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fails to have a cumulative total of at least 1,400 living AIDS
cases in the most recent calendar year,4 id. §§ 300ff-
19(c)(2)(A)(ii), (2)(B); see generally County of Nassau v.
Leavitt, 524 F.3d 408 (2d Cir. 2008).
In the 1996 legislation, and then as refined in the 2006
legislation, Congress also froze the boundaries of the
metropolitan areas to be used by HHS. Ryan White Amendments of
1996 § 101. For metropolitan areas that received funding as
"eligible areas" in 2006, "the boundaries of such metropolitan
area shall be the boundaries that were in effect for such area for
fiscal year 1994," 42 U.S.C. § 300ff-11(c)(1), while for
metropolitan areas that become "eligible areas" after fiscal year
2006, "the boundaries of such metropolitan area shall be the
boundaries that are in effect for such area when such area
initially receives funding . . . .," id. § 300ff-11(c)(2). The
2006 amendments, however, did not so directly dictate which year's
boundaries should be used for metropolitan areas like Ponce that
were no longer eligible areas for funding under 42 U.S.C. § 300ff-
11(a), but were instead receiving funding as "transitional areas"
under § 300ff-19. HHS nevertheless applies the same approach to
transitional areas (all of which were once eligible areas), and
4
Unless the grantee had not "[]obligated" at least 95 percent
of the Part A funding it had received in the previous year, in
which case it was required to have 1,500 living AIDS cases that
year. See 42 U.S.C. §§ 300ff-19(c)(2)(A)(ii), (2)(B).
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supports this consistent approach by appealing to administrative
convenience and "continuity of care," noting that acting otherwise
would lead to overlapping "eligible" and "transitional" areas and
confound Congress's scheme. Ponce offers no rejoinder to this
conclusion.5
By fiscal year 2014, the number of cumulative AIDS cases
and the number of living AIDS cases within the Ponce metropolitan
area as delineated in the 1993 OMB MSA had dropped enough for a
long enough period of time that HHS notified Ponce that it no
longer qualified for transitional funding.6 Ponce thereupon filed
this lawsuit, arguing that HHS must expand its delineation of
Ponce's boundaries to include three additional municipalities7 and
that, as thus expanded, Ponce would have enough AIDS cases to
5 Nor, for that matter, does Ponce argue that it would qualify
for funding under any subsequent MSA delineations adopted by CDC
or OMB. In fact, the 1993 boundaries of the Ponce MSA appear to
be the same as those most-recently promulgated by OMB in 2010 and
revised in 2015, save for the more recent addition of only the
municipality of Guánica. Compare Office of Mgmt. & Budget,
Metropolitan Areas and Components 21 (June 30, 1993), with Office
of Mgmt. & Budget Bull. No. 15-01, supra n.2, at 45.
6 Ponce may well have failed to qualify earlier were it not
for additional grandfathering provisions added by Congress in 2006
and 2009, meaning that metropolitan areas that were eligible areas
in 2010 (or 2007) but not in 2011 (or 2008) became transitional
grant areas without regard to the number of AIDS cases they had.
See 42 U.S.C. § 300ff-19(c)(1) (2008), as amended by Ryan White
Modernization Act of 2006 § 2609; 42 U.S.C. § 300ff-19(c)(1)(2012),
as amended by Ryan White HIV/AIDS Treatment Extension Act of 2009,
Pub. L. No. 111-87, § 4(a)(1), 123 Stat. 2885, 2889 (Oct. 30,
2009).
7 Namely, the municipalities Adjuntas, Santa Isabel, and
Coamo.
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continue to qualify. In support of this argument, Ponce presented
the report of a management consultant, who opined that defining
Ponce's boundaries in that manner would be consistent with OMB's
standards.
Sympathetic to Ponce's request, the district court
concluded that HHS acted arbitrarily and capriciously in employing
the MSAs to define the "metropolitan area" of Ponce because HHS
has no records that would demonstrate this was "a rational exercise
of deliberative decision making." Ponce, 40 F. Supp. 3d at 231
(quoting Associated Fisheries of Me., Inc. v. Daley, 127 F.3d 104,
111 (1st Cir. 1997)). The district court also decided that HHS's
methodology for defining metropolitan areas in Puerto Rico was
unfair and discriminatory because HHS used boundaries for
metropolitan areas in New England "that were different from the
OMB MSAs." Id. at 229. The court issued an order requiring HHS
to develop a new definition of the Ponce metropolitan area that
would more adequately address the factors that the district court
believed needed to be addressed. Id. at 233.
II. ANALYSIS
While a court might, we assume, order relief if HHS
refused to use the boundaries Congress told it to use, there is in
this legislative scheme no license for a court to tell HHS not to
use what Congress said to use: those boundaries that were "in
effect for such area for fiscal year 1994" (i.e., the areas as
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"referred to" in the CDC's 1993 Surveillance Report). 42 U.S.C.
§ 300ff-11(c)(1). Nor is there any license here for a court to
review either CDC's choice of area delineation in its own 1993
Report, or OMB's choices in delineating the boundaries of
metropolitan areas for its own reports. The relevant standards of
selection in this case are the statutory mandate that HHS in 1994
use the area that CDC was using, and the statutory direction in
1996 as refined in 2006 that HHS continue to use the delineation
that it used in 1994. And HHS has plainly complied with both of
these mandates. See Chevron, U.S.A., Inc. v. Nat'l Res. Def.
Council, Inc., 467 U.S. 837, 842 (1984) ("If the intent of Congress
is clear, that is the end of the matter . . . .").
As for the district court's "discrimination" theory, it
appears that the court mistakenly believed that HHS was not
following Congress's mandate to use the areas referred to in the
CDC's surveillance reports (the OMB MSAs) and was instead using a
different definition for the New England states. Ponce, 40 F.
Supp. 3d at 227–29. According to the district court, this
represented "unexplained discrimination." Id. at 231 (quoting
P.R. Sun Oil Co. v. U.S. E.P.A., 8 F.3d 73, 77 (1st Cir. 1993)).
In fact, HHS does use the same delineations that CDC uses, which
is the statutorily relevant question, including those for the New
England states. And thus there was no "unexplained
discrimination." Id.- 11 -
To be sure, the CDC's explanation of the technical
methodology it used to compile its 1993 Surveillance Report is
less than clear. See 1993 Surveillance Report at 18. The Report
explains that "[t]he metropolitan area definitions [used in the
report] are the MSAs for all areas except the 6 New England states.
For these states, the New England County Metropolitan Areas (NECMA)
are used." Id. The district court apparently read this to mean
that HHS chose not to adopt the OMB's delineations for these few
states. In fact, the CDC was merely describing how the OMB itself
treats New England states differently. In 1990, for example, OMB
explained that "in New England," it used "an alternative county-
based definition of MSAs known as the New England County
Metropolitan Areas (NECMAs)." 1990 MSA Standards at 12,157. The
NECMAs are thus an "alternative [] definition" of an MSA, not an
alternative to an MSA. Id.To put all this in perspective, it is helpful to observe
that only 52 metropolitan areas in the entire United States
received such funding in the last fiscal year. See U.S. Dep't
Health Human Servs., Ryan White HIV/AIDS Program FY 2014 Part A
Awards, http://www.hrsa.gov/about/news/2014tables/ryanwhite/
parta.html (last viewed Dec. 17, 2015) (demonstrating that no
metropolitan area in Maine, New Hampshire, Rhode Island, or Vermont
received funding). And San Juan received one of the larger
outlays. See id. While we acknowledge that Puerto Rico suffers
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the disadvantage of lacking formal representation in Congress,
there is simply nothing whatsoever in this case to suggest that
HHS treats the Ponce metropolitan area under the Act in any way
differently than it does hundreds of similarly-situated areas
across the United States.
In sum, we reject the district court's assumption that
this litigation somehow provides an opportunity for the court to
question HHS for doing what Congress told it to do. See Ponce, 40
F. Supp. 3d at 231–32. Congress told HHS, first, to use in 1994
whatever areas CDC was using at the time in its surveillance
reports. And it then told HHS to use whatever area it used in
1994. HHS plainly did both of these things.
III. CONCLUSION
We reverse the district court's entry of judgment for
plaintiffs and remand for entry of judgment in favor of defendants
dismissing the complaint with prejudice.
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