Commonwealth of MA v. Dep't of Health & Human Servs. ( 2019 )

United States Court of Appeals
For the First Circuit
No. 18-1514
COMMONWEALTH OF MASSACHUSETTS,
Plaintiff, Appellant,
v.
UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES;
ALEX MICHAEL AZAR II, in his official capacity as Secretary of
Health and Human Services; UNITED STATES DEPARTMENT OF THE
TREASURY; STEVEN T. MNUCHIN, in his official capacity as
Secretary of the Treasury; UNITED STATES DEPARTMENT OF LABOR;
R. ALEXANDER ACOSTA, in his official capacity as
Secretary of Labor,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nathaniel M. Gorton, U.S. District Judge]
Before
Torruella, Lynch, and Thompson,
Circuit Judges.
Julia E. Kobick, Assistant Attorney General, with whom Maura
Healey, Attorney General of Massachusetts, Jon Burke, Assistant
Attorney General, Jonathan B. Miller, Assistant Attorney General,
and Elizabeth Carnes Flynn, Special Assistant Attorney General,
were on brief, for appellant.
Allan J. Arffa, Crystal Johnson, Elizabeth J. Grossman,
Melina M. Meneguin Layerenza, and Paul, Weiss, Rifkind, Wharton &
Garrison LLP on brief for amici curiae Planned Parenthood
Federation of America, National Health Law Program, and National
Family Planning and Reproductive Health Association.
Michael J. Fischer, Chief Deputy Attorney General, Josh
Shapiro, Attorney General Commonwealth of Pennsylvania, Jonathan
Scott Goldman, Executive Deputy Attorney General, Aimee D.
Thomson, Deputy Attorney General, Xavier Becerra, Attorney General
of California, George Jepsen, Attorney General of Connecticut,
Matthew P. Denn, Attorney General of Delaware, Karl A. Racine,
Attorney General for the District of Columbia, Russell A. Suzuki,
Attorney General of Hawai'i, Thomas J. Miller, Attorney General of
Iowa, Janet T. Mills, Attorney General of Maine, Brian E. Frosh,
Attorney General of Maryland, Lori Swanson, Attorney General of
Minnesota, Barbara D. Underwood, Attorney General of New York,
Joshua H. Stein, Attorney General of North Carolina, Ellen F.
Rosenblum, Attorney General of Oregon, Peter F. Kilmartin,
Attorney General of Rhode Island, Thomas J. Donovan, Jr., Attorney
General of Vermont, Mark R. Herring, Attorney General of Virginia,
and Robert W. Ferguson, Attorney General of Washington, on brief
for amici curiae Pennsylvania, California, Connecticut, Delaware,
District of Columbia, Hawai'i, Iowa, Maine, Maryland, Minnesota,
New York, North Carolina, Oregon, Rhode Island, Vermont, Virginia,
and Washington.
Erin Bernstein, Supervising Deputy City Attorney, City of
Oakland, Laura S. Trice, Lead Deputy County Counsel, Barbara J.
Parker, City Attorney, Maria Bee, Attorney, Malia McPherson,
Attorney, on brief for amici curiae the City of Oakland,
California. Laura S. Trice, Lead Deputy County Counsel, County of
Santa Clara, James R. Williams, County Counsel, Greta S. Hansen,
Attorney, Adriana L. Benedict, Attorney, on brief for amici curiae
the County of Santa Clara, California. Andre M. Davis, City
Solicitor, City of Baltimore, Kimberly M. Foxx, State's Attorney
for Cook County, Michael N. Feuer, City Attorney of the City of
Los Angeles, Charles J. McKee, County Counsel, County of Monterey,
William Litt, Deputy County Counsel, County of Monterey,
Zachary W. Carter, Corporation Counsel, City of New York,
Marcel S. Pratt, City Solicitor, City of Philadelphia Law
Department, Dennis J. Herrera, City Attorney, City and County of
San Francisco, Peter S. Holmes, Seattle City Attorney, Francis X.
Wright, Jr., City Solicitor, City of Somerville, Michael Jenkins,
City Attorney, City of West Hollywood, on brief for amici curiae
13 Cities, Counties, and Local Agencies.
Christopher Escobedo Hart, Emily J. Nash, and Foley Hoag LLP
on brief for amicus curiae Public Health Scholars.
Jamie A. Levitt, Rhiannon N. Batchelder, and Morrison &
Foerster LLP on brief for amici curiae American Association of
University Women, Service Employees International Union, and 12
Additional Professional, Labor, and Student Associations.
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Diana Kasdan, Center for Reproductive Rights, and Jon M.
Greenbaum, Lawyers' Committee for Civil Rights Under Law, on brief
for amici curiae Center for Reproductive Rights, Lawyers'
Committee for Civil Rights Under Law, California Women's Law
Center, GLBTQ Legal Advocates & Defenders, Lawyers' Committee for
Civil Rights and Economic Justice, Legal Momentum, Legal Voice,
Mississippi Justice Center for Justice, National Center for
Lesbian Rights, Women's Law Project.
Jessie J. Rossman, Matthew R. Segal, ACLU Foundation of
Massachusetts, Inc., Brigitte Amiri, ACLU Foundation of New York,
Kate R. Cook, and Sugarman Rogers, on brief for amici curiae
American Civil Liberties Union, American Civil Liberties Union of
Massachusetts, Anti-Defamation League, Leadership Conference on
Civil and Human Rights, NARAL Pro-Choice Massachusetts, and
National Urban League.
M. Duncan Grant, Benjamin J. Eichel, and Pepper Hamilton LLP,
on brief for amici curiae The Guttmacher Institute.
Naomi D. Barrowclough, Jeffrey Blumenfeld, Lowenstein Sandler
LLP, Fatima Goss Graves, Gretchen Borchelt, Sunu Chandy, Michelle
Banker, National Women's Law Center, Sequoia Ayala, Jill
Heaviside, Sisterlove, Inc., Jane Liu, National Asian Pacific
American Women's Forum, on brief for amici curiae National Women's
Law Center, National Latina Institute for Reproductive Health,
Sisterlove, Inc., and National Asian Pacific Women's Forum.
Bruce H. Schneider, Michele L. Pahmer, Gilana Keller, and
Stroock & Stroock & Lavan LLP, on brief for amici curiae the Health
Professional Organizations, American Nurses Association, American
College of Obstetricians and Gynecologists, American Academy of
Nursing, American Academy of Pediatrics, and Physicians for
Reproductive Health.
Ernest A. Young on brief for amicus curiae Professor Ernest A.
Young.
Karen Schoen, Attorney, Appellate Staff, Civil Division, U.S.
Department of Justice, with whom Joseph H. Hunt, Assistant Attorney
General, Andrew E. Lelling, United States Attorney, Hashim M.
Mooppan, Deputy Assistant Attorney General, and Sharon Swingle,
Attorney, Appellate Staff, were on brief, for appellees.
May 2, 2019
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TORRUELLA, Circuit Judge.1 The Commonwealth of
Massachusetts brought suit on October 6, 2017, to enjoin the
enforcement of two federal Interim Final Rules (together, the
"IFRs") promulgated by the United States Departments of Health and
Human Services ("HHS"), Labor, and the Treasury (the
"Departments"), which were to become effective that day. See
Religious Exemptions and Accommodations for Coverage of Certain
Preventive Services Under the Affordable Care Act, 82 Fed. Reg.
47,792 (Oct. 13, 2017); Moral Exemptions and Accommodations for
Coverage of Certain Preventive Services Under the Affordable Care
Act, 82 Fed. Reg. 47,838 (Oct. 13, 2017).
The IFRs permitted employers with religious or moral
objections to contraception to obtain exemptions from providing
health insurance coverage to employees and their dependents for
Food and Drug Administration ("FDA")-approved contraceptive care.
Such coverage would otherwise be required by guidelines issued
pursuant to a provision in the Affordable Care Act, subject to the
limitations imposed by the Supreme Court in Burwell v. Hobby Lobby
Stores, Inc., 573 U.S. 682 (2014).
These IFRs were superseded by final rules (the "Final
Rules"), promulgated on November 15, 2018, with an effective date
of January 14, 2019. Religious Exemptions and Accommodations for
1 I am particularly appreciative of my panel colleagues'
contributions to this opinion.
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Coverage of Certain Preventive Services Under the Affordable Care
Act, 83 Fed. Reg. 57,536 (Nov. 15, 2018); Moral Exemptions and
Accommodations for Coverage of Certain Preventive Services Under
the Affordable Care Act, 83 Fed. Reg. 57,592 (Nov. 15, 2018).
After both sides here moved for summary judgment, the
district court determined that Massachusetts lacked standing to
challenge the IFRs. Massachusetts v. U. S. Dep't of Health & Human
Servs., 301 F. Supp. 3d 248, 266 (D. Mass. 2018). And so, it did
not reach the merits of the Commonwealth's challenges or its prayer
for injunctive relief. The Commonwealth appealed.2
The issue on appeal is narrow: whether the Commonwealth
has Article III standing to challenge the rules. We hold that it
does. Specifically, we conclude that: (1) in agreement with the
position of the United States, the Commonwealth's substantive
challenges have not been mooted by the promulgation of the Final
Rules, but the Commonwealth's procedural challenge to the IFRs has
been mooted; and (2) the Commonwealth has established Article III
standing to challenge the substance of the rules by demonstrating
a sufficiently imminent fiscal injury under a traditional standing
analysis (and so we do not reach the Commonwealth's alternative
parens patriae standing argument).
2 We appreciate the numerous amici who submitted briefs to this
court.
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I.
A. Factual Background
1. The Affordable Care Act and the Contraceptive Care
Requirement
The Affordable Care Act requires employer-sponsored
health plans to provide coverage for a range of preventive care
and related medical services at no cost to the covered employee.
See 42 U.S.C. § 300gg-13(a).3 A provision commonly known as the
Women's Health Amendment requires coverage for, "with respect to
women, such additional preventive care and screenings . . . as
provided for in comprehensive guidelines supported by the Health
Resources and Services Administration."4 Id. § 300gg-13(a)(4).
While the Women's Health Amendment did not indicate the
additional preventive care services that must be covered, it
instructed the Health Resources and Services Administration
("HRSA"), part of HHS, to determine the specifics of such required
3 Employers who provide health plans that existed before March
23, 2010, and who have not made specified changes after that date
to their health plans, are not subject to this requirement. 42
U.S.C. §§ 18011(a), (e).
4 The IFRs and the statutory provision at issue -- the Women's
Health Amendment -- discuss only women. The Commonwealth's
complaint similarly focuses on women. The denial of coverage for
contraceptive care and services may directly affect some
transgender men and gender non-conforming people, as well as
indirectly affect some men (for example, men who have dependents,
whether children or partners, who rely on the man's employer-
sponsored health insurance coverage for contraceptive care and
services).
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care and services. See 155 Cong. Rec. 511, 987 (daily ed. Nov. 30,
2009) (Senate Amendment 2791).
In August 2011, HRSA accepted the recommendations of the
Institute of Medicine ("IOM") and issued guidelines requiring
insurance coverage, at no cost to users, of all "Food and Drug
Administration . . . approved contraceptive methods, sterilization
procedures, and patient education and counseling for all women
with reproductive capacity." Group Health Plans and Health
Insurance Issuers Relating to Coverage of Preventive Services
Under the Patient Protection and Affordable Care Act, 77 Fed. Reg.
8,725, 8,725 (Feb. 15, 2012) (quoting HRSA Guidelines,
http://www.hrsa.gov/womens-guidelines). In its report, the IOM
made extensive factual findings about contraceptive care and
public health outcomes. See Institute of Medicine, Clinical
Preventive Services for Women: Closing the Gaps (2011). Plans
within the guidelines' ambit had to provide such contraceptive
coverage for plan years starting on or after August 1, 2012.5 See
77 Fed. Reg. at 8,725-26.
2. The Departments' Regulations and Related Litigation from
2010 to 2016
Concurrently, the Departments promulgated regulations,
which became final in February 2012, that provided an exemption
5 The Departments estimated in 2017 that about "46.6 million women
aged 15 to 64 received the [contraceptive and related] coverage
through employer sponsored private insurance plans," 82 Fed. Reg.
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from the requirement to provide contraceptive coverage to
"churches, their integrated auxiliaries, and conventions or
associations of churches" with religious objections to
contraception. 76 Fed. Reg. at 46,623; see also 77 Fed. Reg. at
8,725.
Later regulations also created what the Departments
termed an "accommodation" process. Coverage of Certain Preventive
Services Under the Affordable Care Act, 78 Fed. Reg. 39,870
(July 2, 2013). This process allowed nonprofit organizations,
including colleges and universities, to submit a form to their
health insurance issuers asserting their religious objections to
contraception. See id. at 39,874-77. The insurance issuer was
then required to remove contraceptive coverage from the objecting
organization's plan, but still had to provide contraceptive
coverage to members of the plan (without directly involving the
objecting organization) (the "Accommodation"). Id. at 39,875-80.
On June 30, 2014, the Supreme Court held in Hobby Lobby
that the contraceptive regulatory requirement as applied to
closely held corporations violated the Religious Freedom
Restoration Act ("RFRA"), 42 U.S.C. § 2000bb-1 et seq. 573 U.S.
at 47,821, and cited studies showing "that application of HRSA
Guidelines had applied preventive services coverage to 55.6
million women and had led to a 70 percent decrease in out-of-
pocket expenses for contraceptive services among commercially
insured women," id. at 47,805.
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at 736. That was because the regulations "clearly impose[d] a
substantial burden" on closely held employers who had religious
objections to contraception, and the regulations were not the least
restrictive means of furthering a compelling government interest
(assuming arguendo that one existed). Id. at 726, 730-32. The
Supreme Court noted that the Accommodation already available to
nonprofit organizations with religious objections was less
restrictive than "requiring employers to fund contraceptive
methods that violate their religious beliefs." Id. at 730.
After Hobby Lobby, the Departments issued a new rule in
2015 which allowed "Closely Held for-Profit Entit[ies]" who had
religious objections to providing contraceptive coverage to use
the Accommodation process described above. Coverage of Certain
Preventive Services Under the Affordable Care Act, 80 Fed. Reg.
41,318, 41,323 (July 14, 2015).
Nevertheless, numerous religious nonprofit
organizations sued to obtain an exemption similar to that provided
to churches rather than the more limited Accommodation process
(which still allowed for contraceptive coverage for employees of
the objecting organizations). Nine circuits considered the issue
from late 2014 to early 2016. Eight circuits held that the
Accommodation did not substantially burden religious exercise; one
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held that it did.6 The Supreme Court granted certiorari in some
of these cases (from the Third, Fifth, Tenth, and D.C. Circuits).
In a per curiam opinion, it vacated and remanded, instructing that
the parties "be afforded an opportunity to arrive at an approach
going forward that accommodates petitioners' religious exercise
while at the same time ensuring that women covered by petitioners'
health plans receive full and equal health coverage, including
contraceptive coverage." Zubik v. Burwell, 136 S. Ct. 1557, 1560
(2016) (per curiam) (internal quotation marks omitted).
After Zubik, the Departments sought comment in July 2016
through a request for information, seeking alternative ways in
which the contraceptive coverage mandate and employers' religious
beliefs could coexist. Coverage for Contraceptive Services, 81
6 Specifically, the Second, Third, Fifth, Sixth, Seventh, Tenth,
Eleventh, and D.C. Circuits held that the Accommodation did not
substantially burden religious exercise. Eternal Word Television
Network, Inc. v. Sec'y of U.S. Dep't of Health & Human Servs., 818
F.3d 1122, 1151 (11th Cir. 2016); Mich. Catholic Conf. & Catholic
Family Servs. v. Burwell, 807 F.3d 738, 752 (6th Cir. 2015);
Catholic Health Care Sys. v. Burwell, 796 F.3d 207, 226 (2d Cir.
2015); Little Sisters of the Poor Home for the Aged, Denver, Colo.
v. Burwell, 794 F.3d 1151, 1195 (10th Cir. 2015); E. Tex. Baptist
Univ. v. Burwell, 793 F.3d 449, 463 (5th Cir. 2015); Univ. of Notre
Dame v. Burwell, 786 F.3d 606, 619 (7th Cir. 2015); Geneva Coll.
v. Sec'y U.S. Dep't of Health & Human Servs., 778 F.3d 422, 442
(3d Cir. 2015); Priests for Life v. U.S. Dep't of Health & Human
Servs., 772 F.3d 229, 252 (D.C. Cir. 2014). The Eighth Circuit
held that the Accommodation process substantially burdened
religion and faltered under strict scrutiny. Sharpe Holdings,
Inc. v. U.S. Dep't of Health & Human Servs., 801 F.3d 927, 945-46
(8th Cir. 2015). All were vacated as a result of or in light of
Zubik v. Burwell, 136 S. Ct. 1557 (2016) (per curiam).
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Fed. Reg. 47,741, 47,741 (July 22, 2016). The Departments
ultimately stated that, though they received 54,000 public
comments after this request, "includ[ing] [from] the plaintiffs in
Zubik, . . . consumer advocacy groups, women's organizations [and]
health insurance issuers," by September 20, 2016, "no feasible
approach has been identified at this time that would resolve the
concerns of religious objectors, while still ensuring that the
affected women receive full and equal health coverage, including
contraceptive coverage." United States Department of Labor, FAQs
About Affordable Care Act Implementation Part 36, at 4 (Jan. 9,
2017).
3. President's Executive Order and Interim Final Rules on
Exemptions
On May 4, 2017, the President issued an Executive Order
"Promoting Free Speech and Religious Liberty." Exec. Order No.
13,798, 82 Fed. Reg. 21,675 (May 4, 2017). This Order directed
the Departments to "consider issuing amended regulations,
consistent with applicable law, to address conscience-based
objections to the preventive-care mandate promulgated under [42
U.S.C. §] 300gg-13(a)(4)." Id.
Several months later, the Departments issued two IFRs:
a religious exemption IFR and a separate moral exemption IFR, both
effective immediately on publication, on October 6, 2017. See 82
Fed. Reg. at 47,792; 82 Fed. Reg. 47,838. The IFRs included a
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request for further comments before final rulemaking. 82 Fed.
Reg. at 47,792; 82 Fed. Reg. at 47,838. The Departments did not
go through the notice and comment process before issuing the IFRs,
asserting first that these procedures did not apply, and second,
that if the Administrative Procedure Act ("APA") procedures
applied, the "good cause" exception to notice and comment allowed
for the Departments' chosen approach, see 5 U.S.C. § 553
(b)(1)(B),(d); 82 Fed. Reg. at 47,813-15; 82 Fed. Reg. at 47,854-
56.
The religious exemption IFR expanded the previous
exemption (which had covered only churches and related entities,
see 76 Fed. Reg. at 46,623) to include nonprofit organizations,
corporations, institutions of higher education, and health
insurance issuers that object to "establishing, maintaining,
providing, offering, or arranging (as applicable) coverage,
payments, or a plan that provides coverage or payments for some or
all contraceptive services, based on its sincerely held religious
beliefs." 82 Fed. Reg. at 47,835.
The moral exemption IFR created a similar exemption but
based on "sincerely held moral convictions" as opposed to
"sincerely held religious beliefs." 82 Fed. Reg. at 47,853-54.
This second IFR did not define the term "moral conviction." Unlike
the religious exemption, this exemption did not apply to publicly
traded corporations; it did apply to privately held corporations.
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See id. at 47,849-52. Both IFRs allowed an objecting organization
to use either the expanded exemptions (which would then leave their
employees and/or students without direct coverage for
contraceptive care and service), or the Accommodation (under which
employees and/or students would continue to receive contraceptive
care and services paid for and managed by the issuer, not by the
employer or school). See 82 Fed. Reg. at 47,812-13; 82 Fed. Reg.
at 47,854.
The Departments included a regulatory impact analysis in
the IFRs (the "Regulatory Impact Analysis"), see 82 Fed. Reg. at
47,815-28; 82 Fed. Reg. at 47,856-59, as required by law, see
Regulatory Planning and Review, Executive Order 12,866, 58 Fed.
Reg. 51,735 (Oct. 4, 1993). In their Regulatory Impact Analysis,
the Departments estimated that, nationwide, between about 31,700
and 120,000 women would be affected by the expanded exemptions.
See 82 Fed. Reg. at 47,821-23.7 In so doing, they accounted for
various factors that could skew the estimates. For example, they
excluded publicly traded corporations from the estimates, as the
Departments stated that "although publicly traded entities could
make use of exempt status under these interim final rules, the
7 The Commonwealth and several amici challenge these estimates as
too low, arguing, for example, that they rely on data about women
using a contraceptive method at a point-in-time rather than over
time, and that the estimates do not adequately consider the impact
of the untested moral exemption.
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Departments do not expect that very many will do so." 82 Fed.
Reg. at 47,817. This was based primarily on the fact that, at
that point, "[n]o publicly traded for-profit entities ha[d] filed
lawsuits challenging the Mandate." Id.
The Departments based their lower bound estimate of
31,700 women partially on the number of employers that had
previously challenged the contraceptive coverage requirement in
litigation, and partially on an estimate of the number of employers
using the Accommodation. See 82 Fed. Reg. 47815-21. The
Departments acknowledged that they had "not received complete data
on the number of entities actually using the accommodation, because
the accommodation does not require many accommodated entities to
submit information to us." Id. at 47,817.
To calculate an "upper bound" of 120,000 women likely to
lose contraceptive coverage because of the IFRs, the Departments
started from the number of women that used FDA-approved
contraceptives but were employed by entities that did not cover
such care before the Affordable Care Act was enacted, relying on
a survey from the Kaiser Family Foundation. Id. at 47,822. This
estimate did not consider employees of the "31 percent of survey
respondents that did not know about contraceptive coverage." Id.
at n.88. After reducing the extrapolated numbers to account for
already exempt church plans and the assumption that publicly-
traded employers would not make use of the expanded exceptions,
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the Departments reached an amount of 362,100 women. From there,
the Departments calculated their final "upper bound" estimate of
120,000 women based on the view that a "reasonable estimate is
that no more than approximately one third of the persons covered
by relevant entities . . . would likely be subject to potential
transfer impacts." Id. at 47,823. The Departments based this
"one third" estimate on several factors, including employers
potentially objecting to only certain contraceptive methods and a
"prominent poll" purporting to "show[] that 89 percent of Americans
say they believe in God, while 11 percent say they do not or are
agnostic." Id.
The Departments then estimated an "average annual
expenditure on contraceptive products and services of $584 per
user," so a "transfer effect[]" attributable to the IFRs of between
about $18.5 and $63.8 million annually nationwide. Id. at 47,823-
24. In a footnote, the Departments also noted the "noteworthy
potential impact[]" of "increased expenditures on pregnancy-
related medical services," but did not provide a numerical estimate
of such expenditures (or of how many women might face unintended
pregnancies due to the IFRs). Id. at 47,828 n.113.
In their Regulatory Impact Report, the Departments also
included spreadsheets listing either litigating employers or
employers currently using the Accommodation that the Departments
flagged could switch to the expanded exemption. Three
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Massachusetts employers were listed.
4. Relevant Commonwealth Laws and Public Health Structure
The Commonwealth legislature has enacted two laws that
are relevant to this case and factor into the Commonwealth's claims
of injury. In 2002, the legislature passed "An Act Providing
Equitable Coverage of Services Under Health Plans," see 2002 Mass.
Acts ch. 49, §§ 1-4, which required employer-sponsored health
plans to cover contraceptive care and services at the same level
that the plans covered other outpatient care and services, see
Mass. Gen. Laws ch. 175, § 47W; id. Mass. Gen. Laws ch. 176A, § 8W;
id. Mass. Gen. Laws ch. 176B, § 4W; id. Mass Gen. Laws ch. 176G,
§ 4O. Under this Act, people using contraceptive care and services
pursuant to insurance plans could be required to pay cost-sharing
fees such as deductibles and copays for the care and services.
Moreover, in November 2017, the Commonwealth legislature passed
"An Act Relative to Advancing Contraceptive Coverage and Economic
Security in Our State" (the "ACCESS Act"), which barred employer-
sponsored health plans from collecting cost-sharing fees for
contraceptive care and services. 2017 Mass. Acts ch. 120,
§ 4(e)(1). The ACCESS Act did not provide any moral exemption for
employers, but did provide an exemption for churches and "qualified
church-controlled organization[s]." Id. § 3.
Importantly, Massachusetts healthcare laws -- including
the ACCESS Act and the earlier Equitable Coverage law -- do not
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apply to self-insured plans, because such plans come under the
Employee Retirement Income Security Act of 1974 ("ERISA") (which
preempts state regulation). 29 U.S.C. §§ 1144(a) & (b)(2)(A). A
study submitted by the Commonwealth shows that, as of March 2017,
fifty-six percent of Commonwealth residents who have private
commercial health insurance had such insurance from ERISA plans.
Center for Health Information and Analysis, Enrollment Trends:
August 2017 Edition, Ctr. For Health Info. And Analysis 3 (2017).
Thus, to the extent the ACCESS Act and the Equitable Coverage law
mitigate any injury done by the IFRs, that mitigation does not
apply to fifty-six percent of the Commonwealth's residents who
have private ERISA-covered insurance.
The Commonwealth also provides health services to about
two million Commonwealth residents through its Medicaid program,
the MassHealth Program. Massachusetts, 301 F. Supp. 3d at 255-
56. This program provides access to contraceptives. See 130 Mass.
Code Regs. 450.105 ("The following services are covered for
MassHealth Standard members . . . [:] family planning services.").
MassHealth also serves as a "secondary payer" for about 150,000
residents. This means that qualifying residents with employer-
sponsored plans who lose contraceptive coverage would then be
covered by MassHealth, and the Commonwealth would owe ten percent
of the cost of contraceptive coverage paid by MassHealth (and so
ten percent of the cost for loss of coverage occasioned by the
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IFRs). See 42 U.S.C. § 1396b(a)(5); Robert Seifert & Stephanie
Anthony, The Basics of MassHealth, Mass. Medicaid Policy Inst. 3
(Feb. 2011).
In addition to the MassHealth program, the Sexual and
Reproductive Health Program ("SRHP") of the Commonwealth's
Department of Public Health reimburses groups and clinics that are
providing contraceptive care and services in the Commonwealth.
Services funded by the SRHP are available to Massachusetts
residents that either (1) do not have insurance and make less than
300% of the poverty level; (2) need confidential care; or (3) make
less than 300% of the poverty level and have insurance that does
not cover all contraception methods and services. See 101 Mass.
Code Regs. 312.00. The Commonwealth provides about three-quarters
of SRHP's total funding. Massachusetts, 301 F. Supp. 3d at 256.
B. Procedural History of This Litigation
The Commonwealth filed suit to enjoin the IFRs in October
2017. The Commonwealth included, with its amended complaint filed
in November 2017, various declarations from medical professionals,
state officials, the CEO of a partially Commonwealth-funded
nonprofit organization specializing in "sexual and reproductive
health," and an investigator, all in support of its assertion that
the Commonwealth would be harmed by the IFRs. These declarations
are discussed further below where relevant.
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Both sides moved for summary judgment. In its memorandum
in opposition to defendants' cross-motion to dismiss or for summary
judgment, the Commonwealth asserted standing based on a procedural
injury, financial harm, and harm to the Commonwealth's quasi-
sovereign interests. The Departments asserted that the
Commonwealth's projections of injury were too speculative to
support standing.
This case is in an unusual posture for the following
reasons. When filed, it was brought as a pre-enforcement suit.
Before the district court ruled on the cross motions for summary
judgment, two federal district courts issued nationwide
injunctions blocking the IFRs, after finding that the plaintiff
states had standing. See California v. Health & Human Servs.
("California I"), 281 F. Supp. 3d 806, 832 (N.D. Cal. 2017);
Pennsylvania v. Trump ("Pennsylvania I"), 281 F. Supp. 3d 553, 585
(E.D. Pa. 2017). The former injunction, out of California, was
modified to include only the plaintiff states. See California v.
Azar ("California II"), 911 F.3d 558, 585 (9th Cir. 2018). The
IFRs were only effective in the Commonwealth, then, for about two
months. There is no suggestion in the record that, during those
two months, it was possible to measure any injury to the
Commonwealth's interests, much less to measure projected future
injury from this period. Indeed, under the religious exemption
IFR, "[i]f contraceptive coverage is currently being offered by an
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issuer or third party administrator through the accommodation
process, the revocation will be effective on the first day of the
first plan year that begins on or after 30 days after the date of
the revocation," or alternatively sixty days after notice is
provided. 82 Fed. Reg. at 47,831. The moral exemption IFR does
not have a similar rule, likely because no Accommodation process
existed for organizations with moral objections to contraception
prior to this IFR.
On March 12, 2018, the district court granted the
Departments' motion for summary judgment. Massachusetts, 301 F.
Supp. 3d at 266. The district court held that the Commonwealth
failed to establish standing because the Commonwealth had not "set
forth specific facts establishing that it will likely suffer future
injury from the defendants' conduct." Id. at 250. It rejected
the Commonwealth's proportional argument, based on the
Departments' own estimates of women affected, as too "tenuous,"
id. at 259, and faulted the Commonwealth for failing to "identify
any particular woman who is likely to lose contraceptive coverage
because of the IFRs" or "any Massachusetts employer that is likely
to avail itself of the expanded exemptions," id. at 265. The
district court similarly rejected the Commonwealth's alternative
procedural injury and quasi-sovereign harm theories. Id. at 265-
66.
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The Commonwealth appealed. After the Commonwealth filed
its opening brief, the Departments issued Final Rules superseding
the IFRs in November 2018, effective in January 2019. 83 Fed.
Reg. at 57,536; 83 Fed. Reg. at 57,592. In December 2018, this
court directed the parties to address, in the remaining briefing,
whether the appeal was moot. Order, Commonwealth of Mass. v. Dep't
of Health & Human Servs., et al. (18-1514) (Dec. 21, 2018), ECF
No. 117. The parties did so in their response brief and reply
brief, respectively, and agreed that the Commonwealth's
substantive arguments as to the IFRs also apply to the Final Rules
and so that aspect of the case is not moot and should proceed.
During the briefing of this case, California and another
group of states, which did not include the Commonwealth, obtained
an injunction against the Final Rules for the plaintiff states in
January 2019, see California v. Health & Human Servs. ("California
III, 351 F. Supp. 3d 1267, 1301 (N.D. Cal. 2019); this decision
has been appealed. Pennsylvania and New Jersey, together as
plaintiffs, obtained a nationwide injunction in January 2019
against the Final Rules, see Pennsylvania v. Trump ("Pennsylvania
II"), 351 F. Supp. 3d 791, 835 (E.D. Pa 2019); this decision has
also been appealed. In both district court cases, the courts found
Article III standing for the plaintiff states. The net effect of
these cases is that the Final Rules are currently enjoined
nationwide.
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II.
A. Mootness
We first consider whether the Commonwealth's challenges
to the rules are moot because the Departments have promulgated
superseding Final Rules. A case is moot where it is "impossible
for a court to grant any effectual relief whatever to the
prevailing party." Chafin v. Chafin, 568 U.S. 165, 172 (2013)
(quoting Knox v. Serv. Employees Int'l Union, Local 1000, 567 U.S.
298, 307 (2012)). The mootness review is grounded in "[t]he case
or controversy requirement [and] ensures that courts do not render
advisory opinions." Overseas Military Sales Corp. v. Giralt-
Armada, 503 F.3d 12, 16–17 (1st Cir. 2007). "But as long as the
parties have a concrete interest, however small, in the outcome of
the litigation, the case is not moot." Ellis v. Bhd. of Ry.,
Airline & S.S. Clerks, Freight Handlers, Express & Station Emps.,
466 U.S. 435, 442 (1984).
1. Mootness of the Substantive Challenges
Both parties agree that the Commonwealth's substantive
challenges to the rules have not been mooted by the promulgation
of the Final Rules. We still must independently review the issue.
The parties' view accords with our view, based on Supreme Court
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and First Circuit caselaw, that this aspect of the case is not
moot.
The challenged portions of the Final Rules are
sufficiently similar to the IFRs that the case is not moot as to
the Commonwealth's substantive challenges. See Ne. Fla. Chapter
of the Associated Gen. Contractors of Am. v. City of Jacksonville,
508 U.S. 656, 662 & n.3 (1993) (holding that the case was not moot
where the statute challenged had been replaced by a different but
sufficiently similar statute that "disadvantage[d] [plaintiffs] in
the same fundamental way"); Conservation Law Found. v. Evans, 360
F.3d 21, 25-30 (1st Cir. 2004) (holding that the case was not moot
where the framework then in place was "largely an extension" of
the originally challenged framework). The Final Rules have not
excised the features of the IFRs that Massachusetts challenges;
instead, if they were to harm Massachusetts, they would do so in
the "same fundamental way" as the IFRs. City of Jacksonville, 508
U.S. at 662. And the Final Rules are not based on "entirely new
analysis." Gulf of Me. Fishermen's All. v. Daley, 292 F.3d 84, 90
(1st Cir. 2002). Here, the "challenged regulation[s]" are "only
superficially altered by [the] subsequent regulation[s]." Evans,
360 F.3d at 26. The Departments correctly recognize that the
"changes are immaterial to the scope of the challenge." Therefore,
the Commonwealth's substantive challenges to the federal
regulations are not moot.
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2. Mootness of the Procedural Challenge to the IFRs
Nevertheless, we find that the Commonwealth's APA
procedural challenge to the IFRs is moot. Although the IFRs did
not go through notice and comment rulemaking, the Final Rules
superseded the IFRs. 83 Fed. Reg. 57592 (Nov. 2018).
The Final Rules would have become effective as planned
on January 14, 2019, if not enjoined before that date. Past that
date, it would be "impossible for a court to grant any effectual
relief whatever to the prevailing party" as to the IFRs. Chafin,
568 U.S. at 172 (quoting Knox, 567 U.S. at 307). As the Ninth
Circuit has stated, there is "no justiciable controversy regarding
the procedural defects of IFRs that no longer exist." California
II, 911 F.3d at 569; see Daley, 292 F.3d at 88 ("[P]romulgation of
new regulations and amendment of old regulations are among such
intervening events as can moot a challenge to the regulation in
its original form."); Nat. Res. Def. Council v. U.S. Nuclear
Regulatory Comm'n, 680 F.2d 810, 814-15 (D.C. Cir. 1982) (holding
that a procedural challenge to a regulation promulgated in alleged
violation of notice and comment requirements became moot due to
re-promulgation of the rule with notice and comment).
Levesque, which the Commonwealth relies upon to argue
that its procedural challenge to the IFRs has not been mooted, is
distinguishable. Levesque v. Block, 723 F.2d 175 (1st Cir. 1983).
In that case, the district court had found the interim rule to be
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void for "procedural omissions" while it was still in effect. Id.
at 177. Here, any determination by us as to the validity of the
IFRs would be made for the first time after they have ceased to
exist. We see no point in that. Moreover, in Levesque, the court
also considered whether the existing final rule was valid, which
is not the issue here. Id. at 187.
B. Article III Standing for Substantive Challenges
We turn to whether the Commonwealth has established
Article III standing for its substantive challenges to the federal
regulations. "[N]o principle is more fundamental to the
judiciary's proper role in our system of government than the
constitutional limitation of federal-court jurisdiction to actual
cases or controversies." DaimlerChrysler Corp. v. Cuno, 547 U.S.
332, 341 (2006). As one aspect of the case-or-controversy
requirement, plaintiffs must "establish that they have standing to
sue." Raines v. Byrd, 521 U.S. 811, 818 (1997); see also Arizonans
for Official English v. Arizona, 520 U.S. 43, 64 (1997). "[T]he
standing inquiry [is] focused on whether the party invoking
jurisdiction had the requisite stake in the outcome when the suit
was filed." Davis v. Fed. Election Comm'n, 554 U.S. 724, 734
(2008).
"The existence of standing is a legal question, which we
review de novo." Kerin v. Titeflex Corp., 770 F.3d 978, 981 (1st
Cir. 2014). "The party invoking federal jurisdiction bears the
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burden of establishing" that it has standing. Lujan v. Defs. of
Wildlife, 504 U.S. 555, 560 (1992). There are three requirements
for Article III standing. A plaintiff must demonstrate (1) an
injury in fact which is "concrete and particularized" and "actual
or imminent, not conjectural or hypothetical," (2) that the injury
is "fairly traceable to the challenged action," and (3) that it is
"likely . . . that the injury will be redressed by a favorable
decision." Id. at 560 (internal quotation marks and alterations
omitted). "In response to a summary judgment motion," the
"specific facts" set forth by a plaintiff "will be taken as true."
Id. at 561.
The Commonwealth's primary argument for standing is
based on a fiscal injury to itself. In this circuit, "[i]t is a
bedrock proposition that 'a relatively small economic loss -- even
an identifiable trifle -- is enough to confer standing.'" Katz v.
Pershing, LLC, 672 F.3d 64, 76 (1st Cir. 2012) (quoting Adams v.
Watson, 10 F.3d 915, 924 (1st Cir. 1993)); see also United States
v. Students Challenging Regulatory Agency Procedures (SCRAP), 412
U.S. 669, 690 n.14 (1973) ("We have allowed important interests to
be vindicated by plaintiffs with no more at stake in the outcome
of an action than a fraction of a vote[,] a $5 fine and costs[,]
and a $1.50 poll tax." (internal citations omitted)).
We hold that the Commonwealth has demonstrated Article
III standing for its substantive claim based on an imminent fiscal
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injury that is fairly traceable to the federal regulations and
redressable by a favorable decision. We do not afford the
Commonwealth "special solicitude in [the] standing analysis,"
Massachusetts v. EPA, 549 U.S. 497, 520 (2007), in light of its
demonstration of fiscal injury. As the Commonwealth has
established standing under a traditional Article III analysis, we
need not consider the Commonwealth's self-described "alternative
basis" of parens patriae standing based on an alleged "injury to
the Commonwealth's legally protected quasi-sovereign interests."
See, e.g., Alfred L. Snapp & Son, Inc. v. Puerto Rico, ex rel.,
Barez, 458 U.S. 592, 600-02, 607 (1982).
1. Imminent Fiscal Injury to the Commonwealth
The heart of the Departments' standing challenge is that
the Commonwealth has not demonstrated an imminent injury. That
requires us to decide whether the Commonwealth has adequately
demonstrated that a fiscal injury is imminent due to the challenged
federal regulations. Of course, the Commonwealth need not wait
for an actual injury to occur before filing suit. See Adams, 10
F.3d at 921 ("[I]t could hardly be thought that administrative
action likely to cause harm cannot be challenged until it is too
late." (quoting Rental Hous. Ass'n of Greater Lynn v. Hills, 548
F.2d 388, 389 (1st Cir. 1977))).
The imminence requirement is met "if the threatened
injury is 'certainly impending' or there is a 'substantial risk'
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that the harm will occur." Susan B. Anthony List v. Driehaus, 573
U.S. 149, 158 (2014) (quoting Clapper v. Amnesty Int'l, USA, 568
U.S. 398, 409, 414 n.5 (2013)). Either a certainly impending harm
or substantial risk of harm suffices. See Reddy v. Foster, 845
F.3d 493, 500 (1st Cir. 2017). We have considered risk of harm
for Article III standing in a range of cases asserting different
forms of injury, from allegations of future environmental harm,
see Me. People's Alliance v. Mallinckrodt, Inc., 471 F.3d 277, 283
(1st Cir. 2006), to future harm stemming from a store's policy of
a "refusal to sell alcoholic beverages to a disabled person whose
symptoms mimic the traits of intoxication," Dudley v. Hannaford
Bros. Co., 333 F.3d 299, 301 (1st Cir. 2003). The "imminence
concept, while . . . far reaching, is bounded by its Article III
purpose: 'to ensure that the alleged injury is not too
speculative.'" Berner v. Delahanty, 129 F.3d 20, 24 (1st Cir.
1997) (quoting Lujan, 504 U.S. at 564 n.2).
The Commonwealth's argument that it faces an imminent
fiscal injury proceeds in steps: First, it argues that it
established a substantial risk that the rules will cause women in
the Commonwealth to lose their contraceptive coverage. Second, it
argues that it established a substantial likelihood that some of
these women will then obtain state-funded contraceptive services
or prenatal and postnatal care for unintended pregnancies, and
thus that the Commonwealth will incur costs as a result. As for
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those women who go forward with pregnancies because of the loss of
contraceptive services or the loss of the most effective
contraceptive devices, the Commonwealth states it "will incur
costs providing pre- and post-natal care to some of the women who
lose contraceptive coverage and consequently experience an
unintended pregnancy."
The Departments counter that the Commonwealth (1) has
failed to show that employers therein "will use the expanded
exemption under the challenged rules to deprive employees of
contraceptive coverage they previously had"; (2) has not
identified any particular women who would be affected by employers'
use of the exemptions; and, (3) "[e]ven assuming that some
Massachusetts women will lose coverage of their chosen
contraceptive method," the Commonwealth has "fail[ed] to
demonstrate economic injury as a result."
In our view, the Commonwealth has demonstrated that
there is a substantial risk of fiscal injury to itself. It has
made "rational economic assumptions," Adams, 10 F.3d at 923, and
presented "concrete evidence." Clapper, 568 U.S. at 420.8 We
explain.
8 Unlike in Clapper, the issue here is not whether a plaintiff
would ever be subject to the challenged government policy (there,
surveillance under the Foreign Intelligence Surveillance Act).
See 568 U.S. at 411-14. No one disputes that, barring injunctions,
employers in the Commonwealth would have been subject to the IFRs.
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a. The Commonwealth Has Shown There Are Employers
Likely to Use the Exemptions
First, the Commonwealth established that there is a
substantial risk that some women in Massachusetts will lose
coverage due to the regulations. It pointed to the Departments'
Regulatory Impact Analysis, which estimated that between 31,715
and 120,000 women would lose coverage. From there, Massachusetts
set forth that based on its 2.1 percent of the national population
"and [a]djusting these figures to exclude women in fully-insured
plans covered by Massachusetts' contraceptive coverage laws,
between 373 and 1,414 Massachusetts women in self-insured plans
will lose coverage because of the IFRs." The district court
rejected what it deemed Massachusetts' "proportional theory,"
relying in part on Summers v. Earth Island Inst., 555 U.S. 488(2009). Massachusetts, 301 F. Supp. 3d at 259. Yet unlike
Summers, this is not a case resting on unsupported "statistical
probability" for organizational standing. See Summers, 555 U.S.
at 497-98. Summers rejected as insufficient "self-descriptions"
the plaintiff organization's assertions, as the Supreme Court
characterized them, that "some (unidentified) members have planned
to visit some (unidentified) small parcels affected by the Forest
Service's procedures and will suffer (unidentified) concrete harm
as a result." Id.
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Moreover, the Commonwealth has demonstrated that it is
highly likely that at least three employers in the Commonwealth
with self-insured health plans (that is, exempt from state
regulation due to ERISA) will use the expanded exemptions, based
in part on their past litigating positions or their past objections
to providing contraceptive coverage. The three are Autocam Medical
Devices, LLC ("Autocam"), Hobby Lobby Stores, Inc. ("Hobby
Lobby"), and Cummins-Allison Corporation ("Cummins-Allison"), all
identified in the Departments' administrative record.9 In a
spreadsheet listing litigating entities likely to use the expanded
exemptions, the Departments included both Autocam and Hobby Lobby,
both employers in Massachusetts. Additionally, the Departments
included Cummins-Allison in a list of employers using the
Accommodation that had notified the Departments of their religious
9 Before the district court, the Commonwealth also listed Little
Sisters of the Poor as a litigating entity operating in the
Commonwealth. Massachusetts, 301 F. Supp. 3d at 261. Though this
is technically correct, the Little Sisters of the Poor likely
denied contraceptive coverage even before the IFRs. As the
Departments correctly point out, the Little Sisters of the Poor
provided healthcare coverage through a self-insured church plan,
which allowed them to effectively avoid the obligation to provide
contraceptive care prior to the implementation of the IFRs. See
Little Sisters of the Poor Home for the Aged, 794 F.3d at 1166-
67.
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objections to providing contraceptive coverage.10 See 82 Fed. Reg.
47,817-18.
The Commonwealth refers to data, which the Departments
do not contest, stating that as of September 2018, Autocam employed
over one hundred people in the Commonwealth, and Hobby Lobby
operated four stores with employees in the Commonwealth.11 See
Brief for Nat'l Women's Law Ctr. et al., as Amici Curiae in Support
of Plaintiff-Appellant and in Favor of Reversal, at 7 nn.14, 15
(2019).
The Departments' record further supports standing in two
respects. First, the Departments acknowledge that for purposes of
the Regulatory Impact Analysis, they assumed that the litigating
entities, excluding previously exempt ones, would use the expanded
exemption under the interim rules. 82 Fed. Reg. 47,817-18.
Moreover, the Departments estimated that "just over half of the
[estimated 209 previously accommodated entities] will use the
expanded exemption."12 82 Fed. Reg. at 47,818. Hence, the
10 Cummins Allison had used the Accommodation process under the
prior rules, but had not litigated against the Accommodation
process.
11 In Column H of the spreadsheets of "litigating entities" used
for the Departments' Regulatory Impact Analysis, the Departments
list the "number of [employees] counted towards final total." Both
Autocam and Hobby Lobby have a positive number listed in Column H
-- 183 for Autocam, 13,250 for Hobby Lobby -- and both have
employees in the Commonwealth.
12 The estimate of 209 employers using the accommodation process
was made by HHS in 2014. See 82 Fed. Reg. at 47,817-18. The
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Departments have done much of the legwork in establishing that
there is a substantial risk (as opposed to a certainty) that at
least Hobby Lobby, Autocam, and Cummins-Allison would choose to
use the expanded exemptions. See Davis, 554 U.S. at 735 (finding
standing based on third party's likely behavior, and crediting
evidence in the record that "most candidates who had the
opportunity to receive expanded contributions had done so").
We turn to the argument that because the Commonwealth
"cannot point to a single woman who will lose coverage she would
otherwise want," the Commonwealth lacks standing. First, a
plaintiff need not "demonstrate that it is literally certain that
the harms they identify will come about." Clapper, 568 U.S. at
414 n.5. The Departments' brief fails to cite the "substantial
risk" standard drawn from Clapper and Susan B. Anthony List. Its
effort to recast the imminence requirement as one of near certainty
does not comport with the law. Moreover, plaintiffs need not point
to a specific person who will be harmed in order to establish
Departments acknowledge a paucity of data concerning how many
employers used the accommodation process, since employers were not
required to inform the Departments that they were using that
process. Id. at 47,817. A reasonable inference would be that
more employers would have used the Accommodation process over time.
Even if women employed by organizations who would use the exemption
are not scattered proportionally by state, it is improbable based
on the evidence that no women in the Commonwealth would lose
contraceptive coverage. See California II, 911 F.3d at 572
("Evidence supports that, with reasonable probability, some women
residing in the plaintiff states will lose coverage due to the
IFRs." (emphasis added)).
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standing in situations like this.13 See Monsanto Co. v. Geertson
Seed Farms, 561 U.S. 139, 153-55 (2015) (holding that plaintiffs,
alfalfa farmers, had standing based on a causal chain, though
plaintiffs did not identify particular alfalfa plants that had
been, or would necessarily be, pollinated by bees who carried the
genetically engineered gene at issue). Hence, we agree with the
statement of the Ninth Circuit that, though "[a]ppellants fault
the [plaintiff] states for failing to identify a specific woman
likely to lose coverage," "[s]uch identification is not necessary
to establish standing." California II, 911 F.3d at 572.14
13 In Massachusetts v. EPA, the Commonwealth's declarations did
not identify particular coastal land that had been lost or would
necessarily be lost based on rising sea levels, but the Supreme
Court found standing, stating that "the likelihood that
Massachusetts' coastline will recede has nothing to do with whether
[Massachusetts] ha[s] determined the precise metes and bounds of
[its] soon-to-be-flooded land." 549 U.S. at 523 n.21. Similarly,
the likelihood of a fiscal injury to the Commonwealth does not
turn on the identification of specific women, and such
identification is not required for standing here.
14 Here, as the Commonwealth discusses in its reply brief, it is
not clear how it could reasonably be expected to point to
particular women affected by the IFRs, even if the IFRs or Final
Rules were in effect and employers in the Commonwealth had used
the exemptions. Like the IFRs, the Final Rules do not require
employers to notify the Commonwealth that they are using the
exemptions, see 83 Fed. Reg. at 57,558; 83 Fed. Reg. at 57,614,
nor do women have to tell the Commonwealth when they are seeking
contraceptive care and services from a state-funded program.
Indeed, medical privacy concerns cut against any such formal
notification by women to the Commonwealth.
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b. The Commonwealth Has Shown Its Costs Will Most
Likely Rise with Increased Numbers of Women Using
State-Funded Contraceptive Care
The Commonwealth's evidence has also established a
substantial risk that a portion of the women who would lose
contraceptive coverage would then obtain state-funded
contraceptive care or state-funded prenatal care for unintended
pregnancies, and thus cause the Commonwealth to incur costs. The
evidence establishes the following: (1) the Commonwealth provides
at least partially state-funded contraceptive services through
MassHealth, which has about two million enrolled members, through
the Massachusetts Department of Public Health, and through the
University of Massachusetts Boston; (2) women with incomes up to
300 percent of the federal poverty line usually can receive
contraceptive care through programs funded by the Commonwealth's
Department of Public Health; and (3) on average, about twenty-five
percent of women in the Commonwealth who currently have employer-
sponsored coverage could qualify for these state-funded programs
because they (a) have "employer or union provided health insurance
and . . . [b] have household insurance unit income[s] less than or
equal to 300% of the [Federal Poverty Level]," adding up to 365,762
between the ages of 15 and 45 who have employer or union provided
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health insurance and are in household insurance units with income
less than or equal to 300% of the federal poverty level.
Applying the state's calculation that at least
twenty-five percent of women who currently have employer-sponsored
coverage will be eligible for state-funded care, and adjusting the
upper and lower bound estimates of the Departments' Regulatory
Impact Analysis to the Commonwealth's percentage of the national
population, the Commonwealth set forth that 99 to 354 women that
will likely lose coverage as a result of the regulations will
qualify for state funded programs. Considering that, based on the
Departments' Regulatory Impact Analysis, the annual cost of
contraceptive coverage averages around $584 a year per woman, 82
Fed. Reg. 47,821, the state estimated it will likely be liable for
about $54,312 to $206,736 a year for contraceptive care.
None of these statements have been seriously contested
by the Departments (and besides, at the summary judgment stage,
the "specific facts" "'set forth' [by a plaintiff] by affidavit or
other evidence . . . will be taken as true," Lujan, 504 U.S. at
561). The Commonwealth has indeed produced specific facts
regarding the imminent injury, and they go well beyond the
proportional theory on which the district court focused on. The
Departments' attack on the accuracy of the numbers provided by the
Commonwealth misses the point: the Commonwealth need not be exactly
correct in its numerical estimates in order to demonstrate an
-36-
imminent fiscal harm. Indeed, the Departments have assumed in
their own regulatory impact analysis that "state and local
governments will bear additional economic costs," California II,
911 F.3d at 572, and the Commonwealth's evidence fleshes this out.
The Departments' own estimate is based on average costs
across the nation rather than what might be higher costs in the
Commonwealth. Even so, the average cost to the Commonwealth of a
single woman relying fully on state-funded contraceptive care for
one year would be $584 (if no portion was covered by other
sources), based on the national estimate. 82 Fed. Reg. at 47,823.
Whether costs to the Commonwealth are above or below this average,
they are not zero. The declaration submitted by the General
Counsel of the Massachusetts Department of Public Health states
that, based on the General Counsel's personal knowledge and review
of relevant information, "[a]n increase in the prevalence of
employer-sponsored insurance that does not provide coverage for
comprehensive family planning services would likely result in an
increase in the number of Massachusetts residents eligible for and
receiving services funded" by the Commonwealth.
And a birth resulting from the denial of contraceptive
access will likely have significant costs to the Commonwealth as
well. A 2010 analysis found that the average cost to the
Commonwealth of an unplanned birth was $15,109 in maternity care
and other healthcare in the first year of the child's life alone.
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See Adam Sonfield & Kathryn Kost, Public Costs from Unintended
Pregnancies and the Role of Public Insurance Programs in Paying
for Pregnancy-Related Care: National and State Estimates for 2010,
Guttmacher Inst., p.8 (Feb. 2015), https://www.guttmacher.org/
sites/default/files/report_pdf/public-costs-of-up-2010.pdf.
The Departments theorize about a hypothetical woman who
loses coverage but is "able to pay out of pocket for contraceptive
services" or "ha[s] access to such coverage through a spouse's (or
parent's) plan." Such a hypothetical woman may exist, but the
number of women with incomes that make them eligible for state-
assisted contraceptive coverage but who still fit in that category
would, logically, be very small. The argument is largely
irrelevant to the Commonwealth's claims of injury.
c. The Commonwealth Has Shown a Likely Chain of Events
for Standing
The Commonwealth's "cause and effect [chain is]
predicated on . . . probable market behavior." Adams, 10 F.3d at
923. That the asserted imminent fiscal injury relies on a
prospective chain of events does not defeat standing. Indeed, the
Supreme Court has found standing in cases involving causal chains
more attenuated than this one. In Monsanto, standing was found
where the claim of injury was based on a causal chain of at least
four steps: (1) "genetically engineered alfalfa seed fields [we]re
. . . being planted in all the major alfalfa seed production
-38-
areas"; (2) "bees that pollinate alfalfa have a range of at least
two to ten miles"; (3) the alfalfa seed farms at issue were in an
area within the bees' range, due to the "compact geographic area
of the prime alfalfa seed producing areas"; all of which, taken
together, meant that (4) growers would incur injury by taking, for
example, "certain measures to minimize the likelihood of potential
contamination and to ensure an adequate supply of non-genetically-
engineered alfalfa." 561 U.S. at 153 n.4 & 154-55 (internal
quotation marks omitted); accord Clapper, 568 U.S. at 420. The
Commonwealth has set forth predictions of injury, supported by
evidence, that are even more likely than those in Monsanto, and
thus they are not merely a "highly attenuated chain of
possibilities." Clapper, 568 U.S. at 410.
2. The Alleged Injury is Concrete and Particularized
The next question is whether the imminent injury alleged
is concrete and particularized. See Spokeo, Inc. v. Robins, 136
S. Ct. 1540, 1548 (2016). The Departments do not claim that the
Commonwealth's alleged fiscal injury would not be both concrete
and particularized.
Concreteness requires something "real, and not
abstract." Id. (internal quotation marks omitted). An imminent
fiscal injury, supported by evidence, as here, is a concrete
injury. A sufficiently particularized injury "affect[s] the
plaintiff in a personal and individual way." Id. (quoting Lujan,
-39-
504 U.S. at 560 n.1). The imminent financial harm alleged would
impact the Commonwealth in an "individual" way. So, the
Commonwealth's asserted imminent financial injury is concrete and
particularized.
3. The Commonwealth Has Shown Causation and Redressability
Causation and redressability are the final two
requirements for Article III standing. Lujan, 504 U.S. at 561-
62. The Departments do not contest that the alleged injury would
be caused by the federal regulations and would be redressable by
an injunction. As to causation, the asserted imminent fiscal
injury is clearly "fairly traceable to the challenged action,"
Monsanto, 561 U.S. at 149, as we have described earlier. As to
redressability, an injunction preventing the application of these
exemptions would stop the alleged fiscal injury from occurring,
making it not only "likely," Spokeo, 136 S. Ct. at 1547, but
certain that this injury would not occur for as long as the
exemptions are enjoined.
III.
In sum, the Commonwealth's substantive challenges to the
Departments' federal regulations are not moot. Its procedural
challenge to the IFRs, however, has been mooted by the promulgation
of the Final Rules, but this does not preclude the Commonwealth
from asserting any procedural challenges to the Final Rules.
Finally, the Commonwealth has Article III standing to challenge
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the Departments' actions. We vacate and remand for proceedings
consistent with this opinion.
VACATED AND REMANDED.
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