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Another Federal District Court Blocks HHS’s Rollback of Sex-Based Discrimination Protections

Posted on September 22, 2020 in Health Law News

Published by: Hall Render

On September 2, 2020, Judge James E. Boasberg of the U.S. District Court for the District of Columbia issued a nationwide preliminary injunction enjoining the U.S. Department of Health and Human Services (“HHS”) from: (i) enforcing its repeal of the definition of discrimination “on the basis of sex” insofar as it includes discrimination on the basis of “sex stereotyping,” as set forth in a 2016 Rule implementing Section 1557 (the nondiscrimination provision) of the Affordable Care Act (“ACA”) (“2016 Rule”); and (ii) enforcing its incorporation of the religious exemption contained in Title IX[1] to HHS’s 2020 Rule implementing Section 1557 (“2020 Rule”). The case title is Whitman-Walker Clinic v. HHS.[2]

The Whitman-Walker Clinic decision means that for the time being, and at least until final resolution of the case, covered entities subject to the 2020 Rule may not discriminate against individuals on the basis of sex (including on the basis of sex stereotyping) in federally funded health programs and activities. Further, religious organizations that believe the 2020 Rule would be inconsistent with their “religious tenets” cannot claim a religious exemption from the Rule pursuant to the preliminary injunction now in place under Whitman-Walker Clinic.

The Whitman-Walker Clinic decision is the second federal court decision in a two-week period to walk back the portion of the 2020 Rule that bases sex discrimination on “the plain meaning of the word ‘sex’ as male or female and as “determined by biology,” with no additional protections for transgender or gender non-conforming individuals. In the other federal court decision, Walker v. Azar,[3] Judge Frederic Block of the Eastern District of New York stayed the repeal of the 2016 definition of “discrimination on the basis of sex,” thereby reinstating the definitions of “on the basis of sex,” “gender identity” and “sex stereotyping” currently set forth at 45 C.F.R. § 92.4. For more information on the Walker v. Azar case see this previous Hall Render update. Both sets of Plaintiffs in these cases point to the Bostock v. Clayton County Bd. Of Commissioners[4] decision in their arguments, where the Supreme Court held that the definition of “sex” in Title VII, the federal civil rights law that outlaws discrimination in employment, encompasses discrimination on the basis of sexual orientation and gender identity. Hall Render’s previous update on the Bostock decision can be found here.

Whitman-Walker Clinic

In Whitman-Walker Clinic, various health care facilities and organizations that serve LGBTQ individuals filed suit challenging the 2020 Rule’s retraction of specific discrimination protections for transgender and gender non-conforming individuals. The Court ruled that the Plaintiffs had standing to challenge the 2020 Rule and, likely, would succeed in their claim that the 2020 Rule arbitrarily and capriciously eliminated “sex stereotyping” from the 2016 Rule’s definition of “discrimination on the basis of sex.” The Court also held that HHS improperly incorporated  Title IX’s religious exemption into the 2020 Rule. Therefore, the Court granted the Plaintiffs’ motion to enjoin HHS from implementing these two provisions while litigation proceeds.

Of note, Judge Boasberg limited the scope of the preliminary nationwide injunction. Because Judge Boasberg believes the Court in a 2019 case in the U.S. District Court for the Northern District of Texas vacated the term “gender identity” from the definition of sex discrimination in the 2016 Rule, the Court could not grant the Plaintiff’s request for a preliminary injunction that would effectively reinstate protection against sex discrimination based on gender identity.

The 2016 Rule specifically defined “sex discrimination” to include discrimination on the basis of pregnancy, sex stereotyping and gender identity. However, before the 2020 Rule was finalized, the U.S. District Court for the Northern District of Texas vacated the “gender identity” portion of this definition, so that gender identity effectively was removed from the regulation. The Plaintiffs in Whitman-Walker Clinic argued that the Supreme Court Bostock case effectively “abrogated” the earlier opinion. Therefore, they reasoned, the Court’s vacatur of the term “gender identity” from the definition of “discrimination on the basis of sex” was legally nullified by the Bostock decision. Judge Boasberg rejected this argument as unsupported by any authority. The end result is, under the Whitman-Walker Clinic decision, covered entities may not discriminate against individuals in health care on the basis of sex including on the basis of sex stereotyping.

Finally, the Whitman-Walker Clinic opinion explicitly stated that a nationwide injunction is an “appropriate remedy.” Under District of Columbia Circuit precedent, district courts have broad discretion to issue nationwide injunctions when they determine that agency action is illegal. “Unlawful agency regulations are ordinarily vacated universally, not simply enjoined in application solely to the individual plaintiffs.”[5]

Practical Takeaways

The Whitman-Walker Clinic and Walker cases challenged HHS’s 2020 Rule limiting sex-based discrimination protections and provided some relief to the Plaintiffs in the form of preliminary injunctions and stays on enforcement of the 2020 Final Rule, pending final resolution. In another federal case[6] in which the State of Washington challenged HHS’s 2020 Rule, the U.S. District Court for the Western District of Washington ruled that the State of Washington lacked standing to advance its challenges to the 2020 Rule and denied Washington’s motion for a preliminary injunction.

The future of the sex-based discrimination segments of the 2020 Rule will be determined by the final resolution of the federal court cases and the outcome of the upcoming presidential election.  As such, covered entities subject to the nondiscrimination provisions of the ACA should consider maintaining their current nondiscrimination policies and procedures for the time being.

If you have any questions, please contact:

Special thanks to Macauley Rybar, law clerk, for his assistance in preparing this article.

Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.

Resources

[1] Title IX of the Education Amendments of 1972 prohibits sex discrimination in education programs or activities that receive Federal financial assistance.

[2] Whitman-Walker Clinic v. HHS, 2020 WL 5232076 (D.C. Sept. 2, 2020)

[3] Walker v. Azar, 2020 WL 4749859 (E.D.N.Y. Aug. 17, 2020)

[4] Bostock v. Clayton County, 140 S. Ct. 1731 (2020)

[5] Whitman-Walker Clinic @ pp. 99-100 citing Nat’l Mining Ass’n, 145 F.3d 1399, 1409 (D.C. Cir. 1998)

[6] State of Washington v. HHS, 20 WL 5095467 (W.D. Wash. Aug. 28, 2020)