State of California v. Health and Human Services et al

Filing 134

ORDER by Judge Haywood S. Gilliam, Jr. GRANTING DEFENDANT-INTERVENOR'S 87 MOTION TO INTERVENE(terminating 132 Administrative Motion as moot). (ndrS, COURT STAFF) (Filed on 1/26/2018)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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STATE OF CALIFORNIA, et al.,
Plaintiffs,

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v.

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HEALTH AND HUMAN SERVICES, et al.,

ORDER GRANTING DEFENDANTINTERVENOR'S MOTION TO
INTERVENE
Re: Dkt. No. 87

Defendants.

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United States District Court
Northern District of California

Case No. 17-cv-05783-HSG

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Pending before the Court is a motion to intervene filed by March for Life Education and

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Defense Fund (“March for Life”). Dkt. No. 87. In this case, the plaintiffs allege that certain

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federal agencies issued interim final rules (“IFRs”) in violation of the Administrative Procedure

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Act (“APA”) and the United States Constitution. The IFRs, inter alia, created a moral exemption

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to the Affordable Care Actʼs contraceptive mandate, which generally requires employersʼ health

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insurance plans to cover all contraceptive methods approved by the Food and Drug Administration

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(“FDAˮ) without cost sharing on the part of employees. For the reasons set forth below, March

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for Lifeʼs motion is GRANTED.

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I.

BACKGROUND

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A.

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March for Life is a pro-life, non-religious organization located in Washington, D.C. Dkt.

March for Life Education and Defense Fund

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No. 87-1 (Decl. of Jeanne F. Mancini, or “Mancini Decl.”) ¶ 2. Founded in 1973 following the

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Supreme Courtʼs decision in Roe v. Wade, March for Life exists to “oppose abortion in all its

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formsˮ and “help all like-minded Americans to protect and advocate for the lives of unborn

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children.ˮ See id. ¶¶ 3, 4, 5. The organization is non-profit and tax-exempt. Id. ¶ 2. It is this

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organization that brings the instant motion. March for Life represents that in accordance with its

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underlying principles, it opposes the “destruction of human life at any stage before birth, including

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by abortifacient methods that may act after the union of a sperm and ovum.ˮ See id. ¶¶ 11-12. As

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a matter of policy, March for Life only hires employees who are pro-life and share the

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organizationʼs basic moral convictions. See id. ¶ 8.

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B.

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The Court briefly recounts the history of the contraceptive mandate as relevant to the IFR

The Regulatory Backdrop

at issue in this case.1 In 2010, Congress enacted the Affordable Care Act (“ACA”). The ACA

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included a provision that required health plans to cover certain forms of preventive care for

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women without cost sharing, as specified in guidelines provided by the Health Resources and

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Services Administration (“HRSA”), an agency of the U.S. Department of Health and Human

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United States District Court
Northern District of California

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Services (“HHS”). 42 U.S.C. § 300gg-13(a)(4). In 2011, HRSA issued those guidelines, which

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defined preventive care coverage to include all FDA-approved contraceptive methods.2
In 2012, in response to substantial public input, HHS, the U.S. Department of Labor, and

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the U.S. Department of the Treasury (“the agencies”) promulgated regulations exempting from the

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ACA’s contraceptive mandate certain religious employers who objected to providing

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contraceptive coverage. 77 Fed. Reg. 8,727. In 2013, the agencies promulgated rules establishing

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an accommodation, under which eligible organizations with religious objections to providing

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contraceptive coverage were “not required to contract, arrange, pay, or refer for [it],” but their

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“plan participants and beneficiaries . . . [would] still benefit from separate payments for

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contraceptive services without cost sharing or other charge,” as required by law. 78 Fed. Reg.

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39,874.
In 2014, the Supreme Court issued two opinions that affected the contours of the

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The Court provided a more detailed history of the mandate and challenged IFRs in its Order
Granting Plaintiffs’ Motion for a Preliminary Injunction. See Dkt. No. 105 at 2-11.
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See HEALTH RES. & SERVS. ADMIN., Women’s Preventive Services Guidelines, available at
https://www.hrsa.gov/womens-guidelines/index.html. On December 20, 2016, HRSA updated the
guidelines, clarifying that “[c]ontraceptive care should include contraceptive counseling, initiation
of contraceptive use, and follow-up care,” as well as “enumerating the full range of contraceptive
methods for women” as identified by the FDA. See HEALTH RES. & SERVS. ADMIN., Women’s
Preventive Services Guidelines, available at https://www.hrsa.gov/womens-guidelines2016/index.html.
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exemption and accommodation. As a result of Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct.

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2751 (2014), the agencies issued rules extending the exemption to closely-held entities with

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religious objections to providing contraceptive coverage. 80 Fed. Reg. 41,324. And as a result of

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Wheaton College v. Burwell, 134 S. Ct. 2806 (2014), the agencies issued a rule allowing

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organizations to trigger the accommodation process by providing the government notice of a

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religious objection using an alternative mechanism. 80 Fed. Reg. 41,323.
March for Lifeʼs Litigation

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C.

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In July 2014, March for Life (along with two of its employees) brought suit against the
government in federal court, challenging the contraceptive mandate as violating the Constitution,

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the Religious Freedom and Restoration Act of 1993 (“RFRAˮ), and the Administrative Procedure

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United States District Court
Northern District of California

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Act (“APA”). See March for Life v. Burwell, 128 F. Supp. 3d 116, 123 (D.D.C. 2015). In

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September 2014, the plaintiffs moved for, inter alia, preliminary and permanent injunctive relief,

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which the district court consolidated and construed as a motion for summary judgment. Id. at 120.

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In August 2015, the court permanently enjoined the government from enforcing the contraceptive

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mandate against March for Life, on the grounds that enforcement of that provision would violate

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the Equal Protection Clause of the Fifth Amendment, RFRA, and the APA. Id. at 134. In October

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2015, the federal government filed its notice of appeal, and the D.C. Circuit ordered the case be

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held in abeyance pending its decision in a similar case following the Supreme Courtʼs remand in

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Zubik v. Burwell, 136 S. Ct. 1557 (2016) (per curiam). Dkt. No. 87 at 11-12. March for Lifeʼs

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case currently remains in abeyance pending further order by the D.C. Circuit. Id. at 12.

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D.

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In May 2016, the Supreme Court issued its opinion in Zubik. The petitioners were

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primarily non-profit organizations, all of which were eligible for the religious accommodation but

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challenged the requirement that they submit notice to either their insurer or to the federal

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government as a violation of RFRA. Zubik, 136 S. Ct. at 1558. “Following oral argument, the

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Court requested supplemental briefing from the parties addressing ‘whether contraceptive

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coverage could be provided to petitioners’ employees, through petitioners’ insurance companies,

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without any such notice from petitioners.’” Id. at 1558-59. After the parties stated that “such an

The Zubik Case and Subsequent Impasse

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option [was] feasible,” the Court remanded to afford them “an opportunity to arrive at an approach

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going forward that accommodates petitioners’ religious exercise while at the same time ensuring

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that women covered by petitioners’ health plans ‘receive full and equal health coverage, including

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contraceptive coverage.’” Id. at 1559. “The Court express[ed] no view on the merits of the

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cases,” and did not decide “whether petitioners’ religious exercise [had] been substantially

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burdened, whether the [g]overnment has a compelling interest, or whether the current regulations

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are the least restrictive means of serving that interest.” Id. at 1560. The litigation was then stayed.
In July 2016, the agencies issued a request for information (“RFI”) on whether, in light of

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Zubik,
there are alternative ways (other than those offered in current
regulations) for eligible organizations that object to providing
coverage for contraceptive services on religious grounds to obtain an
accommodation, while still ensuring that women enrolled in the
organizations’ health plans have access to seamless coverage of the
full range of [FDA]-approved contraceptives without cost sharing.

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United States District Court
Northern District of California

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81 Fed. Reg. 47,741. In January 2017, the agencies issued a document titled “FAQs About
Affordable Care Act Implementation Part 36” (“FAQs”).3 The FAQs stated that, based on the
54,000 comments received in response to the RFI, there was “no feasible approach . . . at this time

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that would resolve the concerns of religious objectors, while still ensuring that the affected women
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receive full and equal health coverage, including contraceptive coverage.” FAQs at 4.

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E.

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The 2017 Interim Final Rules

On May 4, 2017, the President issued Executive Order No. 13,798, directing the agencies
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to “consider issuing amended regulations, consistent with applicable law, to address consciencebased objections to the preventive care mandate . . . .” 82 Fed. Reg. 21,675. Subsequently, on

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October 6, 2017, the agencies issued the Religious Exemption IFR and the Moral Exemption IFR
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at issue in this case, both of which were effective immediately. 82 Fed. Reg. 47,792.
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The Moral Exemption IFR, which is the IFR relevant to this motion, extended the
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DEPʼT OF LABOR, FAQs About Affordable Care Act Implementation Part 36, available at
https://www.dol.gov/sites/default/files/ebsa/about-ebsa/our-activities/resource-center/faqs/acapart-36.pdf.
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protections afforded under the Religious Exemption4 “to include additional entities and persons

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that object based on sincerely held moral convictions.” 82 Fed. Reg. 47,849. Additionally,

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“consistent with [their] expansion of the exemption, [the agencies] expand[ed] eligibility for the

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accommodation to include organizations with sincerely held moral convictions concerning

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contraceptive coverage,” while also making the accommodation process optional for those entities.

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Id.
Plaintiffsʼ Challenge of the Interim Final Rules

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F.

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Plaintiffs in this case are the states of California, Delaware, Maryland, and New York, and

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the Commonwealth of Virginia. Defendants are HHS, Secretary of HHS Eric D. Hargan, the U.S.
Department of Labor, Secretary of Labor R. Alexander Acosta, the U.S. Department of the

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United States District Court
Northern District of California

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Treasury, and Secretary of the Treasury Steven Mnuchin. Plaintiffs challenge the Religious

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Exemption and Moral Exemption IFRs, asserting that they violate the APA, the Establishment

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Clause, and the Equal Protection Clause.
On November 1, 2017, Plaintiffs filed the First Amended Complaint. Dkt. No. 24. On

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November 9, 2017, they moved for a preliminary injunction, seeking to prohibit implementation

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of the IFRs and require reinstatement of the previous exemption and accommodation regime,

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pending resolution on the merits. See Dkt. No. 28. The Court granted Plaintiffsʼ motion for a

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preliminary injunction on December 21, 2017. Dkt. No. 105.
On November 21, 2017, the Little Sisters of the Poor Jeanne Jugan Residence (“the Little

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Sistersˮ) filed a motion to intervene. See Dkt. No. 38. The Court granted this motion on

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December 29, 2017. See Dkt. No. 115.

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Meanwhile, March for Life filed this motion to intervene on December 8, 2017. Dkt. No.

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87 (“Mot.”). Plaintiffs filed their opposition on December 22, 2017, Dkt. No. 107, and March for

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Life replied on December 29, 2017, Dkt. No. 113. On January 17, 2018, March for Life requested

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The Religious Exemption IFR substantially broadened the scope of the religious exemption,
extending it “to encompass entities, and individuals, with sincerely held religious beliefs objecting
to contraceptive or sterilization coverage,” and “making the accommodation process optional for
eligible organizations.” 82 Fed. Reg. 47,807-08. Such entities “will not be required to comply
with a self-certification process.” Id. at 47,808. Just as the IFR expanded eligibility for the
exemption, it “likewise” expanded eligibility for the optional accommodation. Id. at 47,812-13.
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that its motion to intervene be decided without a hearing. Dkt. No. 132.5

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II.

Federal Rule of Civil Procedure 24(a) governs intervention as of right. The rule is

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“broadly interpreted in favor of intervention,” and requires a movant to show that

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(1) the intervention application is timely; (2) the applicant has a
significant protectable interest relating to the property or transaction
that is the subject of the action; (3) the disposition of the action may,
as a practical matter, impair or impede the applicant’s ability to
protect its interest; and (4) the existing parties may not adequately
represent the applicant’s interest.

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LEGAL STANDARD

Citizens for Balanced Use v. Mont. Wilderness Assʼn, 647 F.3d 893, 897 (9th Cir. 2011) (citing

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Prete v. Bradbury, 438 F.3d 949, 954 (9th Cir. 2006)). Courts deciding motions to intervene as of
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right are “guided primarily by practical considerations, not technical distinctions.” See id.

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United States District Court
Northern District of California

(quoting Sw. Ctr. for Biological Diversity v. Berg, 268 F.3d 810, 818 (9th Cir. 2001)); see also
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U.S. v. City of L.A., 288 F.3d 391, 397 (9th Cir. 2002) (stating that “equitable considerations”

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guide determination of motions to intervene as of right) (citation omitted).
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Federal Rule of Civil Procedure 24(b) governs permissive intervention. The Ninth Circuit
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has interpreted the rule to allow permissive intervention “where the applicant for intervention
shows (1) independent grounds for jurisdiction; (2) the motion is timely; and (3) the applicant’s
claim or defense, and the main action, have a question of law or a question of fact in common.”

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City of L.A., 288 F.3d at 403 (quoting Nw. Forest Res. Council v. Glickman, 82 F.3d 825, 839 (9th
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Cir. 1996)). “In exercising its discretion” on this issue, “the court must consider whether the
intervention will unduly delay or prejudice the adjudication of the original parties’ rights.” Fed.

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R. Civ. P. 24(b)(3).
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III.

DISCUSSION
March for Life argues that it is entitled to intervention as of right, or in the alternative, to

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permissive intervention. At the core of its argument is the claim that this lawsuit “threatens to
undo the protections contained” in the Moral Exemption IFR and “produce a ruling that

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The Court agrees that this matter is appropriate for disposition without oral argument and the
matter is deemed submitted. See Civil L.R. 7-1(b).
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contradicts the injunctive relief” March for Life has “already secured.ˮ Mot. at 1-2. As such, it

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seeks intervention to defend what it characterizes as “its right to operate its organization in a

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manner consistent with its moral convictions and its reason for being, free from the imposition of

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potentially crippling fines.ˮ See id. at 1.
While March for Life’s basis for seeking intervention is different from the Little Sisters’,

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the controlling legal analysis is identical. Accordingly, the Court incorporates by reference the

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analysis in its order granting the Little Sistersʼ motion to intervene, and finds that March for Life

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is not entitled to intervention as of right because it cannot overcome the presumption that the

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government will adequately represent its interest with regard to the Moral Exemption IFR. See

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Dkt. No. 115 at 7-14. As with the Little Sisters, however, permissive intervention is appropriate

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United States District Court
Northern District of California

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under these circumstances. See Dkt. No. 115 at 14-15.

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IV.

CONCLUSION

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For the foregoing reasons, permissive intervention (but not intervention as of right) is

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warranted. March for Lifeʼs motion to intervene is therefore GRANTED. This terminates Docket

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Number 132 as moot.

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IT IS SO ORDERED.
Dated: 1/26/2018
______________________________________
HAYWOOD S. GILLIAM, JR.
United States District Judge

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