Asapansa-Johnson Walker et al v. Azar II et al
MEMORANDUM and ORDER: The Court concludes that the proposed rules are, indeed, contrary to Bostock and, in addition, that HHS did act arbitrarily and capriciously in enacting them. Therefore, it grants plaintiffs application #8 for a stay and preliminary injunction to preclude the rules from becoming operative. The Court stays the repeal of the 2016 definition of discrimination on the basis of sex. As a result, the definitions of on the basis of sex, gender identity, and sex stereotyping currently set forth in 45 C.F.R. 92.4 will remain in effect. In addition, the Court preliminarily enjoins the defendants from enforcing the repeal. Both the stay and the injunction shall remain in effect pending further order of this Court. Ordered by Judge Frederic Block on 8/17/2020. (Innelli, Michael)
Case 1:20-cv-02834-FB-SMG Document 23 Filed 08/17/20 Page 1 of 26 PageID #: 364
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
WALKER and CECILIA GENTILI,
MEMORANDUM AND ORDER
Case No. 20-CV-2834 (FB) (SMG)
AZAR M. AZAR II, in his official
capacity as the Secretary of the United
States Department of Health and Human
Services, and UNITED STATES
DEPARTMENT OF HEALTH AND
For the Plaintiffs:
EDWARD J. JACOBS
KATHRYN M. ZUNNO-FREANEY
MICHAEL A. SABELLA
Baker & Hostetler LLP
45 Rockefeller Plaza
New York, New York 10110-0100
JOSHUA D. ROVENGER
Baker & Hostetler LLP
127 Public Square, Suite 2000
Cleveland, Ohio 44114-1214
KATRINA M. QUICKER
RYAN E. HARBIN
Baker & Hostetler LLP
1170 Peachtree Street, NE, Suite 2400
Atlanta, Georgia 30309-7676
For the Defendants:
WILLIAM K. LANE III
JORDAN L. VON BOKERN
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
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For Amicus Curiae:
DOUGLAS N. LETTER
Office of General Counsel
U.S. House of Representatives
219 Cannon House Office Building
Washington, DC 20515
BLOCK, Senior District Judge:
Some two months ago, the Supreme Court held that discrimination based on
sex encompassed discrimination based on both sexual orientation and gender
See Bostock v. Clayton Cnty, Ga., 140 S. Ct. 1731 (2020). It concluded
that such discrimination “has always been prohibited by Title VII’s plain terms,” and
that “that should be the end of the analysis.”
Id. at 1743.
In this case, the Court is tasked with having to decide if a proposed set of rules
by the Department of Health and Human Services (“HHS”) is contrary to the
Supreme Court’s pronouncement in Bostock or if the agency acted arbitrarily or
capriciously in enacting the rules.
For the reasons that follow, the Court concludes that the proposed rules are,
indeed, contrary to Bostock and, in addition, that HHS did act arbitrarily and
capriciously in enacting them.
Therefore, it grants plaintiffs’ application for a stay
and preliminary injunction to preclude the rules from becoming operative.
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In 2010 President Barack Obama signed into law the Patient Protection and
Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119, commonly known as the
Affordable Care Act (“ACA”) or Obamacare.
Section 1557 of the ACA (codified
at 42 U.S.C. § 18116) prohibits various forms of discrimination in “any health
program or activity” that either receives federal financial assistance or is
administered by a federal agency.
42 U.S.C. § 18116(a).
Rather than list the
prohibited grounds, § 1557 incorporates forms of discrimination prohibited by other
statutes, including Title IX of the Education Amendments of 1972, which makes it
unlawful to discriminate “on the basis of sex.” 20 U.S.C. § 1681(a). In addition,
§ 1557 incorporates the “enforcement mechanisms provided for and available
under” Title IX (and other statutes).
42 U.S.C. § 18116(a).
Finally, § 1557 states
that the Secretary of Health and Human Services (“HHS”) “may promulgate
regulations to implement this section.”
Id. § 18116(c).
Acting on that authority, HHS proposed a series of rules (“the 2016 Rules”)
in September 2015. See Nondiscrimination in Health Programs and Activities, 80
Fed. Reg. 54,172 (Sept. 8, 2015).
One proposed rule restated, in simpler language,
the statutory nondiscrimination provision: “[A]n individual shall not, on the basis of
race, color, national origin, sex, age, or disability, be excluded from participation in,
be denied the benefits of, or otherwise be subjected to discrimination under any
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health program or activity to which this part applies.” 80 Fed. Reg. at 54,218 (to
be codified at 45 C.F.R. § 92.101(a)). Another defined discrimination “on the basis
of sex” to include discrimination “on the basis of pregnancy, false pregnancy,
termination of pregnancy, or recovery therefrom, childbirth or related medical
conditions, sex stereotyping, or gender identity.”
C.F.R. § 92.4).
Id. at 54,216 (codified at 45
It then defined “sex stereotypes” as “stereotypical notions of
gender, including expectations of how an individual represents or communicates
gender to others, such as behavior, clothing, hairstyles, activities, voice,
mannerisms, or body characteristics,” id. at 54,216-17, and “gender identity” as “an
individual’s internal sense of gender, which may be different from that individual’s
sex assigned at birth,” id. at 54,216. The proposed rules were finalized in May
2016 and took effect on July 18, 2016. See Nondiscrimination in Health Programs
and Activities, 81 Fed. Reg. 31,375, 31,376 (May 18, 2016).
The stated purpose of the 2016 Rules was to “reflect the current state of
nondiscrimination law,” id. at 31,388, and HHS concluded that its definition of “on
the basis of sex” was consistent with “existing regulation and previous Federal
agencies’ and courts’ interpretations that discrimination on the basis of sex includes
discrimination on the basis of gender identity and sex stereotyping,” id.
But not everyone agreed that HHS’s interpretation was legally correct.
month after the 2016 Rules took effect, a coalition of states and healthcare providers
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filed suit in the Northern District of Texas to enjoin their enforcement.
Franciscan Alliance, Inc. v. Burwell, No. 7:16-CV-00108 (N.D. Tex. filed Aug. 23,
They argued that HHS exceeded its authority under § 1557 by defining
discrimination on the basis of sex to include discrimination based on gender identity.
The district court agreed and enjoined enforcement of that portion of the 2016
Rules. See Franciscan Alliance, Inc. v. Burwell, 227 F. Supp. 3d 660 (N.D. Tex.
2016).1 It held that HHS’s regulatory definition was not entitled to deference under
Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837
(1984), because “[t]he text of Section 1557 is neither silent nor ambiguous as to its
interpretation of sex discrimination.” Franciscan Alliance, 227 F. Supp. 3d at 687.
Noting that § 1557 incorporated Title IX, the district court believed that it was “clear
from Title IX’s text, structure, and purpose that Congress intended to prohibit sex
discrimination on the basis of the biological differences between males and
females.” Id. That conception of sex discrimination, it held, necessarily excluded
discrimination based on gender identity. See id. at 689 (“Prior to the passage of the
ACA in 2010 and for more than forty years after the passage of Title IX in 1972, no
federal court or agency had concluded sex should be defined to include gender
“Accordingly,” the district court concluded, “HHS’s expanded
The plaintiffs also challenged the inclusion of discrimination based on
pregnancy termination. That aspect of Franciscan Alliance is omitted from the
discussion because it is not at issue in this case.
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definition of sex discrimination exceeds the grounds incorporated by Section 1557.”
Timing, the saying goes, is everything.
injunction on December 31, 2016.
The district court issued its
Three weeks later, a new Administration took
As a result, HHS did not appeal the district court’s preliminary injunction,
which was later converted into an outright vacatur, with remand for “further
consideration.” See Franciscan Alliance, Inc. v. Azar, 414 F. Supp. 3d 928, 947
(N.D. Tex. 2019).
The district court did not delineate what “further consideration” should entail.
But even before the district court’s remand, HHS had begun the process of
dismantling the 2016 Rules.
On June 14, 2019, it gave notice of a proposal “to
repeal the novel definition of ‘sex’ in the Section 1557 regulation in order to make
the Department’s regulations implementing Title IX through the Section 1557
Regulation more consistent with the Title IX regulations of other Federal agencies.”
Nondiscrimination in Health and Health Education Programs or Activities, 84 Fed.
Reg. 27,846, 27,856 (June 14, 2019). In addition, HHS proposed replacing the list
of prohibited grounds of nondiscrimination with a reference to the statutes
incorporated by § 1557, including Title IX.
See 85 Fed. Reg. at 27,861 (to be
codified at 45 C.F.R. § 92.2). Despite significant opposition, the agency finalized
the proposal (“the 2020 Rules”) a year later.
See Nondiscrimination in Health and
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Health Education Programs or Activities, Delegation of Authority, 85 Fed. Reg.
37,160 (June 19, 2020).
Among many other things, HHS “finalize[d] its repeal of
§ 92.4 of the 2016 Rule without change.” Id. at 37,167.2 Cognizant that Bostock
was on the horizon, however, it recognized the obvious: “[T]o the extent that a
Supreme Court decision is applicable in interpreting the meaning of a statutory term,
the elimination of a regulatory definition of such term would not preclude
application of the Court’s construction.” Id. at 37,168.
HHS’s rationale for the 2020 Rules is set forth in what the parties refer to as
Many parts of the preamble evince an interpretation of § 1557 that
is fundamentally at odds with the interpretation embraced by the previous
“The Department enforces statutory prohibitions on discrimination on the
basis of race, color, national origin, age, disability, and sex discrimination
because they are set forth in the text of statutes incorporated into Section 1557,
and gender identity is not set forth as a protected category in those statutes.”
85 Fed. Reg. at 37,175.
Although there is no question that the 2020 Rules repeal the 2016 definition
of discrimination on the basis of sex, the repeal is implicit. Rather than stating “45
C.F.R. § 92.4 is hereby repealed” or something similar, the repeal is effected by
simply omitting that section from the proposed rules and renumbering the
subsequent rules accordingly.
The term, though widely used, is perhaps misleading if it implies a short
statement of purpose. The preamble to many regulations contains thousands of
words, and the 2020 Rules are no exception. The preamble to the Constitution, by
contrast, contains only 52.
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“‘Sex’ according to its original and ordinary public meaning refers to the
biological binary of male and female that human beings share with other
mammals.” Id. at 37,178.
“Title IX, along with its implementing regulations, consistently understands
‘sex’ to refer to the biological binary categories of male and female only.”
Id. at 37,179.
“The Department disagrees with commenters who contend that Section 1557
or Title IX encompass gender identity discrimination within their prohibition
on sex discrimination.” Id. at 37,183.
“The Department believes that, unlike stereotypes, reasonable distinctions on
the basis of sex, as the biological binary of male and female, may, and often
must, play a part in the decision-making process— especially in the field of
health services.” Id. at 37,185 (internal quotation marks omitted).
“The Department declines to interfere in these [medical] practices, and repeals
a mandate that was, at least, ambiguous and confusing.” Id. at 37,187.
“The 2016 Rule’s definition of gender identity does not turn on any biological
or external indicia of sex, and explicitly disavows any such reliance. Under
the 2016 Rule, one can identify as ‘male, female, neither, or a combination of
male and female.’ A person’s gender identity under the 2016 Rule is
determined ultimately by what a person says his or her gender identity is, and
a covered entity is bound to treat all individuals ‘consistent with their gender
identity’ the moment it becomes aware of such a declaration (which must be
allowed to change under the 2016 Rule). No other Federal statute, agency
rule, or guidance has ever gone so far on this question.” Id. at 37,189.
In sum, the 2020 Rules take the position that “[t]he plain meaning of ‘sex’ under
Title IX encompasses neither sexual orientation nor gender identity.” Id. at 37,194.
In addition, HHS noted the effect of pending litigation on its rulemaking. It
proposed the 2020 Rules in part “to address the overbroad interpretations, adopted
in the current rule, of Section 1557 that were identified by the court [in Franciscan
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Alliance] and other Federal precedents.”
84 Fed. Reg. at 27,849; see also id. (“The
existence of lawsuits and court orders blocking enforcement of significant parts of
the [2016 Rule] for over two years indicates that changes in the proposed rule may
minimize litigation risk.”).
But its decision was not based merely on deference to
a court order; as stated in the preamble to the final rules, HHS “also agrees with the
Franciscan Alliance ruling, according to which the 2016 Rule’s extension of sexdiscrimination protections to encompass gender identity was contrary to the text of
Title IX and hence not entitled to Chevron deference.”
85 Fed. Reg. at 37,168
Indeed, the 2020 Rules embodied the new Administration’s position on the
issue: “The U.S. government has taken the position in Harris and other relevant
litigation that discrimination ‘on the basis of sex’ in Title VII and Title IX does not
encompass discrimination on the basis of sexual orientation or gender identity.” Id.
“Harris” referred to EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., in which the
Sixth Circuit held that Title VII prohibited discrimination based on both sex
stereotyping and transgender status. 884 F.3d 560, 574-75 (6th Cir. 2018). The
Supreme Court granted certiorari, see 139 S. Ct. 1599 (2019), and consolidated
Harris with Bostock, in which the Eleventh Circuit had reached a contrary result, see
723 F. App’x 964, 965 (11th Cir. 2018), cert. granted, 139 S. Ct. 1559 (2019).
HHS proposed the 2020 Rules some two months after the Supreme Court
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granted certiorari in Bostock and, as reflected in the preamble, the agency was well
aware of the case and its potential impact.
It noted that some of those commenting
on the proposed rules had “urged the Department to wait until the Supreme Court
decides Harris Funeral Homes before publishing a rule that deals with the same
subject matter, or allow for commenters to comment again once the case has been
85 Fed. Reg. at 37,168.
HHS demurred, reasoning that it was
“permitted to issue regulations on the basis of the statutory text and its best
understanding of the law and need not delay a rule based on speculation as to what
the Supreme Court might say about a case dealing with related issues.” Id.
acknowledged the significance of the case, however, though it stopped short of
conceding that the Supreme Court’s decision would be dispositive:
The Department continues to expect that a holding by the U.S. Supreme
Court on the meaning of “on the basis of sex” under Title VII will likely
have ramifications for the definition of “on the basis of sex” under Title
IX. Title VII case law has often informed Title IX case law with
respect to the meaning of discrimination “on the basis of sex[.]” At
the same time, . . . the binary biological character of sex (which is
ultimately grounded in genetics) takes on special importance in the
health context. Those implications might not be fully addressed by
future Title VII rulings even if courts were to deem the categories of
sexual orientation or gender identity to be encompassed by the
prohibition on sex discrimination in Title VII.
Thus, HHS concluded, “to the extent that a Supreme Court decision is
applicable in interpreting the meaning of a statutory term, the elimination of a
regulatory definition of such term would not preclude application of the Court’s
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HHS was apparently confident that the Supreme Court would endorse the
Administration’s interpretation of sex discrimination. See id. (“[T]he reasons why
‘on the basis of sex’ (or ‘because of sex,’ as used in Title VII) does not encompass
sexual orientation or gender identity under Title VII have similar force for the
interpretation of Title IX.” (emphasis added)). Its confidence was misplaced.
The Supreme Court issued its decision in Bostock on June 15, 2020. Justice
Gorsuch, writing for a six-member majority, accepted, for the sake of argument, that
“sex” referred “only to biological distinctions between male and female.”
Ct. at 1739.
He nevertheless held that “it is impossible to discriminate against a
person for being homosexual or transgender without discriminating against that
individual based on sex.” Id. at 1741.
The final 2020 Rules are dated May 20, 2020, and were filed on June 12, 2020,
three days before the Supreme Court’s decision; they were published on June 15,
2020, four days after the decision.
See 85 Fed. Reg. at 37,248.
unsurprisingly given the timing, the decision is not mentioned once in the 2020 Rules
or their preamble, which span 88 pages of the Federal Register.4
Courts, on the other hand, have already started sorting out the implications
of Bostock. On August 7, 2020, the Eleventh Circuit held that Supreme Court’s
interpretation of Title VII applies with equal force to Title IX. See Adams v. Sch.
Bd. of St. Johns Cnty., ___ F.3d ___, 2020 WL 4561817, at *11 (11th Cir. Aug. 7,
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The 2020 Rules are slated to take effect on August 18, 2020.
See id. at
On June 26, 2020, two transgender women, Tanya Asapansa-Johnson
Walker and Cecilia Gentili, filed this lawsuit.5
conditions that require ongoing care.
Both plaintiffs have serious medical
Specifically, Walker requires treatment
related to her prior lung cancer and her HIV-positive status, while Gentili requires
treatment for chronic obstructive pulmonary disease and emphysema. See Walker
Decl. ¶ 30; Gentili Decl. ¶¶ 44-45.
Both plaintiffs have experienced discrimination based on their transgender
Walker has been mocked by medical office staff and refused treatment by
See Walker Decl. ¶¶ 47-49.
During her lung cancer
treatment, Walker was required to answer invasive questions about her genitals
before being given necessary care. Id. ¶ 54.
Throughout her treatment, Walker
was subjected to misgendering, the exposing of her genitals, physical abuse, and
refusals to provide medication. Id. ¶¶ 58-62. Currently, Walker is seeking gender
Theirs is not the only suit. A coalition of healthcare providers and LGBTQ
organizations have filed a similar suit in the District of Columbia. See WhitmanWalker Clinic, Inc. v. U.S. Dep’t of Health & Human Servs., No. 1:20-CV-1630
(D.D.C. filed June 22, 2020). Meanwhile, twenty-two states and the District of
Columbia have filed suit in the Southern District of New York. See N.Y. v. U.S.
Dep’t of Health & Human Servs., 1:20-CV-5583 (S.D.N.Y. filed July 20, 2020).
Case 1:20-cv-02834-FB-SMG Document 23 Filed 08/17/20 Page 13 of 26 PageID #: 376
confirmation surgery but, because she is a veteran, she needs a letter from Veterans
Affairs (“VA”) stating why the surgery is medically necessary. Id. ¶¶ 68-71.
therapists have repeatedly refused to write this letter.
Gentili has faced similar discrimination.
During routine doctor’s visits,
doctors have mocked Gentili’s body, refused to treat her, and used offensive
language towards her after realizing she is transgender.
Gentili Decl. ¶¶ 22, 27.
Further, doctors have tried to “treat” Gentili’s gender identity against her wishes and
have refused to prescribe her necessary hormones.
Id. ¶¶ 27, 56.
Both Walker and Gentili state that their past experience will lead them to
avoid necessary medical care out of fear of further discrimination.
seek a declaration that the 2020 Rules are invalid under the Administrative
Procedure Act (“APA”) and a concomitant vacatur of the rules. In the meantime,
they ask the Court to stay the rules’ effective date and to preliminarily enjoin HHS
from enforcing them.
In addition to defending the rules on the merits, HHS argues that the plaintiffs
lack standing to sue.
“It is well established . . . that before a federal court can
consider the merits of a legal claim, the person seeking to invoke the jurisdiction of
the court must establish the requisite standing to sue.”
Ross ex rel. Dunham v.
Lantz, 408 F.3d 121, 123 (2d Cir. 2005) (quoting, with alteration, Whitmore v. Ark.,
495 U.S. 149, 154 (1990)).
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To establish standing, plaintiffs must show “(1) an injury in fact, (2) a
sufficient causal connection between the injury and the conduct complained of, and
(3) a likel[ihood] that the injury will be redressed by a favorable decision.” Susan
B. Anthony List v. Driehaus, 573 U.S. 149, 157-58 (2014) (internal quotation marks
omitted). Each of these elements must be demonstrated “with the manner and
degree of evidence required at the successive stages of the litigation.” Lujan v.
Defs. of Wildlife, 504 U.S. 555, 561 (1992). “When a preliminary injunction is
sought, a plaintiff’s burden to demonstrate standing will normally be no less than
that required on a motion for summary judgment.” Cacchillo v. Insmed, Inc., 638
F.3d 401, 404 (2d Cir. 2011) (internal quotation marks omitted)). “Accordingly, to
establish standing for a preliminary injunction, a plaintiff . . . must set forth by
affidavit or other evidence specific facts, which for purposes of the . . . motion will
be taken to be true.” Id. (internal quotation marks omitted).
Fortunately, the relevant allegations of the plaintiffs’ complaint are supported
by declarations. While HHS challenges the legal adequacy of the averments, it does
not dispute their veracity.
1. Injury in Fact
As set forth above, both plaintiffs attest that they have, based on their
transgender status, suffered past discrimination in receiving healthcare. That alone
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constitutes an injury in fact:
[D]iscrimination itself, by perpetuating archaic and stereotypic notions
or by stigmatizing members of the disfavored group as innately inferior
and therefore as less worthy participants in the political community, can
cause serious non-economic injuries to those persons who are
personally denied equal treatment solely because of their membership
in a disfavored group.
Heckler v. Mathews, 465 U.S. 728, 739-40 (1984) (internal citations and quotation
In addition, both plaintiffs state that the threat of future
discrimination will lead them to avoid seeking treatment for extant medical
conditions, with possibly life-threatening consequences. This, too, is an injury in
fact. Cf. Baur v. Veneman, 352 F.3d 625, 631-34 (2d Cir. 2003) (increased risk of
contracting food-borne illness constitutes injury in fact).
HHS does not seriously contend that illness and death are not injuries in fact.
Rather, it argues that the risk that the plaintiffs will experience those outcomes are
speculative. To be sure, a plaintiff seeking injunctive relief must show “a sufficient
likelihood that he [or she] will again be wronged in a similar way.” Marcavage v.
N.Y.C., 689 F.3d 98, 103 (2d Cir. 2012) (quoting, with alteration, L.A. v. Lyons, 461
U.S. 95, 111 (1983)). But “past wrongs are evidence bearing on whether there is a
real and immediate threat of repeated injury.” O’Shea v. Littleton, 414 U.S. 488,
496 (1974). Plaintiffs have experienced discrimination from healthcare providers
in the past, and their medical conditions will require them either to interact with at
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least some of those same medical providers in the future, or to delay or forego
treatment. The Court concludes that this “Catch-22” is sufficiently concrete to
constitute an injury in fact.
The causation element of standing “requires the injury to be ‘fairly traceable
to the challenged action of the defendant, and not the result of the independent action
of some third party not before the court[.]’” Citizens for Responsibility & Ethics in
Wash. v. Trump, 953 F.3d 178, 189 (2d Cir. 2019) (quoting Lujan, 504 U.S. at 560).
HHS argues that whatever discrimination plaintiffs may experience in the future is
traceable to healthcare providers and other third parties, not to the 2020 Rules.
The Court disagrees. An injury is traceable to government action if it results
from “the predictable effect of Government action on the decisions of third parties.”
Dep’t of Commerce v. N.Y., 139 S.Ct. 2551, 2566 (2019). This is true even if the
third parties act unreasonably or unlawfully. See id. (“Respondents have met their
burden of showing that third parties will likely react in predictable ways to the
citizenship question, even if they do so unlawfully and despite the requirement that
the Government keep individual answers confidential.”).
One of HHS’s rationales for repealing the 2016 Rule’s definition of sex
discrimination was that it “imposed new requirements for care related to gender
[that] prevented covered entities from drawing reasonable and/or medically
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indicated distinctions on the basis of sex.” 85 Fed. Reg. at 37,162. “As a result,”
it reasoned, “those provisions would have imposed confusing or contradictory
demands on providers, interfered inappropriately with their medical judgment, and
potentially burdened their consciences.” Id. It also agreed with the assessment of
the plaintiffs in Franciscan Alliance that the 2016 Rules “has created a massive new
liability for thousands of healthcare professionals unless they cast aside their medical
judgment and perform controversial and even harmful medical transition
84 Fed. Reg. at 27,848 (quoting the complaint).
undoubtedly intended the repeal to remove those perceived burdens on healthcare
providers, stating that some would “revert to the policies and practices they had in
place before the agency actions that created confusion regarding Title IX’s definition
of discrimination on the basis of sex.” Id. at 27,876. If even HHS understood that
some providers would refuse treatments to transgender patients following the repeal,
then its effect on those third parties was predictable.
The third component of standing—redressability—requires the plaintiff to
show that it is “likely, as opposed to merely speculative, that the injury will be
redressed by a favorable decision.” Lujan, 504 U.S. at 560 (internal quotation
In this case, redressability follows from traceability: If it is
predictable that some healthcare providers might “revert” to prior practices if the
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2016 Rules are repealed, then it is predicable that they will not do so if those rules
remain in effect.
HHS responds that the plaintiff’s requested remedy cannot revive the “gender
identity” portion of the 2016 definition vacated by the district court in Franciscan
Alliance. Although the Court predicts that either the district court or some higher
authority will revisit the vacatur in light of Bostock, it agrees that it has no power to
revive a rule vacated by another district court.
Nevertheless, Franciscan Alliance did not address the concept of “sex
stereotyping” embodied in the 2016 Rule. In Harris Funeral Homes, the Sixth
Circuit held that “discrimination against transgender persons necessarily implicates
Title VII’s proscriptions against sex stereotyping.” 884 F.3d at 576. Because a
transgender person is “inherently ‘gender non-conforming,’” it reasoned, “an
employer cannot discriminate on the basis of transgender status without imposing
its stereotypical notions of how sexual organs and gender identity ought to align.”
Id. The Court finds that reasoning persuasive and, therefore, disagrees with HHS’s
assertion that “the sex stereotyping provision ha[s] no real-world effect after the
[Franciscan Alliance] decision.” 85 Fed. Reg. at 37,236.
In sum, the Court concludes that plaintiffs have standing to seek a stay and a
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B. The Merits
Under the APA, “[a] person suffering legal wrong because of agency action,
or adversely affected or aggrieved by agency action within the meaning of a relevant
statute, is entitled to judicial review thereof.”
must be “final.”
Id. § 704.
5 U.S.C. § 702.
The agency action
No one disputes that the 2020 Rules satisfy that
In addition to authorizing judicial review, the APA empowers a reviewing
court to “issue all necessary and appropriate process to postpone the effective date
of an agency action or to preserve status or rights pending conclusion of the review
proceedings.” Id. § 705. Plaintiffs seek such a stay; they also ask the Court to
preliminarily enjoin the defendants from enforcing the 2020 Rules.
Those two remedies embody distinct concepts. A stay “halt[s] or postpon[es]
some portion of the proceeding, or . . . temporarily divest[s] an order of
enforceability.” Nken v. Holder, 556 U.S. 418, 428 (2009). “[A]n injunction is a
judicial process or mandate operating in personam”; that is, it is “directed at
someone, and governs that party’s conduct.” Id. But “[b]oth can have the practical
effect of preventing some action before the legality of that action has been
conclusively determined.” Id. This similarity is reflected in the legal standards for
each remedy: In deciding whether to issue a stay pursuant to § 705, courts have
borrowed the standards for preliminary injunctive relief. See, e.g., Nat. Res. Def.
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Council v. U.S. Dep’t of Energy, 362 F. Supp. 3d 126, 149 (S.D.N.Y. 2019) (citing
Sierra Club v. Jackson, 833 F. Supp. 2d 11, 30 (D.D.C. 2012)).
As the Second Circuit has recently reiterated, the standard for a preliminary
injunction comprises four factors:
A plaintiff seeking a preliminary injunction must establish that he is
likely to succeed on the merits, that he is likely to suffer irreparable
harm in the absence of preliminary relief, that the balance of equities
tips in his favor, and that an injunction is in the public interest.
N.Y. v. U.S. Dep’t of Homeland Sec., ___ F.3d ___, 2020 WL 4457951, at *8 (2d
Cir. Aug. 4, 2020) (quoting Winter v. Nat. Res. Def. Council, 555 U.S. 7, 20 (2008)).
When the party to be enjoined is the government, “the final two factors merge.” Id.
(citing Nken, 556 U.S. at 435).
The Court has already addressed the harm to the plaintiffs in connection with
standing. See id. at *30 (noting that the same injuries can “establish standing and
irreparable harm”). And it easily concludes that the harm would be irreparable—
that is, not able to be “remedied by an award of monetary damages.” Id. (internal
quotation marks omitted). Though such damages are possible, they could hardly
compensate plaintiffs for the detrimental effect of discrimination on their health and,
perhaps, their lives. The same can be said for the balance of equities and the public
interest. While HHS surely has an interest in its preferred policy, cf. id., that interest
cannot outweigh the harm to the many non-gender conforming members of the
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public for whom discrimination imposes a very concrete cost, see id. at *31
(preliminary injunction justified by “worse health outcomes”).
And so we come to the crux of the matter—whether the plaintiffs have
established a likelihood of success of the merits. Under the APA, a reviewing court
may set aside an agency action if it is “arbitrary, capricious, an abuse of discretion,
or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(a).
HHS argues that its proposed rules cannot be legally incorrect because they
simply restate the statutory language and acknowledge (as they must) that an
interpretation of that language by the Supreme Court is authoritative. Thus, it
argues that the repeal of the 2016 Rule is inconsequential and therefore plaintiffs fail
to establish a likelihood of success on the merits. As it states in its memorandum of
Because the 2020 Rule tracks the text of Section 1557 with respect to
the definition of “on the basis of sex,” plaintiffs cannot show that it is
legally invalid. Nor can plaintiffs demonstrate that HHS acted
arbitrarily and capriciously in issuing the Rule, given the thorough
reasoning the Agency provided to support its decision.
Defs.’ Mem. of Law 1-2.
The agency’s contention that the 2020 Rules are legally valid is disingenuous.
Moreover, the reasoning that the agency provided to support its decision compels
the conclusion—contrary to the Agency’s contention—that HHS did indeed act
arbitrarily and capriciously in enacting the Rule:
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1. The 2020 Rules are Contrary to Law.
In one sense, the Court agrees with HHS’s description of the legal import of
the 2020 Rules; if they merely restate the statutory bases for prohibited
discrimination, then how could they be contrary to law? Certainly, as HHS points
out, the rules themselves do not explicitly state that discrimination based on gender
identity is permissible.
But regulations must have a preamble. See 5 U.S.C. § 553(c). And “[w]hile
language in the preamble of a regulation is not controlling over the regulation itself,
we have often recognized that the preamble to a regulation is evidence of an agency’s
contemporaneous understanding of its proposed rules.” Halo v. Yale Health Plan,
819 F.3d 42, 52-52 (2d Cir. 2016) (quoting Wyo. Outdoor Council v. U.S. Forest
Serv., 165 F.3d 43, 53 (D.C. Cir. 1999)). It is clear from the preamble to the 2020
Rules that a central reason for HHS’s action was a fundamental disagreement as to
whether Title IX—and, by implication, § 1557—prohibited discrimination based on
gender identity and sex stereotyping. HHS took a position on that issue, as it was
entitled to do, but that position was effectively rejected by the Supreme Court. To
be sure, Bostock interpreted Title VII, but HHS itself recognized that the case would
have “ramifications” because “Title VII case law has often informed Title IX case
law with respect to the meaning of discrimination “on the basis of sex[.]”
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Of course, it is more typical to say that a rule is contrary to law because an
agency has attempted to promulgate a rule that countermands a higher authority,
such as Congress or the Constitution.
No one would argue that the EEOC could
promulgate a rule that employers could discriminate on the basis of gender identity
in light of Bostock’s interpretation of Title VII.
informs the inquiry is hardly unprecedented.
But the notion that motivation
See, e.g., Romer v. Evans, 517 U.S.
620, 632 (1996) (holding that state constitutional amendment violated Equal
Protection Clause because “its sheer breadth is so discontinuous with the reasons
offered for it that the amendment seems inexplicable by anything but animus toward
the class it affects”).
Had the agency correctly predicted the outcome in Bostock, it may well have
taken a different path. Instead, it continued on the same path even after Bostock
was decided. This satisfies the Court that the premise of the repeal was a
disagreement with a concept of sex discrimination later embraced by the Supreme
Court. Therefore, the repeal was contrary to law.
2. In any Event, the Agency Acted Arbitrarily and Capriciously.
HHS contends that its thorough reasoning for its proposed rules shows that it
did not act arbitrarily or capriciously. Nothing could be further from the truth. As
the preamble makes perfectly clear, its reasoning was based upon its pre-Bostock
understanding and contention that “reasonable distinctions on the basis of sex, as the
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biological binary of male and female, may, and often must, play a part in the
decision-making process—especially in the field of health services.” 85 Fed. Reg.
at 37,185 (internal quotation marks omitted).
An agency action can be “arbitrary and capricious” for many reasons, but one
is that the agency has “entirely failed to consider an important aspect of the
problem.” Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S.
29, 43 (1983). And a reviewing court “may not supply a reasoned basis for the
agency’s action that the agency itself has not given.” Id. (internal quotations
Again, the unmistakable basis for HHS’s action was a rejection of the position
taken in the 2016 Rules that sex discrimination includes discrimination based on
gender identity and sex stereotyping. Whether or not it is dispositive of that issue
with respect to Title IX and § 1557, Bostock is at least “an important aspect of the
problem,” State Farm, 463 U.S. at 43. By its own admission, HHS knew that the
case was pending and would have “ramifications”; it must also have known that a
decision would be handed down before the end of the Supreme Court’s term. It
then had an (admittedly brief) opportunity to re-evaluate its proposed rules after the
case was decided contrary to its expectations.
Instead, it did nothing. The timing might even suggest to a cynic that the
agency pushed ahead specifically to avoid having to address an adverse decision.
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But whether by design or bureaucratic inertia, the fact remains that HHS finalized
the 2020 Rules without addressing the impact of the Supreme Court’s decision in
Bostock. This makes it likely that plaintiff will succeed on their claim that the rules
are arbitrary and capricious.
For the foregoing reasons, the Court concludes that plaintiffs have standing to
sue and that they have met the legal requirements for preliminary injunctive relief.
The Court reiterates the same practical concern it raised at oral argument: When the
Supreme Court announces a major decision, it seems a sensible thing to pause and
reflect on the decision’s impact. See Tr. of Aug. 12, 2020 at 21 (“[I]t may be a
simple thing for the agency to maybe reconsider the Rule, in light of Bostock, and
come out with something that’s simple and that just goes right to the heart of it and
eliminates all this obvious confusion that we’re having throughout this country right
now about this issue.”). Since HHS has been unwilling to take that path voluntarily,
the Court now imposes it.
Accordingly, the Court stays the repeal of the 2016 definition of
discrimination on the basis of sex. As a result, the definitions of “on the basis of
sex,” “gender identity,” and “sex stereotyping” currently set forth in 45 C.F.R. § 92.4
will remain in effect. In addition, the Court preliminarily enjoins the defendants
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from enforcing the repeal. Both the stay and the injunction shall remain in effect
pending further order of this Court.
_/S/ Frederic Block___________
Senior United States District Judge
Brooklyn, New York
August 17, 2020
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