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Pennsylvania v. Trump
Citation: 351 F. Supp. 3d 791Docket: CIVIL ACTION NO. 17-4540
Court: District Court, E.D. Pennsylvania; January 13, 2019; Federal District Court
Plaintiffs, the Commonwealth of Pennsylvania and the State of New Jersey, have initiated a lawsuit against the United States and several officials in their official capacities, seeking to block the enforcement of two Final Rules that exempt certain health plans from the Affordable Care Act's (ACA) requirement to cover women's preventive services. These Final Rules finalize Interim Final Rules issued in October 2017, which were previously enjoined by the court. The States argue that the Final Rules, like the Interim Rules, violate various constitutional and statutory provisions. A preliminary injunction against the enforcement of the Final Rules is granted. The ACA, enacted in March 2010, includes the Women's Health Amendment, which mandates that insurance providers cover preventive health services for women without cost-sharing. This includes coverage for a range of services as determined by comprehensive guidelines supported by the Health Resources and Services Administration (HRSA). HRSA commissioned a panel from the Institute of Medicine, which recommended that the ACA cover all FDA-approved contraceptive methods, sterilization procedures, and related counseling. HRSA adopted these recommendations in its 2011 preventive care guidelines, thus establishing the "Contraceptive Mandate." Non-grandfathered group health plans and health insurance issuers are required to comply with these guidelines without imposing cost-sharing obligations. Regulatory action by the Departments of Health and Human Services (HHS), Labor, and Treasury led to the issuance of guidelines in 2011 that considered the religious beliefs of certain employers regarding contraceptive coverage under the Affordable Care Act. Following considerable feedback, HRSA was granted discretion to exempt specific religious employers from the contraceptive services requirement. On August 1, 2011, an interim final rule identified criteria for a "religious employer," which included the purpose of inculcating religious values, employment and service primarily to individuals sharing its religious tenets, and the organization being a church or its integrated auxiliary. After reviewing over 200,000 responses, a final rule was established on February 15, 2012, adopting this definition. Subsequently, a notice of proposed rulemaking was issued on March 21, 2012, to explore alternatives for providing contraceptive coverage for non-profit religious organizations opposed to such coverage. This process generated over 400,000 comments, leading to a final rule on July 2, 2013, which notably revised the "religious employer" definition by eliminating the first three prongs and clarifying the fourth. The new definition allowed qualifying nonprofit entities, including churches and religious orders, to be considered "religious employers." The final rule also created an accommodation for "eligible organizations" with religious objections to contraceptive coverage, defining them as nonprofit entities that self-certify their religious status and opposition. These organizations could provide self-certification to their insurance providers, which would then ensure employees received contraceptive coverage without cost sharing. Legal challenges to the Contraceptive Mandate arose, culminating in the Supreme Court's decision in Burwell v. Hobby Lobby Stores, Inc. on June 30, 2014, involving three closely-held corporations contesting the mandate. The Supreme Court determined that the Contraceptive Mandate infringed upon the plaintiffs' religious exercise in violation of the Religious Freedom Restoration Act (RFRA), as it imposed a substantial burden and was not the least restrictive means of providing cost-free contraception. The Court noted that the existing accommodation for nonprofit organizations with religious objections demonstrated a less restrictive alternative. However, it did not assess whether this accommodation was compliant with RFRA for all religious claims. In a related case, Wheaton College v. Burwell, the Court granted an injunction allowing the college to notify the Secretary of Health and Human Services of its religious objections without using the required self-certification form, while clarifying that this did not reflect the Court's views on the merits of the case. In response to these rulings, the relevant agencies proposed amendments to include closely held for-profit entities with religious objections under the accommodation. An interim final rule was also issued to provide an alternative self-certification process consistent with the Wheaton order. By July 2015, the agencies finalized these rules. On May 16, 2016, in Zubik v. Burwell, the Supreme Court addressed further challenges to the self-certification process. The Court sought supplemental briefing on whether contraceptive coverage could be provided through insurers without notice from the petitioners. After the parties confirmed this option was feasible, the Court remanded the case for them to develop a solution that would respect the petitioners' religious exercise while ensuring that employees had access to full contraceptive coverage. The Court refrained from addressing the merits of the cases regarding potential burdens on religious exercise, the government's compelling interest, or the least restrictive means of regulation. After reviewing over 50,000 comments, the Agencies determined no feasible solution would satisfy both religious objectors and ensure women received full health coverage, including contraceptives. In response to President Trump's Executive Order promoting free speech and religious liberty, the Agencies issued two new Interim Final Rules (IFRs) on October 6, 2017. The Religious Exemption IFR and the Moral Exemption IFR significantly altered the exemption framework. The Moral Exemption IFR expanded eligibility to include for-profit entities with sincerely held moral convictions, without requiring a religious basis. The Religious Exemption IFR broadened the scope to encompass any non-profit or for-profit entities. Both IFRs allowed entities with religious or moral objections to opt out of the accommodation process, eliminating the need for self-certification or notification of intent to exempt. The IFRs took effect immediately, and the Agencies sought post-promulgation comments by December 5, 2017, instead of undergoing standard notice-and-comment procedures. The Commonwealth filed a lawsuit to prevent the enforcement of Interim Final Rules (IFRs), arguing they did not adhere to the notice-and-comment requirements of the Administrative Procedure Act (APA), were arbitrary and capricious, and violated Title VII of the Civil Rights Act, the Equal Protection Guarantee of the Fifth Amendment, and the Establishment Clause. The Court issued a preliminary injunction, indicating the Commonwealth was likely to succeed on its APA claims but did not address the other statutory or constitutional issues. Following this, the defendants appealed and obtained a stay. While the appeal was pending, the Agencies finalized the IFRs with new rules that included minor technical revisions but maintained the substantial content of the exemptions. The Commonwealth, now joined by New Jersey, sought to lift the stay to challenge the Final Rules, arguing similar violations as before. The Court is considering the merits of these claims and first addresses the issue of standing, essential for federal court jurisdiction. The States assert they have standing due to imminent harm to their interests and the health of their residents, while the defendants argue that no legal wrong has occurred to warrant federal court access, emphasizing the necessity of actual cases or controversies in judicial proceedings. The constitutional minimum for standing consists of three essential elements: (1) a plaintiff must demonstrate an "injury in fact," defined as a concrete, particularized, and actual or imminent invasion of a legally protected interest; (2) there must be a causal connection linking the injury to the defendant's conduct, establishing that the injury is "fairly traceable" to the challenged action; and (3) it must be likely, rather than speculative, that a favorable decision will redress the injury. States invoking federal jurisdiction bear the burden of proving these elements, which require substantiation with evidence rather than mere allegations, especially at the preliminary injunction stage. States, such as Pennsylvania and New Jersey, are granted "special solicitude" in the standing analysis due to their unique status as litigants, provided they possess: (1) a procedural right to challenge the conduct in question, and (2) a stake in protecting their quasi-sovereign interests. The cases of Massachusetts v. EPA and Texas v. United States illustrate this concept. In Massachusetts, the Supreme Court recognized Massachusetts' standing to sue the EPA for failing to regulate greenhouse gas emissions, emphasizing its procedural right under the Clean Air Act and its quasi-sovereign interest in preserving its territory from climate change impacts. Similarly, in Texas v. United States, the Fifth Circuit affirmed that Texas and other states were entitled to special solicitude in their legal challenge against the DAPA program. Non-citizens in Texas can obtain a driver's license by presenting documentation from a U.S. agency authorizing their presence in the country. The Deferred Action for Parents of Americans (DAPA) program could have allowed at least 500,000 non-citizens to qualify for these licenses. Texas, which subsidizes licenses, argued that it would incur financial losses for each license issued under DAPA and sought injunctive relief against its implementation. The Fifth Circuit applied the Massachusetts v. EPA framework, determining that Texas was entitled to special solicitude because its challenge was similar to Massachusetts’, focusing on a federal statute that allows judicial review. The court held that DAPA exerted significant financial pressure on Texas, compelling changes to state laws to mitigate costs associated with subsidizing licenses. The Fifth Circuit concluded that Texas and other plaintiff states deserved special consideration in their lawsuit against the federal government under the Administrative Procedure Act (APA). The states argued that the Final Rules impose similar pressure on their quasi-sovereign interests, particularly regarding state-funded contraceptive care, by allowing more employers to exempt themselves from the Contraceptive Mandate. This change would increase the demand for state-funded contraceptive services, creating financial burdens that are akin to legislative pressure. The states thus satisfied the two conditions established in Massachusetts v. EPA for special solicitude. While granted special solicitude, the states must still demonstrate the constitutional minimum for standing: injury in fact, causation, and redressability. The states successfully established that the Final Rules impose significant financial burdens on them, constituting a direct injury. Previous cases, such as Texas v. United States and Wyoming v. Oklahoma, support the notion that substantial economic impacts fulfill the injury requirement. Economic harm is a recognized form of injury in fact, reinforcing the states' standing in this challenge. If the Final Rules take effect, States will incur increased costs for State-funded contraceptive services due to the expected rise in demand from women losing contraceptive coverage through insurance. The Defendants acknowledge existing programs providing subsidized contraceptives to low-income women, emphasizing that the financial harm to States is not speculative. Although no specific instances of women losing coverage have been identified, the States do not need to wait for actual fiscal harm to pursue relief. The plaintiffs must demonstrate a likelihood of future injury caused by the defendants, which the States have done by estimating their financial losses due to the Final Rules. These rules expand the religious exemption for entities refusing contraceptive coverage, likely leading to more women seeking State-funded services. The connection between the Final Rules and the States' financial injury is clear, differentiating this case from Pennsylvania v. New Jersey, where the injury was deemed self-inflicted by state decisions. In contrast, the States' injuries arise from the Agencies' unilateral actions. The States have also satisfied the redressability requirement; enjoining the Final Rules could lead the Agencies to reassess their decision, fulfilling the procedural rights necessary for standing. The States have demonstrated the minimum constitutional standing to challenge the Final Rules in federal court, as preventing the enforcement of these rules would eliminate their injury. Regarding venue, the Eastern District of Pennsylvania is deemed appropriate despite Defendants' claims. The venue statute, 28 U.S.C. § 1391(e)(1), permits civil actions against U.S. officers in any district where the plaintiff resides, provided no real property is involved. Defendants argue Pennsylvania should be treated as an entity, residing only in the Middle District where its principal place of business is located. However, this interpretation is flawed; the statute's definition of "entity" pertains to organizations, not sovereign states. Legislative history indicates Congress intended "entity" to refer to unincorporated associations, not states. Moreover, Congress distinguishes between states and entities in the statute, supporting the notion that states cannot be categorized as entities. Interpreting the residency definition as Defendants suggest would result in illogical limitations on state residency, contradicting the inherent nature of state sovereignty. A state is considered to reside throughout its sovereign borders, leading to the conclusion that a state with multiple judicial districts is deemed to reside in every district within its borders, thereby making venue proper in the Eastern District of Pennsylvania. The court addresses the merits of the preliminary injunction motion, highlighting that such an injunction is an extraordinary remedy granted only under limited circumstances. To obtain a preliminary injunction, a plaintiff must demonstrate: (1) a likelihood of success on the merits, (2) a likelihood of suffering irreparable harm without the injunction, (3) that the balance of equities favors the plaintiff, and (4) that the injunction is in the public interest. The first two factors are deemed the most critical, requiring a showing that the plaintiff has more than a negligible chance of winning and is more likely than not to incur irreparable harm without relief. If these gateway factors are satisfied, the court will then assess the remaining two factors to determine if they collectively favor granting the injunction. In establishing likelihood of success, a plaintiff does not need to prove a greater than 50% chance of success, but rather a reasonable chance of winning. The States argue for an injunction against the Final Rules on the grounds that the Defendants did not comply with the procedural requirements of the Administrative Procedure Act (APA), which mandates notice-and-comment rulemaking. This process requires agencies to issue a general notice of proposed rulemaking, allow public participation through submissions, and incorporate a concise statement of basis and purpose in the final rules, thereby fostering public engagement and agency learning before implementing rules that significantly affect regulated entities. Limited exceptions exist to the requirement for notice-and-comment rulemaking, such as instances where an agency has "good cause" to bypass these procedures or when a subsequent Congressional act overrides the Administrative Procedure Act (APA) requirements. In this case, the Agencies did not comply with notice-and-comment procedures when issuing Interim Final Rules (IFRs). A court enjoined the IFRs for this procedural violation, and while the Defendants contended the IFRs were valid under the exceptions, the court disagreed. They argued that subsequent promulgation of Final Rules met notice-and-comment requirements, but the States countered that the Agencies did not adequately address significant comments, thus failing to comply with the APA. The States highlighted that the Agencies did not sufficiently respond to vital comments regarding the health and economic implications of the Final Rules, the impact of broad religious exemptions on contraceptive coverage, and concerns about medical barriers created by these exemptions. The APA mandates federal agencies to consider and respond to significant public comments, but the States asserted that the Agencies did not meet even this minimal standard. However, the review of the Final Rules indicated that the Agencies did acknowledge these comments and provided explanations for their decisions regarding amendments. The Agencies' explanations for the Final Rules meet the minimal requirements of the Administrative Procedure Act (APA) by adequately considering and responding to significant public comments, despite some lack of clarity. The argument posed by the States that the Agencies failed to comply with notice-and-comment rulemaking is unlikely to succeed. However, the States assert that the procedural deficiencies in the issuance of Interim Final Rules (IFRs) invalidate the Final Rules, as the post-promulgation comment period cannot substitute for the required prior notice and comment. The courts exhibit differing views on whether flaws in the IFRs affect subsequent Final Rules, with some suggesting that an adequate later notice could remedy earlier defects. Nevertheless, the FAA has not demonstrated an open-minded approach during the later comment period, which, aligned with the skepticism shown by the Third Circuit towards post-promulgation procedures, indicates that the States have a strong case that the procedural faults of the IFRs tainted the Final Rules and violated the APA. The relevant Third Circuit case, NRDC v. EPA, supports this view, as the EPA's failure to conduct notice-and-comment procedures before postponing certain amendments was deemed improper. NRDC initiated litigation against the EPA regarding its decision to postpone the effective date of certain amendments. In response, the EPA proposed a rule to further delay the effective date and went through notice-and-comment procedures, ultimately issuing a final rule that implemented some amendments while postponing the most controversial aspects. Despite this, NRDC continued to challenge the EPA's initial postponement action. The Third Circuit rejected the EPA's claim that the subsequent notice-and-comment procedures remedied the lack of such procedures for the initial action, ruling the initial postponement was procedurally invalid. The court emphasized that even though NRDC did not contest the final rule, it was still invalid due to the procedural deficiencies of the initial action. The Third Circuit determined that the EPA's failure to engage in proper notice-and-comment rulemaking before the initial postponement rendered both the initial and subsequent final rules ineffective. The court pointed out that the notice-and-comment procedures could not retroactively validate the final rule, which should have addressed whether to postpone the amendments rather than merely finalize an already postponed rule. The Third Circuit warned against permitting agencies to substitute post-promulgation procedures for pre-promulgation ones, stating such a practice would undermine the Administrative Procedure Act (APA). The situation mirrored NRDC, as the agencies issued Interim Final Rules (IFRs) without engaging in notice-and-comment rulemaking, changing the scope of subsequent rulemaking. The court reiterated its disapproval of the agencies’ actions, which echoed the same procedural flaws identified in the NRDC case. Defendants argued that NRDC's circumstances were not directly comparable, but the court maintained that both the initial and subsequent actions were invalid under the same procedural principles established in NRDC. The Third Circuit determined that subsequent notice-and-comment rulemaking does not remedy a failure to engage in those procedures initially. This ruling is binding on the current court, as established in relevant case law, emphasizing that essential reasoning supporting a case's holding must be adhered to. The Defendants argued that the States did not suffer procedural injury because they could comment on the Interim Final Rules (IFRs), a point previously rejected by the Third Circuit in NRDC. The court highlighted that procedural defects in the initial action fundamentally altered the issues for subsequent rulemaking, leading to potential bias against the States. The Administrative Procedure Act (APA) mandates prior notice for rulemaking, and the right to petition does not substitute for this requirement. Attempts by the Defendant-Intervenor to differentiate this case from NRDC based on the absence of "unique circumstances" were unsuccessful, as the Third Circuit's invalidation was not contingent on the degree of policy change but rather on the procedural validity of the initial action. Thus, the subsequent rulemaking could not address the original procedural shortcomings. The Third Circuit warned against rectifying pre-promulgation procedural flaws through post-promulgation procedures, which informs the current case's outcome. The Defendant-Intervenor argues that the Agencies' creation of the Contraceptive Mandate through Interim Final Rules (IFRs) without notice and comment lends procedural validity to the Final Rules. However, the Court previously rejected a similar argument, emphasizing that the IFRs are not identical to prior regulations due to significant legal changes and the absence of an immediate need for action as per Supreme Court requirements. The Court cannot address the validity of prior regulations' procedures since the current issue is whether the Final Rules violate the Administrative Procedure Act (APA). The States are likely to succeed in their claim that the Final Rules' issuance was procedurally flawed due to the defects in the IFRs that tainted the Final Rules. Additionally, the States contend that the Final Rules violate APA's substantive requirements, particularly highlighting the expansive exemptions allowed under these rules. The Final Religious Exemption permits all entities to deny contraceptive coverage based on religious beliefs, while the Final Moral Exemption allows non-profit and for-profit organizations to deny coverage based on moral convictions. According to the APA, an administrative rule can be invalidated if it is arbitrary, capricious, exceeds statutory authority, or is not in accordance with the law. Agencies must act within the authority granted by Congress, demonstrating the statutory basis for their actions. The Defendants cite the Affordable Care Act (ACA) as a source of broad authority for the Agencies to issue the Final Rules. Defendants argue that the Religious Freedom Restoration Act (RFRA) not only permits but mandates the creation of a religious exemption to the Contraceptive Mandate. However, this assertion is rejected, as the Final Rules exceed the Agencies' authority under the Affordable Care Act (ACA) and are not justified by RFRA. The ACA requires that group health plans and insurance issuers provide coverage for preventive care, including contraceptives, as defined by the Health Resources and Services Administration (HRSA). The HRSA guidelines from 2011 specified that contraceptives fall within this preventive care mandate. The Agencies claim that they have the authority to exempt certain employers from this requirement based on religious or moral objections, raising the question of whether the ACA allows such exemptions. The legal challenge to the Agencies' authority is analyzed under the Chevron framework, which involves two steps: Step One assesses if Congress has clearly addressed the issue. If so, that interpretation prevails. If there is ambiguity, Step Two allows for deference to the agency's interpretation if it is deemed a reasonable policy choice. The excerpt illustrates that the determination of whether the Agencies stayed within their statutory bounds is crucial in resolving the legality of the exemptions established in the Final Rules. The Affordable Care Act (ACA) mandates that all "group health plans" and "health insurance issuers" provide coverage for preventive care and screenings as outlined in guidelines supported by the Health Resources and Services Administration (HRSA). The Women's Health Amendment does not allow for exceptions or exemptions to this coverage mandate, nor does it grant the Agencies the authority to create such exemptions. The term "shall," indicating a mandatory obligation, suggests that specified health plans must cover preventive care without cost-sharing requirements. The Agencies claim authority to issue broad exemptions to the Contraceptive Mandate, arguing that the phrase "as provided for in comprehensive guidelines supported by HRSA" allows them to define the scope of preventive care coverage. However, this interpretation conflicts with the statute's explicit requirements, which clearly define the entities obligated to provide such coverage. The notion that HRSA's role in supporting guidelines means it can undermine mandated coverage through exemptions is challenged by the text of the statute and precedent from cases like MCI Telecommunications Corp. v. American Telephone, where similar agency assertions were rejected. The Supreme Court ruled that an agency could not create exceptions to statutory mandates without explicit authorization, reinforcing the ACA's clear directives regarding preventive care coverage. The Supreme Court affirmed that the FCC's power to "modify" statutory requirements does not extend to making fundamental changes to a statute's commands. It emphasized that it would be improbable for Congress to delegate critical regulatory decisions to an agency through ambiguous terms like "modify." This reasoning implies that Congress did not grant the authority to create broad exemptions to the Contraceptive Mandate, paralleling the Court's ruling in M.C.I., where the agency could not create exceptions to required filings despite explicit modification authority. Here, no such authority to modify or waive requirements is present. The defendants argue that the Affordable Care Act (ACA) allows the Agencies to issue the Final Rules based on the word "as" in the Women's Health Amendment, which specifies preventive care coverage. They assert that this word suggests HRSA can determine the scope of coverage. However, the interpretation of "as" must be contextualized within the statute, with dictionary definitions indicating it could imply various meanings. The context suggests that the second definition—indicating something occurs concurrently—is most fitting, as HRSA had previously established guidelines for children's preventive care prior to those for women's care. The Affordable Care Act (ACA) mandates coverage based on existing HRSA guidelines for children's preventive care, indicating Congress intended these specific guidelines to govern such care. The term "as" in relation to the Women's Health Amendment suggests that HRSA would issue future guidelines, not that the ACA grants the Agencies the authority to create exemptions. Even if "as" implies comparison, the only relevant comparison is to pre-ACA children's health guidelines, which define required preventive care without exemptions. Congress specified that any "group health plan" or "health insurance issuer" must cover women's preventive services without cost-sharing, indicating no intent for HRSA to create exemptions. The ACA explicitly provides only one exemption related to "grandfathered health plans," which supports the principle that when exceptions are enumerated, no others are implied. The absence of religious or moral exemptions in the statute, combined with Congress's previous rejection of similar exemptions in 2012, further underscores that Congress did not authorize the Agencies to create additional exemptions. Consequently, the ACA prohibits HRSA from exempting entities from the mandated coverage outlined in the Final Rules, leading to the conclusion that these Rules violate the Administrative Procedure Act (APA) and do not pass Chevron's Step One analysis. RFRA Defendants contend that even if the Affordable Care Act (ACA) does not empower the Agencies to issue the Final Rules, the Religious Freedom Restoration Act (RFRA) independently permits the issuance of the Final Religious Exemption. They argue that the Contraceptive Mandate must align with the provisions of the Final Religious Exemption to comply with RFRA, suggesting that RFRA mandates the rule’s creation. However, the determination of RFRA's scope rests with the courts, not the Agencies, and the Final Religious Exemption exceeds RFRA's requirements. RFRA was enacted in 1993 in response to the Supreme Court's ruling in Employment Division v. Smith, which stated that strict scrutiny was not required for laws of general applicability that burden religious practices. Prior to this decision, courts applied a balancing test to evaluate substantial burdens on religious practices and whether such burdens served a compelling government interest, as established in Sherbert v. Verner. RFRA aims to reinstate this pre-Smith standard, ensuring that the compelling interest test is applied when religious exercise is substantially burdened. RFRA prohibits the government from imposing a substantial burden on religious exercise unless it can demonstrate that such a burden serves a compelling governmental interest and is the least restrictive means of achieving that interest. The Act has two key components: if government action does not impose a substantial burden on religion, RFRA is not invoked; if it does impose such a burden, the action must be invalidated unless it meets the aforementioned criteria. Despite the Defendants' claims that the Agencies can interpret RFRA’s requirements regarding the ACA, RFRA explicitly assigns this determination to the courts. It provides a private cause of action, allowing individuals whose religious exercise is burdened to seek judicial relief and assert their claims in court. Thus, RFRA entrusts the judiciary with the responsibility of assessing whether generally applicable laws infringe upon an individual's religious exercise. Courts are expected to recognize exceptions under the Religious Freedom Restoration Act (RFRA), which mandates judicial consideration of whether such exceptions are necessary. The Agencies, however, assert that they must independently evaluate the RFRA's implications for the Contraceptive Mandate, claiming their authority to create a Final Religious Exemption stems from this obligation. Previously, the Agencies argued that the accommodation did not significantly burden religious exercise and that providing cost-free contraceptive coverage served compelling government interests. They have since reversed their stance, now contending that the accommodation imposes a substantial burden on objecting employers and that the contraceptive mandate lacks compelling interest. They further argue that their new position is legally definitive. The Agencies have undertaken judicial functions by determining whether the Contraceptive Mandate constitutes a substantial burden, whether any burden serves a compelling government interest, and whether the accommodation is the least restrictive means of providing contraceptive coverage. They argue that RFRA necessitates the Final Religious Exemption based on their interpretations, which is problematic because administrative agencies cannot unilaterally interpret laws outside their expertise or seek to shield their legal determinations from judicial review. The judiciary is empowered to interpret the law, as established in Marbury v. Madison, and RFRA explicitly reserves interpretative authority for the courts. Additionally, the Supreme Court's decisions have indicated that agency interpretations are not entitled to deference regarding trans-substantive statutes like RFRA. The Agencies' attempt to frame their new legal views as reasonable policy decisions does not constitute a legitimate change in interpretation of an ambiguous statute, as there is no explicit delegation of authority to assert what RFRA requires. Defendants lack expertise in administering the Religious Freedom Restoration Act (RFRA), as established in case law, including Gonzales and Real Alternatives. The determination of a RFRA violation is a legal matter that is not solely within agency purview, as highlighted in Iglesia Pentecostal Casa De Dios Para Las Naciones, Inc. v. Duke. Although Defendants may alter their legal interpretation of RFRA, ultimate authority rests with the courts. There is considerable legal uncertainty regarding RFRA's application to the Contraceptive Mandate; however, the law clearly indicates that RFRA does not necessitate the Final Religious Exemption. In Hobby Lobby, the Supreme Court ruled that the Contraceptive Mandate, as applied to closely held corporations, violates RFRA due to imposing a substantial burden on religious exercise without being the least restrictive means of providing contraceptive coverage. The Court noted that the existing accommodation offered a less restrictive solution, allowing religious objectors to inform their healthcare administrators of their objections, thereby enabling compliance without infringing on their beliefs. Following Hobby Lobby, in Zubik, the Supreme Court chose not to determine if the accommodation burdens nonprofit plaintiffs' religious exercise, instead remanding for parties to find a resolution that provides contraceptive coverage to employees without requiring the plaintiffs to fill out the accommodation form. Defendants argue that RFRA demands the Religious Exemption because prior accommodations failed to meet RFRA's requirements. Their argument is based on three legal conclusions: (1) a blanket exemption aligns with RFRA, (2) the accommodation does not alleviate the substantial burden identified in Hobby Lobby, and (3) the mandate burdens publicly traded corporations. These assertions are either legally incorrect or an unwarranted extension of existing doctrine, indicating that Defendants have exceeded RFRA's requirements, thus rendering the Final Religious Exemption unjustifiable. The analysis of the blanket exemption for religious objectors indicates that it exceeds the requirements set by the Religious Freedom Restoration Act (RFRA). The Supreme Court's ruling in Hobby Lobby clarified that such an exemption extends beyond RFRA's protections, as Congress previously rejected a similar 'conscience amendment' that would have allowed employers to deny coverage based on religious beliefs. This rejection suggests that Congress intended to maintain judicial scrutiny over religious objections, as required by RFRA. Consequently, RFRA does not necessitate a blanket exemption. Regarding the second conclusion, the argument that the accommodation imposes a substantial burden on the religious exercise of objecting entities is deemed incorrect within the jurisdiction of the Third Circuit. Although the Supreme Court has not definitively ruled on this matter, Third Circuit precedents, specifically Geneva College and Real Alternatives, uphold that the accommodation does not impose a substantial burden. The Supreme Court's decision in Zubik did not resolve the RFRA challenge but sought to facilitate a solution that respects both religious exercise and women's health coverage, indicating that Geneva remains relevant despite its vacatur. The Third Circuit reaffirmed its stance after Zubik, maintaining that the accommodation does not impose a substantial burden, even though Defendants argue this conclusion is merely dicta. In Geneva, the nonprofits contended that the accommodation form triggered contraceptive provisions, thus burdening their religious exercise. Employees of a secular employer in Real Alternatives claimed that the Contraceptive Mandate violated the Religious Freedom Restoration Act (RFRA) due to insurance purchases facilitating contraceptive provision. The Third Circuit, referencing Geneva, determined there was no substantial burden on religious exercise, as the plaintiffs' actions were too indirectly related to contraceptive provision and obligations on third parties do not constitute a substantial burden under RFRA. Thus, the accommodation does not impose a significant burden on religious exercise. The claim that the Contraceptive Mandate imposes a substantial burden on publicly traded corporations diverges from existing legal precedents. The Supreme Court in Hobby Lobby found a substantial burden on closely held corporations but did not extend this finding to publicly traded corporations, which likely lack unified sincere religious beliefs. The absence of publicly traded corporations asserting RFRA claims supports the improbability of such entities sharing religious beliefs among diverse shareholders. Defendants argue for including publicly traded corporations in the Religious Exemption, but Hobby Lobby clarifies that RFRA does not necessitate this expansion. The Final Religious Exemption extends beyond RFRA's requirements, indicating a disregard for RFRA's mandate for judicial scrutiny, which considers the burden on religious adherents alongside the government's interests and the narrow tailoring of requirements. Consequently, the Religious Exemption lacks justification under RFRA, rendering it invalid as neither the Affordable Care Act (ACA) nor RFRA grants the Agencies the authority to establish it. The States have sufficiently shown a likelihood of success on the merits for their motion for preliminary relief. The second consideration for the States' motion is the demonstration of likely irreparable harm without a preliminary injunction, adhering to the Supreme Court's standard requiring plaintiffs to show that such harm is probable in the absence of relief. Issuing a preliminary injunction based solely on the possibility of irreparable harm contradicts the principle that such relief requires a clear and convincing showing of entitlement. The States claim two forms of irreparable harm: significant damage to their fiscal integrity and harm to the health, safety, and wellness of women in Pennsylvania and New Jersey. The Court finds both claims sufficient to justify preliminary relief. Evidence indicates that the Final Rules will likely cause direct and irreparable harm to the States' fiscal integrity, as they will face increased obligations to provide contraceptive services to women losing coverage due to expanded exemptions. Affected women are expected to seek care from state-funded programs, including Medicaid and Title X clinics, which will lead to additional financial burdens on the States. The estimated loss of coverage for at least 70,500 women under the Final Rules underscores the imminent nature of this harm. While the Defendants argue that individual instances of coverage loss have not been identified, the Court emphasizes that an injunction is warranted given the predicted widespread impact. Loss of money alone typically does not justify a preliminary injunction; however, the irreparable harm to the States’ finances is unique as they cannot recover any damages from the federal government for violations of the Administrative Procedure Act (APA). Thus, if the Final Rules are later found unlawful, the States would not be able to reclaim funds expended on contraceptive care during the interim period. Therefore, a preliminary injunction is deemed appropriate. A preliminary injunction is deemed appropriate when a movant cannot recover damages from a State due to sovereign immunity. States face potential harm not only financially but also in their ability to safeguard the health and well-being of their citizens. Evidence presented indicates that the implementation of the Final Rules could lead to a loss of no-cost contraceptive coverage for women, which may result in increased unintended pregnancies and other health issues due to restricted access to essential contraceptive services. The negative effects of even brief disruptions in access to no-cost contraceptive services are irreversible, thereby establishing the likelihood of irreparable harm to both the States' finances and the welfare of their citizens. The balance of equities favors granting the injunction, as Congress has already determined the public interest through the Women's Health Amendment, which mandates no-cost coverage for preventive services, including contraceptives. This legislation underscores the importance of the decision-making process surrounding medical needs being between a woman and her doctor. The court is urged not to disregard Congress's established balance of interests. The States' insistence on maintaining access to health services for women is clearly in their favor, while the defendants would not suffer significant prejudice from a preliminary injunction, as any violation of applicable laws would render the Final Rules ineffective. Should the defendants ultimately prevail, the injunction would only delay their regulatory objectives without causing them harm. Furthermore, proving a likelihood of success on the merits and irreparable injury typically aligns the public interest with granting preliminary relief. A preliminary injunction is deemed to serve the public interest by preserving the status quo during ongoing litigation. The Final Rules allow entities to opt out of coverage with 30 to 60 days' notice, but this litigation will last longer than that notice period. The injunction will ensure certain protections: individuals eligible for exemptions prior to October 6, 2017, will retain their status; existing injunctions against the Contraceptive Mandate will remain in effect; claims under the Religious Freedom Restoration Act (RFRA) can proceed; and those covered will continue to have coverage. Regarding the scope of the injunction, the document notes that previous injunctions were issued without geographic or temporal limits, which has been debated in recent cases concerning nationwide injunctions. It affirms that district courts have the authority to issue nationwide injunctions, supported by precedents indicating that such orders are binding across the United States. The flexibility in crafting equitable remedies allows the court to tailor the injunction based on the specifics of the case, balancing necessity, fairness, and practicality. The Supreme Court has set a standard that injunctions should not impose more burden on the defendant than necessary to provide complete relief to the plaintiffs. Supreme Court and lower court precedents establish that injunctions must adhere to the "no more burdensome than necessary" standard to avoid overreach. In Madsen v. Women's Health Center, Inc., the Court emphasized that injunctive relief should be limited to what is essential for full relief to the plaintiff. This concept is further supported by the Califano standard, which mandates that courts balance the need for complete relief against the defendant's right to avoid excessive burdens. The remedy should not exceed the violation's scope, as outlined in Milliken v. Bradley. In cases involving agency action, prevailing parties typically result in the invalidation of broad rules rather than merely prohibiting their application to specific individuals, highlighting that the nature of an APA violation often necessitates a comprehensive remedy. The Supreme Court has cautioned against overly broad injunctions, which can hinder judicial adjudication across different contexts and may lead to forum shopping, complicating the equitable administration of laws. Justice Fortas historically warned that empowering federal judges with extensive injunction powers could result in misuse and delay in implementing laws intended for public benefit. Concerns regarding overbroad injunctions are relevant in Administrative Procedure Act (APA) cases, where courts have sometimes hesitated to grant nationwide relief, even for rules with broad applicability. The dissent in Lujan highlighted this issue, and subsequent cases, such as California v. Azar, found APA violations but deemed preliminary injunctions overly broad. Courts recognize that while an APA violation typically warrants nationwide remedies, the risks of overly expansive injunctions necessitate careful consideration. In the context of enforcement of Final Rules affecting contraceptive coverage, states like Pennsylvania and New Jersey argue that such enforcement will result in significant harm, including increased reliance on state-funded contraceptive services and costs from unintended pregnancies. Complete relief would entail a nationwide injunction against all entities providing health insurance in these states, which poses practical challenges in identifying these entities and enforcing such an injunction under Federal Rule of Civil Procedure 65, which requires specificity in injunction orders. As a result, district courts often resort to geographic proxies for crafting remedies. The Ninth Circuit has suggested that limiting injunctions to the plaintiff states could suffice for complete relief, as seen in California v. Health and Human Services. However, this approach may fall short of providing the states with the comprehensive relief they seek, as it does not address the potential wider impact of the Final Rules. Hundreds of thousands of residents from New Jersey and Pennsylvania travel out of state for work, with 548,040 from New Jersey (14% of its workforce) and 299,970 from Pennsylvania (5.4% of its workforce). Additionally, these states attract tens of thousands of out-of-state students annually, with Pennsylvania alone enrolling 32,000. An injunction limited to Pennsylvania and New Jersey would not protect these residents working for out-of-state employers from losing contraceptive coverage, thereby causing economic harm to the states. Furthermore, out-of-state students may also be affected as they often remain on their parents' employer-based health plans. An injunction targeting only these states would fail to provide complete relief, as many residents commute to areas outside the Third Circuit and students come from across the nation. While a nationwide injunction could be too broad, the states have not demonstrated a need for coverage that includes states like New Mexico, where there is no evidence of relevant commuting or educational ties. The challenge lies in crafting a remedy that ensures complete relief for the plaintiffs while avoiding unnecessary breadth. The Court acknowledges the difficulty in determining the minimal burden on defendants due to the lack of empirical data on working conditions across states. Therefore, it must use discretion to balance the risks of an under- or over-inclusive remedy, adhering to the principle that achievable solutions should not be sidelined by unattainable ideals. In this case, the Court favors a potentially over-inclusive remedy, arguing that a geographically limited injunction would fail to provide Texas with complete relief from injuries caused by deferred action beneficiaries. A nationwide injunction is deemed necessary to prevent these individuals from moving to Texas, thereby protecting the state from harm. The Court also notes that the burden of a nationwide injunction on defendants is unclear, as typically unlawful agency regulations are vacated rather than restricted in their application. Additionally, the potential issue of foreclosing adjudication by multiple courts is not a concern here, as parallel litigation exists. The Court emphasizes the significant harm to the states, including increased state-funded contraceptive services and costs from unintended pregnancies, which necessitates a nationwide injunction for complete relief. The findings of fact presented align with the requirements of Rule 52(a) of the Federal Rules of Civil Procedure, and the Institute referenced is acknowledged as an advisory entity to the federal government. The 2016 update to the HRSA-Supported Women's Preventive Services Guidelines continues to classify contraceptive services and counseling as "preventive services." The Interim Final Rules (IFRs) altered how exemptions to the Contraceptive Mandate are applied, shifting from an employer-specific basis to a plan-specific basis. This change allows an employer to bypass the Contraceptive Mandate if it adopts a health plan established by an organization with religious or moral objections to contraception, regardless of the employer's own beliefs. Under ERISA, any exclusions of contraceptive services must be clearly stated in the plan document. New Jersey was not involved in the original complaint or the initial motion for a preliminary injunction. Subsequent to a preliminary injunction issued by the Court, multiple district courts reviewed the IFRs. The Ninth Circuit upheld a lower court ruling that enjoined the IFRs for violating the Administrative Procedure Act (APA) but found the remedy overbroad. Meanwhile, Massachusetts determined it lacked standing to challenge the IFRs. In the case of Pennsylvania v. Trump, after an initial motion for a preliminary injunction, the Defendant-Intervenor Little Sisters sought to intervene, which the Court initially denied. The Third Circuit later reversed this decision, allowing intervention. While an appeal typically transfers jurisdiction to the appellate court, it does not prevent the district court from taking further actions, including modifying injunctions during the appeal process. The Third Circuit stayed the Defendants' appeal pending the outcome of a second motion for a preliminary injunction. This section contains the Court's legal conclusions as mandated by Rule 52(a) of the Federal Rules of Civil Procedure. The defendants dispute the binding effect of *Texas v. United States*, noting that the Supreme Court's summary affirmance by an equally divided Court generally does not set binding precedent. However, it is established that when the Supreme Court is equally divided on an issue of subject matter jurisdiction, it typically remands the issue to a lower court. The Court suggests that had the Supreme Court been equally divided on Texas’s standing to challenge DAPA, it would have remanded that issue, but since it affirmed the Fifth Circuit, it indicates a majority believed Texas had standing to pursue its APA claim. The Court finds that the States have demonstrated a direct injury to their finances due to the Final Rules, negating the need to consider their parens patriae standing. The defendants' reliance on unreported district court cases such as *Gaskin v. Pennsylvania* and *Bentley v. Ellam* is deemed unpersuasive as these cases address the residency of state officials rather than the sovereign State itself. Venue is deemed proper under Section 1391(e) for civil actions against U.S. officers, with the Court asserting that Pennsylvania resides throughout the State, thus not needing to address alternative venue arguments. Regarding New Jersey's residency, it is noted that in actions against the federal government, not all plaintiffs need to reside in the forum district, with only one plaintiff required to meet the residency standard of Section 1391(e). The Court reiterates its previous stance against the Agencies' arguments, citing the law of the case doctrine, which prevents relitigation of decided issues absent unusual circumstances. The States' argument focuses solely on the Agencies' alleged failure to adequately respond to significant comments, without contesting the adequacy of the notice provided. The EPA contended that the initial action to postpone was not a "rule" under the APA and therefore did not require notice-and-comment procedures. The Third Circuit ruled that the EPA's postponement of the effective date constituted a rule, necessitating notice-and-comment procedures. Other appellate courts utilize different standards, such as the "open mind" approach to assess whether defects in an interim rule affect a subsequent final rule. Although the Third Circuit has not formally adopted this standard, it acknowledged that an agency's openness during the interim rule's consideration could indicate an APA violation. The D.C. Circuit emphasized that any procedural defects can only be remedied if the agency convincingly shows it remained open to public comments. Demonstrating openness could involve making substantive changes to the final rule based on feedback. In this case, the Agencies did not convincingly demonstrate open-mindedness, as their modifications were mainly minor and did not change the essential nature of the exemptions in the interim final rules. The agencies exhibited a consistent commitment to expanding exemptions, indicating a closed-minded approach regarding the substantive issues at hand. Consequently, the States are likely to succeed in their procedural claim. Defendants argued that a lack of statutory authority for the Final Rules would undermine their ability to implement the 2011 religious exemption; however, this exemption is not within the current court's purview. The ACA allows specific exceptions to its coverage mandates, including provisions for grandfathered health plans and exemptions for employers with fewer than 50 employees, but the Defendants did not raise concerns regarding the Final Moral Exemption in this context. The Final Moral Exemption must be invalidated because neither the Affordable Care Act (ACA) nor the Religious Freedom Restoration Act (RFRA) grants the Agencies the authority to implement it. Defendants argue that the Final Rules, similar to previous regulations, are attempts by the Agencies to align with Supreme Court decisions in cases such as Hobby Lobby, Wheaton College, and Zubik. However, a critical issue arises regarding whether RFRA provides agencies with the authority to issue generally applicable regulations like the Final Religious Exemption. The scope of any such authority remains unclear, as neither the cited cases nor the statutory language definitively resolves this question. RFRA is primarily a remedial statute aimed at providing claims for individuals whose religious exercise is substantially burdened by government actions, and recent federal positions suggest that agencies cannot create exemptions without a judicial determination. The extent of RFRA's affirmative authority for agencies is unresolved, and while this issue is significant, the Court need not address it here. It concludes that the Agencies exceeded their authority under RFRA in creating the Final Religious Exemption and violated procedural and substantive provisions of the Administrative Procedure Act (APA). As a result, the Court does not need to explore constitutional issues or other statutory challenges to the Final Rules. States contend that the actual number of organizations utilizing the exemption is likely much higher, as these organizations are not required to notify the Agencies of their intentions. They argue that increased rates of unplanned pregnancies will result in additional financial burdens on the States, referencing a study that indicates 68% of unplanned births are funded by public insurance, compared to 38% of planned births. The excerpt mentions a permanent injunction against the enforcement of the Contraceptive Mandate in the case of *Little Sisters of the Poor v. Azar*, with the court's ruling not affecting that order. It cites *Califano*, which established that the "no more burdensome than necessary" standard applies generally to injunctions, regardless of class-action certification. Furthermore, it references *Nat'l Min. Ass'n*, highlighting a consensus among Justices regarding the arbitrary or capricious nature of agency actions under the Administrative Procedure Act (APA). A noted scholar suggests that courts are mandated to vacate such actions. Additionally, there is concern that non-residents losing contraceptive coverage may seek assistance from state programs. The passage concludes by acknowledging that creating an ideal remedy would require impractical amounts of information to collect and manage.