A federal appeals court appeared skeptical Friday about a nationwide injunction that has prevented the Trump administration from broadly exempting nonprofit groups and others from the Affordable Care Act’s contraceptive mandate.
During a hearing, a three-judge panel of the U.S. 9th Circuit Court of Appeals questioned whether California and other states had standing to challenge federal rules that provided the exemptions.
In 2014, the U.S. Supreme Court decided 5 to 4 that closely held private companies could deny contraceptive coverage to their female employees for religious reasons.
The Trump administration, responding to myriad lawsuits challenging the contraceptive mandate, issued two rules in 2017 that expanded the exemption to nonprofit groups that have religious objections to contraception and to companies that are not publicly traded that have moral objections.
California, Maryland, Delaware, New York and Virginia sued to block the rules, and a federal judge in San Francisco last year issued a nationwide preliminary injunction against them.
The judge ruled that the Trump administration had violated a federal administrative procedures law by issuing the rules without prior notice and comment.
The federal government and religious nonprofit groups, including the Little Sisters of the Poor, which runs homes for the indigent elderly, argued the states lacked standing to sue because they had not been directly injured by the rules.
The states countered that they would have to offer contraceptive services to women if their employers refused.
Judge Susan P. Graber, a Clinton appointee, pointed out that the federal government had acknowledged that the rules would cost the states money in public assistance. She suggested that evidence was enough to give the states standing.
But Andrew Kleinfeld, appointed by former President George H.W. Bush, seemed dubious. He said women who were unable to obtain contraceptives could still sue if the court ruled the states lacked standing.
Judge John Wallace, a Nixon appointee, criticized the lower court for applying the injunction to the entire nation.
Kleinfeld, appearing to agree, also questioned why a nationwide injunction had been needed. Graber pointed to a 9th Circuit precedent that said nationwide injunctions must be backed by substantial factual findings.
The rules broadening the exemptions to the contraceptive mandate require notice and comment before adoption unless there is “good cause.”
Lawyers for the federal government and religious groups argued the “good cause” exception involved protecting vital religious liberty guarantees enshrined in law.
Mark L. Rienzi, representing the Little Sisters of the Poor, said the federal and state governments ought to be able to find ways to provide women with contraceptives “without involving nuns.”
California Supervising Deputy Atty. Gen. Karli Eisenberg, representing the states, said the federal government can skirt administrative requirements “in emergency circumstances only when real harm would come.”
“From Little Sisters of the Poor’s perspective,” Kleinfeld shot back, “real harm would come.”
Eisenberg also told the court the case would become moot once the federal government adopted final rules. The injunction covered only interim rules that went into effect last year before the injunction was handed down.
California has argued that the rules would allow nearly any employer or health insurance company to exempt themselves from the contraceptive coverage requirement.
“The regulations thus transformed an important legal entitlement to no-cost contraceptive coverage into a conditional benefit subject to an employer’s or insurer’s veto,” state lawyers told the 9th Circuit in written arguments.
The 9th Circuit could rule at any time, though decisions typically are not issued until several weeks or months after arguments.