On July 3, 2024, Judge Louis Guirola, Jr. of the federal district court in Mississippi issued a nationwide preliminary injunction prohibiting the U.S. Department of Health and Human Services (HHS) from “enforcing, relying on, implementing, or otherwise acting on” the gender identity provisions of a HHS Final Rule that purported to implement Section 1557 of the Patient Protection and Affordable Care Act (ACA) and was set to go into effect on July 5, 2024. The injunction was sought by a plaintiff group comprised of fifteen individual states that alleged the Final Rule violates existing statutory and constitutional law. The breadth of the injunction includes 42 C.F.R. §§ 438.3, 438.206, 440.262, 460.98, and 460.112; 45 C.F.R. §§ 92.5, 92.6, 92.7, 92.8, 92.9, 92.10, 92.101, 92.206-211, 92.301, 92.303, and 92.304 “in so far as these regulations are intended to extend discrimination on the basis of sex to include discrimination on the basis of gender identity.” While the injunction halts the gender identity provisions of the 2024 Final Rule, the remaining provisions of the 2024 Final Rule remain in effect.
On the same day in a separate lawsuit brought by the states of Texas and Montana in the Eastern District of Texas, Judge Jeremy D. Kernodle granted a preliminary injunction staying “all portions of the May 6, 2024 Final Rule… as to Texas and Montana and all covered entities in those States until further order of the Court.”
These injunctions come on the heels of Loper Bright Enterprises, et al. v. Raimondo, et al., the recent U.S. Supreme Court decision that overturned 40 years of precedent and ended the practice whereby courts deferred to administrative agencies’ reasonable interpretations of ambiguous statutory language, also known as Chevron deference. The courts’ reliance on Loper Bright is evident, as Judge Guirola bluntly stated, “The Supreme Court recently held that agencies are no longer entitled to deference pursuant to Chevron…because Chevron ‘allow[ed] agencies to change course even when Congress [had] given them no authority to do so,’” and “‘foster[ed] unwarranted instability in the law, leaving those attempting to plan around agency action in an eternal fog of uncertainty.’” Similarly, Judge Kernodle unequivocally declared, while quoting Loper Bright, “A court should no longer defer to an agency’s interpretation of a statute but should decide for itself ‘whether the law means what the agency says.’”
In both cases, the issues in dispute highlight how Loper Bright may change the way administrative agencies promulgate rules in the future. As cited in Judge Guirola’s decision, the preamble to the May 2024 Final Rule states that HHS “determined it is not necessary to define ‘sex’ in this rule,” presumably because it believed its interpretation of the underlying statute’s meaning was the end of the matter; however, as the plaintiffs noted—and the court repeated—the underlying statutory language in both Title IX of the Educational Amendments of 1972 and the ACA do not expressly include gender identity as a protected category. Furthermore, Title IX, which the ACA incorporates on matters of sex discrimination, does not provide a definition of sex, leaving the court to adjudicate on the meaning of Section 1557 whereas, prior to Loper Bright, deference to agency interpretation would have figured more prominently in the court’s decision making.
What’s Next
An appeal to either injunction would put HHS before the Fifth Circuit Court of Appeals, a historically conservative court. Beginning in 2016, following HHS’s May 18, 2016 Final Rule, the Fifth Circuit issued several opinions interpreting Section 1557, but because HHS repealed that 2016 Rule on its own, the question of whether the wording “on the basis of sex” includes gender identity was never resolved.
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