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Massachusetts v. United States Department of Health and Human Services, 923 F.3d 209, 2019 Employee Benefits Cas. 158,838

Facts

The Commonwealth of Massachusetts filed suit on October 6, 2017, to block two federal Interim Final Rules (IFRs) that allowed employers with religious or moral objections to contraception to exempt themselves from providing health insurance coverage for FDA-approved contraceptive care. These IFRs were issued by the Departments of Health and Human Services, Labor, and Treasury and were set to take effect immediately. The Commonwealth argued that these rules would harm its interests, particularly in light of its own laws requiring contraceptive coverage.

The Commonwealth also provides health services to about two million Commonwealth residents through its Medicaid program, the MassHealth Program. Massachusetts, 301 F.Supp.3d at 255-56.

Issue

Whether the Commonwealth of Massachusetts has Article III standing to challenge the interim final rules issued by federal departments regarding the contraceptive care mandate.

The issue on appeal is narrow: whether the Commonwealth has Article III standing to challenge the rules.

Rule

To establish Article III standing, a plaintiff must demonstrate (1) an injury in fact that is concrete and particularized, (2) that the injury is fairly traceable to the challenged action, and (3) that it is likely that the injury will be redressed by a favorable decision.

A plaintiff must demonstrate (1) an injury in fact which is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical,” (2) that the injury is “fairly traceable to the challenged action,” and (3) that it is “likely … that the injury will be redressed by a favorable decision.”

Analysis

The Court of Appeals found that the Commonwealth had established standing based on a sufficiently imminent fiscal injury that was fairly traceable to the federal regulations. The court noted that the Commonwealth's claims of injury were not speculative and that the fiscal impact of the IFRs on the Commonwealth's health programs provided a concrete basis for standing.

We hold that the Commonwealth has demonstrated Article III standing for its substantive claim based on an imminent fiscal injury that is fairly traceable to the federal regulations and redressable by a favorable decision.

Conclusion

The Court of Appeals vacated the district court's decision and remanded the case, holding that the Commonwealth's substantive challenges to the IFRs were not moot and that it had standing to pursue those challenges.

We first consider whether the Commonwealth's challenges to the rules are moot because the Departments have promulgated superseding Final Rules. A case is moot where it is “impossible for a court to grant any effectual relief whatever to the prevailing party.”

Who won?

Commonwealth of Massachusetts prevailed in establishing standing to challenge the federal regulations, as the court recognized its fiscal injury as a valid basis for jurisdiction.

The Commonwealth has established standing under a traditional Article III analysis, we need not consider the Commonwealth's self-described “alternative basis” of parens patriae standing based on an alleged “injury to the Commonwealth's legally protected quasi-sovereign interests.”

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