ACA’s contraception mandate accommodation rendered lower court injunction moot

Entering an injunction directed to a version of the regulatory framework regarding the Patient Protection and Affordable Care Act (ACA) that had been superseded was error, the Seventh Circuit has ruled. The district court should not have entered any injunctive relief at all once the regulatory accommodation regarding the ACA’s contraception mandate was revised to include for-profit employers. At that point, the for-profit employer’s case became moot.

For-profit employer challenge.

In 2013, a Chicago for-profit employer—a family business supplying ready-mix concrete products—filed a lawsuit challenging the so-called contraception mandate of the ACA which, as embodied in federal implementing regulations, basically required that non-exempt and non-grandfathered group health plans provide specified preventative health services to plan participants without cost-sharing. Among those services were contraceptives approved by the Food and Drug Administration. Employers who refused to provide such services were subject to substantial fines.

Accommodation for religious employers.

The company regarded certain of the contraceptives covered by the mandate as potential abortifacients, the use of which was proscribed by the firm owners’ and managers’ religious tenets. Although the government had established an accommodation for certain religious employers that provided for alternate means of ensuring employee access to the contraceptive services specified by the mandate, without payment or direct involvement by an objecting employer, at the time the lawsuit was filed, that accommodation did not apply to for-profit employers.

Extended accommodation.

In the wake of the Supreme Court ruling on the issue in Hobby Lobby, the government in 2015 extended the accommodation to closely held for-profit employers who also objected to the mandate on religious grounds. Litigation challenging the sufficiency of the accommodation was pending when the employer and the government came before the court with competing proposals for permanent injunctive relief. The district court adopted the government’s proposal and entered a permanent injunction limited to the mandate as it existed prior to the Supreme Court decision in Hobby Lobby, and the employer appealed.

District court abused its discretion.

In its appeal, the employer contended that the district court abused its discretion and otherwise erred in entering the more limited injunction proposed by the government rather than the injunction that the employer proposed. It argued that the injunction as entered provided no lasting relief because it was limited to a state of affairs pre-dating Hobby Lobby-one that no longer existed. Although the Seventh Circuit agreed with the employer that it was error for the district court to enter an injunction directed to a version of the regulatory framework that had been superseded, the court based its conclusion on different grounds.

Only prospective relief sought.

Federal jurisdiction is limited by Article III of the Constitution to live cases and controversies; an actual controversy must exist not only at the time a complaint is filed, but through all stages of the litigation. When a complaint is focused on a particular statute, regulation, or rule and seeks only prospective relief, the case becomes moot when the government repeals, revises, or replaces the challenged law and thereby removes the complained-of defect, noted the appeals court.

Here, the revision of the regulatory framework in July 2015 rendered the employer’s challenge to the contraception mandate moot because that challenge was focused solely on the exclusion of for-profit companies from the regulatory accommodation for employers with religious objections to the mandate. Because the employer had enjoyed the benefit of preliminary injunctive relief during the litigation, it had suffered no injury as a result of the mandate. Accordingly, what it was truly seeking amounted to prospective relief.

Enjoining regulations that no longer exist.

Once the government, in response to the Hobby Lobby decision, re-wrote the regulations to permit closely held for-profit firms to invoke the accommodation (and there was no dispute that the employer had become eligible for and was entitled to invoke the revised accommodation), the mandate no longer posed a prospective harm to the company, and there was no longer any action for the court to take on the employer’s behalf. Any injunction directed to the prior regulations foreclosing the accommodation to the employer would necessarily be meaningless, as those regulations no longer existed.

Accordingly, it was error for the district court to enter any injunctive relief at all once the regulatory accommodation was revised to include for-profit employers, and at that point, the case became moot. The Seventh Circuit vacated the district court’s judgment and remanded the case with directions to dismiss the case as moot.
SOURCE: Ozinga v. Price, (CA-7), No. 15-3648, April 28, 2017, per curiam.
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