The Affordable Care Act guarantees that insurers provide women with free access to contraception coverage. In 2017, the three federal agencies responsible for implementing that guarantee adopted rules that expanded an exemption for certain entities with a religious objection and created a new exemption for certain entities with a moral objection. The agencies issued the 2017 rules as “interim final rules,” without publishing a notice of proposed rulemaking and seeking public comment. In 2018, the agencies published “final rules” that largely mirrored the exemptions stated in interim final rules.
Pennsylvania and New Jersey challenged the exemptions under the Administrative Procedure Act (APA). The district court concluded that the states were likely to prevail in the case and issued a preliminary injunction preventing the agencies from implementing their rules throughout the nation. The district court concluded that a nationwide injunction was necessary to afford the states complete relief pending judicial review. After the court of appeals affirmed the district court’s decision, the agencies obtained Supreme Court review.
In the Supreme Court, Public Citizen filed an amicus brief addressing two issues. First, the brief argued that the agencies violated the notice-and-comment procedures required by the APA when they promulgated the final rules. The brief emphasized the facts that the agencies did not publish a notice of proposed rulemaking, did not offer a sufficient justification for finding “good cause” to dispense with notice-and-comment procedures, and did not structure their requests for comment in the interim final rules in the manner of a bona fide notice of proposed rulemaking. Public Citizen proposed that the Court adopt a standard that would deter agencies from using interim final rules to circumvent notice-and-comment rulemaking procedures and to reject the agencies’ argument that they may cure notice problems simply by fulfilling their separate obligation to address comments filed in the record after the interim final rule was promulgated.
Second, Public Citizen argued that the Supreme Court should reject the government’s argument that a court reviewing agency action under the APA lacks the authority to issue an injunction that has nationwide effect. The brief explained that the default remedies authorized by the APA will typically have nationwide effect in the context of a facial challenge to agency rules due to the nationwide reach of federal rules. The brief also argued that the government’s preferred outcome, in which a court’s relief could benefit only the parties to the litigation, would create confusion and would arbitrarily subject similarly situated persons to different regulatory regimes.
In July 2020, the Supreme Court, in a 7-2 decision, reversed the Third Circuit. The Court held that the agencies had complied with the APA’s notice-and-comment procedures because they had satisfied each of the requirements set forth in the APA for promulgating a legislative rule and because their failure to issue a notice of proposed rulemaking did not cause prejudicial error. The Court did not reach the question whether the lower court properly issued a nationwide injunction.