Section 1557’s new health care civil rights regulations and the end of Chevron deference

The U.S. Supreme Court's late June decision overturning what is referred to as?

Chevron?deference to agency interpretations of “ambiguous” statutes will have many significant, if presently unknown, consequences. (LOPER BRIGHT ENTERPRISES ET AL. v. RAIMONDO, SECRETARY OF COMMERCE, ET AL.)

?In the 6-3 decision, the justices eliminated a long-standing doctrine concerning regulators’ ability to interpret ambiguous laws. Under the doctrine, originating in the 1984 case Chevron v. Natural Resources Defense Council, courts deferred to an agency’s interpretation of ambiguous statutory authority if the agency’s definition was judged reasonable.

I expect health care, environmental, workplace safety, labor regulations and related agency decisions will lead the list of forthcoming challenges made possible by the Court’s decision. One of the first post-Chevron deference decisions came down on July 3, when a federal court in Mississippi ordered a nationwide injunction on the implementation and enforcement of HHS’s new Affordable Care Act Section 1557 regulations that pertain to “… extend[ing] discrimination on the basis of sex to include discrimination on the basis of gender identity in the following regulations: 42 C.F.R. §§ 438.3, 438.206, 440.262, 460.98, 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." The court’s order does not cover any other sections of the final regulations. See Tennessee v. Becerra, No.? 1:24 cv161-LG-BWR (S.D. Miss., July 3, 2024). The Section 1557 regulations became the law on July 5, the above Mississippi injunction notwithstanding.

In the Loper Bright case, the Supreme Court decided that federal courts shall no longer defer to?agency actions and expertise, such as regulations, in making judicial decisions. Instead, the courts will now exclusively and dispositively determine whether statutes?contain sufficient language to enable federal agencies to promulgate regulations to enforce statutory mandates.?

As the Court held: "At best, Chevron has been a distraction from the question that matters: Does the statute authorize the challenged agency action??And at worst, it has required courts to violate the Administrative Procedures Act by yielding to an agency the express responsibility, vested in “the reviewing court,” to “decide all relevant questions of law” and “interpret . . . statutory provisions.” §706 (emphasis added).

The Court invoked the primacy of judicial review as a basis for overruling Chevron, a hint at what is to come - courts deciding the propriety of agency decision making and the end to deference to agency subject matter expertise. “Although the Court finally ends our 40-year misadventure with Chevron deference, its more profound problems should not be overlooked. Regardless of what a statute says, the type of deference required by Chevron violates the Constitution.”

In the decision’s wake, a? flood of new lawsuits is expected, challenging myriad regulations across the federal government. Perhaps my former USDOJ colleagues will need to staff up to defend against what promises to be a whole new trend in federal litigation.

But much uncertainty remains following the Court’s decision overturning Chevron: lower federal courts will now exclusively answer the Supreme Court's rhetorical proposition - Does the statute authorize the challenged agency action? We do not know what factors will be used to make this determination and similarly, do not know what language Congress must include to enable federal regulatory action. Answers to these questions await the coming flood of litigation and court decisions.

The Mississippi decision is an early indication of what post-Chevron challenges may look like, at least in health care. Concerning gender identity discrimination in health care, the court decided:“In the absence of Congressional action addressing discrimination on the basis of gender identity, the Executive Branch began publishing regulations and policy statements in 2016 that interpreted Title IX’s prohibition of discrimination on the basis of sex to include discrimination on the basis of gender identity. …[T]his lawsuit and the pending Motion challenges HHS’s latest regulation, which purportedly implements the prohibition of discrimination set forth in Section 1557 of the Patient Protection and Affordable Care Act (“ACA”), 42 U.S.C. § 18116(a). The ACA incorporates the provisions of Title IX in order to address sex discrimination in the healthcare field.”

Although the court clothes the challenge to HHS’s Section 1557 regulations as falling under the Supreme Court’s Loper Bright decision, the Mississippi case is less about a federal agency overstepping its authority and more about the federal court disagreeing that sex discrimination includes gender identity discrimination. Seemingly, the Mississippi judge appeared eager to invoke the end of Chevron deference in the decision, which is essentially a difference in legal interpretation and reasoning. The underlying statute, 42 U.S. Code § 18116, clearly empowers HHS to implement regulations prohibiting sex discrimination in health care and is not ambiguous. The Mississippi court and HHS differ on the meaning of sex discrimination and whether gender identity discrimination is included under the sex discrimination rubric.

This difference makes clear why it has always been expected that the expansion of sex discrimination to encompass gender identity discrimination in health dare would be ultimately decided by the Supreme Court, an eventuality that I expect will occur within the coming one to three years.

In the landmark Supreme Court case of Bostock v. Clayton County, (140 S. Ct. 1731, 2020), the Court decided that the sex discrimination in employment prohibition of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq., includes discrimination based on sexual orientation and gender identity. The Supreme Court held that “An employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undisguisable role in the decision; exactly what Title VII forbids.” Id. Bostock at 1737

Indeed, the Supreme Court?determined?that it is “impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.”?This decision meant that federal laws, such as Title VII, that prohibit discrimination based on sex also?prohibit discrimination?based on sexual orientation and gender identity.

The Mississippi case concerns sex discrimination under Title IX, which was not part of the. Bostock decision. HHS simply applied its own legal conclusion and extended the Bostock Court’s reasoning to health care discrimination under Title IX, one of the six ancestral laws on which the Affordable Care Act’s health care civil rights protections are based.

?As HHS stated in the final Section 1557 preamble:

“Case law offers strong support for the position that sex discrimination under section 1557 includes discrimination on the basis of gender identity and sexual orientation. As previously noted, a body of developing case law explains how to identify unlawful sex discrimination. As part of its prohibition on sex discrimination, this rule prohibits discrimination against individuals who do not conform with stereotypical notions of how an individual is expected to present as male or female, regardless of gender identity… There is a significant amount of case law, pre-and post-Bostock that affirms that sex discrimination includes discrimination based on gender identity.

See, e.g., Doe v. Snyder, 28 F.4th 103, 113–14 (9th Cir. 2022); Grimm v. Gloucester Cnty. Sch. Bd., 972 F.3d 586, 616 (4th Cir. 2020); but cf. Adams v. Sch. Bd. of St. Johns Cnty, 57 F.4th 791, 811-15 (11th Cir. 2022) (en banc)),

See A.C. by M.C. v. Metro. Sch. Dist. Of Martinsville, 75 F.4th 760, 769 (7th Cir. 2023); Grabowski v. Ariz. Bd. Of Regents, 69 F.4th 1110, 1116-17 (9th Cir. 2023); Doe v. Snyder, 28 F.4th 103, 113-14 (9th Cir. 2022); Grimm v. GloucesterCnty. Sch. Bd., 972 F.3d 586, 616 (4th Cir. 2020), as amended (Aug. 28, 2020), cert. denied, 141 S. Ct. 2878 (Mem) (2020). See, e.g., Whitaker By Whitaker v. Kenosha Unified Sch. Dist. No. 1 Bd. Of Educ., 858 F.3d 1034 (7th Cir. 2017) (title IX); Smith v. City of Salem, Ohio, 378 F.3d 566 (6th Cir. 2004) (title VII); Rosa v. Park W. Bank & Trust Co., 214 F.3d 213 (1st Cir. 2000) (Equal Credit Opportunity Act); Schroer v. Billington, 577 F. Supp. 2d 293 (D.D.C. 2008) (title VII); Boyden v. Conlin, 341 F. Supp. 3d 979 (W.D. Wis. 2018) (section 1557 and title VII); Flack v. Wis. Dep’t. of Health Servs., 395 F.Supp 3d 1001, 1014 (W.D. Wis. 2019) (section 1557 and Equal Protection Clause); Prescott v. Rady Children’s Hosp. San Diego, 265 F. Supp. 3d 1090, 1098–100 (S.D. Cal. 2017) (section 1557); Tovar v. Essential Health, 342 F. Supp. 3d 947, 957 (D. Minn. 2018) (section 1557). See also Doe v. Snyder, 28 F.4th 103, 113-14 (9th Cir. 2022)…"

HHS further disputes ]the final Section 1557 rule’s] commenters who reported that nondiscrimination on the basis of gender identity “… cause[s] confusion in the medical profession or lead[s] to diminished quality of care. Health care providers are highly trained in issues of biology, anatomy, and physiology.

This rule requires that individuals be treated without discrimination on the basis of sex. There is no evidence that demonstrates that compliance with civil rights protections, including on the basis of sex, has caused any confusion in the medical field. On the contrary, evidence suggests that when patients are protected on the basis of sex in health care programs, quality of care improves because patients at risk of discrimination are more likely to seek and receive high quality care.” See: https://www.psychiatry.org/patients-families/gender-dysphoria/what-is-gender-dysphoria (Aug. 2022).”

The final legal word on these issues awaits further court decisions and the eventual determination by the Supreme Court.

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