Bid to Halt Health Discrimination Rule Draws Judge’s Scrutiny

A federal judge on Friday questioned whether Washington state will be harmed if the court fails to block portions of a Trump administration rule that wipes out anti-discrimination protections for LGBT people.

Judge James Robart of the U.S. District Court for the Western District of Washington will have to move fast if he plans to issue a decision before the rule takes effect on Aug. 18. The provisions will make it harder for thousands of Washington residents to access health care and insurance, and the state will suffer financially if it has to refer patients to other providers, Brian Sutherland, the state’s assistant attorney general, argued.

But Robart didn’t seem to think increased administrative costs was a valid injury.

“If I adopt that as your line of reasoning, it seems to me that anytime Congress changes anything you have reason to challenge it because it costs the state some money,” he said. “That can’t possibly be the rule.”

In its June 19 rule, the Department of Health and Human Services stripped gender identity and termination of a pregnancy from the definition of sex under Section 1557 of the Affordable Care Act. It also removed sexual orientation from other HHS regulations in reference to nondiscrimination and eliminated a requirement that health-care facilities send patients notices of their nondiscrimination rights in 15 common languages.

The state asked the court to enjoin the rule’s interpretation of “sex” discrimination to exclude LGBT people, its new, blanket exemption for religious entities, and the exclusion of many health-care entities—including many insurance companies and the HHS itself—from Section 1557’s scope.

The Justice Department doesn’t disagree that a state can prove it’s harmed by an agency rule, but that harm must be concrete and established by a long causal chain, said Liam Holland, a DOJ trial attorney who defended the rule on behalf of HHS.

“Their whole chain of causation relies on the action of third-party entities, of hypothetical insurance companies, of hypothetical self-insured employers who might engage in discrimination,” he said.

But Robart was also tough on the DOJ. He said the agency’s rule suggests that the HHS thought the Supreme Court would rule the other way in Bostock v. Clayton County, Ga. In that case, the high court held that discrimination on the basis of sexual orientation or transgender status counts as unlawful sex discrimination.

Now the HHS is dealing with the fact that the Supreme Court’s decision conflicts with the approach that it took to make the definition of sex under Section 1557 consistent with civil rights statutes, Robart said.

“Why should we bail you out of a problem you created?” he asked.

Washington’s case is one of at least four separate challenges filed against the rule. The latest came from a coalition of states and the District of Columbia led by New York Attorney General Letitia James.

A federal district judge in Washington, D.C., who heard arguments for a preliminary injunction in a separate case on Aug. 3, could also step in to block the rule. Robart signaled he may limit his ruling in Washington’s case to only the western region. He asked during Friday’s hearing why that wouldn’t be more appropriate than blocking the specific provisions at issue nationwide.

He also seemed annoyed that he was hearing the case only a few days before the rule is expected to take effect. He told the attorneys they should expect to get some “homework” from the court over the weekend.

The case is State of Washington v. U.S. Dep’t of Health and Human Servs., W.D. Wash., No. 2:20-cv-01105, motion hearing 8/14/20.