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LGBT Health Discrimination Rule Blocked by Federal Judge (1)

Aug. 17, 2020, 9:14 PM; Updated: Aug. 17, 2020, 11:56 PM

A federal district judge blocked the HHS from allowing health-care providers and insurers to discriminate against LGBT people.

Judge Frederick Block of the U.S. District Court for the Eastern District of New York halted the Department of Health and Human Services from enforcing a rule that stripped gender identity and sex stereotyping from anti-discrimination protections under the Affordable Care Act. The order came late Monday, a day before the new rule was set to take effect.

The proposed rules are contrary to the U.S. Supreme Court’s holding in Bostock v. Clayton County, Ga. and HHS acted arbitrarily and capriciously in enacting them, Block said in his 26-page order.

Three days after the HHS filed the rule, the Supreme Court held in Bostock that discrimination on the basis of sexual orientation or transgender status counts as unlawful sex discrimination. That case, however, focused on the definition of sex under Title VII of the Civil Rights Act, which bans discrimination in the workplace.

Ramifications

The HHS rule changed the definition of sex under Section 1557 of the ACA, which is based on Title IX of the Civil Rights Act. Title IX bans discrimination in education and federally-funded programs.

“Bostock interpreted Title VII, but HHS itself recognized that the case would have ‘ramifications’ because ‘Title VII case law has often informed Title IX case law with respect to the meaning of discrimination ‘on the basis of sex,’” Block said.

While the HHS had an opportunity, albeit brief, to reevaluate its proposed rules after the case was decided, it did nothing, Block said.

“The timing might even suggest to a cynic that the agency pushed ahead specifically to avoid having to address an adverse decision,” he said. “But whether by design or bureaucratic inertia, the fact remains that HHS finalized the 2020 Rules without addressing the impact of the Supreme Court’s decision in Bostock.”

The HHS didn’t immediately respond to a request for comment.

While the court’s order doesn’t directly address the part of the 2020 rule that stripped “termination of a pregnancy” from the definition of “on the basis of sex” under 1557, it is being interpreted as also blocking that revision.

The Human Rights Campaign, which challenged the rule on behalf of two transgender women of color, interprets the decision as a nationwide injunction on the entire rule, including the abortion provision, Jason Starr, the group’s litigation director, said.

“This is a crucial early victory for our plaintiffs, Tanya and Cecilia, and for the entire LGBTQ community, particularly those who are multiply marginalized and suffering disproportionately from the impacts of the twin pandemics of COVID-19 and racialized violence,” HRC President Alphonso David said in a statement. “We are pleased the Court recognized this irrational rule for what it is: discrimination, plain and simple.”

The HRC’s challenge is one of several lawsuits filed against the rule, including one from a coalition of 22 states and the District of Columbia led by New York Attorney General Letitia James.

Rulings on requests from preliminary injunctions against the rule are expected any day from federal district court judges in Washington and the District of Columbia.

The case is Walker v. Azar, E.D.N.Y., No. 1:20-cv-02834, order 8/17/20.

(Updated with additional context.)

To contact the reporter on this story: Lydia Wheeler in Washington at lwheeler@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Alexis Kramer at akramer@bloomberglaw.com

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