Class Certified in Suit to Block HHS’s Transgender Care Policy

Two Texas doctors won class certification in a suit to stop HHS from treating discrimination based on sexual orientation or gender identity as sex discrimination actionable under the Affordable Care Act’s antibias provision.

Susan Neese and James Hurly alleged in the US District Court for the Northern District of Texas that Heath and Human Services Secretary Xavier Becerra’s 2021 announcement regarding the agency’s interpretation and enforcement of ACA Section 1557 may cost them federal money if they refuse to provide gender-confirming care to transgender patients.

They further alleged that Becerra’s announcement violates the Administrative Procedure Act because it wrongfully treats discrimination based on sexual orientation or gender identity as “sex discrimination.” Neese and Hurly are asking the court to declare that Section 1557 doesn’t prohibit this type of discrimination.

Before reaching that point, however, they asked the court to certify a class consisting of all health-care providers subject to Section 1557. The potential class “easily exceeds 1 million people,” because the law applies to any health-care provider participating in a federally funded program like Medicare or Medicaid, they said.

Judge Matthew J. Kacsmaryk granted the certification motion Oct. 14, after finding that Neese and Hurly had standing to bring the suit. The doctors face a credible threat of enforcement because they potentially will lose federal money if the refuse to provide gender-affirming care, he said. The threat creates a concrete, particularized, actual, or imminent injury in fact, he said.

Common Questions

Becerra’s announcement is at issue here, and a since-announced notice of proposed rulemaking doesn’t render the case moot, the court said. The rulemaking process isn’t complete, and the proposed rule doesn’t withdraw or nullify the announcement, it said.

There are at least two questions common to the entire proposed class, the court also found. They are: Whether Becerra’s interpretation of Section 1557 is consistent with the statutory definition of sex discrimination; and, whether Section 1557’s prohibition on sex discrimination compels health-care providers to provide gender-confirming care.

All potential class members face the same potential loss of funds, Kacsmaryk said. Additionally, the doctors are adequate class representatives, even though some potential class members may oppose the relief they seek, he said.

There is no requirement that all potential class members must agree with the representative parties’ aims or beliefs, the judge said.

Jonathan Mitchell of Austin, the Fillmore Law Firm LLP, Sprouse Schrader Smith PLLC, and America First Legal Foundation represent the plaintiffs. The US Department of Justice represents Becerra.

The case is Neese v. Becerra, N.D. Tex., No. 21-cv-163, 10/14/22.