Case: Braidwood Management Inc. v. Becerra

4:20-cv-00283 | U.S. District Court for the Northern District of Texas

Filed Date: March 29, 2020

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Case Summary

On June 11, 2019 — more than nine years after the Affordable Care Act was signed into law—the U.S. Preventive Services Task Force recommended that health insurance cover preexposure prophylaxis (PrEP) drugs without any cost-sharing arrangements such as co-payments or deductibles. On March 29, 2020, in the United States District Court for the Northern District of Texas, Plaintiffs filed a complaint, challenging the PrEP mandate as well as a prior contraception mandate. Plaintiffs, individuals an…

On March 29, 2020, in the United States District Court for the Northern District of Texas, Plaintiffs filed a complaint, challenging the PrEP mandate as well as a prior contraception mandate. Plaintiffs, individuals and businesses in Texas, claimed they did not need or want contraceptive coverage in their health insurance. Plaintiffs also objected to the contraceptive coverage and the coverage of PrEP drugs on religious grounds under the Religious Freedom Restoration Act (RFRA). Plaintiffs sued the Secretary of Health & Human Services (HHS), the Secretary of the Treasury, and the Secretary of Labor. On July 20, 2020, Plaintiffs filed an amended complaint to add additional individuals as plaintiffs.

On February 25, 2021, Judge Reed C. O'Connor ruled on defendants' motion to dismiss, dismissing two claims and retaining the others. The Court concluded that the plaintiffs had standing to bring their claims. However, the Court concluded that the religious challenge to the Contraception Mandate should be dismissed under the principle of res judicata, meaning that the claim was precluded. This was because this Court had already issued an injunction in DeOtte, which prevented the Contraceptive Mandate from being applied to the Religious-Objector Plaintiffs. The Court also dismissed the plaintiffs' statutory interpretation claim for failure to state a claim upon which relief may be granted since the text was clearly unambiguous. That said, the Court allowed the claims pertaining to the Appointments Clause, the Vesting Clause, the Nondelegation Doctrine, and RFRA to proceed. 2021 U.S. Dist. LEXIS 193410 (N.D. Tex. Feb. 25, 2021).

After several months of discovery, both parties filed cross-motions for summary judgment. On September 7, 2022, Judge Reed granted the motions in part and denied them in part. Concluding that at least some of the parties had standing, the Court considered the merits of four claims. 2022 U.S. Dist. LEXIS 161052 (N.D. Tex. Sep. 7, 2022)

First, beginning with the Appointments Clause, the Court held that the U.S. Preventative Services Task Force violates the Appointments Clause but that the other two agencies do not. In its reasoning, the Court concluded that because the HHS Secretary effectively ratified some of the actions by two of the agencies involved in the promulgation of the mandates, there was no need to address the Appointments Clause issues regarding those two agencies. As for the U.S. Preventive Services Task Force, the Court concluded that it was not subject to the Secretary's review, and therefore because of the power it wielded, its officers needed to be appointed pursuant to the Constitution.

Second, regarding the Vesting Clause, the plaintiffs’ removal claim failed because they did not identify any removal restrictions on those agency members. Third, as for the nondelegation issue, the Court granted the defendant's motion for summary judgment, concluding that under the current "intelligible principle" standard, Congress had indeed satisfied that standard and provided such guidance.

Lastly, the Court granted plaintiffs' motion for summary judgment with respect to the RFRA claim, finding that the PrEP mandate had not been shown to further a compelling government interest nor had it been shown that the mandate was the least restrictive means of furthering that stated interest.

After supplemental briefing, Judge Reed ruled on the parties' cross-motions for summary judgment of the remaining claims on March 30, 2023. The biggest remaining issue was the scope of the remedy. In his March 2023 opinion, Judge Reed held that the US Preventive Services Task Force had no federal jurisdiction in mandating coverage of various preventive services. Therefore, in granting a universal remedy, Judge Reed held that all agency action taken to implement or enforce the preventive care coverage requirements in response to the Task Force recommendation was unlawful and vacated. The defendants were thus enjoined from implementing or enforcing the compulsory coverage requirements pertaining to preventive care recommendations.

On March 31, 2023, defendants appealed the order to the U.S. Court of Appeals for the Fifth Circuit. Shortly thereafter, on April 6, the plaintiffs also appealed. On April 12, the defendants filed a motion for a partial stay of the judgment pending appeal. On May 15, the Fifth Circuit issued an administrative stay pending consideration of that motion.

On June 12, 2023, the parties filed a joint stipulation and proposed order, outlining their agreement: defendants agreed to not seek penalties against plaintiffs for failing to abide by the Task Force recommendations on the basis of Judge O'Connor's injunction and judgment, even if later vacated or reversed, and plaintiffs acquiesced to a partial stay. The next day, in light of the parties' stipulation, the Fifth Circuit stayed Judge O'Connor's injunction pending appeal, thus allowing defendants to implement and enforce the compulsory coverage requirements.

On July 21, 2024, a Fifth Circuit panel issued its decision. 104 F.4th 930. The panel affirmed Judge O'Connor's ruling that the Task Force requirement was unconstitutional under the Appointments Clause. Given the Task Force's power to issue recommendations that insurers had to legally follow, the Court held the Task Force's members were principal officers of the U.S. Accordingly, the members had not been validly appointed as mandated under Article II of the U.S. Constitution.

Prior to the ruling, the Secretary had issued a memo ratifying the Task Force's recommendations. However, in its ruling, the Court rejected ratification as a remedy to the Appointments Clause issue. It also rejected defendants request to sever the part of the Task Force's authorizing statute that protected it from the Secretary's supervision.

The Fifth Circuit held the district court had properly enjoined defendants from enforcing the Task Force's preventative care mandate against plaintiffs. However, it also held the lower court had erred in entering a nationwide injunction and in vacating all agency actions to enforce the Task Force's recommendations, as there was no basis to grant relief under the Administrative Procedure Act.

Lastly, the Fifth Court held that plaintiffs' Appointments Clause challenges against the other two administrative agencies failed, as the Secretary has authority to ratify their recommendations and guidelines. Accordingly, it remanded to the district court to consider plaintiffs' argument that the Secretary's ratification memo was defective under the Administrative Procedure Act.

The district court stayed the case on August 28, 2024, as the defendants were planning to ask the U.S. Supreme Court to hear the case. The defendants filed a petition for a writ of certiorari with the Supreme Court the following month, on September 19 (docket number No. 24-316). As of October 6, 2024, the Supreme Court has not yet decided whether to hear the case.

	Document
1 4:20-cv-00283	Complaint -- Class Action	March 29, 2020	March 29, 2020 Complaint
14 4:20-cv-00283	First Amended Complaint	July 20, 2020	July 20, 2020 Complaint
35 4:20-cv-00283	Order Kelley v. Azar II et al.	Feb. 25, 2021	Feb. 25, 2021 Order/Opinion 2021 WL 4025804
92 4:20-cv-00283	Memorandum Opinion and Order	Sept. 7, 2022	Sept. 7, 2022 Order/Opinion 627 F.Supp.3d 624
113 4:20-cv-00283	Second Memorandum Opinion & Order on Remedies in Relation to Plaintiffs' Motion for Summary Judgment	March 30, 2023	March 30, 2023 Order/Opinion 666 F.Supp.3d 613
99-2 23-10326	Unpublished Order U.S. Court of Appeals for the Fifth Circuit	May 15, 2023	May 15, 2023 Order/Opinion
339-1 23-10326	Appeal from the United States District Court for the Northern District of Texas U.S. Court of Appeals for the Fifth Circuit	June 21, 2024	June 21, 2024 Order/Opinion 104 F.4th 930
136 4:20-cv-00283	Appeal from the United States District Court for the Northern District of Texas U.S. Court of Appeals for the Fifth Circuit	Aug. 13, 2024	Aug. 13, 2024 Order/Opinion
140 4:20-cv-00283	Order	Aug. 29, 2024	Aug. 29, 2024 Order/Opinion

ECF Number	Description	Date	Link Date / Link
1	COMPLAINT against All Defendants filed by Kelley Orthodontics, Joel Starnes, Braidwood Management Inc., John Kelley. (Filing fee $400; Receipt number 0539-10733398) Clerk to issue summons(es). In each Notice of Electronic Filing, the judge assignment is indicated, and a link to the Judges Copy Requirements is provided. The court reminds the filer that any required copy of this and future documents must be delivered to the judge, in the manner prescribed, within three business days of filing. Unless exempted, attorneys who are not admitted to practice in the Northern District of Texas must seek admission promptly. Forms, instructions, and exemption information may be found at www.txnd.uscourts.gov, or by clicking here: Attorney Information - Bar Membership. If admission requirements are not satisfied within 21 days, the clerk will notify the presiding judge. (Attachments: # 1 Exhibit(s), # 2 Exhibit(s), # 3 Exhibit(s), # 4 Exhibit(s), # 5 Exhibit(s), # 6 Exhibit(s), # 7 Cover Sheet) (Mitchell, Jonathan) (Entered: 03/29/2020) 1 Exhibit(s) View on RECAP 2 Exhibit(s) View on RECAP 3 Exhibit(s) View on RECAP 4 Exhibit(s) View on RECAP 5 Exhibit(s) View on RECAP 6 Exhibit(s) View on RECAP 7 Cover Sheet View on RECAP	March 29, 2020	March 29, 2020 Clearinghouse
2	CERTIFICATE OF INTERESTED PERSONS/DISCLOSURE STATEMENT by Braidwood Management Inc., John Kelley, Kelley Orthodontics, Joel Starnes. (Mitchell, Jonathan) (Entered: 03/29/2020)	March 29, 2020	March 29, 2020 RECAP
	Case Reassigned to Judge Reed C. O'Connor. Senior Judge John McBryde no longer assigned to the case. (pef)	March 29, 2020	March 29, 2020 PACER
3	New Case Notes: A filing fee has been paid. File to: Judge O'Connor. Pursuant to Misc. Order 6, Plaintiff is provided the Notice of Right to Consent to Proceed Before A U.S. Magistrate Judge. Clerk to provide copy to plaintiff if not received electronically. Attorneys are further reminded that, if necessary, they must comply with Local Rule 83.10(a) within 14 days or risk the possible dismissal of this case without prejudice or without further notice. (pef) (Entered: 03/30/2020)	March 29, 2020	March 29, 2020 RECAP
4	Summons issued as to Alex M. Azar II, Steven T. Mnuchin, Eugene Scalia, United States of America, U.S. Attorney, and U.S. Attorney General. (pef) (Entered: 03/30/2020)	March 30, 2020	March 30, 2020 RECAP
5	SUMMONS Returned Executed: U.S. Attorney served on 04/03/2020 on behalf of all defendants; U.S. Attorney General served on 04/07/2020 on behalf of all defendants. (Fillmore, H) Modified docket text on 4/15/2020 (pef). (Entered: 04/14/2020)	April 14, 2020	April 14, 2020 RECAP
6	NOTICE of Attorney Appearance by Jordan Landrum Von Bokern-DOJ on behalf of Alex M. Azar II, Steven T. Mnuchin, Eugene Scalia, United States of America. (Filer confirms contact info in ECF is current.) (Von Bokern-DOJ, Jordan) (Entered: 05/19/2020)	May 19, 2020	May 19, 2020 RECAP
7	NOTICE of Attorney Appearance by Christopher M Lynch on behalf of Alex M. Azar II, Steven T. Mnuchin, Eugene Scalia, United States of America. (Filer confirms contact info in ECF is current.) (Lynch, Christopher) (Entered: 05/19/2020)	May 19, 2020	May 19, 2020 RECAP
8	Unopposed Motion for Extension of Time to File Answer filed by Alex M. Azar II, Steven T. Mnuchin, Eugene Scalia, United States of America with Brief/Memorandum in Support. (Von Bokern-DOJ, Jordan) (Entered: 05/20/2020)	May 20, 2020	May 20, 2020 RECAP
9	ORDER: Before the Court is Defendant's Unopposed Motion for Extension of Time to File Answer (Motion) (ECF No. 8 ), filed May 20, 2020. Having considered the unopposed Motion, the Court finds that it should be and is hereby GRANTED. It is hereby ORDERED that Defendants may respond to Plaintiff's Complaint on or before June 29, 2020. (Ordered by Judge Reed C. O'Connor on 5/20/2020) (pef) (Entered: 05/20/2020)	May 20, 2020	May 20, 2020 RECAP
10	MOTION Extension of Page Limitation filed by Alex M. Azar II, Steven T. Mnuchin, Eugene Scalia, United States of America (Attachments: # 1 Proposed Order) (Lynch, Christopher) (Entered: 06/26/2020) 1 Proposed Order View on RECAP	June 26, 2020	June 26, 2020 RECAP
11	ORDER: Before the Court is Defendants' Unopposed Motion for Extension of Page Limitation (Motion) (ECF No. 10 ), filed June 26, 2020. Having considered the unopposed Motion, the Court finds that it should be and is hereby GRANTED. Therefore, it is hereby ORDERED that Defendants may file a motion to dismiss not to exceed 40 pages. (Ordered by Judge Reed C. O'Connor on 6/29/2020) (pef) (Entered: 06/29/2020)	June 29, 2020	June 29, 2020 RECAP
12	MOTION to Dismiss for Lack of Jurisdiction, Motion to Dismiss for Failure to State a Claim() filed by Alex M. Azar II, Steven T. Mnuchin, Eugene Scalia, United States of America with Brief/Memorandum in Support. (Lynch, Christopher) (Entered: 06/29/2020)	June 29, 2020	June 29, 2020 RECAP
13	*VACATED PER 16 ORDER* ORDER REQUIRING SCHEDULING CONFERENCE AND REPORT FOR CONTENTS OF SCHEDULING ORDER: The Joint Report shall be filed on or before July 28, 2020. (Ordered by Judge Reed C. O'Connor on 6/30/2020) (pef) Modified on 7/27/2020 (chmb). (Entered: 06/30/2020)	June 30, 2020	June 30, 2020 RECAP
14	AMENDED COMPLAINT (FIRST) against Alex M. Azar II, Steven T. Mnuchin, Eugene Scalia, United States of America filed by Kelley Orthodontics, Joel Starnes, Braidwood Management Inc., John Kelley, Gregory Scheideman, Donovan Riddle, Karla Riddle, Zach Maxwell, Ashley Maxwell, Joel Miller. Unless exempted, attorneys who are not admitted to practice in the Northern District of Texas must seek admission promptly. Forms, instructions, and exemption information may be found at www.txnd.uscourts.gov, or by clicking here: Attorney Information - Bar Membership. If admission requirements are not satisfied within 21 days, the clerk will notify the presiding judge. (Attachments: # 1 Exhibit(s), # 2 Exhibit(s), # 3 Exhibit(s), # 4 Exhibit(s), # 5 Exhibit(s), # 6 Exhibit(s)) (Mitchell, Jonathan) (Entered: 07/20/2020) 1 Exhibit(s) View on RECAP 2 Exhibit(s) View on RECAP 3 Exhibit(s) View on RECAP 4 Exhibit(s) View on RECAP 5 Exhibit(s) View on RECAP 6 Exhibit(s) View on RECAP	July 20, 2020	July 20, 2020 Clearinghouse
15	Joint MOTION to Vacate 13 Order for Scheduling Order Proposal filed by Alex M. Azar II, Steven T. Mnuchin, Eugene Scalia, United States of America (Attachments: # 1 Proposed Order) (Lynch, Christopher) (Entered: 07/24/2020) 1 Proposed Order View on RECAP	July 24, 2020	July 24, 2020 RECAP
16	ORDER granting 15 Joint Motion to Vacate. This Court's order of June 30, 2020, ECF No. 13, is hereby vacated. Defendants may file their Motion to Dismiss on or before August 7, 2020. (Ordered by Judge Reed C. O'Connor on 7/27/2020) (chmb) (Entered: 07/27/2020)	July 27, 2020	July 27, 2020 RECAP
17	MOTION Extension of Page Limitation filed by Alex M. Azar II, Steven T. Mnuchin, Eugene Scalia, United States of America (Attachments: # 1 Proposed Order) (Lynch, Christopher) (Entered: 08/06/2020) 1 Proposed Order View on RECAP	Aug. 6, 2020	Aug. 6, 2020 RECAP
18	ELECTRONIC ORDER finding as moot 12 Motion to Dismiss for Lack of Jurisdiction. ; finding as moot 12 Motion to Dismiss for Failure to State a Claim (Ordered by Judge Reed C. O'Connor on 8/7/2020) (chmb) (Entered: 08/07/2020)	Aug. 7, 2020	Aug. 7, 2020 PACER
19	ORDER granting 17 Motion... Defendants may file a motion to dismiss not to exceed 35 pages. (Ordered by Judge Reed C. O'Connor on 8/7/2020) (wrb) (Entered: 08/07/2020)	Aug. 7, 2020	Aug. 7, 2020 RECAP
20	MOTION to Dismiss for Lack of Jurisdiction First Amended Complaint, Motion to Dismiss for Failure to State a Claim() filed by Alex M. Azar II, Steven T. Mnuchin, Eugene Scalia, United States of America with Brief/Memorandum in Support. (Lynch, Christopher) (Entered: 08/07/2020)	Aug. 7, 2020	Aug. 7, 2020 RECAP
21	Unopposed MOTION to Extend Time of time to respond to motion to dismiss filed by Braidwood Management Inc., John Kelley, Kelley Orthodontics, Ashley Maxwell, Zach Maxwell, Joel Miller, Donovan Riddle, Karla Riddle, Gregory Scheideman, Joel Starnes (Attachments: # 1 Proposed Order) (Mitchell, Jonathan) (Entered: 08/12/2020) 1 Proposed Order View on RECAP	Aug. 12, 2020	Aug. 12, 2020 RECAP
22	ORDER: Having considered the 21 Unopposed Motion, the Court finds that it should be and is hereby GRANTED. Therefore, it is hereby ORDERED that Plaintiffs may file a response on or before September 11, 2020. (Ordered by Judge Reed C. O'Connor on 8/13/2020) (pef) (Entered: 08/13/2020)	Aug. 13, 2020	Aug. 13, 2020 RECAP
23	MOTION Extend Page Limits for Plaintiffs' Response to Defendants' Motion to Dismiss filed by Braidwood Management Inc., John Kelley, Kelley Orthodontics, Ashley Maxwell, Zach Maxwell, Joel Miller, Donovan Riddle, Karla Riddle, Gregory Scheideman, Joel Starnes (Attachments: # 1 Proposed Order) (Mitchell, Jonathan) (Entered: 09/12/2020) 1 Proposed Order View on RECAP	Sept. 12, 2020	Sept. 12, 2020 RECAP
24	BRIEF filed by Braidwood Management Inc., John Kelley, Kelley Orthodontics, Ashley Maxwell, Zach Maxwell, Joel Miller, Donovan Riddle, Karla Riddle, Gregory Scheideman, Joel Starnes re: 20 MOTION to Dismiss for Lack of Jurisdiction First Amended ComplaintMotion to Dismiss for Failure to State a Claim (Mitchell, Jonathan) Modified on 9/14/2020 (wrb). (Entered: 09/12/2020)	Sept. 12, 2020	Sept. 12, 2020 RECAP
25	ELECTRONIC ORDER granting 23 Motion. (Ordered by Judge Reed C. O'Connor on 9/14/2020) (chmb) (Entered: 09/14/2020)	Sept. 14, 2020	Sept. 14, 2020 PACER
26	Unopposed MOTION for Extension of Time to File Response to Motion to Dismiss, Nunc Pro Tunc filed by Braidwood Management Inc., John Kelley, Kelley Orthodontics, Ashley Maxwell, Zach Maxwell, Joel Miller, Donovan Riddle, Karla Riddle, Gregory Scheideman, Joel Starnes (Attachments: # 1 Proposed Order) (Mitchell, Jonathan) (Entered: 09/14/2020) 1 Proposed Order View on RECAP	Sept. 14, 2020	Sept. 14, 2020 RECAP
	Order on Motion for Miscellaneous Relief	Sept. 14, 2020	Sept. 14, 2020 PACER
27	NOTICE of Change of Address for Attorney H Dustin Fillmore, III on behalf of Braidwood Management Inc., John Kelley, Kelley Orthodontics, Ashley Maxwell, Zach Maxwell, Joel Miller, Donovan Riddle, Karla Riddle, Gregory Scheideman, Joel Starnes. (Filer confirms contact info in ECF is current.) (Fillmore, H) (Entered: 09/16/2020)	Sept. 16, 2020	Sept. 16, 2020 RECAP
28	MOTION for Extension of Time to File Response/Reply to 24 Response/Objection, filed by Alex M. Azar II, Steven T. Mnuchin, Eugene Scalia, United States of America (Attachments: # 1 Proposed Order) (Lynch, Christopher) (Entered: 09/24/2020) 1 Proposed Order View on RECAP	Sept. 24, 2020	Sept. 24, 2020 RECAP
29	ELECTRONIC ORDER granting 26 Motion for Extension of Time to File. (Ordered by Judge Reed C. O'Connor on 9/25/2020) (chmb) (Entered: 09/25/2020)	Sept. 25, 2020	Sept. 25, 2020 PACER
30	ELECTRONIC ORDER granting 28 Defendants' Motion to Extend Time to File Reply.The deadline for Defendants to file their Reply is hereby extended to October 5, 2020. (Ordered by Judge Reed C. O'Connor on 9/25/2020) (chmb) (Entered: 09/25/2020)	Sept. 25, 2020	Sept. 25, 2020 PACER
	Order on Motion for Extension of Time to File Document	Sept. 25, 2020	Sept. 25, 2020 PACER
	Order on Motion to Extend Time to File Response/Reply	Sept. 25, 2020	Sept. 25, 2020 PACER
31	MOTION Extension of Page Limitation filed by Alex M. Azar II, Steven T. Mnuchin, Eugene Scalia, United States of America (Attachments: # 1 Proposed Order) (Lynch, Christopher) (Entered: 10/05/2020) 1 Proposed Order View on RECAP	Oct. 5, 2020	Oct. 5, 2020 RECAP
32	REPLY filed by Alex M. Azar II, Steven T. Mnuchin, Eugene Scalia, United States of America re: 20 MOTION to Dismiss for Lack of Jurisdiction First Amended ComplaintMotion to Dismiss for Failure to State a Claim (Lynch, Christopher) (Entered: 10/05/2020)	Oct. 5, 2020	Oct. 5, 2020 RECAP
33	ELECTRONIC ORDER granting 31 Motion (Ordered by Judge Reed C. O'Connor on 10/6/2020) (chmb) (Entered: 10/06/2020)	Oct. 6, 2020	Oct. 6, 2020 PACER
	Order on Motion for Miscellaneous Relief	Oct. 6, 2020	Oct. 6, 2020 PACER
34	NOTICE of Supplemental Authority filed by Braidwood Management Inc., John Kelley, Kelley Orthodontics, Ashley Maxwell, Zach Maxwell, Joel Miller, Donovan Riddle, Karla Riddle, Gregory Scheideman, Joel Starnes (Attachments: # 1 Exhibit(s)) (Mitchell, Jonathan) (Entered: 12/28/2020) 1 Exhibit(s) View on RECAP	Dec. 28, 2020	Dec. 28, 2020 RECAP
35	ORDER: Defendants' Motion to Dismiss (ECF No. 20 ) is GRANTED in part and DENIED in part. Specifically, Defendants' Motion to Dismiss is GRANTED as to Plaintiffs' statutory-interpretation claim and the Religious-Objector Plaintiffs' Contraceptive Mandate claim. Those claims are hereby dismissed with prejudice. All other requested relief in Defendants' Motion to Dismiss is DENIED. (Ordered by Judge Reed C. O'Connor on 2/25/2021) (pef) (Entered: 02/25/2021)	Feb. 25, 2021	Feb. 25, 2021 Clearinghouse

Case: Braidwood Management Inc. v. Becerra

4:20-cv-00283 | U.S. District Court for the Northern District of Texas

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