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Volume XII, Number 138

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Fifth Circuit Brings Enforcement Back into the Mix: The Latest Court Moves with the CMS Vaccination Mandate

A flurry of litigation in federal district and appellate courts has led to an even split between states in which the COVID-19 vaccine mandate issued by the Centers for Medicare and Medicaid Services may be implemented and states in which such implementation has been prevented. Additional appeals are expected shortly; however, the practical effect of these decisions on enforcement of CMS’ mandate remains uncertain.

IN DEPTH


Yesterday, two federal courts issued orders that, together, significantly impact the Biden administration’s authority to implement and enforce the COVID-19 vaccine mandate issued by the Centers for Medicare and Medicaid Services (CMS). The first order, issued by the US Court of Appeals for the Fifth Circuit, has the effect of allowing the federal government to proceed with its efforts to implement the COVID-19 vaccine mandate issued by CMS in more than two dozen states. The second order, issued by a federal court in Texas, bars the federal government from implementing the CMS vaccine mandate in the State of Texas. As we explain in more detail below, the combined effect of yesterday’s orders, as well as recent actions by other federal courts, is that the Biden administration is presently authorized to implement the CMS vaccine mandate in 25 states [1], but precluded from doing so in 25 states [2].

More broadly, yesterday’s orders are the latest in a series of actions by federal courts across the country that reveal vastly different views of the outer limits of the Biden administration’s statutory and constitutional authority to compel vaccination in the healthcare sector, and the proper scope of a remedy appropriate to address allegations that the federal government exceeded such authority.

Background

As we noted here, on November 5, 2021, CMS issued an Interim Final Rule with comment (IFR) requiring certain persons employed or otherwise affiliated with 15 categories of healthcare facilities to receive the first of a two-dose COVID-19 vaccine, or a one-dose COVID-19 vaccine, or to request a federally recognized exemption by December 6, 2021, and to be fully vaccinated or receive an exemption no later than January 4, 2022. Additional administrative requirements, including confirming and storing evidence of staff vaccination and adopting policies and procedures, were also included in the IFR. The 30-day timeline for meeting the December 6 “Phase I” compliance date left many covered providers scrambling.

On November 2, 2021, Florida filed a lawsuit challenging the IFR. Three other lawsuits challenging the IFR soon followed—one each in Missouri, Louisiana and Texas. Within three weeks, federal courts in Louisiana and Missouri granted the plaintiffs’ respective requests for a preliminary injunction, prohibiting the federal government from implementing or enforcing the IFR during the pendency of the litigation [3]. Importantly, the Louisiana court issued an order, styled as a “nationwide” injunction (Louisiana Order), prohibiting the federal government from implementing the IFR in all states except the 10 states that brought the Missouri lawsuit, as those states were granted relief under an order issued by the federal court in Missouri (Missouri Order). The combined effect of the Louisiana Order and the Missouri Order was to prohibit the federal government from implementing the IFR in all 50 states, because the Missouri Order prohibits the government from implementing the IFR in Missouri, Nebraska, Arkansas, Kansas, Iowa, Wyoming, Alaska, South Dakota, North Dakota and New Hampshire—the 10 states that are not covered by the Louisiana Order.

The government immediately appealed both the Missouri Order and the Louisiana Order. In addition, hoping to get the vaccination train back on track, the government filed a motion before the district courts in Missouri and Louisiana, asking each court to “stay”—hold in abeyance—its order halting implementation of the IFR while the government pursued an appeal in each case. The district courts in Missouri and Louisiana promptly denied both requests. The government then filed a motion before the US Court of Appeals for the Fifth Circuit—the appellate court responsible for reviewing the Louisiana Order—seeking a “stay” of the Louisiana Order, as well as before the US Court of Appeals for the Eighth Circuit—the appellate court responsible for reviewing the Missouri Order—seeking a stay of the Missouri Order.

On December 13, 2021, the US Court of Appeals for the Eighth Circuit issued an order denying the federal government’s request to halt the Missouri Order. The Eighth Circuit’s order—which the court of appeals issued without an accompanying opinion—effectively created a pathway for the federal government to salvage the IFR in the near term by petitioning the US Supreme Court to review the Missouri Order, which, as noted above, currently prohibits the federal government from implementing the IFR in ten states.

On December 15, 2021—two days after the Eighth Circuit issued the order denying the government’s request to stay the Missouri Order—the US Court of Appeals for the Fifth Circuit issued an order granting in part and denying in part the government’s request to stay the Louisiana Order. The Fifth Circuit denied the government’s request to stay the Louisiana Order as it relates to the fourteen states that brought the Louisiana litigation—Louisiana, Montana, Arizona, Alabama, Georgia, Idaho, Indiana, Mississippi, Oklahoma, South Carolina, Utah, West Virginia, Kentucky and Ohio—but granted the government’s request as to all states that did not bring the Louisiana litigation. On December 15, 2021, a federal district court in Texas granted the plaintiffs’ motion for a preliminary injunction in the Texas litigation (Texas Order).

The upshot of the orders issued yesterday by the Fifth Circuit and the federal district court in Texas is that the Biden administration may not implement the IFR in the states that brought the Louisiana lawsuit (Louisiana, Montana, Arizona, Alabama, Georgia, Idaho, Indiana, Mississippi, Oklahoma, South Carolina, Utah, West Virginia, Kentucky and Ohio) and the Missouri lawsuit (Missouri, Nebraska, Arkansas, Kansas, Iowa, Wyoming, Alaska, South Dakota, North Dakota and New Hampshire), as well as the State of Texas, but may implement the IFR in all other states and US territories.

The Arguments

In granting the plaintiffs’ requests to enjoin the Biden administration from implementing the IFR, the district courts in Missouri, Louisiana and Texas expressed concerns about the federal government’s statutory and constitutional authority to compel employees, contractors and other associated individuals in the healthcare sector to inoculate.

First, the courts concluded that the plaintiffs were likely to succeed on the merits of their challenge to the IFR, because CMS failed to comply with the “notice-and-comment” procedure required by law under the Administrative Procedures Act. Specifically, the courts held that federal officials failed to follow this statutorily mandated procedure or demonstrate “good cause” as to why compliance was not required under the circumstances.

Second, the courts held that the plaintiffs’ claims were likely to succeed, because Congress did not grant the Secretary of Health and Human Services (and, by delegation, CMS) the authority to issue the IFR. Although Congress authorized the Secretary of Health and Human Services to administer the Medicare and Medicaid programs, the courts opined, it did not expressly confer upon the Secretary the authority to issue the kind of broad, sweeping vaccination mandate set forth in the IFR.

Third, the courts held that the IFR was “arbitrary and capricious” for several reasons, including, among other things, that the federal government failed to consider what two of the courts referred to as “obvious” alternatives to a vaccine requirement, such as periodic testing, or adequately take into account the impact the mandate would have on existing staff shortages in certain geographic areas.

Finally, the Louisiana court highlighted a smorgasbord of constitutional concerns about the IFR, such as, for example, concerns that it violates the states’ police power, the Anti-Commandeering Doctrine and the Non-Delegation Doctrine.

The Way Forward

As noted above, the Missouri Order, the Louisiana Order and the Texas Order presently bar the federal government from implementing or enforcing the IFR in 25 states. We suspect that the federal government will immediately appeal the Eighth Circuit’s order to the US Supreme Court and the portion of the Fifth Circuit’s order that applies to the states that brought the Louisiana lawsuit. The US Supreme Court will decide whether to grant the writ of certiorari and decide the appeals promptly.

In the meantime, the government may appeal the Texas Order and ask the district court to stay the Texas Order as it litigates the appeal. Should the federal district court in Texas deny a motion to stay the Texas Order, the Biden administration will continue to be prohibited from implementing the IFR in Texas, as well as the aforementioned 24 states subject to the Missouri Order and the Louisiana Order. On the other hand, if the federal district court in Texas grants a government motion to stay the Texas Order during the pendency of the government’s appeal, the Biden administration may implement the IFR in Texas.

The manner in which CMS will move forward with enforcement given these most recent shifts is not yet known. In a December 2, 2021, memo to State Agency Survey Directors (QSO-22-04-ALL) (the QSO Memo), CMS announced that it would suspend enforcement of the vaccination mandate, based upon the Missouri and Louisiana Orders. With the December compliance deadline now passed and the January compliance deadline looming, providers in the affected states will have to watch closely for any change to this stated enforcement position.

Key Takeaways

As activity among the various courts on the scope and applicability of the CMS mandate and injunctions against its enforcement continue, covered providers subject to the CMS mandate need to remain alert for developments and further guidance from CMS. The December 6, 2021, Phase I deadline has passed, and the January 4, 2021, deadline is rapidly approaching. With the upcoming Christmas and New Year holidays, it will be incredibly difficult if not impracticable for covered providers to come into compliance by early January. The current CMS guidance remains in effect and deferment on enforcing the CMS vaccine requirements could be extended. Accordingly, barring new guidance or updates to existing guidance like the QSO Memo, how and when CMS plans to proceed with enforcement in the 25 states where that is now a possibility remains an open question.

Endnotes

[1] These jurisdictions include, until further notice, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Maine, Maryland, the Commonwealth of Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, the Commonwealth of Pennsylvania, Rhode Island, Tennessee, Vermont, the Commonwealth of Virginia, Washington, and Wisconsin.

[2] These jurisdictions include, until further notice, Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Kansas, the Commonwealth of Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, West Virginia, and Wyoming.

[3] A federal court in Florida denied the plaintiff’s motion for a preliminary injunction, and subsequently the US Court of Appeals for the Eleventh Circuit upheld the district court’s order. As we discuss below, Texas moved for a preliminary injunction on November 16, 2021, and the district court granted the motion on December 15, 2021.

© 2022 McDermott Will & EmeryNational Law Review, Volume XI, Number 350
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Sandra DiVarco Healthcare Attorney Health Systems Lawyer McDermott Will Emery Law Firm
Partner

Sandra DiVarco is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office. Sandy focuses her practice on the representation of hospitals and health systems. She has counseled health care facility and system clients regarding all aspects of health law transactions and health system restructurings. As a registered nurse, Sandy regularly advises clients on the legal aspects of clinical issues and policy/procedure matters. Sandy also has significant experience in assisting clients with...

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Brian R. Stimson Corporate Healthcare Litigation Attorney McDermott Will & Emery Law Firm
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Brian Stimson is the former Acting General Counsel and Principal Deputy General Counsel (second-ranking lawyer) for the US Department of Health and Human Services (HHS) in Washington, DC. He represents health and life sciences clients in litigations, arbitrations and government investigations nationwide. As part of his practice, Brian counsels clients on how to navigate complex disputes that present overlapping legal, regulatory, public policy and business considerations. His collaborative and pragmatic approach draws on his work as a high-level HHS official and a...

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Kristen O’Brien Healthcare Executive McDermott Consulting
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Kristen O’Brien is an accomplished healthcare executive with a deep understanding of regulatory advocacy and healthcare policy efforts.

Kristen offers a strong background and a keen eye for solutions to barriers and challenges impacting healthcare clients. With more than 10 years of experience, her work focuses on implementing new laws through the rulemaking process, as well as working with relevant agency officials to develop and improve agency guidance.

Kristen recently served as Principal of the Health Industry Policy and Regulatory Practice Group at a law and lobbying...

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