December 6, 2022

Volume XII, Number 340

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December 05, 2022

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Just When You Thought It Was Safe To Go Back In The Water . . . The 11th Circuit Revives Executive Order 14042

With apologies to Jaws II, just when you thought it was safe, the U.S. Court of Appeals for the 11th Circuit has released a shark back into the EO 14042 waters.

On Friday, August 26, the 11th Circuit published a 66-page decision affirming the injunction against the Federal Government’s COVID-19 Vaccine Mandate issued by the U.S. District Court for the Southern District of Georgia, but limiting the previous nationwide scope of the injunction. To quote the decision:

“We agree that the plaintiffs’ challenge to the mandate will likely succeed and that they are entitled to preliminary relief. Even so, because the injunction’s nationwide scope is too broad, we vacate it in part.”

What this means is that the 11th Circuit injunction, which previously applied to every contractor everywhere across the U.S., now applies only to the plaintiffs in this particular case: Seven states and the members of one industry association (Associated Builders and Contractors). Putting it in the affirmative, EO 14042 may be back in play for Federal contractors that, until last week, likely believed compliance with the federal vaccine mandate was behind them.

We should note at the outset, though, that following the issuance of the 11th Circuit’s opinion, the Office of Management and Budget announced its view that the injunction was still in place. As reported by Government Executive Magazine, OMB said

“At this time, the nationwide injunction remains in effect, and thus agencies should continue not to take any steps to enforce Executive Order 14042.”

As a factual matter, OMB is wrong. The nationwide injunction does not remain in effect. We assume what OMB meant to say is that the Administration will continue voluntarily not to enforce the Executive Order for the time being. This should come as some comfort to contractors trying to navigate the new enforceability map, which we affectionately call the SheppardTracker (see below). But unlike an injunction, a voluntary non-enforcement decision can disappear overnight.

In any event, now that the 11th Circuit has narrowed the scope of the District Court’s injunction, let’s discuss the question you all are asking: What does the decision mean to me?

The Current State Of EO 14042 Vaccine Mandate (Notwithstanding OMB’s Non-Enforcement Statement)

Most importantly, EO 14042 no longer is enjoined nationwide. In other words, the Federal Government could begin enforcing EO 14042 (via FAR 52.223-99 and agency deviations) in more than half of the United States (35 states to be exact). As a refresher, FAR 52.223-99, Ensuring Adequate COVID-19 Safety Protocols for Federal Contractors is a clause developed by the FAR Council to support agencies in meeting the applicability requirements and deadlines set forth in EO 14042.

In the absence of a nationwide injunction, the scope of each individual district court injunction once again has become relevant. Here’s a high-level summary of the existing injunctions.

  • Georgia Injunction (clarified by 11th Circuit Decision): The injunction now applies only to the state plaintiffs acting as contractors, and, therefore, has no impact on private companies. Accordingly, the Federal Government now is permitted to enforce FAR 52.223-99 against Federal contractors in Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, and West Virginia (the plaintiff states). (See blue states on the map below.)

  • Kentucky Injunction (appeal pending in the 5th Circuit): The Federal Government is enjoined from enforcing FAR 52.223-99 “in all covered contracts in Kentucky, Ohio, and Tennessee.” (See red states on the map below.)

  • Florida Injunction (appeal pending in the 11th Circuit): For now, the Federal Government is enjoined from enforcing FAR 52.223-99 “within Florida.” However, given the 11th Circuit’s decision on the Georgia injunction, we suspect this injunction, too, will be narrowed, to permit the Federal Government to enforce FAR 52.223-99 against Federal contractors in Florida. (See red states on the map below.)

  • Missouri Injunction (appeal pending in the 8th Circuit): The Federal Government is enjoined from enforcing FAR 52.223-99 “for federal contractors and subcontractors in all covered contracts in Missouri, Nebraska, Alaska, Arkansas, Iowa, Montana, New Hampshire, North Dakota, South Dakota, and Wyoming.” (See red states on the map below.)

  • Louisiana Injunction (appeal pending in the 5th Circuit): The injunction applies only to the state entities acting as contractors, and therefore has no impact on private companies. The Federal Government is permitted to enforce FAR 52.223-99 against Federal contractors in Louisiana, Mississippi, and Indiana. (See green states on the map below.)

We also have updated our SheppardTracker to reflect what we believe to be the current state of play:

In short, the Federal Government may choose to begin enforcement of FAR 52.223-99 against contractors performing in the 35 states NOT shaded red.

Also, do not forget, at least one state has passed anti-vaccination-mandate legislation the enforceability of which hinges to some extent on the viability of the various federal injunctions. With the nationwide injunction no longer in place, the Preemption Doctrine could dictate that EO 14042 overrides contradictory state law.

Whether the Federal Government chooses to resume incorporating FAR 52.223-99 into contracts, or begins enforcing its requirements, however, is yet to be determined; although OMB’s recent statement to Government Executive Magazine provides at least some clue to this mystery in the short term. We suspect the Task Force will publish updated guidance shortly detailing the path forward. The Biden Administration has rolled back many COVID-19 initiatives and restrictions in recent months, and, therefore, its appetite to restart enforcement of EO 14042 is an open question. Time will tell.

In the meantime, there are additional threats circling in the 14042 waters. For instance, other district courts still have not ruled on the Motions for Preliminary Injunction originally filed in their jurisdictions back in 2021 (e.g., the judge in the Southern District of Texas stayed litigation there once the nationwide injunction was issued by the Southern District of Georgia). Additionally, the other Circuits with appeals pending could overturn the preliminary injunctions previously granted by the lower courts (or severely limit their scope, as the 11th Circuit did), which would add to the 35 states in which the Federal Government could enforce EO 14042. We’ll continue tracking the various pieces of litigation and alert you of any notable developments.

While we eagerly await updated Task Force Guidance, for now, it seems many Federal contractors may be back to having to comply with the requirements of EO 14042 to some extent. Accordingly, everyone should keep a close eye on the Task Force website, the OMB website, the GSA 14042 page, and the specific terms of your solicitations and contracts.

Finally, we would be remiss if we did not point out two confusing points in the 11th Circuit’s decision:

  • Who Are The Plaintiffs? According to the 11th Circuit, the injunction now is limited to “the seven plaintiff States and their agencies” (and members of the plaintiff industry association). This language is not a model of clarity regarding whether the Court is referring to the States themselves (i.e., situations in which the state is a federal contractor) or whether the Court is referring to all contractors within those states. While the Court’s explicit language seems to limit the injunction to the state agencies only – and that’s how we read it – the fact that several of the states brought the suit on behalf of their citizens (and presumably their contractors) could mean that those citizens and contractors could be considered plaintiffs. As we said, we think the better reading is that the injunction applies to the states as contractors only (and not all contractors in those states), but we have to acknowledge the possibility of a contrary interpretation.

  • How Does It Apply To Solicitations? The decision includes an interesting statement about the Federal Government including FAR 52.223-99 in solicitations. The 11th Circuit stated: “we leave the injunction in place to the extent that it bars federal agencies from considering the enforceability of the mandate when deciding who should receive a contract, if any plaintiff belongs to the pool of bidders.” Unless every Federal contractor in the United States becomes a member of the Associated Builders and Contractors overnight, this exception appears to be very limited in scope, but the Task Force’s interpretation here will be key. More on this topic below.

Now, let’s take a deeper dive into the 11th Circuit’s decision.

Georgia v. Biden In Greater Detail

Let’s begin with a bit of history.

On December 7, 2021, the U.S. District Court for the Southern District of Georgia enjoined enforcement of EO 14042 nationwide (discussed previously here). This decision resulted a complaint by the states of Georgia, Alabama, Idaho, Kansas, South Carolina, Utah, and West Virginia. The Court permitted the Associated Builders and Contractors, Inc. (ABC), a nationwide trade association, to intervene as a plaintiff. ABC’s intervention proved to be of particular importance because the Court relied on ABC’s national membership as the basis for applying its injunction nationwide.

District Court Judge Baker’s decision focused on preserving the rule of law and ensuring “all branches of the government act within the bounds of their constitutionally granted authorities,” even in times of crisis. In order to do so here, Judge Baker determined that granting plaintiffs motion for a preliminary injunction was necessary. After determining that the plaintiff States and ABC all had standing to challenge EO 14042, Judge Baker focused his decision on the likelihood of success on the merits prong of the injunctive relief standard. Judge Baker noted that plaintiffs “need only show a substantial likelihood of success on the merits on one claim” (emphasis added), and went on to examine the plaintiffs’ contention that EO 14042 exceed the authority granted to the President by the Procurement Act (40 U.S.C. § 101, the Federal Property and Administrative Services Act).

According to Judge Baker, the question before the Court was whether Congress “clearly” authorized the President to use the Procurement Act to issue the directives contained in EO 14042. Judge Baker answered that question in the negative, finding the actual purpose of the EO to be the “regulation of public health.” As explained by Judge Baker, the purpose of the Procurement Act is to promote economy and efficiency in the federal procurement process. Although the Procurement Act affords the President significant deference to achieve this goal, Judge Baker found there was an insufficient nexus between the Procurement Act and EO 14042 and concluded that the Procurement Act “did not clearly authorize the President to issue the kind of mandate contained in EO 14042, as EO 14042 goes far beyond addressing administrative and management issues in order to promote efficiency and economy in procurement and contracting, and instead, in application, works as a regulation of public health, which is not clearly authorized under the Procurement Act.” Because substantial likelihood of success on a single claim was enough, according to Judge Baker, the Court did not examine the other challenges raised by the plaintiffs, such as arguments centered on the Administrative Procedure Act and the Non-Delegation Doctrine.

Regarding the remaining prongs of the injunctive relief standard, Judge Baker found that plaintiffs likely were to be irreparably harmed if the EO was permitted to remain in force and found the balance of harms favored plaintiffs. As such, Judge Baker granted injunctive relief in favor of plaintiffs and ordered the United States enjoined “during the pendency of this action or until further order of this Court, from enforcing the vaccine mandate for federal contractors and subcontractors in all covered contracts in any state or territory of the United States of America.”

The Court’s decision subsequently was appealed to the 11th Circuit. During the pendency of the appeal, the United States Government moved the district court to clarify whether the injunction applied to the entire EO or just the vaccine mandate. The Court clarified that its injunction was intended to enjoin only the vaccine mandate, meaning it did not enjoin the masking or physical distancing requirements of EO 14042 (discussed previously here).

The Court of Appeals Decision

The three-judge 11th Circuit Panel began its analysis by identifying the two questions before it:

  • First, whether the challenge to the vaccine mandate is likely to succeed.

  • Second, whether the scope of the district court’s injunction was too broad, which would suggest an abuse of discretion by the lower court.

Notably, the language of the 11th Circuit’s decision strongly suggests the Court is considering only the vaccine mandate, and not the entirety of EO 14042.

Likelihood of Success

The core question before the Court, in its view at least, was whether Congress, in vesting the President with broad procurement powers under the Procurement Act, authorized the President to improve efficiency through a vaccine mandate. Put another way, did Congress delegate to the President “the power to require widespread vaccination through the Procurement Act.” As the Court put it, “the question is not whether Congress could authorize the President to make procurement agreements continent on COVID-19 vaccination. It is whether Congress did so in the Procurement Act.”

While acknowledging that the Procurement Act confers broad authority on the President, the Court – like the District Court below it – emphasized that the Procurement Act’s delegation to the President is not unlimited. “The Act confers broad but not unbounded authority.”

Limiting its analysis to the Procurement Act (as apparently the Federal Government’s lawyers did before the Court), the Court noted that “the President cannot issue policies that require [federal officials] to take steps outside the Act or contrary to the Act – however useful such steps may appear.” Citing Supreme Court precedent, the Court emphasized that the Procurement Act empowers “the President to carry out the Act’s specific provisions – but not more.” In a more poetic moment, the Court put it this way: The Procurement Act “is not an ‘open book’ to which contracting agencies may ‘add pages and change the plot line.’”

In the end, the 11th Circuit agreed with the District Court that nothing in the Procurement Act confers upon the President the power to mandate vaccines for all federal contractors: “Nothing in the Act contemplates that every executive agency can base every procurement decision on the health of the contracting workforce.” The Court emphasized that the power to create and maintain an “economical and efficient” procurement system is “worlds away” from establishing health standards for all contractors’ employees. “No statutory provision contemplates the power to implement an across-the-board vaccination mandate. It follows that the President likely exceeded his authority under the Procurement Act when directing executive agencies to enforce such a mandate.”

The Court founded its view upon a well-settled principle of statutory interpretation: Congress is expected to “speak clearly when authorizing an agency to exercise powers of vast economic and political significance.” In other words, if Congress had wanted to give the President the power to use its procurement powers to set health policy, Congress would have said so.

Interestingly, reading between the lines, the Court implied that a given Agency could employ a vaccine mandate if it had a compelling reason to do so. “We cannot say that when Congress passed the Procurement Act, it meant to delegate authority to set baseline health and safety qualifications for contractors – standards that would apply regardless of the specific needs in a given project.”

Scope of Injunction

After concluding that the Administration likely would lose its case against the seven plaintiff states (and trade association), the Court set about evaluating the scope of the District Court’s injunction. Remember, the District Court enjoined enforcement of the vaccine mandate “against any contractor, anywhere in the United States, plaintiff or not.” The 11th Circuit began its analysis by commenting “we are both weary and wary of this drastic form of relief.”

The Court then undertook a cogent discussion of the advantages of differences of opinion coming from the various lower courts and the dangers of judicial overstepping that puts those advantages at risk. The Federal court system was designed to “allow courts to reach multiple answers to the same legal questions,” wrote the Court. A nationwide injunction, the Court continued, “gives a single district court an outsized role in the federal system.” “By cutting off parallel lawsuits, nationwide injunctions frustrate foundational principles of the federal court system.”

Against this background, the 11th Circuit found the lower court’s injunction “overbroad.” Accordingly, the Court vacated the lower’s courts injunction “to the extent that it bars enforcement of the mandate against nonparty contractors through new and existing contracts.” In contrast, the Court affirmed the injunction to the extent it “blocks federal agencies from enforcing the mandate in contracts with any plaintiff State or member of the plaintiff trade association.” “As a result,” wrote the Court, “plaintiffs need not comply with the vaccination requirement in their capacity as contractors, and they are not responsible for including that requirement in lower-tier subcontracts.”

One Complicating Factor

While the Court clearly was bothered by the nationwide scope of the injunction, it recognized a complication regarding solicitations. “Unlike procurement contracts, solicitations are generally issued by the federal government to many bidders, who are then expected to comply with the solicitation’s terms to remain eligible for the contract award.” Because a plaintiff could be prejudiced by an agency’s consideration of who is subject to the mandate and who is not, the Court decided to leave “the injunction in place to the extent that it bars federal agencies from considering the enforceability of the mandate when deciding who should receive a contract, if any plaintiff belongs to the pool of bidders.”

This carve-out presents quite a logistical hurdle for procuring agencies that now will have to change the rules of their procurements based upon who is bidding on those procurements. Although unlikely, perhaps we’ll see bidders convincing members of the plaintiff industry association to submit bids simply to knock the EO 14042 provisions out of the solicitation. . . . unlikely, but interesting to think about.

Conclusion

As we continue to monitor how the Administration and Task Force decide to proceed in light of the 11th Circuit’s decision, it likely makes sense to dust off your preexisting EO 14042 compliance plans. Our existing resources are linked below.

Resources

Copyright © 2022, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XII, Number 256
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About this Author

Jonathan S. Aronie, Government Contracts Attorney, Sheppard Mullin, law firm
Partner

Jonathan S. Aronie is the co-Managing Partner of the Washington, D.C. office and a partner in the Government Contracts, Investigations & International Trade Practice Group. Mr. Aronie counsels and represents large and small clients in some of the country's largest and most prominent classified and unclassified Government contracts matters, including bid protests, claims, self-disclosures, internal investigations, DOJ investigations, and False Claims Act Investigations.

Areas of Practice

Mr. Aronie’s...

202-218-0039
Ryan Roberts, Government Contracts Legal Specialist, Sheppard Mullin
Associate

Mr. Roberts is an associate in the Government Contracts, Investigations & International Trade Practice Group in the firm's Washington, D.C. office.

Areas of Practice

Mr. Roberts has extensive experience handling government contract disputes and defending individuals and corporations in a wide range of civil fraud investigations, including investigations under the Civil False Claims Act and the FAR Mandatory Disclosure Rule. Mr. Roberts has handled corporate internal investigations involving diverse industries such as aerospace and defense, electronics,...

202-469-4945
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