UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

STATE OF NEW YORK, STATE OF

CALIFORNIA, COMMONWEALTH OF

MASSACHUSETTS, STATE OF

COLORADO, STATE OF CONNECTICUT,

STATE OF DELAWARE, DISTRICT OF

ISLAND, STATE OF VERMONT,

COMMONWEALTH OF VIRGINIA, and

STATE OF WISCONSIN,

v.

as Director of the Office for Civil Rights at

the United States Department of Health and

Defendants.

Civil Action No. 1:20-cv-5583

AND INJUNCTIVE RELIEF

INTRODUCTION

1. Congress enacted the Patient Protection and Affordable Care Act (“ACA”), Pub.

L. No. 111-148, 124 Stat. 119 (codified at 42 U.S.C. §§ 18001-18122 (2010)), to expand access

significant barriers to health care access caused by inadequate and discriminatory health

insurance coverage.

2. The ACA contained a landmark civil rights provision, 42 U.S.C. § 18116

(commonly known as Section 1557), intended to strike at these barriers by prohibiting

origin, sex, age, or disability. Section 1557 was the first federal civil rights law to

comprehensively prohibit discrimination in health care, complementing existing protections

under other laws, and the first to expressly extend prohibitions on sex discrimination to health

care providers and insurers.

3. After the ACA went into effect in 2010, Defendant U.S. Department of Health

In 2012, the Director of HHS’s Office for Civil Rights (“OCR”) advised that “Section 1557’s sex

after the hospital put the complainant, a transgender woman, in a room with a man.

4. In 2013, HHS, under its authority to promulgate Section 1557 implementing

regulations, commenced a three-year-long process to codify the statute’s civil rights protections

1

into HHS’s regulations by issuing a Request for Information Regarding Nondiscrimination in

Certain Health Programs or Activities, 78 Fed. Reg. 46,588 (Aug. 1, 2013) (“2013 RFI”) to

publication of a Final Rule, Nondiscrimination in Health Programs and Activities, 81 Fed. Reg.

essential to achieving this goal.” 81 Fed. Reg. 31,444. The rule found that discrimination in the

health care context “can often lead to poor and inadequate health care or health insurance or

other coverage for individuals and exacerbate existing health disparities in underserved

people, women and other individuals seeking reproductive health care or with pregnancy-related

care faced by these groups. Id. at 31,459-61.

6. To address these barriers and fulfill Section 1557’s antidiscrimination mandate,

the 2016 Rule detailed the obligations of health care providers and insurers with respect to

transgender people, women and individuals seeking reproductive health care, LEP individuals,

and people with disabilities. The 2016 Rule’s key provisions included: (a) clarifying that Section

1557 broadly applies to all health providers and insurers that receive federal financial assistance,

discrimination on the basis of sex included discrimination based on gender identity, sex

(e) establishing a uniform enforcement scheme for all forms of discrimination prohibited by the

7. A mere three years later, Defendants promulgated a proposed rule,

Nondiscrimination in Health and Health Education Programs or Activities, 84 Fed. Reg. 27,846

(June 14, 2019) (“2019 NPRM”), that would eviscerate the 2016 Rule and eliminate many of its

Health and Health Education Programs or Activities, Delegation of Authority, 85 Fed. Reg.

37,160 (June 19, 2020) (to amend and be codified at 45 C.F.R. pt. 92) (“2020 Rule” or “Rule”).

The 2020 Rule, by Defendants’ own admission, made only “minor and primarily technical

corrections” to the 2019 NPRM, notwithstanding the substantial number of public comments. 85

Fed. Reg. 37,161. The 2020 Rule arbitrarily and unlawfully strips health care rights statutorily

reproductive health care or with pregnancy-related conditions, LEP individuals, individuals with

disabilities, and other individuals experiencing discrimination. The Rule, published in the midst

of the global COVID-19 pandemic, will impose unjustifiable barriers to health care on

vulnerable populations at a time when access to care is as crucial as ever.

9. Remarkably, Defendants published the 2020 Rule mere days after the Supreme

Court confirmed, in Bostock v. Clayton County, 140 S. Ct. 1731 (2020), that the prohibition on

against gender identity discrimination, removing the specific protections for transgender people

contained in the 2016 Rule, and striking the express prohibitions on sexual orientation and

gender identity discrimination from other HHS regulations.

10. These changes—coupled with Defendants’ well-established animus towards

11. The 2020 Rule, without sufficient justification, purports to redefine covered

“health program or activity” to newly exclude many health insurers not “principally engaged in

the business of providing healthcare.” 85 Fed. Reg. 37,244. This redefinition, in conflict with

the statute, arbitrarily and narrowly defines “healthcare” to exclude health insurance, thus

2

regulation’s coverage. This redefinition—which is at odds with the plain language of Section

1557 and the statute’s core purpose of eliminating discrimination by health care providers and

health insurance companies—will reduce express federal protections for all victims of health

care discrimination. By adopting this unduly narrow definition of “health program or activity,”

including eliminating requirements that covered entities notify LEP individuals of their rights

and reducing entities’ obligations to ensure that LEP individuals are afforded appropriate

language access services while seeking and obtaining health care.

13. Contrary to its stated purpose of “reduc[ing] confusion,” 85 Fed. Reg. 37,202, the

2020 Rule unnecessarily sows confusion. The Rule deletes the uniform Section 1557

that has no basis in that statute and that attempts to give religiously-affiliated providers and

insurers license to deny care and coverage for discriminatory reasons, jeopardizing the health and

well-being of individuals for whom a religiously-affiliated health plan or provider may be the

only option.

15. Defendants’ unlawful and arbitrary rollback of health care protections will harm

Plaintiffs and their residents. Plaintiffs the State of New York, State of California,

Commonwealth of Massachusetts, State of Colorado, State of Connecticut, State of Delaware,

the District of Columbia, State of Hawaii, State of Illinois, State of Maine, State of Maryland,

State of Michigan, State of Minnesota, State of Nevada, State of New Jersey, State of New

Mexico, State of North Carolina, State of Oregon, Commonwealth of Pennsylvania, State of

Rhode Island, State of Vermont, Commonwealth of Virginia, and State of Wisconsin, bring this

action to vacate the 2020 Rule and enjoin its implementation because it is arbitrary, capricious,

guarantee of the Fifth Amendment to the United States Constitution.

16. The Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1346,

and 2201(a). Jurisdiction is also proper under the judicial review provisions of the

Administrative Procedure Act, 5 U.S.C. § 702.

Defendants are United States agencies or officers sued in their official capacities. Plaintiff the

State of New York is a resident of this judicial district, and a substantial part of the events or

PARTIES

19. Plaintiff the State of New York, represented by and through its Attorney General,

Law § 63.

20. Plaintiff the State of California, by and through Attorney General Xavier Becerra,

brings this action. The Attorney General is the chief law officer of the State of California and

has the authority to file civil actions in order to protect public rights and interests. Cal. Const.,

art. V, § 13; Cal. Bus. & Prof. Code § 321. This challenge is brought pursuant to the Attorney

Attorney General, is a sovereign state of the United States of America. The Attorney General is

authorized to pursue this action under Mass. Gen. Laws ch. 12, §§ 3,10.

22. Plaintiff the State of Colorado, represented by and through its Attorney General,

Phil Weiser, brings this action. The Attorney General is Colorado’s chief legal representative

and is authorized to pursue this action on behalf of the State under Colo. Rev. Stat. § 24-31-101.

24. Plaintiff the State of Delaware is a sovereign state of the United States of

America. This action is brought on behalf of the State of Delaware by Attorney General

Kathleen Jennings, the “chief law officer of the State.” Darling Apartment Co. v. Springer, 22

A.2d 397, 403 (Del. 1941). Attorney General Jennings also brings this action on behalf of the

State of Delaware pursuant to her statutory authority. Del. Code Ann. tit. 29, § 2504.

25. Plaintiff District of Columbia is a sovereign municipal corporation organized

District of Columbia, Karl A. Racine. The Attorney General has general charge and conduct of

all legal business of the District and all suits initiated by and against the District and is

responsible for upholding the public interest. D.C. Code § 1-301.81.

or be interested. Haw. Rev. Stat. § 28-1. The Department of the Attorney General has the

§ 26-7. This challenge is brought pursuant to the Attorney General’s constitutional, statutory,

28. Plaintiff, the State of Maine, represented by and through its Attorney General

Aaron M. Frey, is a sovereign state of the United State of America. The Attorney General of

Maine is a constitutional officer with the authority to represent the State of Maine in all matters

and serves as its chief legal officer with general charge, supervision, and direction of the State’s

legal business. Me. Const. art. IX, Sec. 11; Me. Rev. Stat. tit. 5, §§ 191 et seq. The Attorney

General’s powers and duties include acting on behalf of the State and the people of Maine in the

federal courts on matters of public interest. The Attorney General has the authority to file suit to

57. HHS’s post-ACA enforcement efforts were consistent with the Department’s

finding that “[i]ndividuals, families and communities that have systematically experienced social

and economic disadvantage face greater obstacles to optimal health, and that “[c]haracteristics

such as race or ethnicity, religion, [socioeconomic status], gender, age, mental health, disability,

care.” 78 Fed. Reg. 46,558-59.

discrimination against LGBTQ people, women and other individuals seeking

reproductive health services and with pregnancy-related conditions, and

LEP individuals.

58. HHS first commenced Section 1557 rulemaking with the 2013 RFI, which

requested information on: (1) examples and experiences of discrimination in the health care

59. The 2013 RFI yielded 402 responses, more than half of which were from

many comments from civil rights organizations, advocacy groups, and medical organizations

3

Programs and Activities: Notice of Proposed Rulemaking, 80 Fed. Reg. 54,172 (Sept. 8, 2015)

(“2015 NPRM”).

60. With respect to the LGBTQ community, the Department obtained information

through the 2013 RFI documenting the widespread discrimination against LGBTQ people by

61. Individual LGBTQ commenters shared experiences, including being subjected to

categorical coverage exclusions for gender-confirming health treatments, being subject to

inappropriate and humiliating comments from providers relating to sexual orientation, and being

denied essential medical care simply for being gay, transgender, or intersex. Examples of these

 A transgender man had a biopsy indicating that he had breast cancer. Because the

attending physician objected to his gender identity, the physician did not inform

cancer diagnosis, after the cancer had progressed past the point where

chemotherapy could effectively treat it.

 A gay man reported: “My doctor knew or thought I was gay. I had to have a

proctological exam of my rectum. There was an insurance problem so I went to

the insurance office, and was faced with the fact that the doctor said the exam was

necessary because of sexual orientation and because he thought that I liked large

genetic signature with a number of identified people who are mostly male, but

also include some whom are not male like me. The stigma attached to attaining

medical services rendered from these types of regulations show that as they stand

only diagnosis the hospitals can use requires me to be male, and has no exceptions

62. Commenters responding to the 2013 RFI also documented the rampant

discrimination faced by women and others seeking reproductive health services and with

pregnancy-related conditions (including insurance coverage exclusions and discriminatory

treatment by providers), barriers to effective care faced by LEP individuals denied access to

adequate language assistance services, and widespread discrimination against people with

disabilities. The comments also provided data showing that this pervasive discrimination deters

4

63. On September 8, 2015, HHS promulgated its proposed Section 1557

64. During the notice and comment period on the 2015 NPRM, HHS received nearly

25,000 comments in response to the proposed rule from individuals, civil rights organizations,

individuals, and people with disabilities, and the critical need for HHS’s robust enforcement of

Section 1557’s protections on behalf of these groups.

mandate to eradicate discriminatory barriers to health care access.

65. On May 18, 2016, HHS published the 2016 Rule to implement Section 1557’s

protections. 81 Fed. Reg. 31,376. The rule went into effect on July 18, 2016, with provisions

applicable to health insurance and group benefit design becoming applicable on January 1, 2017,

“expand[ing] access to care and coverage and eliminat[ing] barriers to access.” Id. at 31,377.

The 2016 Rule made express factual findings that discrimination within the health care system

contributes to inadequate insurance coverage and poor health outcomes, exacerbates health

denied the ability to obtain health services provided to others, resulting in adverse health effects.

67. Consistent with Section 1557’s general statutory prohibition against

discrimination, the 2016 Rule required that, “[e]xcept as provided in Title I of the ACA, an

specific prohibitions and exceptions. Id. at 31,469-70 (§ 92.101).

68. The 2016 Rule defined a “covered entity” as: “(1) An entity that operates a health

program or activity, any part of which receives Federal financial assistance; (2) An entity

established under Title I of the ACA that administers a health program or activity; and (3) The

Department.” Id. at 31,466 (§ 92.4). The rule defined “health program or activity” as “the

where an entity is principally engaged in these activities, such as hospitals, group health plans,

Section 1557. Id.

69. Consistent with federal case law, HHS’s own enforcement policies and practices,

and the enforcement policies and practices of other federal agencies, the 2016 Rule defined

discrimination “on the basis of sex” to include, but not be limited to, “discrimination on the basis

of pregnancy, false pregnancy, termination of pregnancy, or recovery therefrom, childbirth or

related medical conditions, sex stereotyping, and gender identity.” Id.; see also id. at 31,387-88.

Although the rule stopped short of expressly including sexual orientation discrimination as a

form of sex discrimination, it noted the rapidly evolving law on the question of whether federal

minimum, any LGBTQ person facing discrimination based on nonconformity to sex stereotypes

limitations on coverage; maintaining discriminatory marketing practices or benefit designs; and

denying or limiting coverage to transgender people both for routine and transition-related health

by the transgender community, the 2016 Rule specified that denying or limiting coverage to a

discrimination prohibition. Id. at 31,471 (§ 92.206).

71. The 2016 Rule directed covered entities to provide LEP individuals with

assistance services at no cost. Id. at 31,470-71 (§ 92.201). Under the rule, “[a] covered entity

shall take reasonable steps to provide meaningful access to each individual with limited English

proficiency eligible to be served or likely to be encountered in its health programs and

(§ 92.201(c)-(d)). The 2016 Rule restricted entities’ ability to rely on family members to provide

translation or interpretation services, and imposed specific requirements for the use of video

1557-compliant nondiscrimination policy, including providing notice that the entity provides the

language access services and auxiliary aids and services for individuals with disabilities required

by the rule, and information on how to obtain those services. Id. at 31,469 (§ 92.8). The rule

languages spoken by LEP individuals in the relevant state or states, include taglines translated

the 2016 Rule, making translated versions of both available for covered entities’ use in 64

73. The 2016 Rule adopted a uniform legal standard applied to all forms of

discrimination prohibited by Section 1557. This included recognizing the availability of

compensatory damages, associational discrimination claims, and disparate impact claims, as well

as the existence of a private right of action to challenge prohibited discrimination in court. Id. at

31,472 (§ 92.301); see also id. at 31,439-40. As explained in the 2015 NPRM, HHS intended

this approach to avoid inconsistent application of the enforcement mechanisms in the statutes

incorporated by Section 1557, and “to simplify and make uniform, consistent, and easy to

understand the various nondiscrimination requirements and rights available under Section 1557,

as appropriate.” 80 Fed. Reg. 54,194.

74. HHS declined to incorporate Title IX’s various exceptions into the 2016 Rule,

religious tenets. See 20 U.S.C. § 1681(a)(3); 34 C.F.R. § 106.12. As HHS explained, Section

1557 itself contains no religious exemption and, unlike religious schools where attendance is a

coverage from religiously-affiliated entities. 81 Fed. Reg. 31,380. Thus, HHS determined that a

that other protections for religious entities under federal law would still be available to

75. In promulgating the 2016 Rule, HHS carefully weighed a variety of expected

costs and benefits of the rule’s requirements. 81 Fed. Reg. 31,444-65. The 2016 Rule identified

costs associated with complying with Section 1557’s sex discrimination prohibition (including

the specific requirements pertaining to health care for transgender people) and with the rule’s

language access and notice requirements. Id. at 31,446-59. The rule noted that HHS intended to

taglines for entities’ use. Id. at 31,453. HHS determined that, based on the evidence gathered,

the costs associated with the rule’s requirements would be offset by the public health benefits

62.

consent, adherence with medication regimes, preventive testing, appointment attendance, and

diagnoses, prescribe medications, reach treatment decisions, and ensure that treatment plans are

understood by patients.” Id. at 31,459.

77. The Department also cited research demonstrating the health benefits to women

resulting in negative health consequences and costs associated with untreated or inadequately

treated conditions. Id. It projected that the rule “would result in more women and transgender

uncompensated care costs to the government. Id. at 31,460-61.

79. The 2019 NPRM proposed eliminating the definition of “on the basis of sex,”

thereby removing express protections based on sex stereotyping, gender identity, and pregnancy-

related conditions; redefining “health program or activity” to newly exclude many private

religious exemption not contained in or authorized by the Section 1557 statute. The 2019 NPRM

regulations for grant-making programs run by the Center for Medicare and Medicaid Services.

80. The 2019 NPRM relied heavily on one district court case, Franciscan Alliance,

the question had reached the contrary view, interpreting Section 1557 to prohibit discrimination

against transgender people. And, while HHS acknowledged that the questions of whether gender

identity and sexual orientation discrimination prohibited by federal sex discrimination laws

would likely be resolved by the Supreme Court in the coming term, 84 Fed. Reg. 27,855, the

Department nevertheless proceeded with rulemaking without the benefit of the Supreme Court’s

decision in Bostock.

81. During the notice and comment period, HHS received an outpouring of comments

opposing the massive rewrite of its Section 1557 implementing regulations. HHS received

52 (7th Cir. 2017) (en banc) (same); EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., 884 F.3d

Educ., 845 F.3d 217, 222 (6th Cir. 2016) (transgender girl denied access to girls’ restroom likely

to succeed on Title IX claim); Glenn v. Brumby, 663 F.3d 1312, 1321 (11th Cir. 2011)

(discrimination against transgender employee, which violated Fourteenth Amendment’s Equal

Protection Clause, would also violate Title VII); Barnes v. City of Cincinnati, 401 F.3d 729, 740-

41 (6th Cir. 2005) (transgender employee stated Title VII claim under sex stereotyping theory);

2000) (transgender customer stated sex discrimination claim under Equal Credit Opportunity

Act).

93. Consistent with this precedent, federal district courts have consistently interpreted

Section 1557 to prohibit health care discrimination against transgender people. See Flack v. Wis.

Medicaid program’s categorical exclusion on gender-confirming treatments and services violated

Section 1557, the Medicaid Act, and the Fourteenth Amendment’s Equal Protection Clause, and

permanently enjoining the exclusion); Boyden v. Conlin, 341 F. Supp. 3d 979, 997, 1002-03

947, 953 (D. Minn. 2018) (finding that “Section 1557 . . . prohibits discrimination on the basis

of gender identity.”); Prescott v. Rady Children’s Hosp.-San Diego, 265 F. Supp. 3d 1090, 1099

the reasoning of which was validated by the Supreme Court’s decision in Bostock. Instead,

Defendants relied on: decisions from the Franciscan Alliance case in the Northern District of

Texas adopting a contrary interpretation (now abrogated by Bostock), Franciscan All., Inc. v.

Burwell, 227 F. Supp. 3d 660 (N.D. Tex. 2016), Franciscan All., Inc. v. Azar, 414 F. Supp. 3d

928 (N.D. Tex. 2019); dissenting opinions from circuit cases concluding that federal sex

sufficient when the 2019 NPRM was published—which it was not—none of this analysis

survives Bostock. The 2020 Rule’s continued reliance on this authority for its revisions is

arbitrary, capricious, and contrary to law.

95. In the 2019 NPRM, the Department recognized “the likelihood that the Supreme

the expected decision in Bostock and its companion cases “will likely have ramifications for the

definition of ‘sex’” under Section 1557. 84 Fed. Reg. 27,855, 27,857. Yet, when Bostock

altering their entirely rebuked theory that sex discrimination protections are only based on an

people have a gender identity that is different than the sex they were assigned at birth. The 2020

Rule’s removal of the mandate that covered entities treat transgender people consistent with their

coverage policies (including categorical exclusions or limitations on transition-related treatments

Defendants’ failure to properly consider the harms to transgender people’s health and well-being

was arbitrary and capricious.

97. In addition, the 2020 Rule’s removal of pregnancy-related conditions as

failed to account for, and is at odds with, settled case law holding that unlawful discrimination on

the basis of sex includes discrimination based on pregnancy status. See UAW v. Johnson

Controls, Inc., 499 U.S. 187, 198-99 (1991); Newport News Shipbuilding & Dry Dock Co. v.

EEOC, 462 U.S. 669, 684 (1983); DeMarco v. CooperVision, Inc., 369 F. App’x 254, 255 (2d

Cir. 2010).

98. The 2020 Rule’s removal of specific requirements for equal access to health care

programs and specific prohibitions against discrimination on the basis of sex in health insurance

design, codified at 45 C.F.R. § 92.207, conflicts with the ACA and will hurt patients. See 85

meeting the minimum requirements necessary to be certified, but shaping the plan so that all of

the benefits necessary to treat certain conditions are placed in the highest cost-sharing tier.

“principally engaged in the business” of providing health treatments and

financial assistance, including credits, subsidies, or contracts of insurance, or under any program

or activity that is administered by an Executive Agency or any entity established under this title

(or amendments).” 42 U.S.C. § 18116(a) (emphases added). By these express terms—which are

consistent with the central objective of the ACA to combat discrimination in both the provision

100. The 2020 Rule dramatically narrows the scope of entities covered under Section

1557 in two ways, both in direct contravention of the plain text of the statute. In so doing, the

2020 Rule arbitrarily and capriciously undermines the purpose of the ACA, namely, to increase

access to quality, affordable care in a nondiscriminatory manner.

contrary to Section 1557’s plain text, which applies Section 1557 to “any program or activity that

exclude from Section 1557’s scope all health programs or activities administered by HHS and

other executive agencies except for those programs established by HHS under Title I of the

“principally engaged in the business of healthcare,” narrowly and arbitrarily defining

As the plain text of the statute and the 2016 Rule explain, Section 1557 applies to all of the

operations of any health insurer and other health programs and activities, if some part of that

exchange. 42 U.S.C. § 18116(a); 81 Fed. Reg. 31,430-31. For example, if a health insurer

offered an insurance plan on an exchange, Section 1557’s protections apply to all of the insurer’s

other plans and products, such as private employer-based health plans. Now, under the 2020

experiencing discrimination on any prohibited basis will be unable to challenge that

discrimination through OCR’s administrative enforcement process.

103. This redefinition impermissibly narrows the broad definition of “covered entity”

antidiscrimination mandate and central purpose of expanding nondiscriminatory access to health

services and insurance. Contrary to Section 1557’s statutory mandate, the Rule will wrongfully

exclude private insurers, the FEHB program, and Medicare Part B plans, among others, from the

Rule’s scope.

104. For these reasons, the 2020 Rule’s redefinition of covered “health program or

105. Section 1557 incorporates Title VI’s prohibition on national origin discrimination,

42 U.S.C. § 2000d, under which federal funding recipients are obligated to provide meaningful

access to their programs to LEP individuals. See Lau v. Nichols, 414 U.S. 563, 568-59 (1974).

106. To effectuate Section 1557’s prohibition on national origin discrimination, and

The 2016 Rule’s focus on providing meaningful language access to individuals was consistent

with Section 1557’s prohibition on discrimination against “an individual,” 42 U.S.C. § 18116(a),

not on LEP individuals as a group. The 2016 Rule provided that language assistance services

“must be provided free of charge, be accurate and timely, and protect the privacy and

established standards by which HHS could determine whether an individual was provided

meaningful access to a health program or activity through adequate language assistance services,

using a two-part inquiry. 81 Fed. Reg. 31,470 (§ 92.201(b)). This inquiry required HHS to:

“(1) [e]valuate, and give substantial weight to, the nature and importance of the health program

or activity and the particular communication at issue, to the individual with limited English

108. Contrary to the statutory text, the 2020 Rule removes the requirement of

providing adequate language assistance services to LEP individuals, requiring merely that a

covered entity “take reasonable steps to ensure meaningful access to [its] programs and activities

109. In addition, the 2020 Rule requires covered entities to provide language assistance

Reg. 37,245 (§ 92.101(b)). An entity must consider:

be served or likely to be encountered in the eligible service population;

(ii) [t]he frequency with which LEP individuals come in contact with the entity’s

service; and

(iv) [t]he resources available to the entity and costs.

of charge—only when the entity has determined, based on its self-assessment, that it is obligated

to provide such services at all. Id.

110. The 2020 Rule thus abandons the individualized assessments mandated by

Section 1557 to ensure that every individual can seek and obtain health treatments, services, and

protections.

111. The 2020 Rule’s revision, which now authorizes covered entities to make a self-

determination about whether to offer any language assistance services at all, with no specific

directives or guidance on how an entity should weigh the factors in the four-factor inquiry, is

arbitrary and capricious.

112. The 2020 Rule also deletes the existing regulation’s notice and tagline

requirements, and the sample translated notices and taglines that HHS previously provided to

covered entities. The 2016 Rule mandated that covered entities notify LEP individuals of their

rights to language assistance services and their ability to complain about a denial of such

services. 81 Fed. Reg. 31,442. In contrast, the 2020 Rule will effectively deny information to

services, as well as information on how to seek redress if those services are wrongfully denied.

113. These revisions are arbitrary and capricious because Defendants failed to properly

consider the likelihood that the revisions will result in LEP individuals being denied language

assistance services—and thus deny these individuals the ability to access health care and

services, to communicate effectively with providers and insurers, or to understand their treatment

regimens, among other things. Because the revisions will result in discriminatory denial or

114. Defendants purport to justify the removal of these protections based, in large part,

on the costs associated with the 2016 Rule’s tagline requirement. 85 Fed. Reg. 37,162, 37,211,

37,224, 37,227, 37,232. But Defendants fail to adequately consider the harms of the Rule,

including the cost of confusion engendered by the removal of taglines and notices, the public

mandate to expand access to health care.

capricious, contrary to law, and exceeds HHS’s statutory authority.

115. The 2020 Rule improperly incorporates the blanket religious exemption and

does not authorize HHS to create a blanket exemption applicable to health programs and

activities.

117. Although Section 1557 incorporates the protected classifications contained in

Title VI, Title IX, the Age Act, and Section 504 by banning discrimination “on the grounds

prohibited under” those statutes, 42 U.S.C. § 18116(a), it does not incorporate those statute’s

exceptions. To the contrary, the statute makes clear that its nondiscrimination prohibitions apply

118. The Department, when it promulgated the 2016 Rule, correctly declined to

that these exceptions specifically applied to educational institutions and were inapplicable in the

health care context. It also correctly declined to incorporate Title IX’s “abortion neutrality”

142. The flawed cost-benefit analysis and failure to consider harms renders the Rule

arbitrary and capricious.

I. The 2020 Rule is contrary to Section 1554 of the ACA

143. Section 1554 of the ACA forbids the HHS Secretary from promulgating “any

of health care providers to provide full disclosure of all relevant

professionals.

42 U.S.C. § 18114.

144. The Rule violates Section 1554 by creating unreasonable barriers and impeding

timely access to medical care, including to patients on the basis of race, color, national origin,

sex, disability, and age. The Rule violates this provision by reversing nondiscrimination

protections Defendants long recognized were needed to avoid patients being “denied

opportunities to obtain [health care services provided to others, with resulting adverse effects on

their health status,” 80 Fed. Reg. 54,194; see also 81 Fed. Reg. 31,444, and by eliminating access

to language provisions.

language of the statute, and arbitrarily and capriciously removes express protections from the

existing regulations. Defendants’ new policy is not the product of reasoned decision-making,

nor is it based on a valid interpretation of the law or the prevailing medical consensus on the

health care needs of transgender people. Rather, it is part of Defendants’ long-running campaign

to attack the civil rights of transgender Americans and to push members of that community back

unjustifiable—goal of imposing barriers to transgender Americans’ access to health care through

the Section 1557 rulemaking process.

146. Defendants have acted with full awareness and disregard of the harms that the

During the notice and comment period, Defendants received thousands of comments opposing

See 85 Fed. Reg. 37,181. Nevertheless, HHS dismissed this evidence, contending implausibly

that “[t]he Department knows of no data showing that the proper enforcement of Federal

nondiscrimination law according to statutory text,” i.e., based on HHS’s erroneous view that

10

Section 1557’s protections only applied to “biological” sex, “will disproportionately burden

individuals on the basis of sexual orientation or gender identity.” Id. at 37,181-82.

147. Moreover, after the Supreme Court’s decision in Bostock, Defendants’ primary

purported justification for promulgating the 2020 Rule—to “address legal concerns” that the

that position. See id. at 37,178. Defendants’ decision to flout the Supreme Court’s Bostock

opinion—similar to their decision, in the 2019 NPRM, to brush aside binding circuit court

precedent contradicting their position, see supra ¶ 92—only confirms that Defendants’ decision

to promulgate, and ultimately finalize, the 2020 Rule was based on discriminatory animus and a

policies, which have long reflected a deep animus toward the LGBTQ community and

transgender people in particular. From the first days of the Administration, the White House and

federal agencies, including HHS, have engaged in a sustained effort to reverse civil rights

developments in federal sex discrimination case law, “the best reading of Title VII’s prohibition

transgender status,” and, in turn, “the Department [of Justice] will no longer assert that Title

VII’s prohibition against discrimination based on sex does not encompass gender identity per se

for transgender people.

151. Numerous statements and actions by the President and high-ranking officials in

his Administration, including HHS officials, reflect animus toward transgender people, an

ongoing pattern of overt bias against the LGBTQ community at large, and a desire to roll back

civil rights protections for this community. Delivering on his campaign promises to attack

guidance document to schools on their obligations under Title IX to treat transgender

12

he wants to hang them all!,”

21

5.105(a)(2), 106(b)(2). HUD Secretary Ben Carson has been widely quoted mocking

for Civil Rights and to lead the agency’s attacking on the health care rights

153. In 2017, President Trump appointed Defendant Roger Severino, an attorney with

notorious and vocal opposition to LGBTQ rights, as the Director of HHS’s OCR.

154. In his previous role as the director of the Heritage Foundation’s DeVos Center for

Section 1557’s health care protections for them.

not altered or treated as diseases,” and that “[g]ender identity and sexual orientation, unlike race

or sex, are changeable, self-reported, and entirely self-defined characteristics.”

A few months

156. In a separate May 2016 op-ed piece in the Daily Signal, Severino criticized DOJ’s

lawsuit against North Carolina’s anti-transgender restroom bill, again decrying the Obama

into pledging allegiance to a radical new gender ideology.”

repeatedly misgendered transgender people, describing transgender girls as “boys” and

transgender boys as “girls,” and attacked HHS’s then-proposed 2016 Rule as “add[ing] to the

problems” of what he described as the federal government’s “overreach” in protecting the rights

of transgender people.

Heritage Foundation) co-wrote an op-ed in the Philadelphia Inquirer, characterizing the Obama

Administration’s enforcement of federal sex discrimination protections to protect transgender

26

teenage boy litigating a high-profile Title IX case against his Virginia school district for

refusing to respect his male gender identity, misgendering him as “a gender-dysphoric teen

girl” and improperly using the female pronoun “her” to refer to Grimm.

159. Defendants’ reversal of the 2016 Rule is part of their broader campaign to

160. For example, in early 2017, HHS struck questions about LGBTQ demographic

Independent Living, an evaluation of programs serving people with disabilities, and the National

Survey of Older Americans Act Participants, an annual, national survey of individuals served by

30

161. On December 14, 2017, staff at the Centers for Disease Control and Protection—a

component of HHS—were instructed not to use the word “transgender” in official agency

162. On January 23, 2019, OCR granted an exemption to adoption and foster care

Conscience Rights in Health Care; Delegations of Authority, 84 Fed. Reg. 23,170 (May 21,

2019), that would allow medical providers to cite their personal beliefs in refusing to provide a

broad spectrum of services—including lifesaving care for LGBTQ patients.

164. On November 1, 2019, HHS announced it would not enforce, and planned to

repeal, regulations prohibiting discrimination based on gender identity, sexual orientation, and

165. On May 12, 2020, HHS published a final rule eliminating collection of sexual

orientation data of foster youth, foster and adoptive parents, and child guardians and rejecting

proposals to collect gender identity data.

32

178. Defendants’ issuance of the Rule and related publicity have caused many of

Plaintiffs’ residents—particularly those who are transgender—to worry that they are losing

state and local protections continue to exist.

19, 2020, an increase of more than threefold. Callers brought up the Rule in roughly 10 percent

180. Accordingly, the Rule will also require Plaintiffs to undertake efforts and incur

costs to address the confusion caused by the Rule and to educate the public about their rights

their right to file complaints with [OCR] and some unknown subset of this population may suffer

remediable grievances, but will not complain to OCR absent notices informing them of the

process.” 84 Fed. Reg. 27,883; see also 85 Fed. Reg. 37,234 (“The Department continues,

however, to not be aware of a way to quantify those potential effects.”). Accordingly, the Rule

will require Plaintiffs to invest resources to inform LEP individuals of their rights to obtain

language assistance services and to file complaints when they are denied those services or

otherwise face discrimination by health care providers or insurers.

182. Plaintiffs have already been forced to incur costs to remedy the confusion

of policies and procedures.” 85 Fed. Reg. 37,163; see also id. at 37,236–238.

under Section 1557.

prohibit discrimination based on an insured’s or prospective insured’s actual or perceived sexual

orientation, gender identity or expression, or transgender status. The amendment, which takes

effect July 28, 2020, also prohibits policy exclusions for treatments related to gender transition,

gender dysphoria, or gender incongruence. Also as a result of the Rule, NYDFS also issued a

Rule, NYDFS also updated its guide for transgender New Yorkers regarding their health care

rights to assist transgender individuals in understanding their health insurance coverage for

40

184. In addition, the New York State Division of Human Rights hosted a Know Your

Rights webinar on June 30, 2020 regarding New York state law protections, noting that despite

HHS’s rollback of the regulatory protections against discrimination in health settings, New York

State’s laws and rules, which include protections based on sexual orientation, gender identity or

clarify that discrimination on the bases of gender identity and sexual orientation in health care

and insurance are unlawful under California law. CA DFEH may also engage in a multi-lingual

campaign to educate LEP Californians about their rights due to the Rule’s removal of notice and

186. Similarly, the California Department of Insurance (“CA CDI”) has already

The Rule will require hiring one or more compliance officers to field those inquiries.

187. Several Massachusetts agencies have already had to, or will need to, promulgate

advisories or guidance as a result of the Rule. For example, MassHealth—the program that

administers the Commonwealth’s Medicaid program and Children’s Health Insurance

Program—prepared and sent an advisory to all of its managed care plans and other stakeholders

to reiterate that state anti-discrimination laws (as well as managed care contracts) continue to

prohibit discrimination on the basis of sexual orientation and transgender status, and require

meaningful language access for MassHealth members.

188. In addition, Massachusetts’ Division of Insurance (“DOI”) is preparing guidance

is also working to ensure that its staff understands the continued applicably of state anti-

discrimination protections and considering developing additional educational material.

189. In anticipation of the Rule, Colorado’s Division of Insurance (“CO DOI”)

promulgated DOI Regulation 4-2-62, which among other things, prohibits insurance carriers

updated its website to address LGBTQ resources (including distinguishing between state and

navigate appeals, and triage support needs with LGBTQ community members who contact the

Division; and may issue additional guidance to insurers about their obligations under state law,

as well as educational materials for consumers to reduce confusion around the Rule.

190. The Colorado Department of Health Care Policy and Financing (“COHCPF”) has

also begun to undertake substantial and costly actions out of serious concern that the Rule will

confuse or embolden providers who do not understand or who disagree with LGBTQ and LEP

and the state’s hospital association and will provide similar clarifications to other health

providers in Colorado about the state’s protections through oral and written communications.

Additionally, COHCPF has already provided an internal staff-wide training about the Rule and

Opportunities (CHRO) issued a declaratory ruling that, inter alia, prohibits insurers from selling

insurance plans that discriminate on the basis of sexual orientation or gender identity.

week after the Rule was promulgated, Connecticut’s Insurance Commissioner released new

reminding regulated entities and community members alike that Connecticut law prohibits

(“HBX”) will need to provide updated guidance to assister grantees, who provide application and

also need to update trainings and guidance to assisters based on the Rule to help them address

questions related to the new Rule. HBX will also provide training to internal staff and customer

service representatives that serve their call center, and may need to update customer service

193. Because of the Rule, the State of Hawaii’s Department of Human Services Med-

QUEST Division will likely need to expend funds to provide guidance, training, education, and

confusion created by the Rule. For example, the Illinois Department of Human Rights (“IL

DHR”), Department of Insurance (“IL DOI”), and Department of Healthcare and Family

Services (“IL DHFS”) issued a joint agency non-discrimination in health care services

communication “to clarify the 2020 Final Rule’s impact on residents of Illinois, to identify the

protections from discrimination that exist in State law, and to remind the healthcare community

Section 1557 through the Rule, IL DOI proposed its own rulemaking to expand the existing

nondiscrimination protections for gender identity at Ill. Adm. Code tit. 50, § 2603.35, so that the

insurance coverage, other than grandfathered health plans or excepted benefit policies. See 43

Ill. Reg. 14,987 (Dec. 27, 2019).

196. And IL DHFS issued a provider notice “to clarify that despite the federal Final

in light of the Rule.

198. To remediate the harmful effects of Defendants’ decision to narrow the scope of

Section 1557 through the Rule, the Illinois Department of Insurance proposed its own

Code tit. 50, § 2603.35, so that the protections apply to policy and claims practices relating to

discrimination legislation to ensure that individuals would remain protected under state law

H.B. 1120/S.B. 738, 2020 Leg., 441st Sess. (Md. 2020) to be codified at Md. Code Ann., Health-

Gen. § 2-1001 et seq.; Md. Code Ann., Ins. § 15-1A-22 (Acts 2020, c. 620, § 1, eff. May 8,

2020; Acts 2020, c. 621, § 1, eff. May 8, 2020). Since HHS’s publication of the Rule,

Maryland’s Health Benefit Exchange has convened a workgroup to assess the Rule’s impact

including updated guidance that will need to be issued, regulations that may need to be issued,

Department of Human Services anticipates costs relating to revising guidance materials,

201. The New Jersey Department of Health (“NJDOH”) will likely need to update

guidance to explain inconsistencies between federal- and state-level non-discrimination

patients with LEP have options and the same standard access to health care. NJDOH will also

need to remind grantees and licensees about the necessity of language access and non-

discrimination in the absence of a federal mandate.

202. Due to the Rule and concomitant concerns from consumers, the Oregon Health

health plan members based on gender identity remains prohibited under state law. OHA will

need to update current public-facing materials regarding anti-discrimination protections and send

out guidance related to language access to account for the Rule’s changes. The Rule also means

that OHA will need to consistently and continuously reaffirm that affected individuals are

protected by Oregon law and that there are remedies for discrimination. The Rule creates fear

and uncertainty in an already difficult and challenging climate and frustrates OHA’s mission for

orientation, and gender identity/expression are still covered under state law despite the Rule and

other Rhode Island agencies, including the state-based health insurance exchange, are

considering training for staff in light of the Rule, which would incur additional costs. Rhode

Island’s Department of Health (RIDOH) plans to issue guidance to address confusion for health

care professionals and health care facilities to highlight the important differences between what

205. The Wisconsin Department of Health Services also plans to (1) issue guidance in

light of the Rule to address confusion likely to be experienced by health plans, providers, and

members; (2) train and educate staff, benefit program members, and community partners on the

(“WI OCI”) issued a bulletin clarifying legal requirements regarding nondiscrimination in health

insurance coverage for individuals who are transgender or gender dysphoric.

OCI is in the process of updating consumer information publications and compiling a fact sheet

on individual rights in light of the Rule.

and to counteract the 2020 Rule.

B. Plaintiffs will incur increased enforcement costs and burdens as a result of

the 2020 Rule.

207. In addition, the Rule will injure Plaintiffs by causing them to incur additional

costs through investigation and enforcement of state civil rights protections banning

discrimination in health care settings and health insurance.

208. Most Plaintiffs have one or more state agencies with jurisdiction to investigate

discrimination in the health care context and have established complaint or grievance procedures

to address discrimination in that context, including, for example, health departments, agencies

dedicated to human rights, and state insurance commissioners or departments. Plaintiffs’

agencies receive complaints from the public, investigate the facts giving rise to those complaints

49