In an opinion written by Circuit Judge Patty Shwartz, the panel found that the plaintiffs had proved particularized injury—rejecting the Trump Administration’s argument that the states lacked standing. The panel found there was evidence in the record showing the exemptions would result in increased spending of state-funded services either from women who have lost coverage or states bearing the costs of unintended pregnancies. This holding goes farther than the recent Ninth Circuit decision in The Little Sisters of the Poor Jeanne Jugan Residence v. California, et al. No. 18-1192, which limited injunction to the select states that brought the litigation because there was not a sufficient showing of economic injury.

The appeals panel ruled it was necessary to halt the implementation of the rules until it has been decided whether or not the agencies responsible for the rules—the Departments of Health and Human Services, Treasury and Labor—followed the Administrative Procedure Act. The panel was not convinced by either argument presented: that there was good cause sufficient to avoid notice and comment or that the Religious Freedom Restoration Act required a religious exemption.

Whether any appeal to the Supreme Court is in progress has yet to be determined. Accordingly, employers may want to take a cautious approach toward limiting contraceptive coverage.

Teal Trujillo, a summer associate in our Chicago office, also contributed to this On the Subject.