United States District Court, E.D. Washington
PLANNED PARENTHOOD OF GREATER WASHINGTON AND NORTH IDAHO; PLANNED PARENTHOOD OF THE GREAT NORTHWEST AND THE HAWAIIAN ISLANDS; and PLANNED PARENTHOOD OF THE HEARTLAND, Plaintiffs,
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES and ALEX MICHAEL AZAR II in his official capacity as Secretary of the U.S. Department of Health and Human Services, Defendants.
ORDER GRANTING PERMANENT INJUNCTION; GRANTING IN PART
AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS;
DENYING MOTION FOR SUMMARY JUDGMENT
O. RICE CHIEF UNITED STATES DISTRICT JUDGE
THE COURT are Plaintiffs' Motion for Preliminary
Injunctive Relief (ECF No. 24) and Defendants' Opposition
to Plaintiffs' Motion for a Preliminary Injunction and
Cross-Motion to Dismiss or for Summary Judgment (ECF No. 27).
This matter was heard with oral argument on April 24, 2018.
The Court has reviewed the record and files herein,
considered the parties' arguments, and is fully informed.
For the reasons discussed below, Plaintiffs' Motion for
Preliminary Injunctive Relief (ECF No. 24) is GRANTED;
Defendants' Motion to Dismiss (ECF No. 27) is GRANTED in
part and DENIED in part; and Defendants' Motion for
Summary Judgment (ECF No. 27) is DENIED.
February 15, 2018, Plaintiffs Planned Parenthood of Greater
Washington and North Idaho, Planned Parenthood of the Great
Northwest and Hawaiian Islands, and Planned Parenthood of the
Heartland (collectively “Planned Parenthood”)
filed this Complaint against Defendants United States
Department of Health and Human Services (“HHS”)
and the Secretary of HHS, Alex Michael Azar II. ECF No. 1.
Plaintiffs seek to prevent and declare unlawful HHS's
decision to terminate Plaintiffs' grant agreements and
end the Teen Pregnancy Prevent Program (“TPP
Program”). Id. at ¶ 1. Plaintiffs assert
claims for declaratory and injunctive relief under the
Administrative Procedure Act (“APA”),
Establishment Clause, and Due Process Clause. Id. at
instant motion, Plaintiffs move for preliminary injunctive
relief enjoining Defendants from terminating without cause
Plaintiffs' five-year cooperative agreements under the
TPP Program. ECF No. 24 at 8. Defendants oppose
Plaintiffs' motion for a preliminary injunction and
request the Court dismiss or enter summary judgment on all of
Plaintiffs' claims. ECF No. 27.
otherwise indicated, the following facts are primarily drawn
from Plaintiffs' Complaint and documents appended to the
instant motion, and are accepted as true for the purposes of
the motions for preliminary injunction and to dismiss. The
TPP was created by Congress for the 2010 fiscal year
(“FY”). ECF No. 1 at ¶ 2. Congress has
continued to appropriate funds for the TPP Program since 2010
at approximately $110 million annually. Id. at
¶¶ 26-27, 31. The appropriations language explains
that funds “shall be for making competitive contracts
and grants to public and private entities to fund medically
accurate and age appropriate programs that reduce teen
pregnancy ….” Id. at ¶ 26; 27-2 at
353; Pub.L. 115-141, 132 Stat. 348, 733 (Consolidated
Appropriations Act, 2018).
Office of Adolescent Health (OAH) is responsible for
implementing and administering the TPP Program. ECF No. 1 at
¶ 30. In April 2015, HHS issued Funding Opportunity
Announcements (FOAs) for the TPP Program. Id. at
¶ 34. The FOAs required a detailed work plan over the
“five-year project period.” Id. at
¶ 42; 27-2 at 11 (Ex. A). The FOAs state, “Each
year of the approved project period, grantees are required to
submit a noncompeting application which includes a progress
report for the current budget year, and work plan, budget and
budget justification for the upcoming year.” ECF No.
27-2 at 78.
2015, HHS awarded 81 new TPP Program grants. ECF No. 1. at
¶ 40. In the three TPP Programs at issue, the Notice of
Award (“NOA”) forms issued in 2015 and again in
2016 listed the project period as July 1, 2015 through June
30, 2020. ECF Nos. 1 at ¶ 41; 24-3 (Ex. A-B); 24-5 (Exs.
A-C); 24-6 (Exs. E-F). The budget period in these awards were
only for the relevant year. ECF Nos. 24-3 (Ex. A-B); 24-5
(Exs. A-C); 24-6 (Exs. E-F). Plaintiffs assert that over the
first three years of the latest round of the TPP Program
funding, HHS consistently commended all three Plaintiffs for
their implementation of their respective TPP Program
projects. ECF No. 1 at ¶ 55.
2017, HHS awarded FY 2017 funds to Plaintiffs. Id.
at ¶ 76. The NOAs for 2017 state, “This award also
shortens the project period to end on June 30, 2018 at the
end of this budget year.” ECF Nos. 1 at ¶ 77; 24-3
at 54 (Ex. D); 24-5 at 43 (Ex. C); 24-6 at 565 (Ex. K). On
August 1, 2017, Plaintiffs each separately wrote to HHS
challenging the alleged termination and Defendants did not
respond. ECF No. 1 at ¶¶ 79-80.
to Federal Rule of Civil Procedure 65, the Court may grant
preliminary injunctive relief in order to prevent
“immediate and irreparable injury.” Fed.R.Civ.P.
65(b)(1)(A). Rule 65 also states that “[b]efore or
after beginning the hearing on a motion for a preliminary
injunction, the court may advance the trial on the merits and
consolidate it with the hearing.” Fed.R.Civ.P.
argument, the Court questioned the parties as to whether
there was any reason not to make this action a final
injunction. Defendants asserted that Plaintiffs had not
sought a permanent injunction. On reply, Plaintiffs clarified
that their priority is a preliminary injunction, but see no
reason why the resolution should not be final if the Court is
ready to resolve the case. The Court finds that there is no
reason not to decide the issue as a final injunction as it
appears that the Defendants do not have any additional
evidence concerning the decision with respect to
Plaintiffs' APA claims. Accordingly, the Court considers
Plaintiffs' request for a preliminary injunction as a
entitled to a permanent or final injunction, a plaintiff must
demonstrate: “(1) actual success on the merits; (2)
that it has suffered an irreparable injury; (3) that remedies
available at law are inadequate; (4) that the balance of
hardships justify a remedy in equity; and (5) that the public
interest would not be disserved by a permanent
injunction.” Indep. Training & Apprenticeship
Program v. California Dep't of Indus. Relations, 730
F.3d 1024, 1032 (9th Cir. 2013). “The standard for a
preliminary injunction is essentially the same as for a
permanent injunction with the exception that the plaintiff
must show a likelihood of success on the merits rather than
actual success.” Id. (quoting Amoco Prod.
Co. v. Village of Gambell, 480 U.S. 531, 546 n.12
(1987)). Accordingly, the Court's analysis remains
largely the same as if it were considering the
Plaintiffs' original motion for preliminary injunction.
plaintiff must satisfy each element for injunctive relief.
Yet, the Ninth Circuit uses a “sliding scale”
under which the injunction may be issued if there are serious
questions going to the merits and the balance of hardships
tips sharply in the plaintiff's favor, along with two
other Winter factors. All. for the Wild Rockies
v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011)
(“[A] stronger showing of one element may offset a
weaker showing of another.”); see also Farris v.
Seabrook, 677 F.3d 858, 864 (9th Cir. 2012) (“We
have also articulated an alternate formulation of the
Winter test, under which serious questions going to
the merits and a balance of hardships that tips sharply
towards the plaintiff can support issuance of a preliminary
injunction, so long as the plaintiff also shows that there is
a likelihood of irreparable injury and that the injunction is
in the public interest.” (internal quotation marks and
Actual Success on the Merits
insist that HHS's actions must be set aside under the APA
as HHS's conduct is arbitrary and capricious, and
contrary to law. ECF Nos. 1 at ¶¶ 100-13; 24 at 17.
Grant Policy Statement Applicability
initial matter, Plaintiffs argue that the GPS is not a
binding regulation, but merely informal internal guidance.
ECF No. 29 at 20. The GPS states:
Recipients are not directly subject to the requirements of
HHS Grants Policy Directives and implementing HHS Grants
Administration Manuals …, which are internal documents
guiding HHS operations. If an OPDIV [HHS Operating Divisions]
implements a requirement in an internal document that does
affect recipients, it will not do so by citing that document;
rather, the requirement is placed on the recipient through
explicit coverage in the NoA.
ECF No. 27-2 at 111 (Ex. B). The GPS explains general terms
and conditions that are common across all OPDIVs and apply
“unless there are statutory, regulatory, or
award-specific requirements to the contrary (as specified in
individual Notices of Award).” Id. at 110. The
controlling NOAs specify that the order of precedence for
conflicting or inconsistent policies applicable to the grants
are: (1) grant program legislation; (2) grant program
regulations; (3) award notice including terms and conditions;
and (4) federal administrative requirements, costs principles
and audit requirements applicable in this grant. ECF No. 24-5
at 14 (item 16).
respond that the GPS simply explains what is evident as a
consequence of HHS's regulations and the ADA, but is not
arguing that the GPS should be followed at the expense of
HHS's regulations. ECF No. 30 at 16. Defendants emphasize
that HHS's “Federal award must include wording to
incorporate, by reference, the applicable set of general
terms and conditions.” ECF Id. (quoting 45
C.F.R. § 75.210(b)(2)). Defendants argue that they did
not merely cite the document, but “placed [it] on the
recipient through explicit coverage in the NoA” terms
and conditions. Id. The NOAs state, “You must
comply with all terms and conditions outlined in the grant
award, including grant policy terms and conditions contained
in applicable Department of Health and Human Services (HHS)
Grant Policy Statements (GPS) ….” ECF No. 24-3
at 13. Defendants assert that Plaintiffs' interpretation
is clear error because it would require 217 pages of the GPS
to be appended to the NOA every year in order for HHS to rely
upon its general terms and conditions for grants. ECF No. 30
Court finds that while the NOAs are controlling, the GPS aids
in illuminating the general terms and conditions for the TPP
Program. The NOAs incorporate the GPS by reference as
required under 45 C.F.R. § 75.210(b)(2). See
ECF No. 24-3 at 13. Yet, the GPS also makes clear that
“statutory, regulatory, or award-specific
requirements” are controlling when they contradict the
GPS. ECF No. 27-2 at 110. The NOAs also explain that
legislation and regulations control over conflicting terms
and conditions. ECF No. 24-5 at 14. Accordingly, the Court
will consider the GPS, but regulatory or statutory language
controls over any conflicting GPS language.
contend that Plaintiffs' request for relief would violate
the Anti-Deficiency Act (ADA). ECF No. 27 at 21. The ADA is a
codification of Congress' power over federal spending.
U.S. Const. art. 1, § 8, cl. 1; 31 U.S.C. § 1341.
“An officer or employee of the United States Government
or of the District of Columbia government may not …
involve either government in a contract or obligation for the
payment of money before an appropriation is made unless
authorized by law.” 31 U.S.C. § 1341(a)(1)(B).
parties agree Leiter v. United States, 271 U.S. 204
(1926) is the controlling case on the ADA. ECF Nos. 27 at 22;
29 at 25; 30 at 11. In Leiter, a government agency
entered into several leases for office space with terms of
four and five years. Leiter, 271 U.S. at 205. Annual
funds covered the first year and the lease terms for the next
years were specifically made contingent upon appropriations
for those years. Id. The Supreme Court found an ADA
violation and held, “A lease to the Government for a
term of years when entered into under an appropriation
available for but one fiscal year, is binding on the
Government only for that year.” Id. at 207.
“Under Leiter and its progeny, the contract
‘dies' at the end of the fiscal year, and may be
revived only by affirmative action by the government. This
‘new' contract is then chargeable to appropriations
for the subsequent year.” U.S. Gen. Accountability
Office, 6 GAO-RB pt. C, s. 2, Obligation/Expenditure in
Excess or Advance of Appropriations (2015).
argue that Plaintiffs' view of their TPP Program awards
is inconsistent with the ADA. ECF No. 27 at 23. Defendants
insist that while Plaintiffs assert that HHS obliged itself
in 2015 to award unappropriated funds through 2020, no
multi-year obligating authority exists for grants between HHS
and TPP Program grantees. Id. Defendants emphasize
that HHS could not lawfully commit the government to a
“future payment of money in advance of, or in excess
of, an existing appropriation.” Id. at 24;
Hercules, Inc. v. United States, 516 U.S. 417, 427
Funding Opportunity Announcement and Application Instructions
(“Funding Announcement”) state that future
funding would be “contingent upon the availability of
funds, satisfactory progress of the project, and adequate
stewardship of Federal funds.” ECF Nos. 27 at 24, 27-2
at 39 (Ex. A). Yet, Defendants insist that this language must
be read in context with other grant documents that explain
the grantee's lack of legal rights to future continuation
awards, and they must be read in light of the ADA. ECF No. 27
at 24. Defendants argue that even if the Plaintiffs are
correct in the meaning of this document, the HHS is not
authorized to agree to the future award scheme Plaintiffs
describe and any agreements that do not comport with
Leiter and the ADA are void ab initio.
Id. Additionally, Defendants contend that the TPP
Program appropriation specifically appropriates funds
“for making competitive contracts and grants.”
Id. Defendants then argue that Plaintiffs cannot use
that statute to prohibit HHS from competing FY 2018 funds.
Defendants conclude that HHS was legally obliged to reserve
the option not to give continuation funds, and exercised that
option by choosing to recompete funds appropriated to the TPP
Program by Congress. Id. at 25.
respond that agencies routinely make plans, including
entering into contracts, beyond the expiration date of their
available appropriations. ECF No. 29 at 26. Plaintiffs argue
that the GAO has consistently recognized that an agency may
enter into a multi-year agreements where, at the time of
award, the United States incurs no financial obligation
beyond current appropriation. Id. A Comptroller
General decision stated:
[A] conditional contract which specifically provides that the
government's liability is contingent upon future
availability of appropriations may be entered into prior to
the enactment of an appropriation act … such contract
would become operative only if and when the appropriation is
made and should be given no legal liability on the part of
the government for any payment shall arise until the
appropriation has been made.
ECF No. 29 at 26; To the Secretary of the Interior,
B-140850 (Comp. Gen. Oct. 29, 1959). Plaintiffs then
emphasize that the five-year programmatic approval here does
not obligate the government to pay money beyond the first
year of performance. ECF No. 29 at 26-27. Plaintiffs insist
that the HHS did not violate the ADA by agreeing to work with
Plaintiffs for five-year project periods, but it did commit
itself to acting in a manner that is not arbitrary,
capricious, or otherwise contrary to law. Id. at 27.
argue that the Comptroller General decision was an unusual
case where Congress passed a statute that conditioned the
release of funding on the Secretary of the Interior
submitting the principal construction contract to Congress
“for a period of 45 calendar days prior to its
execution.” ECF No. 30 at 12; To the
Secretary of the Interior, B-140850 (Comp. Gen. Oct.
29, 1959). Defendants emphasize that the statute entailed
“the soliciting of bids and awarding of a proposed
contract to be conditioned upon the approval or
disproval” of Congress “and also contingent upon
the future authorization by the Congress of sufficient funds
….” ECF No. 30 at 12; To the Secretary of
the Interior, B-140850 (Comp. Gen. Oct. 29, 1959).
Defendants then argue that under these specific
circumstances, the making of a contract contingent on the
condition of a specific appropriation for that agreement was
acceptable. Defendants assert that there is no similar
statutory authority here. ECF No. 30 at 12.
Court agrees with Defendants that the Comptroller General
decision is distinguishable and is not entirely applicable to
the case at hand. Yet, the Court finds no violation of the
ADA. Defendants are correct that HHS cannot commit the
government to future payments of money in advance of an
existing appropriation under the ADA and Leiter.
Yet, the Court disagrees that the cooperative agreements here
obligate the government to pay money until the appropriation
has been made. The GPS explains that “projects are
programmatically approved for support in their entirety, but
are funded in annual increments called budget periods.”
ECF No. 27-2 at 156. These budget periods then ensure that
HHS is compliant with the ADA. Merely because HHS approved
the project in its entirety, does not mean it committed
itself to appropriate money for future years beyond the first
year. The Funding Announcement also states that the award is
“contingent upon the availability of funds, ”
which ensures compliance with the ADA. Id. at 39.
Court finds that Plaintiffs' argument does not contravene
the ADA, but merely alleges that HHS committed itself to not
acting arbitrary, capricious, or otherwise contrary to law
throughout the five-year project period, not that HHS was
required to appropriate money for each future year.
See ECF No. 29 at 27. Accordingly, the Court finds
that Plaintiffs' interpretation would not violate the
parties dispute whether Defendants' conduct amounts to a
termination and the Court addresses this issue before
considering the merits of Plaintiffs' APA claims.
See ECF Nos. 24 at 18-19; 27 at 27-28; 29 at 14-20.
This question revolves around whether “period of
performance” under the ...