By Helen Christophi

SAN FRANCISCO – A divided Ninth Circuit on Thursday partly lifted a nationwide injunction barring enforcement of the Trump administration’s interim rules letting employers opt out of covering birth control on religious and moral grounds, limiting the injunction to California and four other states.

In a 2-1 decision, the appellate panel’s majority affirmed findings by U.S. District Judge Haywood Gilliam Jr. that the administration probably violated mandated procedures for issuing the rules and that their enforcement would “imminently” financially harm plaintiffs California, Delaware, Maryland, New York and Virginia as women turn to state-funded programs for coverage.

But it ruled the preliminary injunction’s nationwide scope “overbroad” and lifted it for the remaining 45 states, concluding a scaled-back version would sufficiently protect the plaintiffs.

In doing so, it rejected Gilliam’s justification that federal officials violated the Administrative Procedure Act as to every state by failing to provide a notice-and-comment period for agencies around the country.

Writing for the majority, U.S. Circuit Judge J. Clifford Wallace said Gilliam “abused [his] discretion in granting a nationwide injunction.”

“District judges must require a showing of nationwide impact or sufficient similarity to the plaintiff states to foreclose litigation in other districts, from Alaska to Puerto Rico to Maine to Guam,” Wallace, a Nixon appointee, wrote in a 48-page decision.

In a statement, California Attorney General Xavier Becerra didn’t address the decision to limit the injunction. But he called the ruling “an important step to protect a woman’s right to access cost-free birth control and make independent decisions about her own reproductive healthcare.”

He added, “A woman’s health decisions should be made by a woman and her doctor – not her employer or politicians.” Congress, he said, “made clear that all women and their families have the right to access cost-free birth control under the ACA. The Trump Administration’s rules attempt to trample these rights, with no regard for public comment or the rule of law.”

The Affordable Care Act requires employers to offer health insurance that covers contraception with no co-payment. Houses of worship have an exemption to the mandate, and nonprofits were allowed to opt out via an accommodation by which an employer certifies its objection to the mandate to the federal government. The government is consequently tasked with confirming that insurers provide separate coverage.

But the Trump administration issued new interim rules in October 2017 letting any employer or health insurer with religious or moral objections to providing birth control opt out of the ACA requirement. Under these rules, exempted entities no longer need to certify their objection or otherwise notify the federal government of their decision to stop providing coverage.

The appellate panel on Thursday also admonished Gilliam over the delay his decision to freeze the case during the appeal had caused. But it affirmed the reasoning on which he based the injunction.

On the Administrative Procedure Act claim, Wallace said federal officials had satisfied none of the APA’s three exceptions to notice-and-comment rulemaking. He chided as disingenuous their insistence there was no time for notice and comment because violations of the Religious Freedom Restoration Act had to be immediately eliminated, noting federal officials in January 2017 “explicitly declined to change the accommodation in light of Zubik and RFRA.”

“They then let nine months go by and failed to specify what developments necessitated the agencies to change their position and determine, in October 2017, that RFRA violations existed,” Wallace said. “The [Interim Final Rules] are devoid of any findings related to the issue. Indeed, the agencies cited no intervening legal authority for their justification … “Given these failures, the agency action cannot be upheld on unexplained about-face.”

Wallace next found it “reasonably probable that loss of contraception coverage will inflict economic harm to the states.” To back this up, he cited the administration’s own estimates that up to 120,000 women nationwide will lose some contraception coverage under the rules at a cost of up to $63.8 million annually, and specific employers it had identified as likely to use the expanded exemptions, like Hobby Lobby.

“The injury asserted is traceable to the agencies’ issuing the IFRs allegedly in violation of the APA’s requirements, and granting an injunction would prohibit enforcement of the IFRs. The states have thus established standing,” Wallace wrote.

Dissenting, U.S. Circuit Judge Andrew Kleinfeld said the states had not in fact established standing.

The George H.W. Bush appointee relied on the Supreme Court’s 1976 decision in Pennsylvania v. New Jersey, in which the high court held the plaintiff states couldn’t “demonstrate that the injury for which [they sought] redress was directly caused by the actions of another state.”

“The reason they lack standing is that their injury is what the Supreme Court calls ‘self-inflicted,’ because it arises solely from their legislative decisions to pay these moneys,” Kleinfeld wrote. “Under the Supreme Court’s decision in Pennsylvania v. New Jersey, we are compelled to reverse.”

The majority, however, questioned the application of Pennsylvania in light of a newer Supreme Court ruling in Wyoming v. Oklahoma. The 1992 ruling concluded Wyoming had standing to challenge an Oklahoma statute that decreased some Wyoming tax revenues because Wyoming had suffered a “direct injury” caused by the Oklahoma law.

But, Wallace wrote, “we need not decide whether Pennsylvania’s ‘self-infliction’ doctrine applies to the ordinary injury-in-fact requirement of Article III standing because…the injury here is not “self-inflicted” within the meaning of Pennsylvania.”

Justice Department Spokeswoman Kelly Laco said in an email, “The ruling by the Ninth Circuit today to eliminate the nationwide preliminary injunction is a victory for restoring the constitutional order of the federal government and ending abuses of judicial power. The Constitution does not grant to a single, unelected judge the power to veto executive branch actions and issue a ruling that affects people across the nation and the world, regardless of whether they were part of the case or not. The Department of Justice will continue to fight injunctions that are contrary to the law and the Constitution.”

Last month, the federal government published final versions of challenged rules. Once they take effect in January 2019, the alleged APA violations will become moot.

U.S. Circuit Judge Susan Graber, a Clinton appointee, also sat on the panel.