United States District Court, District of Columbia
E. BOASBERG UNITED STATES DISTRICT JUDGE.
2010, Congress enacted the Patient Protection and Affordable
Care Act - popularly known as Obamacare - which is “a
comprehensive national plan to provide universal health
insurance coverage” across the nation. See
Nat'l Fed'n of Indep. Bus. v. Sebelius, 567 U.S.
519, 583 (2012). One central component of that statute was an
expansion of Medicaid, allowing states to provide
“health care to all citizens whose income falls below a
certain threshold.” Id. at 531. This
“expansion, ” the Supreme Court has held,
represented “a shift in kind, not merely degree.”
Id. at 583. While the “original program was
designed to cover medical services for four particular
categories of the needy: the disabled, the blind, the
elderly, and needy families with dependent children, ”
the Affordable Care Act “transformed” Medicaid
“into a program to meet the health care needs of the
entire nonelderly population with income below 133 percent of
the poverty level.” Id.
in this case have sought to roll back those reforms. Upon
assuming office in March 2017, Defendant Seema Verma, the
Administrator for the Centers for Medicare & Medicaid
Services - along with then-Secretary of the Department of
Health and Human Services Tom Price - immediately circulated
a letter to the Governors of all states to share her belief
that the ACA's Medicaid expansion “was a clear
departure from the core, historical mission of the
program.” Sec'y of Health & Human Servs., Dear
Governor Letter (Mar. 14, 2017),
The letter encouraged states to apply for
“waiver[s]” of some of the program's coverage
requirements - especially for the expansion group - promising
to “fast-track” approval of such petitions.
is one state to board that train. After the ACA went into
effect, it elected to broaden Medicaid to include the
expansion population, and by April 2016, more than 428, 000
new residents had thereby received medical assistance. In
July 2017, however, the state submitted an experimental plan
to CMS called “KY HEALTH, ” which is made up of
several components, most significantly Kentucky HEALTH. That
latter program promised to “comprehensively
transform” its Medicaid program. Under that plan, the
state would impose “community-engagement”
requirements for the expansion population, along with some of
the traditional population as well. This new mandate would
require that those recipients work (or participate in other
qualifying activities) for at least 80 hours each month as a
condition of receiving health coverage. The project also
called for, among other things, increased premiums and more
stringent reporting requirements. Consistent with CMS's
earlier invitation, the Secretary approved Kentucky's
application on January 12, 2018, waiving several core
Medicaid requirements in the process.
in this case are fifteen Kentucky residents, each of whom is
currently enrolled in the state's Medicaid program.
Together, they fear that Kentucky HEALTH will relegate them
to second-class status within Medicaid, putting them and
others “in danger of losing” their health
insurance altogether. They have thus brought this action to
challenge the Secretary's approval of Kentucky HEALTH.
the Secretary is afforded significant deference in his
approval of pilot projects like Kentucky's, his
discretion does not insulate him entirely from judicial
review. Such review reveals that the Secretary never
adequately considered whether Kentucky HEALTH would in fact
help the state furnish medical assistance to its citizens, a
central objective of Medicaid. This signal omission renders
his determination arbitrary and capricious. The Court,
consequently, will vacate the approval of Kentucky's
project and remand the matter to HHS for further review.
Court begins with an overview of the statutes governing
Medicaid and its experimental projects. It then turns more
specifically to Kentucky's challenged plan, before
concluding with a brief procedural history of the current
1965, the federal government and the states have worked
together to provide medical assistance to certain vulnerable
populations under Title XIX of the Social Security Act,
colloquially known as Medicaid. See 42 U.S.C. §
1396-1. The Centers for Medicare and Medicaid Services (CMS),
a federal agency within the Department of Health and Human
Services, has primary responsibility for overseeing Medicaid
programs. Under the cooperative federal-state arrangement,
participating states submit their “plans for medical
assistance” to the Secretary of HHS. Id. To
receive federal funding, those plans - along with any
material changes to them - must be “approved by the
Secretary.” Id.; see also 42 C.F.R.
§ 430.12(c). Currently, all states have chosen to
participate in the program.
the Secretary can approve a state plan, the Medicaid Act sets
out certain minimum parameters that all states must follow.
See 42 U.S.C. § 1396a (listing 83 separate
requirements). One such provision requires state plans to
“mak[e] medical assistance available” to certain
low- income individuals. Id. § 1396a(a)(10)(A).
Until recently, that group included pregnant women, children,
and their families; some foster children; the elderly; and
people with certain disabilities. Id. In 2010,
however, Congress enacted the Affordable Care Act “to
increase the number of Americans covered by health
insurance.” NFIB, 567 U.S. at 538. Under that
statute, states can choose to expand their Medicaid coverage
to include additional low-income adults under 65 who would
not otherwise qualify. See 42 U.S.C. §
1396a(a)(10)(A)(i)(VIII). It also allowed states to cover
certain former foster children under the age of 26.
Id. § 1396a(a)(10)(A)(i)(IX).
a state must cover all qualified individuals or forfeit its
federal Medicaid funding. Id. §
1396a(a)(10)(B). Although it may choose not to cover
this ACA expansion population, see NFIB, 567 U.S. at
587, if the state decides to provide coverage, those
individuals become part of its mandatory population. In that
instance, the state must afford the expansion group
“full benefits” - i.e., it must provide
“medical assistance for all services covered under the
State plan” that are substantially equivalent “in
amount, duration, or scope . . . to the medical assistance
available for [other] individual[s]” covered under the
Act. See 42 U.S.C. § 1396d(y)(2)(B); 42 C.F.R.
§ 433.204(a)(2); see also Jones v. T.H., 425
U.S. 986 (1976).
Medicaid Act also ensures that enrolled individuals receive a
minimum level of coverage. Under section 1396a, states must
cover certain basic medical services, see 42 U.S.C.
§§ 1396a(a)(10)(A), 1396d(a), and the statute
limits the amount and type of premiums, deductions, or other
cost-sharing charges that a state can impose on such care.
Id. § 1396a(a)(14); see also id.
§ 1396o. Other provisions require states to
provide up to three months of retroactive coverage once a
beneficiary enrolls, see id. § 1396a(a)(34),
and to ensure that recipients receive all “necessary
transportation . . . to and from providers.” 42 C.F.R.
§ 431.53. Finally, states must “provide such
safeguards as may be necessary to assure” that
eligibility and services “will be provided, in a manner
consistent with simplicity of administration and the best
interests of the recipients.” 42 U.S.C. §
Section 1115 of Social Security Act
before and after the passage of the ACA, a state wishing to
deviate from the Medicaid Act's requirements must obtain
a waiver from the Secretary of HHS. See 42 U.S.C.
§ 1315. In enacting the Social Security Act (and, later,
the Medicaid program within the same title), Congress
recognized that statutory requirements “often stand in
the way of experimental projects designed to test out new
ideas and ways of dealing with the problems of public welfare
recipients.” S. Rep. No. 1589, 87th Cong., 2d Sess. 19,
reprinted in 1962 U.S.C.C.A.N. 1943, 1961-62. To
that end, Section 1115 of the Social Security Act allows the
Secretary to approve “experimental, pilot, or
demonstration project[s]” in state medical plans that
would otherwise fall outside Medicaid's parameters. The
Secretary can approve only those projects that “in
[his] judgment . . . [are] likely to assist in promoting the
[Act's] objectives.” 42 U.S.C. § 1315(a). Once
the Secretary has greenlighted such a project, he can then
waive compliance with the requirements of Section 1396a
“to the extent and for the period . . . necessary to
enable [the] State . . . to carry out such project.”
Id. § 1315(a)(1).
the ultimate decision whether to grant approval rests with
the Secretary, his discretion is not boundless. Before HHS
can act on a waiver application, the state “must
provide at least a 30-day public notice[-]and[-]comment
period” regarding the proposed program and hold at
least two hearings at least 20 days before submitting the
application. See 42 C.F.R. §§
431.408(a)(1), (3). Once a state completes those
prerequisites, it then sends an application to CMS.
Id. § 431.412 (listing application
requirements). After the agency notifies the state that it
has received the waiver application, a federal 30-day
public-notice period commences, and the agency must wait at
least 45 days before rendering a final decision. Id.
§§ 431.416(b), (e)(1).
no secret that the current administration hopes to
“prompt[ly] repeal the Patient Protection and
Affordable Care Act.” Exec. Order No. 13765, Minimizing
the Economic Burden of the Patient Protection and Affordable
Care Act Pending Repeal, 82 Fed. Reg. 8351 (Jan. 20, 2017).
“In the meantime, ” it has promised to
“take all actions consistent with law to
minimize” the Act's impact, including on states.
Id. To that end, the new CMS Administrator
circulated a letter on March 14, 2017, alerting states of the
agency's “intent to use existing Section 1115
demonstration authority” to help revamp Medicaid.
See Dear Governor Letter at 2. In that letter,
Defendant Verma and then-Secretary Price lamented
“[t]he expansion of Medicaid through the Affordable
Care Act” as “a clear departure from the core,
historical mission of the program.” Id. at 1.
Together they promised to find “a solution that best
uses taxpayer dollars to serve” those individuals they
deemed “truly vulnerable.” Id.
January 11, 2018, Brian Neale, Director of CMS, issued a
follow-up letter to all state Medicaid Directors, fleshing
out that “new policy.” See AR 90-99. The
agency, he said, would “assist states in their efforts
to improve Medicaid enrollee health and well-being through
incentivizing work and community engagement among”
certain adult mandatory Medicaid groups. Id. This
was “a shift from prior agency policy.” AR 92.
While other welfare programs - such as Temporary Assistance
for Needy Families (TANF) and Supplemental Nutritional
Assistance Program (SNAP) - condition benefits on working,
see 42 U.S.C. § 607; 7 U.S.C. §
2029(a)(1), there is no equivalent for the Medicaid program.
Indeed, during the 50-plus years of Medicaid, CMS has not
previously approved a community-engagement or work
requirement as a condition of Medicaid eligibility.
See AR 4. Instead, the agency has consistently
denied these requests, finding that work requirements
“could undermine access to care” and were thus
inconsistent with the purposes of Medicaid. See,
e.g., Letter from Andrew M. Slavitt, Acting
Administrator, Ctrs. For Medicare & Medicaid Servs., HHS
to Thomas Betlach, Director, Az. Health Care Cost Containment
Sys. at 2-3 (Sept. 30, 2016), at
2018 State Medical Director (SMD) letter, however, the agency
espoused a new commitment to “support[ing] state
efforts to test incentives that make participation in work or
other community engagement a requirement for continued
Medicaid eligibility” and encouraged states to apply
for Section 1115 waivers for this purpose. See AR
90. It then “identified a number of issues for states
to consider as they develop[ed]” a community-engagement
requirement for the Medicaid program. Id. at 93-98.
To date, at least ten states have applied for such Medicaid
waivers. See ECF No. 40 (Amicus Brief of AARP,
et al.) at 2 n.1.
those states is the Commonwealth of Kentucky. On August 24,
2016, Governor Matt Bevin submitted an application to CMS
requesting a Section 1115 waiver to implement an experimental
project, Helping to Engage and Achieve Long Term Health, or
KY HEALTH. See AR 5432-33, 5447. He followed up with
an amended (though similar) KY HEALTH application on July 3,
2017. That application had two key programs relevant here (as
well as some others not challenged): (1) Kentucky HEALTH -
not to be confused with the umbrella KY HEALTH - a
“program” that applies only to “adult
beneficiaries who do not qualify for Medicaid on the basis of
a disability”; and (2) Substance Use Disorder (SUD)
Treatment, which would be available for all Medicaid
beneficiaries. See AR 2-3. The Court outlines each
HEALTH is a program primarily (though not exclusively)
targeting the expansion group of adults covered under the
ACA. See AR 2-3, AR 5442. The Commonwealth believed
that this project would “transform” the
state's Medicaid program by, among other things,
predicating Medicaid eligibility for most of the expansion
population on workforce participation or community service.
See AR 2, 15-16.
January 12, 2018 (just one day after issuing the SMD letter),
the Secretary approved Kentucky HEALTH, granting waivers to
implement the following features:
1) Community-engagement requirement, which requires
beneficiaries to spend at least 80 hours per month on
qualifying activities (including employment, job-skills
training, education, community service, and participation in
SUD treatment) or lose their Medicaid coverage;
2) Limits on retroactive eligibility, which excuse
the state from “provid[ing] three months of retroactive
eligibility for beneficiaries receiving coverage through the
Kentucky HEALTH program; except for pregnant women and former
foster care youth”;
3) Monthly premiums, including premiums varied based
on income and/or length of time enrolled in Medicaid;
4) Limits on non-emergency medical transportation,
which “relieve Kentucky of the requirement to assure
non-emergency medical transportation to and from providers
for the new adult group” - i.e., adults
without disabilities, except for those who are medically
frail, former foster-care youth, or pregnant;
5) Reporting requirements, which mandate that
individuals provide information for an annual redetermination
and report changes in income or circumstances that affect
Medicaid eligibility within 10 days; and
6) Lockouts, which allow the state to deny Medicaid
coverage for up to six months for any beneficiary who (a) has
an income above 100% of the FPL and (b) failed to meet her
premium or reporting requirements.
AR 2, 13-15.
HEALTH also included “commercial market health
insurance” features, see AR 6, such as a
deductible account, an incentive and savings account called
My Rewards. Id. at 6-7. The Secretary
approved each of those mechanisms as part of Kentucky HEALTH
and, in doing so, agreed to “fund” those
programs “through the Section 1115(a)(2) expenditure
authority.” CMS Br. at 42. As part of that approval,
the Secretary allowed Kentucky to penalize recipients who
used the emergency room for “non-emergent”
purposes, by deducting $75 from their new My Rewards
health account (an account where Kentucky provides virtual
funds for healthy behaviors). See AR 33-35, 5463.
those programs in place, the Commonwealth expected to save
roughly $331 million dollars, see AR 5513 (Estimated
Fiscal Projections), primarily by reducing its Medicaid
population by an estimated 95, 000 persons. Compare
AR 5421, with AR 5422.
same KY HEALTH application, Kentucky also sought approval for
an SUD Program. Traditionally, Medicaid bars states from
receiving any “payments with respect to care or
services for any individual who has not attained 65 years of
age and who is a patient in an institution for mental
diseases [IMD].” 42 U.S.C. § 1396d(a)(29); see
also 42 U.S.C. § 1396d(a)(14) and (16)(A)
(separately allowing payments for individuals under age 21).
An IMD is a “hospital, nursing facility, or other
institution . . . that is primarily engaged in providing
diagnosis, treatment, or care of persons with mental
diseases.” Id. § 1396d(i). In other
words, the statute prohibits the federal government from
reimbursing any treatment in mental-health facilities (at
least for beneficiaries between 21 and 64).
this provision has posed problems for states. An estimated
21% of Medicaid-eligible adults suffer from a substance-use
disorder, and Kentucky's citizens are no exception.
See AR 5468. The state estimates that nearly
“90, 000 newly enrolled Kentuckians may have a SUD
requiring treatment.” Id. In 2014, the state
expanded its coverage of mental health and SUD treatment
options, “allowing Medicaid recipients to receive
coverage for the full spectrum of inpatient and outpatient
SUD services.” Id. As the state put it,
however, “coverage of benefits mean[s] little without
access to providers.” Id. Although there were
26 qualified mental-health facilities within Kentucky, none
could provide care (or, at least, none could receive federal
funding for such care) because of the “IMD
Secretary recognized as much and circulated a State Medical
Director letter in 2015, informing states of “a new
opportunity for demonstration projects approved under section
1115 . . . to ensure that a continuum of care is available to
individuals with SUD.” Letter No. 15-003 at 1 (July 27,
smd15003.pdf. It encouraged states to propose
“demonstration projects” under Section 1115 for
treating SUDs. Id. If the Secretary approved any
such project, Section 1115 would then require that the
project costs (including patient-treatment costs) be
“regarded as expenditures under the State [Medicaid]
plan, ” meaning that they would be treated as
reimbursable under Medicaid. See 42 U.S.C. §
1315(a)(2)(A). So long as states treated their SUD programs
as part of a “demonstration” project, the federal
government could thus help pick up the tab.
2017, the current administration confirmed its commitment to
“work[ing] with states on section 1115(a)
demonstrations . . . to combat the ongoing opioid
crisis.” Letter No. 17-003 at 1 (Nov. 1, 2017),
smd17003.pdf. In a new SMD Letter, the Secretary reaffirmed
that through the “section 1115 initiative, states will
have an opportunity to receive federal financial
participation (FFP) for the continuum of services to treat
addiction to opioids or other substances, including services
provided to Medicaid enrollees residing in residential
treatment facilities.” Id. at 2. In total,
twelve states (including Kentucky) have received approval on
SUD demonstration projects. See MaryBeth Musumeci,
Key Questions about Medicaid Payment for Services in
“Institutions for Mental Disease”, Henry J.
Kaiser Family Foundation (June 18, 2018). Another thirteen
have applications pending. Id.
of KY HEALTH, the Secretary approved an “[SUD] program
available to all Kentucky Medicaid beneficiaries.” AR
3. The “SUD program [allows] beneficiaries with SUD to
access benefits that include SUD residential treatment,
crisis stabilization and withdrawal management services
provided in IMDs, which would otherwise be excluded from
federal reimbursement.” AR 85. Relatedly, the Secretary
waived the requirement that Kentucky cover the non-emergency
use of medical transportation (NEMT) “to and from
methadone treatment, which requires daily dosing, for all
Medicaid populations.” AR 85. The plaintiffs have not
challenged the SUD program (or any other component of KY
HEALTH besides Kentucky HEALTH).
submitting its Section 1115 application to CMS,
Kentucky's Department for Medicaid Services held three
public hearings and conducted two public-comment periods.
See AR 5509, 5410. Throughout this process, the
state and CMS were engaged in “continued
negotiations” regarding the program's terms.
See AR 5413, 5410. CMS also opened a federal
public-comment period on Kentucky HEALTH. See AR
7-8. On January 12, 2018, CMS notified the Governor's
office that the application had been approved. See
weeks later, Plaintiffs brought this nine-count suit seeking
declaratory and injunctive relief on behalf of themselves and
a “statewide proposed class . . . of all residents of
Kentucky who are enrolled in the Kentucky Medicaid program on
or after January 12, 2018.” Compl., ¶ 33. Most
named Plaintiffs have an income below 133% of the federal
poverty line; many have serious medical conditions.
See ECF Nos. 33-2-17 (Declarations). Almost all
either already have part-time jobs or are actively seeking
work, yet each fears that she may not be able to comply with
the new “community-engagement” requirement.
Id. Together, they worry that such a requirement -
along with Kentucky HEALTH's other measures - places them
in danger of losing Medicaid completely. Id. Their
Complaint alleges principally that by approving Kentucky
HEALTH, Defendants violated the Constitution and the
Administrative Procedure Act. See Compl.,
March 30, 2018, the Court granted Kentucky's Motion for
Intervention. See Minute Order. Defendants then
moved to transfer, asking the Court to send the case to the
Bluegrass State, specifically the Frankfort Docket of the
Central Division of the Eastern District of that state.
See ECF No. 6 at 2 n.2. The Court denied that
request on April 10, 2018, finding that this case was of
“national, rather than local, significance” and
would be properly adjudicated within the District of
Columbia. See Stewart v. Azar, 2018 WL 1730304, at *
6 (D.D.C. Apr. 10, 2018). In the meantime, the parties have
filed competing Motions for Summary Judgment. The Court heard
oral argument on June 15, 2018, and because Kentucky HEALTH
will take effect on July 1, 2018, has issued this Opinion on
an expedited basis.
parties have cross-moved for summary judgment on the
administrative record. The summary-judgment standard set
forth in Federal Rule of Civil Procedure 56(c), therefore,
“does not apply because of the limited role of a court
in reviewing the administrative record.” Sierra
Club v. Mainella, 459 F.Supp.2d 76, 89 (D.D.C. 2006);
see also Bloch v. Powell, 227 F.Supp.2d 25, 30
(D.D.C. 2002), aff'd, 348 F.3d 1060 (D.C. Cir.
2003). “[T]he function of the district court is to
determine whether or not as a matter of law the evidence in
the administrative record permitted the agency to make the
decision it did.” Sierra Club, 459 F.Supp. 2d.
at 90 (quotation marks and citation omitted). “Summary
judgment is the proper mechanism for deciding, as a matter of
law, whether an agency action is supported by the
administrative record and consistent with the [Administrative
Procedure Act] standard of review.” Loma Linda
Univ. Med. Ctr. v. Sebelius, 684 F.Supp.2d 42, 52
(D.D.C. 2010) (citation omitted), aff'd, 408
Fed. App'x 383 (D.C. Cir. 2010).
Administrative Procedure Act “sets forth the full
extent of judicial authority to review executive agency
action for procedural correctness.” FCC v. Fox
Television Stations, Inc., 556 U.S. 502, 513 (2009). It
requires courts to “hold unlawful and set aside agency
action, findings, and conclusions” that are
“arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” 5 U.S.C. §
706(2). Agency action is arbitrary and capricious if, for
example, the agency “entirely failed to consider an
important aspect of the problem, offered an explanation for
its decision that runs counter to the evidence before the
agency, or is so implausible that it could not be ascribed to
a difference in view or the product of agency
expertise.” Motor Vehicle Mfrs. Ass'n of U.S.,
Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43
other words, an agency is required to “examine the
relevant data and articulate a satisfactory explanation for
its action including a rational connection between the facts
found and the choice made.” Id. at 43 (quoting
Burlington Truck Lines v. United States, 371 U.S.
156, 168 (1962)) (internal quotation marks omitted). Courts,
accordingly, “do not defer to the agency's
conclusory or unsupported suppositions, ” United
Techs. Corp. v. Dep't of Def., 601 F.3d 557, 562
(D.C. Cir. 2010) (quoting McDonnell Douglas Corp. v.
Dep't of the Air Force, 375 F.3d 1182, 1187 (D.C.
Cir. 2004)), and “agency ‘litigating
positions' are not entitled to deference when they are
merely [agency] counsel's ‘post hoc
rationalizations' for agency action, advanced for the
first time in the reviewing court.” Martin v.
Occupational Safety & Health Review Comm'n, 499
U.S. 144, 156 (1991) (citation omitted). Although a reviewing
court “may not supply a reasoned basis for the
agency's action that the agency itself has not given,
” a decision that is not fully explained may,
nevertheless, be upheld “if the agency's path may
reasonably be discerned.” Bowman Transp., Inc. v.
Arkansas-Best Freight System, Inc., 419 U.S. 281, 285-86
(1974) (citation omitted).
case, Plaintiffs accuse HHS of “tak[ing] by regulatory
fiat what it could not accomplish in Congress.” Pl. MSJ
at 3. The Secretary and Kentucky, they say, sought to do
little more than “knock people off Medicaid and
undermine the Medicaid expansion enacted by Congress.”
Id. at 17. With that view in mind, their nine-count
Complaint - which relies almost exclusively on the APA -
challenges nearly every component of Kentucky HEALTH.
they attack the project as a whole, claiming the Secretary
erred by finding that it was likely to promote the objectives
of Medicaid. See Compl, Count VIII. Second, in
Counts II-VII, they challenge each individual component of
that program - i.e., the community-engagement
requirement, the premiums, the reporting requirements, the
lockouts, the limits on NEMT and retroactive eligibility, and
the penalties for non-emergency use of the emergency room.
For the latter counts, Plaintiffs principally maintain that
each of those features is unlikely to promote the Act's
objectives. In Counts III and IV, Plaintiffs further allege
that the Secretary could not permit certain premium or cost
sharing (such as penalties on non-emergency use of the
emergency room) through his Section 1115 authority. Beyond
that, Plaintiffs challenge the Secretary's issuance of
the SMD Letter (Count I), as well as allege violations under
the Take Care Clause (Count IX).
reasons discussed in more detail below, the Court need
adjudicate only one count of Plaintiffs' Complaint to
grant them full relief: Count VIII, which challenges the
Secretary's approval of Kentucky HEALTH as a whole.
Before the Court can reach that dispute, however, it must
first address several threshold issues.
his approval was lawful or not, the Secretary argues that
this Court has no power to review it either because (1)
Plaintiffs cannot establish standing for their challenge, or
(2) the decision is “committed to agency discretion by
law, ” 5 U.S.C. § 701(a)(2), thus barring any
judicial oversight under the APA.
III of the Constitution limits the jurisdiction of federal
courts to actual “Cases” and
“Controversies.” U.S. Const., art. III, § 2.
But not just any dispute will do. See Lujan v. Defs. of
Wildlife, 504 U.S. 555, 559-61 (1992). A plaintiff must
demonstrate that she suffers: 1) an injury-in-fact that is 2)
caused by the conduct complained of and 3)
“likely” to be “redressed by a favorable