Planned Parenthood of Wisconsin, Inc. v. Azar

          MEMORANDUM OPINION

          TREVOR N. MCFADDEN UNITED STATES DISTRICT JUDGE

         Under Title X of the Public Health Service Act, the Secretary of the U.S. Department of Health and Human Services (HHS) can award federal grants for “voluntary family planning projects” around the country, “which shall offer a broad range of acceptable and effective family planning methods and services.” 42 U.S.C. § 300(a). HHS annually releases a funding opportunity announcement for the program, explaining how it will evaluate grant applications, a process that has historically included scoring based on seven criteria. The Plaintiffs-three Planned Parenthood affiliates and the National Family Planning and Reproductive Health Association-challenge the 2018 Announcement's addition of an eighth criterion to proposal scoring. This new factor evaluates proposals based on their ability to address the agency's program priorities and key issues enumerated in the Announcement. The Plaintiffs particularly object to the Announcement's focus on “[a] meaningful emphasis on . . . the benefits of avoiding sexual risk, ” easier access to primary health care, “increasing family participation, ” and “[c]ooperation with . . . faith based organizations.” Compl. Ex. A at 9-11. They argue that the challenged language required notice-and-comment rulemaking, violates the Title X statutory scheme, and is arbitrary and capricious.

         The Government claims that the Announcement language is not subject to judicial review-except about whether rulemaking was required-because the Announcement is not “final agency action” under 5 U.S.C. § 704, and consideration of extra factors in Title X grant-making is “committed to agency discretion” under 5 U.S.C. § 701(a)(2). On the merits, the Government argues that the eighth criterion is only a rule of agency procedure exempt from notice-and-comment rulemaking, and that the agency's substantive priorities are consistent with Title X's design, and not arbitrary and capricious.

         Both parties seek summary judgment on the undisputed administrative record. I conclude that the language in this Announcement, which does not bind the final decisionmaker, is not a “final agency action” reviewable under the Administrative Procedure Act (APA). Although the Plaintiffs' notice-and-comment claim is reviewable, the eighth factor is a procedural rather than legislative rule, and it is not arbitrary and capricious. The substantive tweaks to the program priorities and key issues are neither new nor incompatible with Title X, instead they rephrase similar priorities and issues that appeared in prior funding announcements without objection or notice-and-comment rulemaking. I will therefore grant summary judgment for the Government.

         I. BACKGROUND

         In 1970, Congress added Title X to the Public Health Service Act to “assist in making comprehensive voluntary family planning services readily available to all persons desiring such services.” Pub. L. No. 91-572, § 2(1) (1970). The statute authorizes the Secretary to:

[M]ake grants to . . . assist in the establishment and operation of voluntary family planning projects which shall offer a broad range of acceptable and effective family planning methods and services (including natural family planning methods, infertility services, and services for adolescents). To the extent practical, entities which receive grants or contracts under this subsection shall encourage familiy [sic] participation in projects assisted under this subsection.

         42 U.S.C. § 300(a). The statute lists four factors that “the Secretary shall take into account” in making grant awards: “the number of patients to be served, the extent to which family planning services are needed locally, the relative need of the applicant, and its capacity to make rapid and effective use of such assistance.” Id. § 300(b). The statute also gives the Secretary authority to promulgate grant-making regulations. Id. § 300a-4.

         An HHS regulation details the agency's grant-making evaluation criteria:

What criteria will the Department of Health and Human Services use to decide which family planning services projects to fund and in what amount?

(a) Within the limits of funds available for these purposes, the Secretary may award grants for the establishment and operation of those projects which will in the Department's judgment best promote the purposes of section 1001 of the Act, taking into account:

(1) The number of patients, and, in particular, the number of low-income patients to be served;

(2) The extent to which family planning services are needed locally;

(3) The relative need of the applicant;

(4) The capacity of the applicant to make rapid and effective use of the federal assistance;

(5) The adequacy of the applicant's facilities and staff;

(6) The relative availability of non-federal resources within the community to be served and the degree to which those resources are committed to the project; and

(7) The degree to which the project plan adequately provides for the requirements set forth in these regulations.

42 C.F.R. § 59.7 (2016). This regulation has remained substantially the same since the Title X program began. Compare 36 Fed. Reg. 18467 (Sept. 15, 1971) with 42 C.F.R. § 59.7 (2016).

         The Title X grant application process begins with a funding opportunity announcement, which describes the program and provides eligibility and evaluation criteria. 45 C.F.R. § 75.203. Each announcement recounts the statutory and regulatory requirements for Title X programs and also describes program priorities and key issues that set “overarching goals for the Title X program.” See, e.g., 1998 Funding Opportunity Announcement (FOA) at *10726, Pls.' Mot. Summ. J. Ex. E, ECF No. 18-12.^[1] The agency used the announcement to introduce a scoring system in 2001, with 100 points allocated across seven criteria that correspond to the seven criteria listed in 42 C.F.R. § 59.7. Decl. of Clare Coleman, Pls.' Mot. Summ. J., ECF No. 18-4 (Coleman Decl.) ¶¶ 54-56. The announcements have often instructed applicants to develop “[p]roject plans . . . that address [that year's] Title X program priorities, ” and to “provide evidence of the project's capacity to address program priorities as they evolve in future years.” See, e.g., 2010 FOA at 5, Mot. Dismiss Ex. 11, ECF No. 25-10.

         HHS issued the 2018 Funding Opportunity Announcement (Announcement or 2018 Announcement) in February 2018. Compl. Ex. A, ECF No. 1-1. The Announcement added an eighth scored criterion under which “[f]ederal staff and an independent review panel will assess all eligible applications.” Id. at 43. The eighth factor awards up to 25 out of 100 points for the project plan's ability to implement the “requirements set forth in the priorities and key issues outlined [in] this funding announcement.” Id. at 44. The Announcement also added language to the fifth criterion, for which up to 10 points can be awarded, saying that the “adequacy of the applicant's facilities and staff” would depend, in part, on whether staff are “adequately trained to carry out the program requirements, as well as the priorities and key issues outlined in this announcement.” Id. at 43. The Announcement set eight program priorities and eight key issues. Id. at 9-11. This resulted in 16 total program priorities and key issues, tied to 35 potential points. The Plaintiffs object to only some of the language in these priorities and key issues:

Program Priorities: Each year the OPA [Office of Population Affairs] establishes program priorities that represent overarching goals for the Title X program. . . . Applicants should provide evidence of their capacity to address program priorities. . . .

1. Assuring innovative high quality family planning and related health services that will improve the overall health of individuals, couples and families, with priority for services to those of low-income families, offering, at a minimum, core family planning services enumerated earlier in this Funding Announcement. Assuring that projects offer a broad range of family planning and related health services that are tailored to the unique needs of the individual, that include natural family planning methods (also known as fertility awareness based methods) which ensure breadth and variety among family planning methods offered, infertility services, and services for adolescents; breast and cervical cancer screening and prevention of STDs as well as HIV prevention education, counseling, testing, and referrals;

2. Assuring activities that promote positive family relationships for the purpose of increasing family participation in family planning and healthy decision-making; education and counseling that prioritize optimal health and life outcomes for every individual and couple; and other related health services, contextualizing Title X services within a model that promotes optimal health outcomes for the client.

4. Promoting provision of comprehensive primary health care services to make it easier for individuals to receive both primary health care and family planning services preferably in the same location, or through nearby referral providers, and increase incentive for those individuals in need of care choosing a Title X provider.

6. Encouraging participation of families, parents, and/or legal guardians in the decision of minors to seek family planning services; and providing counseling to minors on how to resist attempts to coerce minors into engaging in sexual activities;

Key Issues: In addition to program priorities, the following key issues should be considered in developing the project plan:

3. Cooperation with community-based and faith-based organizations;

5. A meaningful emphasis on education and counseling that communicates the social science research and practical application of topics related to healthy relationships, to committed, safe, stable, healthy marriages, and the benefits of avoiding sexual risk or returning to a sexually risk-free status, especially (but not only) when communicating with adolescents;

6. Activities for adolescents that do not normalize sexual risk behaviors, but instead clearly communicate the research informed benefits of delaying sex or returning to a sexually risk-free status.

         Compl. Ex. A at 9-11.

         Prior announcements have contained similar priorities. For example, from 2003 to 2011, the announcements emphasized that funding applicants should provide access to abstinence counseling. See, e.g., 2003 FOA at 4, Mot. Dismiss Ex. A, ECF No. 25-10, 2011 FOA at 7, Mot. Dismiss Ex. I, ECF No. 25-10; see also 2015 FOA at 8, Mot. Dismiss Ex. M, ECF No. 25-10 (emphasizing natural family planning methods). From 2003 to 2015, the announcements focused on providing “related preventative health services” that improve “the overall health of individuals” rather than merely attending to reproductive health. See, e.g., 2003 FOA at 4; 2015 FOA at 8. The previous announcements have also urged applicants to encourage family participation in the delivery of family planning services. See, e.g., 2004 FOA at 4, Mot. Dismiss Ex. B, ECF No. 25-10; 2010 FOA at 7, Mot. Dismiss Ex. H, ECF No. 25-10. Finally, from 2004 to 2009, the funding announcements encouraged applicants to partner with community-based and faith-based organizations. See, e.g. 2004 FOA at 4; 2009 FOA at 7, Mot. Dismiss Ex. G, ECF No. 25-10.

         The Plaintiffs filed two suits that the parties agreed to consolidate.^[2] The Plaintiffs moved for a preliminary injunction, and the Government moved for dismissal or summary judgment. I granted the parties' joint motion to consolidate the Plaintiffs' Motion for a Preliminary Injunction with the merits and to construe the parties' cross motions as motions for summary judgment. Minute Order of June 21, 2018.

         II. LEGAL STANDARDS

         To prevail on a motion for summary judgment, a movant must show that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Celotex Corp v. Catrett, 477 U.S. 317, 322 (1986). “[A] party seeking summary judgment always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the [record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex, 477 U.S. at 323. Once this showing ...