Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-15-05164/USCOURTS-caDC-15-05164-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 5, 2016 Decided May 13, 2016

No. 15-5164

AMERICAN FREEDOM LAW CENTER AND ROBERT JOSEPH 

MUISE,

APPELLANTS

v.

BARACK HUSSEIN OBAMA, IN HIS OFFICIAL CAPACITY AS 

PRESIDENT OF THE UNITED STATES OF AMERICA, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:14-cv-01143)

Robert Joseph Muise argued the cause for appellants. 

With him on the briefs was David Yerushalmi.

Katherine Twomey Allen, Attorney, U.S. Department of 

Justice, argued the cause for appellees. With her on the brief 

were Benjamin C. Mizer, Principal Deputy Assistant Attorney 

General, and Mark B. Stern and Alisa B. Klein, Attorneys.

Before: GRIFFITH, SRINIVASAN and WILKINS, Circuit 

Judges.

Opinion for the Court filed by Circuit Judge WILKINS.

USCA Case #15-5164 Document #1613145 Filed: 05/13/2016 Page 1 of 14
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WILKINS, Circuit Judge: Appellants Robert Muise and 

American Freedom Law Center allege that their health 

insurance premiums increased by 57% at the end of 2014, and 

claim that the Affordable Care Act (“ACA”) is to blame. 

Specifically, Appellants contend that in late 2013, the 

Department of Health and Human Services (“HHS”) 

unlawfully implemented two policies: a “Transitional Policy,” 

which permitted health insurance companies to temporarily 

continue providing health insurance plans that do not comply 

with ACA requirements; and a “Hardship Exemption,” which 

permitted some individuals whose policies were cancelled for 

noncompliance to avoid the penalty under the individual 

mandate. These actions, Appellants argue, caused fewer 

people to purchase ACA-compliant plans. They assert that 

the Transitional Policy drove up the cost of ACA-compliant 

plans, such as the one purchased by Appellants. They also 

claim that HHS violated equal protection principles by 

applying either the Transitional Policy or the Hardship 

Exemption in a discriminatory fashion. At issue in this case is 

whether Appellants have standing to raise their challenges. 

We affirm the District Court’s determination that 

Appellants lack standing. Appellants have failed to 

demonstrate that the Transitional Policy caused Appellants’ 

insurer, Blue Cross Blue Shield of Michigan (“Blue Cross”),

to increase the premium for their health care plan specifically. 

Additionally, any alleged injury to Appellants from the 

Transitional Policy stemmed not from the Policy itself, which 

HHS applied evenhandedly, but from Blue Cross’s decision 

not to take advantage of the Policy. Accordingly, Appellants

also lack standing to bring their equal protection challenge. 

USCA Case #15-5164 Document #1613145 Filed: 05/13/2016 Page 2 of 14
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I.

A.

The ACA, enacted by Congress in 2010, “aims to 

increase the number of Americans covered by health 

insurance and decrease the cost of health care.” Nat’l Fed’n 

of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2580 (2012). 

Among other things, the ACA institutes an individual 

mandate, which requires each “applicable individual” to 

purchase health insurance by maintaining “minimum essential 

coverage,” and requires those who fail to do so to pay a 

“penalty.” 26 U.S.C. § 5000A(a)-(c). In enacting the ACA, 

Congress acknowledged that the individual mandate was an 

important part of the overall functioning of the law, noting 

that “significantly increasing health insurance coverage . . . 

will minimize . . . adverse selection and broaden the health 

insurance risk pool to include healthy individuals, which will 

lower health insurance premiums.” 42 U.S.C. § 18091(2)(I). 

The ACA also imposes a number of new “market 

reforms,” setting forth minimum standards that all offered 

health insurance plans must meet. See, e.g., id. § 300gg 

(prohibiting discriminatory premium rates); id. § 300gg-1 

(guaranteeing issuance of coverage); id. § 300gg-3 

(prohibiting preexisting conditions exclusions); id. § 18022 

(defining essential health benefits requirements). These 

reforms were scheduled to take effect on January 1, 2014. 

See Cutler v. HHS, 797 F.3d 1173, 1177 (D.C. Cir. 2015)

(citing 42 U.S.C. § 300gg (note)). Prior to that time, certain

health insurance providers began cancelling some health 

insurance plans that did not comply with the ACA’s reforms. 

In a letter HHS sent to state insurance commissioners in 

November 2013, it explained that

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[a]lthough affected individuals and small 

businesses may access quality health insurance 

coverage through the new Health Insurance 

Marketplaces, in many cases with federal 

subsidies, some of them are finding that such 

coverage would be more expensive than their 

current coverage, and thus may be dissuaded 

from immediately transitioning to such 

coverage.

J.A. 43. To ameliorate this problem, HHS announced in its 

letter a Transitional Policy, whereby HHS would not enforce 

the ACA’s market reform requirements against health 

insurance providers until October 2014. J.A. 43-45. It later 

extended that deadline ultimately to October 2017.1 The 

Transitional Policy thus allowed individuals whose plans 

otherwise would have been terminated to keep their original 

health insurance during this transitional period, so long as 

their health insurance provider agreed to continue issuing 

their plan. The Policy, however, applies solely to health 

insurance providers, which are given the option of 

temporarily providing non-ACA-compliant plans, though they 

are not required to do so. The Policy does not apply to

individuals, who still are required to comply with the ACA’s 

individual mandate, unless they qualify for the Hardship 

Exemption.

 1 In March 2014, HHS extended the policy for an additional two 

years, to October 1, 2016. J.A. 50-51. In February 2016, it 

extended the transitional period for an additional year, to October 1, 

2017. Letter from Kevin Counihan, Dir., Ctr. for Consumer Info. & 

Ins. Oversight (February 29, 2016), www.cms.gov/CCIIO/Resource

s/Regulations-and-Guidance/Downloads/final-transition-bulletin-2-

29-16.pdf.

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B.

Robert Muise is the co-founder and senior counsel of 

AFLC, a nonprofit corporation whose “mission . . . is to fight 

for faith and freedom through litigation, education, and public 

policy programs.” Muise Decl. ¶¶ 2-4 (internal quotation 

marks omitted). Muise receives health insurance through 

AFLC’s group health plan, which is issued by Blue Cross. Id.

¶ 6. After passage of the ACA, Blue Cross informed AFLC 

that its “current plan [was] changing” and that it would “be 

transitioning [AFLC] into a reform-compliant plan.” J.A. 60. 

Thus, Blue Cross chose not to continue offering Appellants’

original health insurance plan, even though it could have

continued to do so during the period established by the 

Transitional Policy. Appellants allege that when Blue Cross 

transitioned to that reform-compliant plan, the monthly 

premium AFLC paid for Muise’s health insurance plan 

increased from $1,349.96 to $2,121.59 – an increase of 57% 

($771.63). See Muise Decl. ¶ 13. 

In a June 2014 rate filing, Blue Cross explained that there 

would be a 2.7% rate increase for 2015 “for all small group 

products that were offered in 2014,” such as Appellants’ plan.

J.A. 80. They listed four “[s]ignificant drivers of the rate 

change,” one of which was “[l]ower than anticipated 

improvement of the ACA compliant market level risk pool in 

2014 and 2015 due to the market being allowed to extend preACA . . . plans into 2016.” Id. In other words, Blue Cross 

blamed the rate increase, in part, on the ability of individuals

to retain non-ACA-compliant coverage, presumably due to 

HHS’s Transitional Policy. In a later, March 2015 rate 

filing,

2 Blue Cross reversed course, and noted that there 

 2 This filing was not included in the record before the District Court 

or before us on appeal, but it is publicly available. See Actuarial 

Memorandum, Blue Cross Blue Shield Michigan, BCBSM 2015 

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would be a 3.3% decrease for policies issued between July 1, 

2015, and December 31, 2015. 2015 Blue Cross Filing 6. It 

listed two “[s]ignificant drivers” for the rate change: (1) 

“2014 trend results coming in much lower than anticipated”; 

and (2) “[s]hifts in market risk assumptions after the 

allowance by the government for carriers to extend offerings 

of pre-reform plans.” Id. Thus, although Blue Cross 

appeared to blame its initial rate increase, in part, on the 

consequences of the Transitional Policy, it seemed to also 

credit, in part, the Policy with the later rate decrease. 

Appellants filed suit in July 2014, challenging the

Transitional Policy as an “unlawful executive action[]” issued 

by “executive fiat.” Compl. ¶¶ 33, 46. They claim that the 

Policy caused their health insurance costs to increase. Id.

¶ 49. Additionally, they assert an equal protection challenge, 

claiming that Appellees violated the Fifth Amendment by 

allowing certain individuals to benefit from the Policy, 

thereby exempting them from the individual mandate, but not 

providing this exemption to others, including Appellants. Id.

¶ 62.

The District Court granted Appellees’ motion to dismiss 

the case pursuant to Rule 12(b)(1) of the Federal Rules of 

Civil procedure, holding that Appellants lacked standing. Am. 

Freedom Law Ctr. v. Obama, 106 F. Supp. 3d 104, 113 

(D.D.C. 2015). It determined, among other things, that 

Appellants had failed to demonstrate that whatever injury they 

 

Small Group Rate Filing (Mar. 23, 2015), 

https://filingaccess.serff.com/sfa/home/MI (follow “Begin Search”; 

follow “Accept”; enter “BBMI-129573445” in the field labeled 

“SERFF Tracking Number”; select “Blue Cross Blue Shield of 

Michigan”; select the document titled “Actuarial Memorandum 

3Q2015 BCBSMSG 20150330 Final.pdf”) [hereinafter 2015 Blue 

Cross Filing].

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alleged to have suffered was caused by HHS’s Transitional 

Policy, noting that “health insurance premiums fluctuate for 

myriad reasons, ranging from the particular terms of coverage 

to various other actuarial factors.” Id. at 109. 

II.

The only question in this appeal is whether Appellants 

have standing to bring this suit. Because they have failed to 

show that the increase in their health care premiums stems 

from HHS’s Transitional Policy, Appellants have not 

demonstrated that they have standing. We affirm the District 

Court’s dismissal pursuant to Rule 12(b)(1). 

A.

We review a District Court’s decision regarding standing 

de novo. Info. Handling Servs., Inc. v. Def. Automated 

Printing Servs., 338 F.3d 1024, 1029 (D.C. Cir. 2003). The 

“irreducible constitutional minimum of standing contains 

three elements”: (1) injury-in-fact, (2) causation, and (3) 

redressability.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 

(1992). Stated differently, “a litigant must demonstrate a 

‘personal injury fairly traceable to the [opposing party’s] 

allegedly unlawful conduct and likely to be redressed by the 

requested relief.’” Ass’n of Flight Attendants-CWA, AFL-CIO 

v. U.S. Dep’t of Transp., 564 F.3d 462, 464 (D.C. Cir. 2009)

(quoting Allen v. Wright, 468 U.S. 737, 751 (1984)). 

When “[t]he existence of one or more of the essential 

elements of standing ‘depends on the unfettered choices made 

by independent actors not before the courts and whose 

exercise of broad and legitimate discretion the courts cannot 

presume either to control or to predict,’” it becomes 

“‘substantially more difficult’ to establish” standing. Lujan, 

504 U.S. at 562 (quoting ASARCO Inc. v. Kadish, 490 U.S. 

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605, 615 (1989) (opinion of Kennedy, J.); Allen, 468 U.S. at

758); accord Nat’l Wrestling Coaches Ass’n v. Dep’t of 

Educ., 366 F.3d 930, 938 (D.C. Cir. 2004). “[M]ere 

‘unadorned speculation’ as to the existence of a relationship 

between the challenged government action and the third-party 

conduct ‘will not suffice to invoke the federal judicial 

power.’” Nat’l Wrestling, 366 F.3d at 938 (quoting Simon v. 

E. Ky. Welfare Rights Org., 426 U.S. 26, 44 (1976)). “The 

greater number of uncertain links in a causal chain, the less 

likely it is that the entire chain will hold true.” Fla. Audubon 

Soc’y v. Bentsen, 94 F.3d 658, 670 (D.C. Cir. 1996) (en banc). 

However, where “the alleged injury flows not directly from 

the challenged agency action, but rather from independent 

actions of third parties, we have required only a showing that 

‘the agency action is at least a substantial factor motivating 

the third parties’ actions.’” Tozzi v. HHS, 271 F.3d 301, 308 

(D.C. Cir. 2001) (quoting Cmty. for Creative Non-Violence v. 

Pierce, 814 F.2d 663, 669 (D.C. Cir. 1987)). 

In considering a motion to dismiss for lack of subject 

matter jurisdiction, courts are required to “accept as true all of 

the factual allegations contained in the complaint.” 

Swierkiewicz v. Sorema N.A., 534 U.S. 506, 508 n.1 (2002). 

Nonetheless, we “may consider materials outside the 

pleadings in deciding whether to grant a motion to dismiss for 

lack of jurisdiction.” Jerome Stevens Pharm., Inc. v. FDA, 

402 F.3d 1249, 1253 (D.C. Cir. 2005).

B.

Accepting, for the sake of argument, that Appellants have 

demonstrated that they have suffered a concrete injury in fact, 

they have failed to show that HHS’s Transitional Policy 

caused that injury. At oral argument, Appellants conceded 

that the injury they claim is solely a prospective one; they 

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assert that the Transitional Policy will cause them to pay more 

for their health insurance in the future. This assumption, 

however, is speculative. 

The only evidence Appellants offer to demonstrate that 

the Policy caused, or will cause, their alleged injury is Blue 

Cross’s 2014 rate increase filing, which included as a reason 

for the rate increase the fact that the overall risk pool for 

ACA-compliant plans was smaller than Blue Cross had 

anticipated. But that statement alone is not enough to show 

causation here. 

First, it is unclear whether the rate increase discussed in 

Blue Cross’s filing applied to Appellants’ health care plan at 

all. The filing stated that Blue Cross’s rates would increase

overall by 2.7%, but makes clear that the increase was an 

average across all of Blue Cross’s plans. It notes that the rate 

changes discussed in the filing “vary slightly by product and 

plan,” J.A. 80, and provides a chart showing that some plans 

increased by as much as 3.3%, while others did not increase at 

all. See id. at 81. Appellants failed to specify before the 

District Court which plan Blue Cross transitioned them to 

after it discontinued their old plan, see Am. Freedom Law 

Ctr., 106 F. Supp. 3d at 112, and they have provided no 

further information on appeal. We are therefore left to guess

whether Appellants’ current plan was one of the plans for 

which Blue Cross noted a rate increase in its 2014 filing. 

Second, although it appears that the price of at least some 

of Blue Cross’s plans increased at the beginning of 2015, the 

price of those same plans appears to have decreased in the 

second half of 2015.3

 According to Appellants, “basic 

 3 Unlike its June 2014 filing, which showed a price increase in only 

certain plans, Blue Cross’s March 2015 filing showed a decrease in 

every plan’s price. See 2015 Blue Cross Filing 7. 

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economic principles” establish a direct link between the 

supposed decrease in the number of individuals in ACAcompliant risk pools allegedly caused by HHS’s Transitional 

Policy and the asserted increase in the price of Appellants’ 

health insurance plan. Appellant’s Br. 41. But as Blue 

Cross’s two rate filings reveal, the effect of various factors, 

including the size of risk pools, on health insurance pricing is 

far from “basic,” and Appellants have made no concrete 

allegations, nor provided any specific evidence, establishing 

that the cost of their health insurance plan is likely to increase 

in the future, let alone that such an increase will stem from the 

Transitional Policy. This is a major missing link in the causal 

chain Appellants must establish to demonstrate that HHS’s

Transitional Policy is a “substantial factor motivating” 

Appellants’ alleged harm. Tozzi, 271 F.3d at 308 (quoting 

Cmty. for Creative Non-Violence, 814 F.2d at 669).

Moreover, as discussed above, we do not know whether 

Appellants’ health insurance plan was one of the plans 

affected by the rate increase discussed in Blue Cross’s 2014 

filing. Accordingly, even if we did accept that HHS’s 

Transitional Policy was a “substantial factor motivating” the

rate increase Blue Cross discusses in that rate filing, 

Appellants have not linked that rate increase to their own 

alleged injury. 

To circumvent the holes in their causation theory, 

Appellants rely principally on our decision in Center for Auto 

Safety v. NHTSA, 793 F.2d 1322 (D.C. Cir. 1986). That case 

involved the Corporate Average Fuel Economy (“CAFE”) 

standards set by the National Highway Traffic Safety 

Administration (“NHTSA”), which determine how fuel 

efficient an overall fleet of vehicles must be. The Center for 

Auto Safety challenged NHTSA’s 1985 CAFE standard, 

which allowed light trucks to be 1.5 miles per gallon less fuel 

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efficient than its previous standard. See id. at 1323. 

Assessing whether the Center had standing to bring its suit, 

we considered whether its alleged injury – its members’

inability to buy more fuel-efficient trucks, see id. at 1324 –

was caused by NHTSA’s new CAFE standard. We found “no 

difficulty in linking the petitioners’ injury to the challenged 

agency action,” id. at 1334, stating that “the agency’s 

regulation and the injury are . . . directly linked” because 

“NHTSA sets standards for the purpose of making vehicles 

more fuel-efficient,” and “petitioners, in turn, complain of 

less fuel-efficient vehicles.” Id. We explained that “[i]f 

setting a higher standard cannot result in vehicles with 

increased fuel efficiency, then the entire regulatory scheme is 

pointless.” Id. at 1334-35. We also noted that the case 

“involves none of the multiple, tenuous links between 

challenged conduct and asserted injury that have 

characterized claims in which causation has been found 

lacking.” Id. at 1335. 

Based on their reading of Center for Auto Safety, 

Appellants argue that “increasing health insurance coverage 

and the size of purchasing pools” is “pointless” if it does not 

bring down health care costs. Appellants’ Br. 36 (emphasis 

omitted). Accordingly, they contend that there must be a 

direct link between HHS’s Transitional Policy, which 

allegedly decreased the size of those purchasing pools, and 

the increase in Appellants’ premiums. The instant case, 

however, is easily distinguished from Center for Auto Safety. 

There, NHTSA set a specific floor auto manufacturers were 

required to follow. Thus, if NHTSA determined that a truck 

fleet had to meet, on average, a 20-miles-per-gallon fuel 

efficiency rating, the average fuel efficiency of a 

manufacturer’s truck fleet could not fall below 20 miles per 

gallon. There were also no outside factors that could interact 

with fuel efficiency standards to alter that floor. 

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The instant case is different. First, although one of 

Congress’s goals in drafting the ACA was to decrease the cost 

of health care, Nat’l Fed’n of Indep. Bus., 132 S. Ct. at 2580, 

the ACA establishes no floor under which health care prices 

cannot drop, nor a ceiling above which prices cannot rise. 

Second, many factors determine the cost of health care, 

including administrative costs, drug costs, and the health and 

age of the national populace. See generally BIPARTISAN 

POLICY CTR., WHAT IS DRIVING U.S. HEALTH CARE 

SPENDING? AMERICA’S UNSUSTAINABLE HEALTH CARE COST 

GROWTH (September 2012), http://bipartisanpolicy.org/

library/what-driving-us-health-care-spending-americasunsustainable-health-care-cost-growth/ (providing a “basic 

overview of the drivers of health care cost growth,” and 

noting that such drivers are “complex and overlapping”). 

Changes in any of these factors could cause costs to increase 

or decrease, and it is difficult to separate out which factors 

actually cause any specific price adjustment. Unlike Center 

for Auto Safety, where the Center established a direct link 

between NHTSA’s CAFE standards and the fuel efficiency of 

vehicles, Appellants have made no attempt to separate out any 

of these factors. As a result, they have not established a

sufficient link between the size of the risk pools at issue here

and the cost of their health care.

Accordingly, Appellants have failed to demonstrate that 

HHS’s Transitional Policy caused the alleged increase in their 

health insurance policy’s price; they lack standing to 

challenge the Transitional Policy on that ground. 

C.

“The ‘injury in fact’ element of standing in . . . an equal 

protection case is the denial of equal treatment resulting from 

the imposition of the barrier . . . .” Ne. Fla. Chapter of 

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Associated Gen. Contractors of Am. v. City of Jacksonville, 

Fla., 508 U.S. 656, 666 (1993). Appellants’ second standing 

argument is that HHS discriminated against Muise when it

“unlawfully exempted some ‘applicable individuals’ (and 

their plans) . . . from the Individual Mandate,” but not him.

Appellants’ Br. 42-43. Although Appellants evidently intend 

to contend that HHS has denied Muise equal treatment with 

respect to the Hardship Exemption, Muise cannot demonstrate 

injury in that regard: Muise is insured and thus is not subject 

to the penalty in the first place (such that the exemption 

would be of no benefit to him). 

Appellants also evidently raise an equal protection 

challenge with regard to the Transitional Policy. They 

contend that because only some individuals were able to 

benefit from the Transitional Policy (namely, those 

individuals whose plan is issued by a health insurance 

company that took advantage of the Policy), HHS applied its 

policy discriminatorily. Our precedent directly refutes this

claim. 

In Cutler v. HHS, a plaintiff whose health insurance plan 

was cancelled by his health insurance company because the 

plan was not ACA-compliant brought suit challenging HHS’s 

Transitional Policy. 797 F.3d at 1175. Among other things, 

plaintiff challenged the Policy as depriving him of equal 

protection of the law. Id. at 1183. We held that he lacked 

standing to bring his challenge: 

Cutler lacks Article III standing to pursue his 

equal protection challenge because his alleged 

injury is not fairly traceable to the transitional 

policy, nor would it be redressed by striking 

down that policy. The transitional policy 

applies evenhandedly across the United States, 

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so if Cutler cannot obtain the insurance he 

desires and others can, that is because his own 

insurer cancelled his policy. Cutler’s injury is 

thus the result of the action of his private 

insurer, not the transitional policy, and it is 

purely speculative whether an order in this 

case would alter or affect the non-party 

insurers’ decision.

Id. at 1183-84. 

Cutler is directly on point here. Appellants’ inability to 

benefit from the Transitional Policy stems not from the 

actions of HHS, which applied the Policy “evenhandedly,” 

but from Blue Cross’s decision to discontinue Appellants’ 

policy. Thus, for the same reasons established in Cutler, 

Appellants’ “alleged injury is not fairly traceable to the 

transitional policy, nor would it be redressed by striking down 

that policy.” Id. at 1183. 

Appellants therefore lack standing to challenge the 

Transitional Policy on equal protection grounds. 

***

For the foregoing reasons, we affirm the District Court’s 

judgment.

So ordered.

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