Court Opinion

ID: 3164778
Source: CourtListenerOpinion
Date Created: 2015-12-22 19:00:34.835923+00
Date Added: 2024-06-11T12:47:18.313908
License: Public Domain

United States Court of Appeals
                     For the First Circuit

No. 14-2287

  MUNICIPIO AUTÓNOMO DE PONCE; CENTRO DEAMBULANTES CRISTO POBRE,
INC.; LUCHA CONTRA EL SIDA, INC.; INICIATIVA COMMUNITARIA, INC.;
 ITCIA HERNÁNDEZ-LABOY; JORGE ORTIZ-TORRES; JOSÉ ALVAREZ-MEDINA;
                  HOGAR CREA POSADA LA ESPERANZA,

                     Plaintiffs, Appellees,

                               v.

   UNITED STATES OFFICE OF MANAGEMENT AND BUDGET; BRIAN DEESE,
 Acting Director, United States Office of Management and Budget;
  UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES; SYLVIA
 MATHEWS BURNWELL, Secretary, United States Department of Health
 and Human Services; UNITED STATES HEALTH RESOURCES AND SERVICES
 ADMINISTRATION; MARY WAKEFIELD, Administrator, Health Resources
                   and Services Administration,

                     Defendants, Appellants.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF PUERTO RICO

         [Hon. José Antonio Fusté, U.S. District Judge]

                             Before

                   Kayatta, Stahl, and Barron,
                         Circuit Judges.

     Jeffrey A. Clair, Attorney, Civil Division, Department of
Justice, with whom Michael S. Raab, Attorney, Civil Division,
Department of Justice, Benjamin C. Mizer, Principal Deputy
Assistant Attorney General, Civil Division, Department of Justice,
and Rosa Emilia Rodríguez-Vélez, United States Attorney, were on
brief, for appellants.
     Edgar Hernández Sánchez, with whom Cancio, Nadal, Rivera &
Díaz, P.S.C., was on brief, for appellees.

                       December 22, 2015
          KAYATTA, Circuit Judge.    This lawsuit concerns the Ryan

White Comprehensive AIDS Resources Emergency Act ("Ryan White Act"

or the "Act"), Pub. L. No. 101–381, 104 Stat. 576 (1990) (codified

at 42 U.S.C. § 300ff et seq.).      Under "Part A" of the Act, the

U.S. Department of Health and Human Services ("HHS") disburses

funding to combat HIV/AIDS infection in metropolitan areas that

are home to more than a specified number of individuals who have

AIDS.   42 U.S.C. § 300ff-11(a).    This lawsuit arose because HHS

recently determined that the Ponce metropolitan area no longer has

enough AIDS cases to qualify for continued Part A funding.   Joined

by several community health groups, Ponce claims that HHS has

unfairly drawn the boundaries of Ponce's metropolitan area too

narrowly, and that the addition of three adjoining communities

would raise the total number of AIDS cases enough to qualify for

continued funding.   Confronted with what it correctly recognized

as largely unhelpful briefing by the parties, the district court

agreed with Ponce in part and declared that the boundaries of the

Ponce area were "unlawful as they now stand."   Municipio Autónomo

de Ponce v. U.S. Office of Mgmt. & Budget, 40 F. Supp. 3d 222, 234

(D.P.R. 2014), reconsideration denied, No. 3:14-CV-01502 JAF, 2014

WL 4639896 (D.P.R. Sept. 16, 2014) ("Ponce").     Because we agree

with HHS that Congress can reasonably be said to have dictated

                                   - 3 -
that HHS use the boundaries that it uses in defining the Ponce

metropolitan area, we reverse.1

                                 I.   BACKGROUND

              The Act originally defined "metropolitan area" to be "an

area referred to in the HIV/AIDS Surveillance Report of the Centers

for Disease Control and Prevention as a metropolitan area."                     42

U.S.C.    §   300ff-17(2)    (1992);     see    also   id.   §    300ff-19(d)(3)

(explicitly adopting the § 300ff-17 definitions for the subsection

relevant to Ponce).         When Congress enacted this definition, the

CDC used the Office of Management and Budget's ("OMB") delineations

of geographical Metropolitan Statistical Areas ("MSAs") in its

Surveillance Reports.        See Ctr. Disease Control, Dept. Health &

Human.    Servs.,     HIV/AIDS    Surveillance     Report    21    (Jan.    1990).

Accordingly, the practical effect of the manner in which Congress

defined "metropolitan area" was to require HHS to use as its

metropolitan areas under the Act the MSAs developed by OMB, unless

and   until     CDC   started    using   some    other   definition        in   its

surveillance reports.        And CDC has in fact continued to use OMB's

MSAs in its surveillance reports. See, e.g., Ctr. Disease Control,

Dept. Health & Human Servs., HIV/AIDS Surveillance Report 18

      1We have expedited this appeal because, according to HHS:
"Funding decisions are typically made by January 15th of each year,
and funds are typically awarded on or about March 1st. Moreover,
once funds are disbursed, HHS's practical ability to recoup
erroneous awards and redistribute them to eligible grantees is
exceedingly limited."

                                         - 4 -
(July       1993)     (hereinafter,    "1993    Surveillance     Report");      Ctr.

Disease       Control,       Dept.    Health    &    Human     Servs.,   HIV/AIDS

Surveillance Report 14 (2013).

               For its own purposes, OMB has delineated the boundaries

of MSAs (under various names) since the 1940s.                 See 2010 Standards

for Delineating Metropolitan and Micropolitan Statistical Areas,

75 Fed. Reg. 37,246, 37,246 (June 28, 2010) (hereinafter "2010 MSA

Standards").          OMB's standards for arriving at the delineations and

the MSAs themselves are published decennially in the Federal

Register.       See Revised Standards for Defining Metropolitan Areas

in the 1990's, 55 Fed. Reg. 12154-01 (Mar. 30, 1990) (hereinafter,

"1990 MSA Standards").           The delineations are issued according to

OMB's       general    statutory     mandate   to   "develop    and   oversee   the

implementation          of   Governmentwide     [sic]   policies,     principles,

standards, and guidelines concerning--(A) statistical collection

procedures and methods; (B) statistical data classification; (C)

statistical information presentation and dissemination; [etc.]."

44 U.S.C. § 3504(e)(3); see also 31 U.S.C. § 1104(d) (overlapping,

similar statutory mandate).

               OMB has made it clear that it developed the MSAs to be

used "solely for statistical purposes" and they might not be

suitable for allocating funding.               2010 MSA Standards at 37,246.2

        2
       See also, e.g., Office of Mgmt. & Budget Bull. No. 15-01,
Revised   Delineations   of   Metropolitan  Statistical   Areas,

                                           - 5 -
The   CDC,   though,   does   not   make   the   Ryan    White    Act   funding

decisions.     Nor did it "select" OMB's MSAs to be used for that

purpose.     The CDC uses the MSAs as they were intended: for the

purpose of gathering statistics.           It did so before and when the

Act was enacted; and there is no hint in the Act at all that the

CDC needed to set aside its own purposes in selecting how to define

"metropolitan areas."

             Under OMB's 1993 delineation used by CDC in its 1993

Report and, thus, used by HHS to award Part A grants in fiscal

year 1994, Puerto Rico was divided into four "metropolitan areas":

the "Combined Metropolitan Area" of San Juan, which includes 38 of

the   island's   78    communities,   and     three     other    "Metropolitan

Statistical Areas," one of which is comprised of Ponce and five

other communities.     As thus delineated, Ponce initially qualified

as eligible to receive funding under the Act.             In 1996, however,

Micropolitan Statistical Areas, and Combined Statistical Areas,
and Guidance on Uses of the Delineations of These Areas 3 (2015),
available at https://www.whitehouse.gov/sites/default/files/omb/
bulletins/2015/15-01.pdf ("These areas should not serve as a
general-purpose    geographic    framework   for    nonstatistical
activities, and they may or may not be suitable for use in program
funding formulas."); Office of Mgmt. & Budget Bull. No. 13-01,
Revised Delineations of Metropolitan Statistical Areas 3 (2013)
(same language); Standards for Defining Metropolitan and
Micropolitan Statistical Areas, 65 Fed. Reg. 82,228, 82,228 (Dec.
27, 2000) ("Programs that base funding levels or eligibility on
whether a county is included in a Metropolitan or Micropolitan
Statistical Area may not accurately address issues or problems
faced by local populations . . . .").

                                      - 6 -
Congress raised the eligibility requirements,3 enough so that

Ponce's number of AIDS cases no longer rendered it eligible.

Nevertheless, for a decade Ponce continued to receive funding as

if it were eligible based on a grandfathering provision included

in the 1996 legislation.        42 U.S.C. § 300ff-11(d) (2000), as

amended by Ryan White CARE Act Amendments of 1996, Pub. L. No.

104-146, § 3(d), 110 Stat. 1346, 1347 (1996) (amended 2006, 2009).

            In 2006 Congress removed the grandfathering provision,

but Ponce still managed to receive funding under the newly-created

category of "transitional [grant] area[s]."           Ryan White HIV/AIDS

Treatment Modernization Act of 2006, Pub. L. No. 109-415, §§ 101,

2609, 120 Stat. 2767, 2768, 2781–83 (2006) (codified in part at 42

U.S.C. § 300ff-19 (2012) (amended 2009)).            A transitional grant

area is defined as a metropolitan area "for which there has been

reported to and confirmed by the Director of the Centers for

Disease Control and Prevention a cumulative total of at least

1,000, but fewer than 2,000, cases of AIDS during the most recent

period of 5 calendar years . . . ."      Id.   Under the current amended

statute,    a   metropolitan   area   ceases    to    be   eligible   as   a

transitional grant area if, in each of three consecutive years, it

fails to have more than 1,000 and less than 2,000 reported AIDS

cases in the preceding five years, id. § 300ff-19(c)(2)(A)(i), and

     3   42 U.S.C. §§ 300ff-11(a); (c)(1) (2000).

                                      - 7 -
fails to have a cumulative total of at least 1,400 living AIDS

cases       in    the     most     recent    calendar      year,4       id.    §§    300ff-

19(c)(2)(A)(ii),           (2)(B);     see     generally       County    of    Nassau     v.

Leavitt, 524 F.3d 408 (2d Cir. 2008).

                 In the 1996 legislation, and then as refined in the 2006

legislation,            Congress      also   froze       the    boundaries          of   the

metropolitan areas to be used by HHS.                     Ryan White Amendments of

1996 § 101.             For metropolitan areas that received funding as

"eligible areas" in 2006, "the boundaries of such metropolitan

area shall be the boundaries that were in effect for such area for

fiscal      year     1994,"      42    U.S.C.     §     300ff-11(c)(1),        while      for

metropolitan areas that become "eligible areas" after fiscal year

2006, "the boundaries of such metropolitan area shall be the

boundaries        that    are    in   effect    for     such   area     when   such      area

initially receives funding . . . .," id. § 300ff-11(c)(2).                               The

2006 amendments, however, did not so directly dictate which year's

boundaries should be used for metropolitan areas like Ponce that

were no longer eligible areas for funding under 42 U.S.C. § 300ff-

11(a), but were instead receiving funding as "transitional areas"

under § 300ff-19.           HHS nevertheless applies the same approach to

transitional areas (all of which were once eligible areas), and

        4
      Unless the grantee had not "[]obligated" at least 95 percent
of the Part A funding it had received in the previous year, in
which case it was required to have 1,500 living AIDS cases that
year. See 42 U.S.C. §§ 300ff-19(c)(2)(A)(ii), (2)(B).

                                                - 8 -
supports this consistent approach by appealing to administrative

convenience and "continuity of care," noting that acting otherwise

would lead to overlapping "eligible" and "transitional" areas and

confound Congress's scheme.    Ponce offers no rejoinder to this

conclusion.5

          By fiscal year 2014, the number of cumulative AIDS cases

and the number of living AIDS cases within the Ponce metropolitan

area as delineated in the 1993 OMB MSA had dropped enough for a

long enough period of time that HHS notified Ponce that it no

longer qualified for transitional funding.6   Ponce thereupon filed

this lawsuit, arguing that HHS must expand its delineation of

Ponce's boundaries to include three additional municipalities7 and

that, as thus expanded, Ponce would have enough AIDS cases to

     5 Nor, for that matter, does Ponce argue that it would qualify
for funding under any subsequent MSA delineations adopted by CDC
or OMB. In fact, the 1993 boundaries of the Ponce MSA appear to
be the same as those most-recently promulgated by OMB in 2010 and
revised in 2015, save for the more recent addition of only the
municipality of Guánica.      Compare Office of Mgmt. & Budget,
Metropolitan Areas and Components 21 (June 30, 1993), with Office
of Mgmt. & Budget Bull. No. 15-01, supra n.2, at 45.
     6 Ponce may well have failed to qualify earlier were it not

for additional grandfathering provisions added by Congress in 2006
and 2009, meaning that metropolitan areas that were eligible areas
in 2010 (or 2007) but not in 2011 (or 2008) became transitional
grant areas without regard to the number of AIDS cases they had.
See 42 U.S.C. § 300ff-19(c)(1) (2008), as amended by Ryan White
Modernization Act of 2006 § 2609; 42 U.S.C. § 300ff-19(c)(1)(2012),
as amended by Ryan White HIV/AIDS Treatment Extension Act of 2009,
Pub. L. No. 111-87, § 4(a)(1), 123 Stat. 2885, 2889 (Oct. 30,
2009).
     7 Namely, the municipalities Adjuntas, Santa Isabel, and

Coamo.

                                 - 9 -
continue to qualify.       In support of this argument, Ponce presented

the report of a management consultant, who opined that defining

Ponce's boundaries in that manner would be consistent with OMB's

standards.

             Sympathetic    to    Ponce's    request,     the   district     court

concluded that HHS acted arbitrarily and capriciously in employing

the MSAs to define the "metropolitan area" of Ponce because HHS

has no records that would demonstrate this was "a rational exercise

of deliberative decision making."            Ponce, 40 F. Supp. 3d at 231

(quoting Associated Fisheries of Me., Inc. v. Daley, 127 F.3d 104,

111 (1st Cir. 1997)).       The district court also decided that HHS's

methodology for defining metropolitan areas in Puerto Rico was

unfair   and    discriminatory         because    HHS   used    boundaries    for

metropolitan areas in New England "that were different from the

OMB MSAs."     Id. at 229.       The court issued an order requiring HHS

to develop a new definition of the Ponce metropolitan area that

would more adequately address the factors that the district court

believed needed to be addressed.            Id. at 233.

                                 II.    ANALYSIS

             While a court might, we assume, order relief if HHS

refused to use the boundaries Congress told it to use, there is in

this legislative scheme no license for a court to tell HHS not to

use what Congress said to use: those boundaries that were "in

effect for such area for fiscal year 1994" (i.e., the areas as

                                         - 10 -
"referred to" in the CDC's 1993 Surveillance Report).                        42 U.S.C.

§ 300ff-11(c)(1).           Nor is there any license here for a court to

review either CDC's choice of area delineation in its own 1993

Report,      or    OMB's    choices   in     delineating          the    boundaries   of

metropolitan areas for its own reports.                The relevant standards of

selection in this case are the statutory mandate that HHS in 1994

use the area that CDC was using, and the statutory direction in

1996 as refined in 2006 that HHS continue to use the delineation

that it used in 1994.          And HHS has plainly complied with both of

these mandates.            See Chevron, U.S.A., Inc. v. Nat'l Res. Def.

Council, Inc., 467 U.S. 837, 842 (1984) ("If the intent of Congress

is clear, that is the end of the matter . . . .").

              As for the district court's "discrimination" theory, it

appears that the court mistakenly believed that HHS was not

following Congress's mandate to use the areas referred to in the

CDC's surveillance reports (the OMB MSAs) and was instead using a

different definition for the New England states.                          Ponce, 40 F.

Supp.   3d    at    227–29.     According       to    the    district      court,   this

represented "unexplained discrimination."                     Id. at 231 (quoting

P.R. Sun Oil Co. v. U.S. E.P.A., 8 F.3d 73, 77 (1st Cir. 1993)).

In fact, HHS does use the same delineations that CDC uses, which

is the statutorily relevant question, including those for the New

England      states.          And     thus     there        was     no     "unexplained

discrimination."       Id.

                                             - 11 -
            To be sure, the CDC's explanation of the technical

methodology it used to compile its 1993 Surveillance Report is

less than clear.       See 1993 Surveillance Report at 18.        The Report

explains that "[t]he metropolitan area definitions [used in the

report] are the MSAs for all areas except the 6 New England states.

For these states, the New England County Metropolitan Areas (NECMA)

are used."     Id.     The district court apparently read this to mean

that HHS chose not to adopt the OMB's delineations for these few

states.    In fact, the CDC was merely describing how the OMB itself

treats New England states differently.            In 1990, for example, OMB

explained that "in New England," it used "an alternative county-

based   definition      of    MSAs   known   as   the   New   England   County

Metropolitan Areas (NECMAs)."         1990 MSA Standards at 12,157.       The

NECMAs are thus an "alternative [] definition" of an MSA, not an

alternative to an MSA.        Id.

            To put all this in perspective, it is helpful to observe

that only 52 metropolitan areas in the entire United States

received such funding in the last fiscal year.                See U.S. Dep't

Health Human Servs., Ryan White HIV/AIDS Program FY 2014 Part A

Awards,        http://www.hrsa.gov/about/news/2014tables/ryanwhite/

parta.html (last viewed Dec. 17, 2015) (demonstrating that no

metropolitan area in Maine, New Hampshire, Rhode Island, or Vermont

received funding).           And San Juan received one of the larger

outlays.     See id.     While we acknowledge that Puerto Rico suffers

                                        - 12 -
the disadvantage of lacking formal representation in Congress,

there is simply nothing whatsoever in this case to suggest that

HHS treats the Ponce metropolitan area under the Act in any way

differently than it does hundreds of similarly-situated areas

across the United States.

           In sum, we reject the district court's assumption that

this litigation somehow provides an opportunity for the court to

question HHS for doing what Congress told it to do.   See Ponce, 40

F. Supp. 3d at 231–32.   Congress told HHS, first, to use in 1994

whatever areas CDC was using at the time in its surveillance

reports.   And it then told HHS to use whatever area it used in

1994.   HHS plainly did both of these things.

                            III. CONCLUSION

           We reverse the district court's entry of judgment for

plaintiffs and remand for entry of judgment in favor of defendants

dismissing the complaint with prejudice.

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