Court Opinion

ID: 7361224
Source: CourtListenerOpinion
Date Created: 2022-07-27 18:00:31.504802+00
Date Added: 2024-06-11T16:20:37.453645
License: Public Domain

Case: 21-10302     Document: 00516409307            Page: 1     Date Filed: 07/27/2022

              United States Court of Appeals
                   for the Fifth Circuit
                                                                             United States Court of Appeals
                                                                                      Fifth Circuit

                                                                                    FILED
                                                                                July 27, 2022
                                   No. 21-10302                                Lyle W. Cayce
                                                                                    Clerk

   Victor Leal; Patrick Von Dohlen; Kim Armstrong,

                                                              Plaintiffs—Appellants,

                                       versus

   Xavier Becerra, Secretary, U.S. Department of Health
   and Human Services; Janet Yellen, Secretary, U.S.
   Department of Treasury; Martin Walsh, Secretary,
   U.S. Department of Labor; United States of America;
   Kent Sullivan; Texas Department of Insurance,

                                                          Defendants—Appellees.

                  Appeal from the United States District Court
                      for the Northern District of Texas
                           USDC No. 2:20-CV-185-Z

   Before Jolly, Higginson, and Engelhardt, Circuit Judges.
   Per Curiam:*
          Plaintiffs-Appellants challenged the Affordable Care Act (“ACA”),
   its derivative Contraceptive Mandate, and the Texas Contraceptive Equity

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.

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   Law (“TCEL”). They claimed that these laws restrict the health-insurance
   market so that insurers cannot feasibly offer health-insurance plans that
   Plaintiffs-Appellants find acceptable. Thus, it was “impossible” for
   Plaintiffs-Appellants to obtain the health-insurance plans they seek.
   Defendants-Appellees filed a motion to dismiss. The district court held that
   Plaintiffs-Appellants had standing, dismissed Plaintiffs Victor Leal and
   Patrick Von Dohlen under the doctrine of res judicata, held that Plaintiff Kim
   Armstrong had stated an Appointments Clause claim,1 and dismissed
   Armstrong’s nondelegation claim. Leal v. Azar, No. 2:20-CV-185-Z, 2020
   WL 7672177, at *23 (N.D. Tex. Dec. 23, 2020), judgment entered sub nom. Leal
   v. Becerra, No. 2:20-CV-185-Z, 2021 WL 1163663 (N.D. Tex. Mar. 26, 2021).
   The district court also dismissed Texas from the case on sovereign immunity
   grounds and, in the alternative, “decline[d] to exercise its supplemental
   jurisdiction over the state-law claims.” Id.
          The sole issue Plaintiffs-Appellants raise on appeal is their challenge
   to the ACA. Because our opinion in DeOtte v. Nevada, 20 F.4th 1055 (5th Cir.
   2021), renders res judicata inapplicable, and because the absence of Texas
   from this appeal implicates unaddressed standing issues, we VACATE and
   REMAND for further proceedings.
                                                 I
          In 2018, a group of plaintiffs sued to enjoin the Contraceptive
   Mandate. DeOtte, 20 F.4th at 1062. After certifying a class that included
   religious objectors, the district court in DeOtte issued an injunction in favor
   of that class. Id. at 1063. The district court in this case held that because Leal
   and Von Dohlen are members of the class certified in DeOtte, and the claims
   in both cases arise from the same nucleus of operative facts, they could have

          1
              Armstrong later stipulated dismissal of this claim with prejudice.

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   brought their instant claims in that proceeding. Leal, 2020 WL 7672177, at
   *7; id. at *8 n.9. Thus, their claims were barred under the doctrine of res
   judicata. Id. at *7.
          We need not decide whether the district court was correct because res
   judicata is no longer applicable. Res judicata requires that “the prior action
   was concluded by a final judgment on the merits.” Hous. Pro. Towing Ass’n v.
   City of Houston, 812 F.3d 443, 447 (5th Cir. 2016) (cleaned up). Because this
   court has vacated the final judgment in DeOtte and remanded with
   instructions to dismiss that case as moot, there is no longer a final judgment
   on the merits and res judicata is inapplicable. DeOtte, 20 F.4th at 1071.
                                         II
          We next turn to standing. At the time the district court ruled on
   Defendants-Appellees’ motion to dismiss, both the Contraceptive Mandate
   and the TCEL were being challenged in this case. But after the district court
   dismissed Texas as a defendant, Plaintiffs-Appellants declined to appeal that
   dismissal. The issues before this court therefore concern only Plaintiffs-
   Appellees’ claims against the federal government. As briefing and oral
   argument have made clear, this implicates standing problems that the district
   court did not have occasion to consider. Thus, we vacate the judgment of the
   district court and remand for further proceedings.
          Article III of the Constitution of the United States requires that courts
   only adjudicate “Cases” and “Controversies,” which, among other things,
   means that the party or parties invoking federal jurisdiction must have
   standing to sue. Lujan v. Defs. of Wildlife, 504 U.S. 555, 559 (1992). In order
   to demonstrate standing, a party must establish: 1) that it has suffered an
   injury in fact that is concrete and particularized and is actual or imminent
   rather than conjectural or hypothetical, 2) that there is a causal connection

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   between the injury and the defendants’ conduct (i.e., traceability), and 3) that
   a favorable decision is likely to redress the injury. Id. at 560–61.
          When multiple laws cause the same harm, that injury may not be
   traceable or redressable when only one of those laws is challenged.
   Traceability requires causation, so “[o]ne law alone does not cause the injury
   if the other law validly outlaws all the same activity.” 13A Charles Alan
   Wright et al., Federal Practice and Procedure § 3531.5 (3d
   ed. 2008 & Supp. 2021). Redressability is also a problem when declaring one
   law unenforceable may not provide relief because a different law
   independently causes the same injury. See Fischer v. Governor of New Jersey,
   842 F. App’x 741, 750–51 (3d Cir. 2021) (citing 15 Moore’s Federal
   Practice § 101.42 (2020) (“[T]he redressability element . . . is not
   satisfied if a favorable result would eliminate one of multiple causes of an
   injury without actually decreasing the injury at all.”)); Fischer, 842 F. App’x
   at 751 n.11 (gathering cases). These difficulties have been recognized by the
   Supreme Court and several sister circuits. Renne v. Geary, 501 U.S. 312, 319
   (1991) (finding it doubtful that an injury caused by a California constitutional
   provision could be redressed when a separate California statute that could
   cause the same injury was unchallenged); see, e.g., Kaspersky Lab, Inc. v.
   DHS, 909 F.3d 446, 465 (D.C. Cir. 2018) (holding that an injury caused by
   an agency action was not redressable when a federal statute prohibited the
   same conduct); White v. United States, 601 F.3d 545, 552–53 (6th Cir. 2010)
   (holding that traceability and redressability were not satisfied when plaintiffs
   challenged a federal ban on cockfighting but not state laws prohibiting the
   same); San Diego Cnty. Gun Rts. Comm. v. Reno, 98 F.3d 1121, 1130 (9th Cir.
   1996) (holding that an injury was not traceable to the challenged federal
   statute when it was also traceable to a state statute).
          But this rule, like most, has exceptions and exclusions. In Renne, the
   Supreme Court noted that the “invalidation of one [offending law] may not

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   impugn the validity of another” in the context of that case, so redressability
   was doubtful. Renne, 501 U.S. at 319. Consistent with that reasoning, this
   court has recognized that when the “fates” of the law at issue and other
   causative laws are “intertwined,” plaintiffs may have standing to challenge
   one but not the other. Hollis v. Lynch, 827 F.3d 436, 442 (5th Cir. 2016).
   Further, the general rule is inapplicable when a state invokes one law as the
   basis for an enforcement action and the injured party challenges only that law,
   despite the existence of some other law that could also be used to justify the
   government’s action. In that situation, plaintiffs have standing because they
   are challenging “the sole basis” of one “discrete injury,” the injury that
   “gave rise to the present suit.” Larson v. Valente, 456 U.S. 228, 241–43
   (1982); see State v. Rettig, 987 F.3d 518, 528–29 (5th Cir. 2021) (applying
   Larson in the federal context).
           The district court did not have the opportunity to consider these cases
   because the issue was not present while Texas, and the TCEL, remained in
   the suit. Since the ground has shifted in the wake of Texas’s dismissal, we
   remand so that the district court may consider the standing issue with the
   benefit of amended pleadings and new argument from the parties.2
                                                III
           This case has changed dramatically since it left the district court. After
   DeOtte, res judicata is inapplicable. After Plaintiffs-Appellants abandoned
   their challenge to the TCEL—at least in this court—a standing issue has

           2
             This remand due to changed circumstances does not foreclose application of any
   other threshold jurisdictional obstacles that the parties and the district court may raise. For
   example, the parties disputed the relevance and applicability of California v. Texas, 141 S.
   Ct. 2104 (2021), on appeal. The district court may also wish to consider whether Plaintiff-
   Appellant Armstrong’s alleged injury, increased health insurance cost, is a generalized
   grievance in light of Hotze v. Burwell, 784 F.3d 984, 995 (5th Cir. 2015).

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   come to the fore despite taking a back seat in the parties’ briefing. Thus, we
   VACATE and REMAND to ensure that the case as it now stands is fully
   ventilated and that the district court has a chance to take the new status quo
   into account.3 To that end, Plaintiffs-Appellants should be permitted to
   amend their complaint to reflect that they have abandoned their claims
   against Texas.

           3
             Although Plaintiffs-Appellants also appealed the district court’s dismissal of
   Armstrong’s non-delegation claim, we cannot consider it unless Armstrong has standing.
   Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 110 (1998). Since we have remanded
   standing to the district court, the merits go with it.

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