UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
COALITION FOR PARITY, INC.,
Plaintiff,
v. Civil No. 10-527 (CKK) KATHLEEN SEBELIUS in her official capacity as Secretary, United States Department of Health and Human Services, et al.,
Defendants.
MEMORANDUM OPINION (April 1, 2010)
Plaintiff Coalition for Parity, Inc. has filed this action against the Secretaries of Health
and Human Services, Labor, and Treasury, along with their respective Departments (collectively,
“Defendants”), seeking to enjoin implementation of regulations promulgated to enforce the
provisions of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity
Act of 2008 (“MHPAEA”), Pub. L. No. 110-343 §§ 512-13, 122 Stat. 3765, 3881 (codified in
scattered sections United States Code titles 26, 29, and 42). Pursuant to the MHPAEA,
Defendants are required to issue regulations to implement the Act’s substantive provisions. See
MHPAEA § 512(d). Defendants did so on February 2, 2010, publishing Interim Final Rules
(“IFR”) in the Federal Register. See Interim Final Rules Under the Paul Wellstone and Pete
Domenici Mental Health Parity and Addiction Equity Act of 2008, 75 Fed. Reg. 5410 (Feb. 2,
2010). The Interim Final Rules are effective on April 5, 2010, and are generally applicable to
group health plans and group health insurance issuers for plan years beginning on or after July 1, 2010. See id. at 5410.
Plaintiff filed the Complaint on April 1, 2010, the same date as this Memorandum
Opinion. Together with the Complaint, Plaintiffs filed an [2] Application for Temporary
Restraining Order (“TRO”) and a [3] Motion for Preliminary Injunction. After Defendants were
served with the Complaint, the Court asked Defendants to provide the Court with an opposition
to the Application for TRO, and Plaintiff provided the Court with a brief in reply.1 The Court
held a hearing on the Application for TRO at 4:00 p.m., considering the parties’ written
submissions and oral arguments. For the reasons expressed on the record during the TRO
hearing, as well as for the reasons stated below, the Court DENIED Plaintiff’s Application for a
Temporary Restraining Order.
LEGAL STANDARD AND DISCUSSION
The standard for obtaining injunctive relief through either a temporary restraining order
or a preliminary injunction is well established. A moving party must show: (1) a substantial
likelihood of success on the merits, (2) that it would suffer irreparable injury if the injunction
were not granted, (3) that an injunction would not substantially injure other interested parties,
and (4) that the public interest would be furthered by the injunction. Chaplaincy of Full Gospel
Churches v. England, 454 F.3d 290, 297 (D.C. Cir. 2006); Hall v. Daschle, 599 F. Supp. 2d 1, 6
n.2 (D.D.C. 2009) (“[t]he same standard applies to both temporary restraining orders and to
preliminary injunctions”). In applying this four-factored standard, district courts may employ a
sliding scale as to which a particularly strong showing in one area can compensate for weakness
1 Because of the emergency nature of TRO proceedings, the Court asked the parties to submit their briefs directly to the Court via fax; however, the Court has directed the parties to file their briefs on the electronic docketing system to ensure a complete record.
2 in another. Id. (quoting CityFed Fin. Corp. v. Office of Thrift Supervision, 58 F.3d 738, 747
(D.C. Cir. 1995)). Nevertheless, both the United States Supreme Court and the Court of Appeals
for the D.C. Circuit have emphasized that a plaintiff must show at least some likelihood of
irreparable harm in the absence of an injunction. See Winter v. Nat. Res. Def. Council, Inc., __
U.S. __ , 129 S. Ct. 365, 375 (2008) (holding that a plaintiff must “demonstrate that irreparable
injury is likely in the absence of an injunction,” and not a mere “possibility”); CityFed, 58 F.3d at
747 (holding that a plaintiff must demonstrate “‘at least some injury’ for a preliminary injunction
to issue . . . [because] ‘the basis of injunctive relief in federal courts has always been irreparable
harm . . . .’” (quoting Sampson v. Murray, 415 U.S. 61, 88 (1974)).
A. Irreparable Injury If the TRO Is Not Granted
Plaintiff is a coalition of managed behavioral healthcare organizations (“MBHOs”) who
contract with managed care organizations or with employers and states to manage behavioral
healthcare benefits on behalf of group health plans. See Pl.’s Mem. at 4. In their written
submissions and at the TRO hearing, Plaintiff explained that it believes it will be irreparably
injured because the Interim Final Rules impose substantive regulations that will directly impact
MBHOs. However, the parties disagreed over whether the substantive provisions of the Interim
Final Rules are binding on Plaintiff as the Rules’ effective date, which is April 5, 2010, or the
“applicability date,” which is no earlier than July 1, 2010. Plaintiff agreed at the hearing that if
the Interim Final Rules are not binding until July 1, 2010, there is no irreparable harm to justify a
The Interim Final Rules have an “effective date” of April 5, 2010. See 75 Fed. Reg.
5410. At the hearing, Defendants asserted that all this means is that the Interim Final Rules will
3 be published in the Code of Federal Regulations on that date. Defendants argue that the plain
language of the regulations indicates that none of their substantive provisions will apply prior to
July 1, 2010. Paragraph (i) of the regulations2 provides “the requirements of this section are
applicable for plan years beginning on or after July 1, 2010.”3 See 75 Fed. Reg. 5437, 5444,
5451. Defendants stated on the record that the purpose of having an “effective date” in April
2010 was to give all affected parties a three-month period in which to get into compliance with
the new regulations. Thus, Defendants stated on the record that Plaintiff has no obligations
beginning April 5, 2010 with respect to the Interim Final Rules.
Plaintiff, however, argues that the “applicability date” of July 1, 2010, only extends to
provisions that would be encompassed by an actual plan, and that there are substantive provisions
in the Interim Final Rules that go into effect on April 5, 2010, such as the “nonquantitative
treatment limitations” described at 75 Fed. Reg. 5443. However, the plain language of the Rules
states that “the requirements of this section are applicable for plan years beginning on or after
July 1, 2010.” The Rules do not say that only some of the requirements are applicable on that
date or that this section applies only to provisions that are incorporated in a plan. Therefore, the
Court agrees with Defendants’ reading of the Interim Final Rules and finds that they impose no
obligations affecting Plaintiff immediately on April 5, 2010.
Plaintiff has also argued that although the government will not enforce the Interim Final
Rules until July 1, 2010, private parties may enforce the Rules as of April 5, 2010, potentially
2 There are three relevant regulations affected: 26 C.F.R. § 54.9812
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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
COALITION FOR PARITY, INC.,
Plaintiff,
v. Civil No. 10-527 (CKK) KATHLEEN SEBELIUS in her official capacity as Secretary, United States Department of Health and Human Services, et al.,
Defendants.
MEMORANDUM OPINION (April 1, 2010)
Plaintiff Coalition for Parity, Inc. has filed this action against the Secretaries of Health
and Human Services, Labor, and Treasury, along with their respective Departments (collectively,
“Defendants”), seeking to enjoin implementation of regulations promulgated to enforce the
provisions of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity
Act of 2008 (“MHPAEA”), Pub. L. No. 110-343 §§ 512-13, 122 Stat. 3765, 3881 (codified in
scattered sections United States Code titles 26, 29, and 42). Pursuant to the MHPAEA,
Defendants are required to issue regulations to implement the Act’s substantive provisions. See
MHPAEA § 512(d). Defendants did so on February 2, 2010, publishing Interim Final Rules
(“IFR”) in the Federal Register. See Interim Final Rules Under the Paul Wellstone and Pete
Domenici Mental Health Parity and Addiction Equity Act of 2008, 75 Fed. Reg. 5410 (Feb. 2,
2010). The Interim Final Rules are effective on April 5, 2010, and are generally applicable to
group health plans and group health insurance issuers for plan years beginning on or after July 1, 2010. See id. at 5410.
Plaintiff filed the Complaint on April 1, 2010, the same date as this Memorandum
Opinion. Together with the Complaint, Plaintiffs filed an [2] Application for Temporary
Restraining Order (“TRO”) and a [3] Motion for Preliminary Injunction. After Defendants were
served with the Complaint, the Court asked Defendants to provide the Court with an opposition
to the Application for TRO, and Plaintiff provided the Court with a brief in reply.1 The Court
held a hearing on the Application for TRO at 4:00 p.m., considering the parties’ written
submissions and oral arguments. For the reasons expressed on the record during the TRO
hearing, as well as for the reasons stated below, the Court DENIED Plaintiff’s Application for a
Temporary Restraining Order.
LEGAL STANDARD AND DISCUSSION
The standard for obtaining injunctive relief through either a temporary restraining order
or a preliminary injunction is well established. A moving party must show: (1) a substantial
likelihood of success on the merits, (2) that it would suffer irreparable injury if the injunction
were not granted, (3) that an injunction would not substantially injure other interested parties,
and (4) that the public interest would be furthered by the injunction. Chaplaincy of Full Gospel
Churches v. England, 454 F.3d 290, 297 (D.C. Cir. 2006); Hall v. Daschle, 599 F. Supp. 2d 1, 6
n.2 (D.D.C. 2009) (“[t]he same standard applies to both temporary restraining orders and to
preliminary injunctions”). In applying this four-factored standard, district courts may employ a
sliding scale as to which a particularly strong showing in one area can compensate for weakness
1 Because of the emergency nature of TRO proceedings, the Court asked the parties to submit their briefs directly to the Court via fax; however, the Court has directed the parties to file their briefs on the electronic docketing system to ensure a complete record.
2 in another. Id. (quoting CityFed Fin. Corp. v. Office of Thrift Supervision, 58 F.3d 738, 747
(D.C. Cir. 1995)). Nevertheless, both the United States Supreme Court and the Court of Appeals
for the D.C. Circuit have emphasized that a plaintiff must show at least some likelihood of
irreparable harm in the absence of an injunction. See Winter v. Nat. Res. Def. Council, Inc., __
U.S. __ , 129 S. Ct. 365, 375 (2008) (holding that a plaintiff must “demonstrate that irreparable
injury is likely in the absence of an injunction,” and not a mere “possibility”); CityFed, 58 F.3d at
747 (holding that a plaintiff must demonstrate “‘at least some injury’ for a preliminary injunction
to issue . . . [because] ‘the basis of injunctive relief in federal courts has always been irreparable
harm . . . .’” (quoting Sampson v. Murray, 415 U.S. 61, 88 (1974)).
A. Irreparable Injury If the TRO Is Not Granted
Plaintiff is a coalition of managed behavioral healthcare organizations (“MBHOs”) who
contract with managed care organizations or with employers and states to manage behavioral
healthcare benefits on behalf of group health plans. See Pl.’s Mem. at 4. In their written
submissions and at the TRO hearing, Plaintiff explained that it believes it will be irreparably
injured because the Interim Final Rules impose substantive regulations that will directly impact
MBHOs. However, the parties disagreed over whether the substantive provisions of the Interim
Final Rules are binding on Plaintiff as the Rules’ effective date, which is April 5, 2010, or the
“applicability date,” which is no earlier than July 1, 2010. Plaintiff agreed at the hearing that if
the Interim Final Rules are not binding until July 1, 2010, there is no irreparable harm to justify a
The Interim Final Rules have an “effective date” of April 5, 2010. See 75 Fed. Reg.
5410. At the hearing, Defendants asserted that all this means is that the Interim Final Rules will
3 be published in the Code of Federal Regulations on that date. Defendants argue that the plain
language of the regulations indicates that none of their substantive provisions will apply prior to
July 1, 2010. Paragraph (i) of the regulations2 provides “the requirements of this section are
applicable for plan years beginning on or after July 1, 2010.”3 See 75 Fed. Reg. 5437, 5444,
5451. Defendants stated on the record that the purpose of having an “effective date” in April
2010 was to give all affected parties a three-month period in which to get into compliance with
the new regulations. Thus, Defendants stated on the record that Plaintiff has no obligations
beginning April 5, 2010 with respect to the Interim Final Rules.
Plaintiff, however, argues that the “applicability date” of July 1, 2010, only extends to
provisions that would be encompassed by an actual plan, and that there are substantive provisions
in the Interim Final Rules that go into effect on April 5, 2010, such as the “nonquantitative
treatment limitations” described at 75 Fed. Reg. 5443. However, the plain language of the Rules
states that “the requirements of this section are applicable for plan years beginning on or after
July 1, 2010.” The Rules do not say that only some of the requirements are applicable on that
date or that this section applies only to provisions that are incorporated in a plan. Therefore, the
Court agrees with Defendants’ reading of the Interim Final Rules and finds that they impose no
obligations affecting Plaintiff immediately on April 5, 2010.
Plaintiff has also argued that although the government will not enforce the Interim Final
Rules until July 1, 2010, private parties may enforce the Rules as of April 5, 2010, potentially
2 There are three relevant regulations affected: 26 C.F.R. § 54.9812; 29 C.F.R. § 2590.712; 45 C.F.R. § 146.136. 3 Paragraph (i) also provides that a different set of rules apply for collectively-bargained health plans, but in no event do regulations apply to plan years beginning before July 1, 2010.
4 opening MBHOs up to litigation. See Pl.’s Reply at 2. In support of this proposition, Plaintiffs
rely on this paragraph from the IFR:
Because the statutory MHPAEA provisions are self-implementing and are generally effective for plan years beginning after October 3, 2009, many commenters asked for a good faith compliance period from Departmental enforcement until plans (and health insurance issuers) have time to implement changes consistent with these regulations. For purposes of enforcement, the Departments will take into account good-faith efforts to comply with a reasonable interpretation of the statutory MHPAEA requirements with respect to a violation that occurs before the applicability date of paragraph (i) of these regulations. However, this does not prevent participants or beneficiaries from bringing a private action.
75 Fed. Reg. 5419. However, Defendants argue, and the Court agrees, that this paragraph is
clearly referring to actions that may be brought under the statute itself, not actions that may be
brought for violations of the Interim Final Rules. Because Plaintiff has asserted that its members
are continuing to comply with the statutory requirements, this does not change the irreparable
harm analysis.
Thus, because the Interim Final Rules will not have any substantive effect until July 1,
2010, the Court finds there is no irreparable harm to Plaintiff if the temporary restraining order is
not granted.
B. Standing
During the TRO hearing, Defendants raised the question of whether Plaintiff has standing
to challenge the Interim Final Rules since Plaintiff represents neither group health plans nor
health insurance issuers, the two entities directly regulated by the Interim Final Rules.
Defendants cited Block v. Community Nutrition Institute, 467 U.S. 340 (1984), as an example of
a case in which a statutory or regulatory scheme limits the class of possible plaintiffs to those
whose conduct is directly regulated. Thus, in Community Nutrition Institute, the Supreme Court
5 held that milk consumers lacked standing to challenge milk market orders because Congress
intended causes of action to be limited to milk producers and handlers. See 467 U.S. at 347.
Although the Court has not had the benefit of briefing on this issue, the Court finds at this
preliminary stage that Plaintiff has standing to seek injunctive relief as a representative of parties
who are in privity with group health plans or health insurance issuers directly regulated under the
Interim Final Rules.
CONCLUSION
For the reasons stated above, and for the reasons expressed on the record at the TRO
hearing, the Court DENIED Plaintiff’s [2] Application for Temporary Restraining Order. The
parties agreed to establish an expedited briefing schedule to address the merits of Plaintiff’s
challenge to the Interim Final Rules. Accordingly, the Court shall enter a minute order with an
expedited briefing schedule.
Date: April 1, 2010
/s/ COLLEEN KOLLAR-KOTELLY United States District Judge