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* Pursuant to 5th Circuit Rule 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5th Circuit Rule 47.5.4.
1 Case: 21-10302 Document: 00516409307 Page: 2 Date Filed: 07/27/2022
No. 21-10302
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.
2 Case: 21-10302 Document: 00516409307 Page: 3 Date Filed: 07/27/2022
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.
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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.
1 Case: 21-10302 Document: 00516409307 Page: 2 Date Filed: 07/27/2022
No. 21-10302
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.
2 Case: 21-10302 Document: 00516409307 Page: 3 Date Filed: 07/27/2022
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
3 Case: 21-10302 Document: 00516409307 Page: 4 Date Filed: 07/27/2022
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
4 Case: 21-10302 Document: 00516409307 Page: 5 Date Filed: 07/27/2022
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.