"Unserious Leaders Are Unsafe," Opines a Federal Judge About RFK, Jr.

That’s the opening line from yesterday’s Oregon v. Kennedy, by Judge Mustafa Kasubhai (D. Or.) (the only federal judge I’ve seen who includes pronouns, in this instance “he/him,” in his signature block; perhaps there are a few others, but very few). I’m not knowledgeable enough on the substance to speak to the administrative law issues here, I’m no fan of Kennedy, and it would certainly not surprise me that the Administration’s actions here were inconsistent with federal law. But my tentative sense is that, whatever one might personally think about Kennedy’s seriousness, judges’ decisions are more credible when those decisions focus solely on the law, rather than deciding which of our leaders are serious.

In any event, some excerpts from the long opinion:

Unserious leaders are unsafe. There is nothing more serious than our leaders’ dedication to the rule of law so that we might maintain the integrity of our constitutional democracy. This case highlights a leader’s unserious regard for the rule of law. This case demonstrates how disregard for the rule of law does not merely result in an abstract infraction. Rather, and tragically, this case is one of a long list of examples of how a leader’s wanton disregard for the rule of law causes very real harm to very real people.

This Court can and does judge the lawfulness of the process (or lack thereof) by which any policy choice might be made. Here, the Secretary of Health and Human Services, Robert F. Kennedy, Jr., unlawfully issued a declaration threatening to cut federal funding to medical providers who provided gender-affirming care to minors. If such a declaration could have been enacted lawfully, there might have been ample time and opportunity for medical providers, families, and children—all people and institutions of our great nation—to seek out other alternatives and options. Secretary Kennedy’s utter failure to promulgate rules in accordance with statutory authority, but instead threaten to cease federal funding to medical providers almost immediately after the declaration, caused chaos and terror for all those people and institutions of our great nation. Secretary Kennedy’s unlawful declaration harmed children. This case illustrates that when a leader acts without authority and in the absence of the rule of law, he acts with cruelty.

Plaintiffs filed this lawsuit alleging that Defendants violated the Administrative Procedure Act (“APA”), by issuing a declaration entitled “Safety, Effectiveness, and Professional Standards of Care for Sex-Rejecting Procedures on Children and Adolescents.” Before the Court is Plaintiffs’ Motion for Summary Judgment, and Defendants’ Motion to Dismiss or, in the Alternative, for Summary Judgment, For the reasons below, Plaintiffs’ motion is granted, and Defendants’ motion is denied….

The APA requires the Court to “hold unlawful and set aside agency action, findings, and conclusions found to be … without observance of procedure required by law.” Plaintiffs’ Count 1 alleges that the Kennedy Declaration violates the notice and comment procedures required by the Medicare Act. The Medicare Act requires an agency to provide notice and an opportunity to comment when a (1) “rule, requirement or other statement of policy” (2) “establishes or changes a substantive legal standard” that (3) governs the eligibility of healthcare providers “to furnish or receive services or benefits.” Plaintiffs argue that the Kennedy Declaration is a rule that purports to establish a new legal standard of care that governs payment or eligibility for services and thus violates the Medicare Act’s notice and comment requirements. Defendants again argue the Kennedy Declaration, as a non-binding policy opinion, does no such thing.

First, with respect to the “rule, requirement, or other statement of policy” requirement, the Kennedy Declaration states that gender-affirming care for minors fails to meet professionally recognized standards of care and that the Kennedy Declaration supersedes any other state or national standard of care. This operates as a requirement for healthcare providers; if they are to meet professionally recognized standards of care, they cannot offer gender-affirming care to minors. Defendants’ use of the word “Declaration,” their attempted disclaimers, and their continuous arguments that the Kennedy Declaration is a “non-binding policy opinion” are not dispositive because it operates exactly like a rule would. Azar v. Allina Health Servs. (2019) (“Agencies have never been able to avoid notice and comment simply by mislabeling their substantive pronouncements.”). The Court has already rejected Defendants’ contention that the Kennedy Declaration has no legal consequences. The Kennedy Declaration is a “rule, requirement, or other statement of policy” for purposes of 42 U.S.C. § 1395hh’s notice and comment rulemaking requirements.

Second, the rule at issue must modify a “substantive legal standard.” … [T]he Kennedy Declaration … explicitly alters the standard of care, a substantive legal standard. By its plain terms, the Kennedy Declaration obliges OIG to find that healthcare providers offering gender-affirming care to minors fall below professionally recognized standards of care.

Finally, the substantive legal standard must govern the eligibility of entities to furnish or receive services or benefits. Here, by unilaterally defining a standard of care, and proclaiming that providing gender-affirming care falls short of this standard, the Kennedy Declaration prevents healthcare providers from providing gender-affirming care to minors if they wish to remain eligible for federal funding. This is sufficient to establish that the substantive legal standard at issue in the Kennedy Declaration governs healthcare providers’ eligibility to furnish services. Medicare’s notice and comment rulemaking requirements apply.

Defendants did not comply with Medicaid’s procedural requirements because there is no dispute that Defendants failed to provide notice or an opportunity for comment. “[N]otice and comment [is] a matter not merely of administrative grace, but of statutory duty.” “Notice and comment gives affected parties fair warning of potential changes in the law and an opportunity to be heard on those changes—and it affords the agency a chance to avoid errors and make a more informed decision.” Plaintiffs’ Motion for Summary Judgment as to Count 1 is granted and Defendants’ cross-motion is denied because the Kennedy Declaration violated Medicare’s notice and comment requirements….

Plaintiffs’ Count 3 alleges that Defendants exceeded their statutory authority in violation of 5 U.S.C. § 706(2)(C), which requires the Court to “hold unlawful and set aside agency action, findings, and conclusions found to be … in excess of statutory jurisdiction, authority, or limitations, or short of statutory right” ….

The Court agrees with Plaintiffs that Defendants have failed to invoke any statutory authority that authorizes the Kennedy Declaration, much less an “unmistakably clear” one that would be required to supplant states’ authority to regulate medical conduct. Indeed, the Medicare statute specifically states that it shall not “be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided.” …

Finally, Plaintiffs’ Count 4 alleges that the Kennedy Declaration is not in accordance with the law and therefore in violation of 5 U.S.C. § 706(2)(A), which requires the Court to “hold unlawful and set aside agency action, findings, and conclusions found to be … not in accordance with law.” …

The statute does provide for HHS to disallow payment under approved Medicaid plans after “reasonable notice and opportunity for hearing” if the HHS Secretary finds that a state’s Medicaid plan no longer complies with the statutory conditions. Here, however, HHS has not provided notice or an opportunity for hearing, and it has made no finding that any Plaintiffs’ Medicaid plan does not comply with statutory conditions. The Kennedy Declaration violates the HHS Secretary’s obligation to pay under approved Medicaid plans by subjecting providers to exclusion for providing care that is covered under approved Medicaid plans without complying with the statutory and regulatory requirements governing disallowance of payments….

This Court can scarcely recall an APA action that has come before it in which the agency’s action was so clearly unlawful. Indeed, many of Defendants’ arguments rest on the same falsehoods about the Kennedy Declaration and its effects that the Court already rejected in response to Defendants’ jurisdictional arguments. Defendants’ merits briefing takes these absurd arguments a step further by suggesting that finding the Kennedy Declaration unlawful would impinge Secretary Kennedy’s First Amendment right to express his views and hinder public debate on a matter of public importance.

Defendants cannot bully or gaslight this Court into ignoring the many procedural and legal flaws of the Kennedy Declaration by invoking one of the most sacred principles of our constitutional democracy—the freedom of speech—when that principle comes nowhere close to being implicated. Plaintiffs’ claims do not contest Secretary Kennedy’s rights to express his views on gender-affirming care, and their lawsuit does not seek to limit Secretary Kennedy’s ability to speak generally about gender-affirming care for minors. Rather, Plaintiffs’ claims challenge Secretary Kennedy’s authority to unilaterally, categorically, and without any process, supersede professional standards of care regarding gender-affirming care that apply in the Plaintiff states. Secretary Kennedy’s First Amendment rights are not even at issue, much less offended.

However, several other principles sacred to our constitutional democracy are both implicated and offended: the rule of law and state sovereignty. The Kennedy Declaration exceeded Defendants’ statutory authority, flouted applicable notice and comment rulemaking procedures, and impeded Plaintiffs’ rights to regulate the medical profession and their discretion to design their own statutorily-compliant Medicaid plans….

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