Update on Texas Defunding of Planned Parenthood

In a previous post, we discussed a rule of the Texas Medicaid agency disqualifying Planned Parenthood as a provider of services in its family planning waiver program. Planned Parenthood asked a federal court for an injunction to stop the state’s action. On Monday, April 30, 2012, Judge Lee Yeakel granted a preliminary injunction barring the Texas agency from refusing to reimburse Planned Parenthood for waiver services. However, the same day, a single judge on the Fifth Circuit Court of Appeals issued a stay lifting the injunction. A three-judge panel vacated the stay on Friday, May 4th.

The  Texas rule provides that no waiver funds may be used to contract with entities that perform or promote elective abortions or affiliate with an entity that performs or promotes elective abortions. It defines “affiliate” as an individual or entity that has a legal relationship with an entity created or governed by a written document that allows the affiliate to use a brand name, trademark, service mark or other registered identification mark. In other words, simply by having permission to use the Planned Parenthood name, a provider is barred from waiver funding. The bar on affiliates does not apply to hospitals.

The clinics were legally and financially separate from the entities that performed abortions. They argued that the Texas rule violated their constitutional rights to freedom of speech and to free association because it required them to give up their affiliation to continue providing Medicaid services.

Relying on prior decisions of the Supreme Court and Courts of Appeals, Judge Yeakel ruled that the state’s conditions violated the clinics’ rights. He reasoned that the cases upheld a restriction on the fundamental right of free speech only if the restriction was necessary to accomplish a compelling state interest related to the purpose of the program. One factor that courts considered in upholding these restrictions was the ability to form an affiliated organization that did not seek public funds and could speak freely.

The Texas officials argued that the rule was necessary to accomplish one purpose of the rule, which was to prevent elective abortions by providing contraception. However, the case law is clear that the government has a compelling interest in preventing abortions only when necessary to protect the life of a viable fetus, one that could survive outside the womb. The court found that the rule was not necessary to promote the state’s compelling interest related to abortion. Therefore, it was unconstitutional.

The clinics also argued that the rule violated the Equal Protection Clause of the Fourteenth Amendment to the constitution because it did not apply to hospitals. The court found that the distinction between hospitals and clinics did not serve the state’s compelling interest in protecting fetal life and, arguably, was not even rationally related to that interest. Judge Yeakel also noted that the state officials did not claim that the clinics had performed or advocated abortion or that the public funds had been commingled with funds used for prohibited purposes.

Texas officials filed an appeal immediately and requested a stay. Just before midnight, Judge Jerry E. Smith issued the stay and directed the clinics to file their response by 5:00 p.m. the next day. The stay order contained no explanation of the court’s reasoning except to state that it was entered by a single judge pursuant to Federal Rule of Appellate Procedure 8(a)(2)(D). That rule allows a party to present a request for a stay to a single judge without first filing it with the Clerk of the Court; the judge may grant the stay “in an exceptional case in which time requirements make [the usual] procedure impracticable.”

Judge Smith was in the news recently when he reacted to a statement by President Obama by ordering a Justice Department lawyer to submit a statement on the power of federal courts to strike down laws that violate the constitution. You can hear that discussion here.

When the panel vacated Judge Smith’s order, it found that the state had failed to address controlling precedent on which the district court’s decision was based, specifically, the Fifth Circuit’s 2005 ruling in Planned Parenthood v. Sanchez. That decision involved federally funded family planning services and Texas legislation barring payment of the federal grant funds to any entity that “contract[ed] with or provide[d] funds to individuals or entities for the performance of elective abortion procedures.” The court held that the legislation was constitutional because the grantees could form affiliated entities and enter into contracts that did not involve payment for abortion services. However, the Sanchez court noted that if the legislation could not be interpreted to permit contracts with affiliated entities, it would likely be preempted because of its conflict with the law governing the grant program.

The panel also found that the state officials’ affidavit in support of the stay did not allege any imminent threat to the state’s program. The affidavit alleged that the state would have to close the program when the federal funding ended. But the record established that federal funding would continue until November 2012, undermining the claim of irreparable harm. Because the record did not support entry of the stay, the panel denied the request.

The panel ordered that the appeal of the injunction be expedited.