Federal Judge Shelves President Biden’s CMS Vaccine Mandate … But in Only 10 States

In a 32-page order issued on November 29, 2021, United States District Judge Matthew T. Schelp entered a preliminary injunction against the Biden administration’s Centers for Medicaid and Medicare Services (CMS) interim final rule entitled “Medicare and Medicaid Programs; Omnibus COVID-19 Health Care Staff Vaccination.” The effect of the order is that CMS must immediately “cease all implementation or enforcement of the [CMS] Rule” in the following states only:

• Alaska
• Arkansas
• Iowa
• Kansas
• Missouri
• Nebraska
• New Hampshire
• North Dakota
• South Dakota
• Wyoming

The court found that all four of the following factors weighed in favor of entering a preliminary injunction: (1) the threat of irreparable harm to the movant; (2) the state of the balance between this harm and the injury that granting the injunction will inflict on the other parties to the litigation; (3) the probability that the movant will succeed on the merits; and (4) the public interest.

The court found that the 10 states filing this lawsuit were likely to succeed in establishing that the CMS vaccine mandate is arbitrary or capricious and that “Congress must ‘speak clearly when authorizing an agency to exercise powers of vast economic and political significance.’” Since Congress has not spoken—much less clearly spoken—on this issue, the CMS rule cannot be enforced, the court reasoned.

The court also made the following observations:

[T]he overwhelming lack of evidence likely shows CMS had insufficient evidence to mandate vaccination on the wide range of facilities that it did. Looking even beyond the evidence deficiencies relating to the specific facilities covered, the lack of data regarding vaccination status and transmissibility—in general—is concerning.

CMS failed to adequately explain its contradiction to its long-standing practice of encouraging rather than forcing—by governmental mandate—vaccination. For years, CMS has promulgated regulations setting the conditions for Medicare and Medicaid participation; never has it required any vaccine for covered facilities’ employees—despite concerns over other illnesses and their corresponding low vaccination rates. As recent as this May, CMS adopted an IFC requiring education on COVID vaccines but again decided against forced vaccination.

Finally, the court was also concerned by the states’ arguments that the mandate would have the effect of reducing staff and putting the quality of care provided at facilities in jeopardy, compromise the safety of patients, and place even more stress on the remaining staff. The judge also found persuasive the 10 states’ concern that the CMS rule could force “some facilities … to close altogether.”

Because the court found “the public has an interest in maintaining the ‘status quo’ while the merits of the case are determined,” the preliminary injunction will remain in place until there can be a trial on the merits or until further order of the court. Such a trial would presumably be months away, and it is unclear whether the federal government will try and be allowed to appeal the decision.

In the end, the court’s long but very direct opinion left very little room for doubt regarding how it feels about the CMS rule’s validity and enforceability.

Other Challenges Remain Pending

Three other cases trying to accomplish the same objective are currently pending in other federal district courts including:

• the U.S. District Court for the Western District of Louisiana (filed by Alabama, Arizona, Georgia, Idaho, Indiana, Louisiana, Mississippi, Montana, Oklahoma, South Carolina, Utah, and West Virginia);
• the U.S. District Court for the Northern District of Texas (filed by Texas); and
• the U.S. District Court for the Northern District of Florida (filed by Florida).

Florida Challenge

On November 20, 2021, the federal judge presiding over the Florida challenge denied that state’s request for a temporary restraining order (TRO) or preliminary injunction. Like the 10 states that filed suit in Missouri, Florida argued that the CMS rule would cause staff shortages and the inability to provide necessary services. However, holding the opposite of the federal judge in Missouri, the Florida judge found “no adequate showing that irreparable injury will occur in the absence of a TRO or preliminary injunction prior to [the] December 6, 2021 [deadline].”

And, while Florida argued that its own sovereignty would be trampled by the federal government if state law is preempted or if there is interference with state policy, the court disagreed and said “[t]his argument lacks merit and even if this could state irreparable injury, Florida references no law or established policy in danger of preemption but argues only that the Florida Legislature is contemplating legislation that would prohibit vaccine mandates.” Nonetheless, by the time the Florida judge issued her order, Florida had indeed passed legislation banning vaccine mandates by public employers and by private employers unless certain exemptions are provided.

On November 23, 2021, Florida promptly noticed its appeal and filed a motion for emergency injunction pending the appeal. Although the court declined to enter an emergency injunction, the judge indicated she would reconsider the original request for a preliminary injunction due to the newly enacted state laws and set an evidentiary hearing for November 30, 2021. The legal battle will continue as both parties have filed a joint motion agreeing “that further district court proceedings on the same motion are unwarranted under these circumstances” in light of the pending appeal.

Key Takeaways

This latest order only prevents the federal government from mandating vaccination policies.  Facilities covered by the CMS rule—like other private employers—can still generally decide to voluntarily implement mandatory vaccination and/or testing policies. These policies are subject to various state laws (such as those in Florida, Montana, Tennessee, and Texas) that may prohibit these private employer mandates or allow employees to utilize a broader range of objections.

As a result of the order, “covered facilities” in Alaska, Arkansas, Iowa, Kansas, Missouri, Nebraska, New Hampshire, North Dakota, South Dakota, and Wyoming are presently relieved of any obligations or deadlines imposed by the federal government’s CMS rule.

“Covered facilities” in other states (including those listed above with pending legislation challenging the CMS rule) may want to monitor the status of the CMS rule in their states, particularly where they could be subject to immediate fines through the enforcement of conflicting state laws.

In order to avoid a state-by-state patchwork of CMS rule applicability that may result due to these and further state challenges, CMS could decide to stand down and put implementation and enforcement of its CMS rule on hold across the entire nation like the Occupational Safety and Health Administration (OSHA) did with the emergency temporary standard (ETS).

Ogletree Deakins will continue to monitor and report on developments regarding the COVID-19 pandemic and will post updates in the firm’s Coronavirus (COVID-19) Resource Center as additional information becomes available. Important information for employers is also available via the firm’s webinar and podcast programs.