Cravath Wins Decision Vacating Discriminatory HHS Regulation

On June 29, 2022, in response to a lawsuit filed by Cravath, Democracy Forward and Lambda Legal, the U.S. District Court for the District of Columbia vacated a regulation issued in the final days of the prior presidential administration that sought to eliminate the non‑discrimination provisions that bar service providers funded with grants from the U.S. Department of Health and Human Services (HHS) from discriminating against program participants and beneficiaries on the basis of sex, sexual orientation, gender identity, religion and other protected traits.

Cravath and co-counsel filed the original complaint on February 2, 2021, on behalf of four nonprofit organizations—Facing Foster Care in Alaska (FFCA), which is composed of former and current foster youth, and Family Equality, True Colors United and Services & Advocacy for GLBT Elders (SAGE), which are LGBTQ service and advocacy groups—against HHS and the Acting Secretary of HHS, challenging the Trump‑era regulation published on January 12, 2021 and set to take effect on February 11, 2021. The complaint alleged that the regulation was arbitrary and capricious under the Administrative Procedure Act (APA) and must be set aside.

On February 4, 2021, Cravath, Democracy Forward and Lambda Legal applied for a temporary restraining order blocking the regulation from taking effect and moved to stay the effective date of the regulation pending judicial review, or, in the alternative, for preliminary injunctive relief. In this request, Cravath, Democracy Forward and Lambda Legal argued that each Plaintiff (and, in the case of FFCA, its individual members) would face irreparable harm if the regulation were to take effect. In particular, Counsel for Plaintiffs detailed the extensive discrimination already suffered by Plaintiffs’ members and constituencies, the myriad ways HHS’s elimination of universal nondiscrimination protections would frustrate Plaintiffs’ organizational missions and the extensive time and resources Plaintiffs would need to devote to responding to the rule. Counsel further argued that Plaintiffs would likely succeed on the merits of their APA claim given the deficiencies in HHS’s stated justifications for the rule, its failure to consider the record evidence of harm that would result from the rule and its failure to appropriately assess the costs of its rulemaking.

On February 9, 2021, the U.S. Department of Health and Human Services (HHS) stipulated that the U.S. District Court for the District of Columbia should temporarily postpone the effective date of the regulation so that it could be reviewed by the agency. HHS continued to stipulate to postponements of the effective date of the regulation until June 17, 2022, at which point the agency moved to vacate the challenged portions of the regulation. The court granted this motion on June 29. As a result of HHS’s stipulations and the Court’s grant of HHS’s motion for remand with vacatur, the challenged regulation never went into effect.

The Cravath team is led by partner Peter T. Barbur and includes associates Rebecca J. Schindel and Serena Candelaria. Kate Janson, Senior Manager of Professional Development and Training, also worked on the matter.

The case is Facing Foster Care in Alaska, et al. v. U.S. Dep’t of Health and Human Servs., et al., No. 1:21-cv-308 (D.D.C.).