HHS Postpones Regulation Repealing Nondiscrimination Protections

On February 9, 2021, in response to a lawsuit and request for preliminary injunctive relief filed by Cravath, Democracy Forward and Lambda Legal challenging a regulation promulgated by the prior presidential administration, 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 while it is reviewed by the agency. As a result, the effective date of the rule is postponed for 180 days, until August 11, 2021, while HHS assesses its next steps. The regulation would have eliminated nondiscrimination protections that bar HHS‑grant‑funded service providers 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 regulation published on January 12 and set to take effect on February 11. The complaint alleged that the regulation was arbitrary and capricious under the Administrative Procedure Act (APA) and must be set aside.

On February 4, 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.

The Cravath team is led by partner Peter T. Barbur and includes practice area attorney Katherine D. Janson and associate Rebecca J. Schindel. Serena Candelaria also worked on the matter.