Trump List for Court Includes Conservatives in Health Law Fray

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By Mary Anne Pazanowski

May 19 — Presumptive Republican presidential nominee Donald Trump's short list for potential nominees to the Supreme Court, released May 18, could have a profound effect on some key health-law issues.

At least three of the federal judges listed have voted against requiring nonprofit and closely held corporations to comply with the Affordable Care Act's contraceptive mandate, and they aren't likely to change their votes if seated on the high court—though they may decide to recuse themselves should the issue come before the court again.

Another judge wrote the opinion that overturned the merger of two Ohio hospitals, while yet another voted to uphold one of the most restrictive abortion laws in the country. A third judge participated in a panel that issued a groundbreaking decision interpreting the Employee Retirement Income Security Act, as applied to a faith-based hospital.

A possible Trump win is months away, and the vetting and confirmation of a new Supreme Court justice would take time, but any of these potential nominees could lead to a decidedly conservative court.

Conservative Reaction

“From a conservative perspective, it's hard to argue” with any of Trump's choices, Malcolm J. Harkins III, formerly a partner at Proskauer Rose LLP and currently a professor of practice at Saint Louis University School of Law, told Bloomberg BNA. These are all “terrific judges,” he said.

The judges on the list are all “principled conservatives, but not ideologues,” Harkins said.

“Trump made thoughtful choices,” Hannah Smith, senior counsel at the Becket Fund for Religious Liberty in Washington, told Bloomberg BNA. All these judges have “impressive records of analyzing the Constitution and federal laws in principled ways,” Smith said. They've shown a commitment to applying the Constitution and laws as written, she said.

Also, Smith said, all these judges have shown themselves to be committed to protecting “religious liberty for all Americans.” The “future of religious pluralism depends on the appointment of justices” whose rulings will “protect the right to live according to one's religious beliefs.”

Contraceptive Mandate

Judge Steven M. Colloton, of the U.S. Court of Appeals for the Eighth Circuit, was on the only federal appeals court panel to hold that religious nonprofit corporations may not be compelled, due to their beliefs, to either provide employee health plans covering contraceptives and the like or to participate in any accommodation process designed to alleviate their concerns (181 HCDR, 9/18/15).

The decision was significant because the Eighth Circuit was the only appeals court to agree with the religious groups, creating a split among the circuits. In seven other cases—now eight including a recent decision from the U.S. Court of Appeals for the Eleventh Circuit—courts said the groups had to go along with the Department of Health and Human Services' accommodation for these employers.

The Supreme Court in March heard oral argument on whether the groups could be compelled to go along with the HHS's scheme. It didn't, however, definitively answer the question presented. Instead, the court sent the issue back to the courts of appeal from which it came, with directions to the groups and the HHS to reach a compromise (95 HCDR, 5/17/16).

If the parties find it impossible to reach detente, the issue could find its way back to the high court, though by that time a future administration may have changed the requirement. In addition, according to Smith, the government's position has changed so significantly that the case may appear very different on second look.

Colloton, if seated on the court, may feel compelled to recuse himself on the issue, Smith warned. Each justice decides for himself or herself whether to abstain from arguments in cases that he or she heard in the lower courts. Then again, the issue may have changed so much by that time that Colloton might not feel a need to excuse himself, Smith said.

Judge William H. Pryor Jr., of the U.S. Court of Appeals for the Eleventh Circuit, in 2014 sat on a panel that issued an order blocking the HHS from enforcing the contraceptive mandate against a Catholic broadcast network, the Eternal Word Television Network Inc. (126 HCDR, 7/1/14).

The motions panel expressed no opinion on the merits of the case, but Pryor filed a lengthy concurring opinion in which he explained why the network was likely to win on the merits. Pryor's prediction proved to be wrong, as a different Eleventh Circuit panel upheld the mandate in February (33 HCDR, 2/19/16).

Ironically, the majority opinion was written by another Judge Pryor—Judge Jill A. Pryor. The network May 4 asked the full Eleventh Circuit to rehear the case (88 HCDR, 5/6/16).

Pre-Hobby Lobby Mandate

Potential Trump nominee Judge Diane S. Sykes, of the U.S. Court of Appeals for the Seventh Circuit, also may be a factor if the contraceptive mandate comes back to the court.

In 2013, Sykes wrote the majority opinion in a case holding that small, closely held for-profit corporations were “persons” within the meaning of the Religious Freedom Restoration Act (RFRA), 42 U.S.C. § 2000bb (219 HCDR, 11/13/13).

Under that ruling, the corporations were entitled to assert, along with their owners, that the contraceptive mandate substantially interfered with their religious free exercise. The Supreme Court eventually upheld that view in a different case (126 HCDR, 7/1/14).

Antitrust

Mergers and consolidations are rife within the health-care industry—and the trend isn't expected to slow down. A Supreme Court facing challenges to health-care transactions might render interesting decisions if it includes Judge Raymond M. Kethledge, of the U.S. Court of Appeals for the Sixth Circuit.

Kethledge wrote an opinion that famously upheld a Federal Trade Commission order requiring Ohio's ProMedica Health System Inc. to divest itself of St. Luke's Hospital (78 HCDR, 4/23/14).

In 2014, when the decision was released, antitrust attorneys specializing in health care warned that the decision would give the FTC the confidence to scrutinize more hospital mergers. That prediction appears to have come true, with agency investigations in the works—though stalled in some cases—with respect to deals in Chicago, Pennsylvania and West Virginia.

ProMedica's petition for Supreme Court review of the Sixth Circuit's decision was denied in May 2015 (86 HCDR, 5/5/15).

Also of interest to health-care attorneys is Kethledge's grilling of attorneys at oral argument in a challenge to the settlement of a private antitrust class action involving Blue Cross Blue Shield of Michigan's most-favored-nation clauses.

In the MFN clauses, BCBS agreed to pay providers higher rates in exchange for the providers' agreements to charge other insurers the same rates or higher for the same services. The plaintiff class members alleged the clauses had the effect of raising health-care prices across the board throughout Michigan.

The parties reached a settlement, but the case wound up in the Sixth Circuit on an appeal from a district court order approving a $30 million settlement after a fairness hearing.

Kethledge seemed to take issue only with the process that the district court used in approving the settlement. But his questioning indicated concern with two key issues: the likelihood the class members would have succeeded on the merits of their claims, and the total amount of the damages available.

Abortion, ERISA

This term, the Supreme Court granted review of a case addressing the constitutionality of state regulations on abortion for the first time in nearly a decade. Down a member, the court at oral argument appeared to be split along ideological lines.

The three most conservative justices seemed to indicate their approval of the Texas regulations at issue, while the four liberal justices seemed likely to strike down the provisions. Justice Anthony M. Kennedy didn't show his hand, leading to predictions of a 4-4 tie.

A court with Judge Raymond W. Gruender, of the U.S. Court of Appeals for the Eighth Circuit, likely would shift the vote to the conservative side. In 2011, he voted to uphold South Dakota's informed consent law (172 HCDR, 9/6/11).

The full panel upheld a provision requiring doctors to tell patients that an abortion terminates the life of a whole, separate, unique, living human being, as well as a provision requiring a doctor to inform a patient that by having an abortion she would be ending her relationship with an unborn human being.

Two of the judges on the panel drew the line at a third provision. While doctors could be required to tell patients about the known risks of abortion, they couldn't be compelled to give a suicide advisory. That is, the state couldn't mandate that doctors tell patients that there is an increased risk of suicide and suicide ideation in women who have abortions.

Gruender dissented on this point. He asserted that scientific evidence supported the suicide advisory. Therefore, he said, the advisory was “not only truthful, but also non-misleading and relevant to the patient's decision to have an abortion.”

Additionally, Pryor is on the record as calling Roe v. Wade, 410 U.S. 113 (1973), a constitutional “abomination.” Harkins told Bloomberg BNA he didn't believe Pryor was denigrating the Supreme Court's refusal to declare abortion illegal, so much as stating an objection to making a federal issue of it.

Harkins said he believes Pryor sees abortion as a state, not federal, issue. Most of the judges on the list, Harkins added, are members of the Federalist Society, a group consisting of conservatives and libertarians that was “founded on the principles that the state exists to preserve freedom, that the separation of governmental powers is central to our Constitution, and that it is emphatically the province and duty of the judiciary to say what the law is, not what it should be,” according to its website.

The remaining federal judge, Judge Thomas Hardiman, of the U.S. Court of Appeals for the Third Circuit, was a member of a panel that held Saint Peter's Healthcare System couldn't treat its pension plan as a church plan exempt from ERISA.

This was the first appellate court decision to come out in favor of the challengers, and the court rejected nearly every argument put forth by the health-care company. It was estimated in December 2015 that the ruling could cost the religiously affiliated hospital over $30 million in pension contributions.

There also were several state court jurists on Trump's list of potential Supreme Court nominees: Justice Allison H. Eid, of the Colorado Supreme Court; Justice Joan L. Larsen, of the Michigan Supreme Court; Justice Thomas R. Lee, of the Utah Supreme Court; Justice Don R. Willett, of the Texas Supreme Court; and Justice David R. Stras, of the Minnesota Supreme Court.

To contact the reporter on this story: Mary Anne Pazanowski in Washington at mpazanowski@bna.com

To contact the editor responsible for this story: Peyton M. Sturges in Washington at psturges@bna.com