Case: 18-20440 Document: 00515603503 Page: 1 Date Filed: 10/15/2020
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
October 15, 2020
No. 18-20440 Lyle W. Cayce
Clerk
John J. Dierlam,
Plaintiff—Appellant,
versus
Donald J. Trump, President of the United States, in his official capacity
as President of the United States; United States Department of
Health and Human Services; Alex M. Azar, II, Secretary,
U.S. Department of Health and Human Services, in his official capacity as the
Secretary of the U.S. Department of Health and Human Services; United
States Department of Treasury; Steven T. Mnuchin,
Secretary, U.S. Department of Treasury, in his official capacity as the Secretary
of the U.S. Department of the Treasury; United States Department
of Labor; Eugene Scalia, Secretary, U.S. Department of Labor, in his
official capacity as the Secretary of the U.S. Department of Labor,
Defendants—Appellees.
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:16-CV-307
Before Clement, Haynes, and Willett, Circuit Judges.
Don R. Willett, Circuit Judge:
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The Affordable Care Act, now ten years old, is “the most challenged
statute in American history.” 1 The ACA’s far-reaching scope has sparked
more than 2,000 legal challenges, including a smattering of suits filed by
individual plaintiffs.2 Over this decade of litigation, no pro se challenge can
likely match the breadth of John J. Dierlam’s, which seeks retrospective and
prospective relief for myriad alleged violations of the United States
Constitution and the Religious Freedom Restoration Act.
But there are jurisdictional issues concerning both the forward- and
backward-looking relief Dierlam seeks. So, as explained below, we decline to
reach the merits of his claims.
First, as Dierlam’s case was progressing, the ACA was evolving. A
year after Dierlam filed his lawsuit, Congress passed and President Donald J.
Trump signed the Tax Cut and Jobs Act, which reduced the shared-
responsibility payment (imposed on individuals who fail to purchase health
insurance) to $0. 3 That same year, the Department of Health and Human
Services created new exemptions to the contraceptive mandate, including an
exemption for individuals like Dierlam. 4 These exemptions were enjoined
until the Supreme Court’s recent decision in Little Sisters of the Poor Saints
Peter and Paul Home v. Pennsylvania. 5 Given the altered legal landscape, and
the potential effects on Dierlam’s request for prospective relief, a mootness
analysis must precede the merits.
1
Abbe R. Gluck et. al., The Affordable Care Act’s Litigation Decade, 108 Geo. L.J.
1471, 1472 (2020).
2
Id. at 1521–22.
3
See Pub. L. No. 115-97, § 11081, 131 Stat. 2054, 2092 (Dec. 22, 2017).
4
82 Fed. Reg. 47792-01 (Oct. 13, 2017).
5
140 S. Ct. 2367 (2020).
2
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Second, the parties agree that the district court incorrectly dismissed
Dierlam’s claim for retrospective relief (a refund of his shared-responsibility
payments). The Government argues that, even though Dierlam’s refund
request is jurisdictionally deficient, he should be allowed to amend his
complaint to cure any jurisdictional deficiencies.
Our holding: We vacate the district court’s dismissal of Dierlam’s
claims and remand so that the district court can conduct a mootness analysis
in the first instance and allow Dierlam to amend his complaint.
I
To contextualize Dierlam’s claims, we start with an explanation of the
ACA’s serpentine history, emphasizing the ways in which the individual and
contraceptive mandates have changed over the course of this lawsuit. Then
we discuss the procedural history of Dierlam’s claims.
A
In 2010, President Barack Obama signed the ACA into law. 6 As
originally enacted, the ACA’s individual mandate required an “applicable
individual” 7 to maintain “minimum essential coverage” (basic health
insurance). 8 If an individual failed to comply, and didn’t receive an
exemption, he had to make a “shared responsibility payment” (pay a
penalty) to the IRS. 9
6
See Pub. L. No. 111-148, 124 Stat. 119 (Mar. 23, 2010).
7
26 U.S.C. § 5000A(d)(2)(A), (B).
8
See id. § 5000A(f)(1).
9
See id. § 5000A(b); NFIB v. Sebelius, 567 U.S. 519, 570 (2012) (holding that
Congress “had the power to impose the exaction in § 5000A under the taxing power”).
3
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In 2017, Congress passed and President Trump signed into law the
TCJA, which eliminated the shared-responsibility payment for
noncompliance with the individual mandate. 10 But the TCJA did not alter
the existence of the individual mandate—under the statute, an “applicable
individual” must still “maintain minimum essential coverage.” 11
The changes to the contraceptive mandate are more complex,
involving “six years of protracted litigation.” 12 The ACA requires health-
insurance providers to cover certain preventive services without “any cost
sharing requirements.” 13 For women, coverage must include “preventive
care and screenings . . . as provided for in comprehensive guidelines
supported by” HHS. 14 The statute says nothing more, and it doesn’t
mention contraceptives. Under the statute’s direction, though, HHS issued
guidelines requiring coverage of all FDA-approved contraceptives for plan
years beginning on or after August 1, 2012. 15 The guidelines provided an
exemption for religious employers, such as churches, and an accommodation
for religious nonprofits. 16
After several changes in the exemption and accommodation process,
HHS and the Departments of Labor and the Treasury promulgated two
interim final rules in 2017. “The first IFR significantly broadened the
10
See Pub. L. No. 115-97, § 11081, 131 Stat. 2054, 2092 (Dec. 22, 2017).
11
26 U.S.C. § 5000A(a).
12
Little Sisters of the Poor, 140 S. Ct. at 2373.
13
42 U.S.C. § 300gg-13(a).
14
Id. § 300gg-13(a)(4).
15
See 77 Fed. Reg. 8725, 8725 (Feb. 15, 2012); 76 Fed. Reg. 46,621, 46,623 (Aug. 3,
2011).
16
Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682, 698–99 (2014).
4
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definition of an exempt religious employer.” 17 And “[t]he second IFR
created a similar ‘moral exemption’ for employers.” 18 Part of the second
IFR also included an “individual exemption,” which allows “a willing plan
sponsor” or “willing health insurance issuer” to offer a separate policy to
individuals who object to some or all contraceptive services. 19 The individual
exemption is completely dependent on an insurer’s willingness to provide a
one-off plan that doesn’t cover contraceptives. 20 It “cannot be used to force
a plan (or its sponsor) or an issuer to provide coverage omitting
contraception.” 21
When the Departments finalized the new exemptions, a district court
enjoined them, and the Third Circuit affirmed the injunction. 22 The
Supreme Court recently reversed that decision in Little Sisters of the Poor and
remanded the case with instructions to dissolve the nationwide injunction. 23
With this background in mind, we turn to the case before us.
B
Dierlam is a devout Roman Catholic who opposes the use, funding,
provision, and support of contraceptives. He believes that life begins at
17
Little Sisters of the Poor, 140 S. Ct. at 2377.
18
Id. at 2378.
19
82 Fed. Reg. at 47,812.
20
Id.
21
Id.
22
83 Fed. Reg. 57,536, 57,536 (Nov. 15, 2018) (final religious exemption); 83 Fed.
Reg. 57,592 (Nov. 15, 2018) (final moral exemption); Pennsylvania v. President of the United
States, 930 F.3d 543, 556 (3d Cir. 2019).
23
Little Sisters of the Poor, 140 S. Ct. at 2373 (holding that the ACA authorized
HHS to exempt or accommodate employers’ religious or moral objections to providing no-
cost contraceptive coverage).
5
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conception, and that “supporting [the practice of abortion, contraception,
and sterilization] even indirectly” contradicts the teachings of the Catholic
Church.
In 2012, Dierlam was enrolled in his employer-provided health-
insurance plan. But after learning about ACA-mandated changes to the
plan’s coverage of contraceptives and “abortion services,” he dropped his
insurance to avoid “support[ing] these services through payment of
premiums and fees.” Dierlam then tried and failed to find alternative
insurance plans consistent with his faith. So Dierlam went without insurance,
paid the shared-responsibility payment in 2014 and 2015, and altered his diet
to minimize the need for healthcare services.
In 2016, Dierlam sued the Government pro se, bringing numerous and
novel statutory and constitutional claims. 24 Dierlam seeks both retrospective
relief (a refund of his shared-responsibility payments) and prospective relief
(an injunction of the mandates, a declaration that the mandates are
unconstitutional, and a simpler exemption process).
The Government filed a 12(b)(6) motion to dismiss Dierlam’s claims.
Focusing almost exclusively on the RFRA claims, the magistrate judge
recommended granting the Government’s motion in its entirety. At the
hearing on objections to the magistrate judge’s report, the court dismissed
with prejudice all of Dierlam’s claims. Dierlam timely appealed.
24
Dierlam argues that the individual and contraceptive mandates violate RFRA.
Dierlam also brings a claim under § 1502(c) of the ACA for failure to notify him of
insurance exchanges available through the state. Finally, Dierlam raises numerous
constitutional claims, arguing that the individual and contraceptive mandates violate the
Establishment, Free Exercise, and Freedom of Association clauses of the First
Amendment, the Due Process clause of the Fifth Amendment, and the Fourth and Ninth
Amendments.
6
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II
We review Rule 12(b)(6) dismissals de novo. 25 But given the ACA’s
recent and relevant changes, we must scrutinize our jurisdiction before we
scrutinize the district court’s judgment. We review jurisdictional questions
de novo. 26
We first address our jurisdiction over Dierlam’s request for
prospective relief then briefly turn to retrospective relief.
A
Dierlam seeks various types of prospective relief—an injunction of the
individual and contraceptive mandates, a declaration that the mandates are
unconstitutional, and a simpler and expanded exemption process from the
mandates. But under the TCJA, there is no longer a shared-responsibility
payment for failing to maintain health insurance. 27 And the new HHS rules
provide an exemption for individuals, like Dierlam, with moral objections to
contraceptives. So we must ask whether these changes provided Dierlam
with all of the prospective relief he seeks. 28 In other words, did these
intervening changes moot Dierlam’s claims?
The doctrine of mootness arises from Article III of the Constitution,
which provides federal courts with jurisdiction over a matter only if there is
a live “case” or “controversy.” 29 “Accordingly, to invoke the jurisdiction of
25
Moon v. City of El Paso, 906 F.3d 352, 357 (5th Cir. 2018).
26
In re Scruggs, 392 F.3d 124, 128 (5th Cir. 2004).
27
See Pub. L. No. 115-97, § 11081, 131 Stat. 2054, 2092 (Dec. 22, 2017).
28
Dailey v. Vought Aircraft Co., 141 F.3d 224, 227 (5th Cir. 1998) (“[I]f the facts
suggest mootness,” then “a federal court is obligated to raise the issue.”).
29
DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 (2006).
7
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a federal court, a litigant must have suffered, or be threatened with, an actual
injury traceable to the defendant and likely to be redressed by a favorable
judicial decision.” 30 This case-or-controversy requirement persists “through
all stages of federal judicial proceedings.” 31
If an intervening event renders the court unable to grant the litigant
“any effectual relief whatever,” the case is moot. 32 But even when the
“primary relief sought is no longer available,” “being able to imagine an
alternative form of relief is all that’s required to keep a case alive.” 33 So “[a]s
long as the parties have a concrete interest, however small, in the outcome of
the litigation, the case is not moot.” 34
Further, a case is not necessarily moot because it’s uncertain whether
the court’s relief will have any practical impact on the plaintiff. “Courts often
adjudicate disputes where the practical impact of any decision is not
assured.” 35 For example, “the fact that a defendant is insolvent does not
moot a claim for damages.” 36 And “[c]ourts also decide cases against foreign
nations, whose choices to respect final rulings are not guaranteed.” 37
30
Chafin v. Chafin, 568 U.S. 165, 171–72 (2013) (cleaned up).
31
Id. at 172.
32
Calderon v. Moore, 518 U.S. 149, 150 (1996).
33
Univ. of Notre Dame v. Sebelius, 743 F.3d 547, 553 (7th Cir. 2014), judgment
vacated sub nom. Univ. of Notre Dame v. Burwell, 575 U.S. 901 (2015).
34
Knox v. Serv. Emps. Int’l Union, Local 1000, 567 U.S. 298, 307–08 (2012).
35
Chafin, 568 U.S. at 175.
36
Id. at 175–76.
37
Id. at 176.
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When conducting a mootness analysis, a court must not “confuse[]
mootness with the merits.” 38 This means that a court analyzing mootness in
the early stages of litigation need only ask whether the plaintiff’s requested
relief is “so implausible that it may be disregarded on the question of
jurisdiction.” 39 “[I]t is thus for lower courts at later stages of the litigation to
decide whether [the plaintiff] is in fact entitled to the relief he seeks.” 40
Ordinarily, when a case “has become moot on appeal,” the court
should “vacate the judgment with directions to dismiss.” 41 But “in instances
where the mootness is attributable to a change in the legal framework govern-
ing the case, and where the plaintiff may have some residual claim under the
new framework that was understandably not asserted previously,” we “va-
cate the judgment and remand for further proceedings in which the parties
may, if necessary, amend their pleadings or develop the record more
fully.” 42
Both the magistrate judge and district court addressed mootness, but
only in part. The magistrate judge found that the latest HHS exemption to
the contraceptive mandate mooted all of Dierlam’s claims for prospective re-
lief. The magistrate judge first stated that the exemption applied to Dierlam,
and thus “[t]he sole issue is whether [Dierlam] can obtain” healthcare cov-
erage under the exemption. Taking judicial notice, sua sponte, of a “Catholic
38
Id. at 174.
39
Id. at 177.
40
Id.
41
N.Y. State Rifle & Pistol Ass’n, Inc. v. City of N.Y., 140 S. Ct. 1525, 1526 (2020)
(citation omitted); see also Diffenderfer v. Cent. Baptist Church of Miami, Fla., Inc., 404 U.S.
412 (1972) (remanding case to allow amendment of the pleadings after new statute altered
terms of real estate tax exemption at issue).
42
N.Y. State Rifle & Pistol Ass’n, 140 S. Ct. at 1526 (citation omitted).
9
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health care sharing ministry” she found online, the magistrate judge con-
cluded that Dierlam could “join the Catholic sharing ministry without violat-
ing his beliefs.” Finally, the magistrate judge found that the new HHS ex-
emption would cause “the health care marketplace” to “adapt . . . to provide
insurance plans that do not cover contraceptive services.” At the time of the
magistrate judge’s report, the HHS exemption was not a final rule.
During the district court’s hearing on the magistrate judge’s report,
the Government said it was no longer pursuing a mootness argument
concerning the exemption (still in an interim state). But it maintained that
Dierlam’s ability to find alternative insurance plans mooted his claims. The
district court then raised the TCJA, which became law after the magistrate
judge issued her report but before the hearing. The Government said the new
statute mooted only claims based on the individual mandate’s shared-
responsibility payment. From the bench, the district court held that the
TCJA mooted Dierlam’s claims for prospective relief concerning the
individual mandate. And then it dismissed the remainder of Dierlam’s claims
with prejudice.
On appeal, the Government continues to argue that the TCJA moots
only Dierlam’s claims for prospective relief from the individual mandate. It
only mentions the HHS exemption in a footnote, noting that the exemption
was enjoined at the time. Dierlam argues that neither the TCJA nor the latest
HHS exemption moot his claims. He asserts that, even though the TCJA
reduced the shared-responsibility payment to $0, the mandate remains. And
he asserts that the new exemption is “worthless.” After the parties
completed their briefing, the Supreme Court dissolved the nationwide
injunction of the relevant HHS exemption to the contraceptive mandate. 43
43
Little Sisters of the Poor, 140 S. Ct. at 2373.
10
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In sum, the mootness arguments below and on appeal were made
piecemeal because of the way the ACA was changing in real time. And the
magistrate judge’s and district court’s partial mootness analyses were
problematic. Thus, the mootness analyses so far have been incomplete and
incorrect.
First, it’s unclear what effect the district court thought the TCJA had
on the mootness of Dierlam’s claims. At the hearing, the district court only
said: “I think, prospectively, it seems to me that most recent legislation does
take care of the problem.”
Second, the magistrate judge’s conclusion about the insufficiency of
Dierlam’s search for alternative health-insurance plans, including taking sua
sponte judicial notice of a Catholic healthcare-sharing ministry, is irrelevant
to the mootness determination. Dierlam says the sharing ministry is not a
viable option for him. And he says that the magistrate judge’s conclusion
about his search for insurance “is factually incorrect.” It is inappropriate to
resolve these types of factual disputes at the pleadings stage to determine
mootness. These are merits issues, not mootness issues.
With the relevant legal standards explained above, we vacate and re-
mand for the district court to conduct a thorough mootness analysis in the
first instance. If necessary, the district court should allow the parties to
amend their pleadings to address the intervening changes to the individual
and contraceptive mandates.
B
We also vacate and remand Dierlam’s claim for retrospective relief in
which he seeks a refund of his 2014 and 2015 shared-responsibility payments.
The parties agree that the district court incorrectly dismissed Dierlam’s
claim with prejudice, and the Government argues that Dierlam is entitled to
amend his complaint to cure any jurisdictional deficiencies. Given the
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circumstances of this case, Dierlam should be allowed to amend his
complaint. 44
III
For the reasons explained above, we VACATE the district court’s
dismissal of Dierlam’s claims and REMAND for further proceedings
consistent with this opinion and any ensuing precedents. If a party to this case
later files a notice of appeal, the appeal should be assigned to the same
panel. 45
44
While a court can dismiss a deficient pleading, it should provide “at least one
opportunity to cure pleading deficiencies before dismissing a case, unless it is clear that . .
. the plaintiffs advise the court that they are unwilling or unable to amend in a manner that
will avoid dismissal.” Great Plains Tr. Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d
305, 329 (5th Cir. 2002) (emphasis added). For pro se plaintiffs, 12(b)(6) dismissals “are
disfavored, [and] a court should grant a pro se party every reasonable opportunity to
amend.” Hale v. King, 642 F.3d 492, 503 n.36 (5th Cir. 2011).
Also, the Government states that Dierlam is seeking a refund for 2016. But
Dierlam’s complaint only refers to payments made in 2014 and 2015. Even so, the
Government is correct that Dierlam requested his 2015 refund in April 2016 and filed his
amended complaint only three months later, which was too soon. The relevant statute, 26
U.S.C. § 6532, states that a taxpayer seeking a refund cannot file a lawsuit until at least six
months after filing a refund claim with the IRS.
45
See Constructora Subacuatica Diavaz, S.A. v. M/V Hiryu, 718 F.2d 690, 693 (5th
Cir. 1983).
12