In the United States Court of Appeals for the Fifth Circuit

Transcription

1 Case: Document: Page: 1 Date Filed: 05/11/2012 No In the United States Court of Appeals for the Fifth Circuit PLANNED PARENTHOOD ASSOCIATION OF HIDALGO COUNTY TEXAS, INC., PLANNED PARENTHOOD ASSOCIATION OF LUBBOCK, INC., PLANNED PARENTHOOD OF CAMERON AND WILLACY COUNTIES, FAMILY PLANNING ASSOCIATES OF SAN ANTONIO, PLANNED PARENTHOOD OF CENTRAL TEXAS, PLANNED PARENTHOOD GULF COAST, INC., PLANNED PARENTHOOD OF NORTH TEXAS, INC., PLANNED PARENTHOOD OF WEST TEXAS, INC., and PLANNED PARENTHOOD OF AUSTIN FAMILY PLANNING, INC., Plaintiffs-Appellees, V. THOMAS M. SUEHS, EXECUTIVE COMMISSIONER, TEXAS HEALTH AND HUMAN SERVICES COMMISSION, IN HIS OFFICIAL CAPACITY, Defendant-Appellant. On Appeal from the United States District Court for the Western District of Texas, Austin Division APPELLANT S BRIEF GREG ABBOTT Attorney General of Texas DANIEL T. HODGE First Assistant Attorney General DAVID C. MATTAX Deputy Attorney General for Defense Litigation JONATHAN F. MITCHELL Solicitor General ANDREW S. OLDHAM Deputy Solicitor General KRISTOFER S. MONSON Assistant Solicitor General Counsel of Record ARTHUR C. D ANDREA BETH KLUSMANN MICHAEL P. MURPHY Assistant Solicitors General OFFICE OF THE ATTORNEY GENERAL P.O. Box (MC 059) Austin, Texas Tel.: (512) Fax: (512) COUNSEL FOR APPELLANT

2 Case: Document: Page: 2 Date Filed: 05/11/2012 No In the United States Court of Appeals for the Fifth Circuit PLANNED PARENTHOOD ASSOCIATION OF HIDALGO COUNTY TEXAS, INC., PLANNED PARENTHOOD ASSOCIATION OF LUBBOCK, INC., PLANNED PARENTHOOD OF CAMERON AND WILLACY COUNTIES, FAMILY PLANNING ASSOCIATES OF SAN ANTONIO, PLANNED PARENTHOOD OF CENTRAL TEXAS, PLANNED PARENTHOOD GULF COAST, INC., PLANNED PARENTHOOD OF NORTH TEXAS, INC., PLANNED PARENTHOOD OF WEST TEXAS, INC., and PLANNED PARENTHOOD OF AUSTIN FAMILY PLANNING, INC., Plaintiffs-Appellees, V. THOMAS M. SUEHS, EXECUTIVE COMMISSIONER, TEXAS HEALTH AND HUMAN SERVICES COMMISSION, IN HIS OFFICIAL CAPACITY, Defendant-Appellant. On Appeal from the United States District Court for the Western District of Texas, Austin Division CERTIFICATE OF INTERESTED PERSONS The undersigned counsel of record certifies that the following listed persons and entities as described in the fourth sentence of Fifth Circuit Rule have an interest in the outcome of this case. These representations are made in order that the judges of this Court may evaluate possible disqualification or recusal. Planned Parenthood Association of Hidalgo County Texas, Inc. Appellee; Planned Parenthood Association of Lubbock, Inc. Appellee; Planned Parenthood of Cameron and Willacy Counties Appellee; Family Planning Associates of San Antonio Appellee; i

3 Case: Document: Page: 3 Date Filed: 05/11/2012 Planned Parenthood of Central Texas Appellee; Planned Parenthood of Gulf Coast, Inc. Appellee; Planned Parenthood of North Texas, Inc. Appellee; Planned Parenthood of West Texas, Inc. Appellee; Planned Parenthood of Austin Family Planning, Inc. Appellee; Carrie Y. Flaxman, Helene T. Krasnoff, Roger K. Evans, Planned Parenthood Federation of America Counsel for Appellees; P. M. Schenkkan, Susan G. Conway, Matthew B. Baumgartner, Graves Dougherty Hearon & Moody, PC Counsel for Appellees; Thomas M. Suehs, Executive Commissioner, Texas Health and Human Services Commission, in his Official Capacity Appellant; Jonathan F. Mitchell, Andrew S. Oldham, Kristofer S. Monson, Arthur C. D Andrea, Beth Klusmann, Michael P. Murphy, OFFICE OF THE ATTORNEY GENERAL Counsel for Appellant. s/ Kristofer S. Monson KRISTOFER S. MONSON Assistant Solicitor General Counsel of Record for Appellant ii

4 Case: Document: Page: 4 Date Filed: 05/11/2012 STATEMENT REGARDING ORAL ARGUMENT The Court has already set this case for oral argument June 7, The State agrees that the issues in this case are sufficiently important and complex to warrant oral argument. iii

5 Case: Document: Page: 5 Date Filed: 05/11/2012 TABLE OF CONTENTS Certificate of Interested Persons... i Statement Regarding Oral Argument... iii Table of Authorities... vii Statement of Jurisdiction... 2 Statement of the Issues... 2 Statement of the Case... 4 Statement of Facts... 7 Summary of the Argument Standard of Review Argument I. Planned Parenthood Cannot Make the Requisite Clear Showing, That Is Reasonably Free From Doubt, That It Will Prevail on the Merits of Its Lawsuit II. The District Court Erred Because It Misunderstood and Misapplied the Unconstitutional Conditions Doctrine A. Rust v. Sullivan Does Not Suggest That States Are Forbidden To Withhold Taxpayer Subsidies on Account of Constitutionally Protected Behavior That Occurs Outside the Program B. Indeed, the Supreme Court Has Routinely Blessed Funding Limitations Based on Activity Outside the Funded Program iv

6 Case: Document: Page: 6 Date Filed: 05/11/2012 C. The District Court Erred by Concluding That the Rules Violate the Equal Protection Clause D. The District Court Erred by Characterizing the State s Exclusion of Planned Parenthood as a Penalty Rather Than a Constitutionally Permissible Nonsubsidy Under South Dakota v. Dole III. If the Court Addresses the Constitutionality of the Affiliate Rule, It Should Conclude That Plaintiffs Cannot Establish a Probable Right of Recovery on Their Claims as a Matter of Law A. WHP Is Not a Forum, It Is Government Speech When the government uses taxpayer dollars to speak, it need not fund incompatible speech Texas need not use WHP to fund Plaintiffs incompatible speech Accordingly, WHP does not violate plaintiffs rights because it is not a forum for speech B. Even Under the District Court s Analysis, Plaintiffs Can Be Excluded From the Program Because of Speech That Takes Place Within the Program IV. Plaintiffs Request Does Not Meet Their Burden to Obtain a Preliminary Injunction and the Order Is Defective, at Any Rate A. Plaintiffs Have Not Demonstrated Irreparable Injury, the Balance of Harms Tips in the State s Favor, and the Public Interest Weighs Against Injunctive Relief v

7 Case: Document: Page: 7 Date Filed: 05/11/ Plaintiffs have not demonstrated irreparable injury The balance of harms tips in the State s favor The public interest weighs against injunctive relief B. The Order Is Overbroad, in Any Event C. The Plaintiffs Should Be Required To Post Security To Cover the State s Losses Conclusion Certificate of Service Certificate of Compliance vi

8 Case: Document: Page: 8 Date Filed: 05/11/2012 Cases TABLE OF AUTHORITIES Air Transport Ass n of Am. v. Export-Import Bank of the U.S., No (JEB), 2012 WL (D.D.C. Jan. 13, 2012) Boy Scouts of Am. v. Dale, 530 U.S. 640 (2000) Byrum v. Landreth, 566 F.3d 442 (5th Cir. 2009) Chiras v. Miller, 432 F.3d 606 (5th Cir. 2005) Coal. for Econ. Equity v. Wilson, 122 F.3d 718 (9th Cir. 1997) Connecticut v. Massachusetts, 282 U.S. 660 (1931) Continuum Co. v. Incepts, Inc., 873 F.2d 801 (5th Cir. 1989) Corrigan Dispatch Co. v. Casa Guzman, S.A., 569 F.2d 300 (5th Cir. 1978) (per curiam) DeShaney v. Winnebago County Dep t of Soc. Servs., 489 U.S. 189 (1989) Dolan v. City of Tigard, 512 U.S. 374 (1994) Ex Parte Young, 209 U.S. 123 (1908) F.C.C. v. League of Women Voters of California, 468 U.S. 364 (1984)... passim vii

9 Case: Document: Page: 9 Date Filed: 05/11/2012 Filarsky v. Delia, 132 S. Ct (2012) Ill. Bell Tel. Co. v. WorldCom Techs., Inc., 157 F.3d 500 (7th Cir. 1998) Kaepa, Inc. v. Achilles Corp., 76 F.3d 624 (5th Cir. 1996) L.L. Nelson Enter., Inc. v. County of St. Louis, Mo., 673 F.3d 799 (8th Cir. 2012) Legal Servs. Corp. v. Velazquez, 531 U.S. 533 (2001) , 46, 48 Locke v. Davey, 540 U.S. 712 (2004)... passim Maher v. Roe, 432 U.S. 464 (1977) Mazurek v. Armstrong, 520 U.S. 968 (1997) (per curiam)... 21, 27, 50 Miss. Power & Light Co. v. United Gas Pipe Line Co., 760 F.2d 618 (5th Cir. 1985)... 20, 51 Morgan v. Fletcher, 518 F.2d 236 (5th Cir. 1975)... 51, 52, 53 Muir v. Ala. Educ. Television Comm n, 688 F.2d 1033 (5th Cir. 1982) New Motor Vehicle Bd. v. Orrin W. Fox Co., 434 U.S (1977)... 20, 55 Nichols v. Alcatel USA, Inc., 532 F.2d 364, 379 (5th Cir. 2008)... 20, 21, 64, 66 viii

10 Case: Document: Page: 10 Date Filed: 05/11/2012 Pendergest-Holt v. Certain Underwriters at Lloyd s of London, 600 F.3d 562 (5th Cir. 2010) Pennzoil Co. v. FERC, 645 F.2d 394 (5th Cir. 1981)... 55, 56 Phillips v. Charles Schreiner Bank, 894 F.2d 127 (5th Cir. 1990) Pierce v. Society of Sisters, 268 U.S. 510 (1925) Planned Parenthood of Houston & Se. Tex. v. Sanchez, 403 F.3d 324 (5th Cir. 2005)... 8 Planned Parenthood of Houston & Se. Tex. v. Sanchez, 480 F.3d 734 (5th Cir. 2007)... 9, 30 Regan v. Taxation with Representation, 461 U.S. 540 (1983)... passim Roemer v. Bd. of Pub. Works of Md., 426 U.S. 736 (1976)... 19, 39 Rosenberger v. Rector & Visitors of Univ. of Va., 515 U.S. 819 (1995)... 42, 44, 47, 48 R.R. Comm n v. Tex. Citizens for a Safe Future, 336 S.W.3d 619 (Tex 2011) Rust v. Sullivan, 500 U.S. 173 (1991)... passim Sampson v. Murray, 415 U.S. 61 (1974)... 51, 52 Sherbert v. Verner, 374 U.S. 398 (1963) ix

11 Case: Document: Page: 11 Date Filed: 05/11/2012 South Dakota v. Dole, 483 U.S. 203 (1987)... 18, 32, 37, 38 Town of Castle Rock v. Gonzales, 545 U.S. 748 (2005) U.S. Civil Serv. Comm n v. Nat l Ass n of Letter Carriers, 413 U.S. 548 (1973) United Public Workers v. Mitchell, 330 U.S. 75 (1947)... 31, 32, 37 Va. Petroleum Jobbers Ass n v. Fed. Power Comm n, 259 F.2d 921 (D.C. Cir. 1958) Virginian Ry. Co. v. Sys. Fed n No. 40, 300 U.S. 515 (1937) Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008)... 21, 50, 60 Wisc. Gas Co. v. FERC, 758 F.2d 669 (D.C. Cir. 1985) (per curiam) Woodard v. Ohio Adult Parole Auth., 107 F.3d 1178 (6th Cir. 1997) Wyman v. James, 400 U.S. 309 (1971) Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412 (3d Cir. 2010) Statutes and Rules 1 TEX. ADMIN. CODE , 11 1 TEX. ADMIN. CODE (1) TEX. ADMIN. CODE (1)(A)(iii) x

12 Case: Document: Page: 12 Date Filed: 05/11/ TEX. ADMIN. CODE (6) TEX. ADMIN. CODE TEX. ADMIN. CODE (a)(2)(A)... 60, 61 1 TEX. ADMIN. CODE (a)(2)(B) U.S.C. 1292(a)(1) U.S.C C.F.R (1989)... 61, C.F.R. 59.9(d) (1989) U.S.C U.S.C. 1988(b) U.S.C. 2996f(b)(8) U.S.C. 2996i(c) FED. R CIV. P. 65(c)... 20, 64 TEX. HUM. RES. CODE (c-1)... passim TEX. HUM. RES. CODE (a)... 7 TEX. HUM. RES. CODE (b)... 8 TEX. HUM. RES. CODE (h)... 8, 10 xi

13 Case: Document: Page: 13 Date Filed: 05/11/2012 Other Authorities 36 Tex. Reg (2011)... 5, Tex. Reg (2012)... 5, 11 Act of June 28, 2011, 82d Leg., 1st C.S., ch. 7, 1.19, 2011 Tex. Gen. Laws , 10 Act of May 28, 2011, 82d Leg., R.S., ch. 1355, 2011 Tex. Gen. Laws , 10 Act of May 30, 2005, 79th Leg., R.S., ch. 816, 1, 2005 Tex. Gen. Laws Daniel A. Farber, Free Speech Without Romance: Public Choice and the First Amendment, 105 HARV. L. REV. 554 (1991) Daryl J. Levinson, Framing Transactions in Constitutional Law, 111 YALE L. J (2002) Kathleen M. Sullivan, Unconstitutional Conditions, 102 HARV. L. REV (1989) Mitchell N. Berman, Coercion Without Baselines: Unconstitutional Conditions in Three Dimensions, 90 GEO. L.J. 1 (2001) Richard A. Epstein, Foreword: Unconstitutional Conditions, State Power, and the Limits of Consent, 102 HARV. L. REV. 4 (1988) Seth F. Kreimer, Allocational Sanctions: The Problem of Negative Rights in a Positive State, 132 U. PA. L. REV (1984) xii

14 Case: Document: Page: 14 Date Filed: 05/11/2012 No In the United States Court of Appeals for the Fifth Circuit PLANNED PARENTHOOD ASSOCIATION OF HIDALGO COUNTY TEXAS, INC., PLANNED PARENTHOOD ASSOCIATION OF LUBBOCK, INC., PLANNED PARENTHOOD OF CAMERON AND WILLACY COUNTIES, FAMILY PLANNING ASSOCIATES OF SAN ANTONIO, PLANNED PARENTHOOD OF CENTRAL TEXAS, PLANNED PARENTHOOD GULF COAST, INC., PLANNED PARENTHOOD OF NORTH TEXAS, INC., PLANNED PARENTHOOD OF WEST TEXAS, INC., and PLANNED PARENTHOOD OF AUSTIN FAMILY PLANNING, INC., Plaintiffs-Appellees, V. THOMAS M. SUEHS, EXECUTIVE COMMISSIONER, TEXAS HEALTH AND HUMAN SERVICES COMMISSION, IN HIS OFFICIAL CAPACITY, Defendant-Appellant. On Appeal from the United States District Court for the Western District of Texas, Austin Division APPELLANT S BRIEF Texas law prohibits health clinics that perform or promote elective abortions, or that affiliate with or use the trademarks of abortionpromoting entities, from receiving taxpayer subsidies to administer the Texas Women s Health Program (WHP), a program that provides nonabortion family planning and other preventative health services to lowincome women. The plaintiffs in this case assert a right to administer a state-run program in a manner that directly conflicts with directives of

15 Case: Document: Page: 15 Date Filed: 05/11/2012 the Texas Legislature that explicitly protect taxpayer funds from subsidizing entities that affiliate with third parties in order to perform or promote elective abortions. The district court s preliminaryinjunction order violates Rust v. Sullivan, 500 U.S. 173 (1991), by precluding the State from controlling the speech activity that occurs within a government program. STATEMENT OF JURISDICTION Federal subject-matter jurisdiction exists under 28 U.S.C. 1331, as the plaintiffs have brought a lawsuit challenging the constitutionality of the State s rules under the First and Fourteenth Amendments. The Court has appellate jurisdiction under 28 U.S.C. 1292(a)(1), because the district court granted the plaintiffs motion for a preliminary injunction on April 30, USCA (Rec. Ex. C). The State timely filed a notice of appeal later that day. USCA (Rec. Ex. B). STATEMENT OF THE ISSUES I. Regan v. Taxation with Representation, 461 U.S. 540 (1983), and F.C.C. v. League of Women Voters of California, 468 U.S. 364 (1984), hold that governments may withhold taxpayer subsidies on account of First Amendment activity when the recipient entity is capable of shunting that constitutionally protected activity into a separate, non-taxpayer-funded affiliate organization. The plaintiff 2

16 Case: Document: Page: 16 Date Filed: 05/11/2012 entities in this case admit that they advocate for legalized elective abortion advocacy that the State of Texas does not wish to subsidize and they have not relegated all of their abortionpromoting advocacy to affiliated entities that will not receive taxpayer subsidies. Did the district court err by holding that the unconstitutional conditions doctrine prohibits the State from withholding taxpayer subsidies from the plaintiff entities that advocate for legalized elective abortion? II. Regan allows the government to withhold taxpayer subsidies from an entity if any part of that entity engages in lobbying, even when that lobbying is privately funded and occurs outside the scope of a taxpayer-funded program. Did the district court err by holding that the unconstitutional conditions doctrine categorically prohibits the State from withholding taxpayer subsidies on account of constitutionally protected activity that occurs outside the scope of a taxpayer-funded program? III. Rust v. Sullivan, 500 U.S. 173 (1991), permits governments to control the speech activity that occurs within a government program. The plaintiffs in this case are demanding a right to administer a state-run program in violation of the Legislature s stated intent. Did the district court violate Rust by concluding that the Constitution deprives the State of Texas of the ability to control this speech activity that occurs within the state-funded WHP? IV. Under the Supreme Court s precedent, not every denial of a government benefit or subsidy on account of constitutionally protected behavior is treated as an unconstitutional penalty ; only when the condition is unrelated or non-germane to the benefit will the failure to subsidize be equated with a penalty rather than a permissible nonsubsidy. Did the district court err by characterizing the State s conditions on participation in the WHP as a penalty on Planned Parenthood s speech activities without even considering whether those conditions could be deemed germane to the benefits provided by the WHP? 3

17 Case: Document: Page: 17 Date Filed: 05/11/2012 V. Federal courts are not to enjoin the enforcement of regulations in their entirety unless no set of circumstances exists under which the [regulations] would be valid. See Rust, 500 U.S. at 183. Some of the provisions of Title 1, of the Texas Administrative Code have undeniably constitutional applications to the plaintiffs in this case. Did the district court err by enjoining the regulations in their entirety, rather than limiting the scope of injunctive relief to the specific applications that he believed would violate the Constitution? VI. The Equal Protection Clause permits States to treat differently situated entities differently. Planned Parenthood s health clinics differ from hospitals that maintain affiliate relationships with abortion-providing entities, because Planned Parenthood operates under a trademark that is linked to the promotion of elective abortion and because Planned Parenthood advocates for legalized elective abortion. Did the district court err by concluding that Texas violated the Equal Protection Clause by excluding Planned Parenthood entities from the WHP but not hospitals that maintain affiliate relationships with abortion-providing entities? VII. Federal Rule of Civil Procedure 65(c) permits a court to issue a preliminary injunction only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or restrained. Did the district court err by awarding preliminary injunctive relief without requiring the plaintiffs to post a bond? STATEMENT OF THE CASE During its 2011 Regular Session, the Texas Legislature appropriated money to fund the Texas Women s Health Program, contingent on receiving a waiver from the federal government. Act of May 28, 2011, 82d Leg., R.S., ch. 1355, 2011 Tex. Gen. Laws 4025,

18 Case: Document: Page: 18 Date Filed: 05/11/2012 (Rider 62). The Legislature also enacted a requirement prohibiting Health and Human Services Commission (HHSC) from spending WHP funds on performing or promoting elective abortions, and prohibiting HHSC from contracting with entities that perform or promote elective abortions or that affiliate with entities that do the same. Act of June 28, 2011, 82d Leg., 1st C.S., ch. 7, 1.19, 2011 Tex. Gen. Laws 5390, 5425 (codified at TEX. HUM. RES. CODE (c-1)). HHSC subsequently proposed new rules to implement the Legislature s funding restrictions. 36 Tex. Reg (2011) (to be codified at 1 TEX. ADMIN. CODE ). The proposed rules were published for comment in the Texas Register on August 26, 2011, id., and adopted to be effective on March 14, Tex. Reg (2012) (adopting 1 TEX. ADMIN. CODE ). Pursuant to the rules, HHSC required WHP providers to certify that they comply with the new rules by April 30, 2012, or else HHSC would disqualify them from participating in the WHP. USCA Unable to certify compliance with the rules, the plaintiffs filed suit on April 11, 2012, in the Western District of Texas against Thomas M. Suehs in his official capacity as Executive Commissioner of the Texas 5

19 Case: Document: Page: 19 Date Filed: 05/11/2012 Health and Human Services Commission. USCA The plaintiffs alleged that Texas Human Resources Code (c-1) and the related rules violated the unconstitutional conditions doctrine by excluding providers from the Women s Health Program on account of their First Amendment activities. Id. They further alleged that the rules violated the Equal Protection Clause by treating Planned Parenthood s health clinics differently from hospitals that maintain affiliate relationships with abortion providers. USCA That same day, the plaintiffs moved for a preliminary injunction to prevent Suehs from enforcing the rules on May 1, USCA Following a status conference on April 16, the district court required the State to file its response within two days and set the matter for a hearing on April 19. USCA The district court issued its preliminary-injunction order on April 30, 2012, concluding that the new rules were likely to violate the unconstitutional conditions doctrine as well as the Equal Protection Clause, and enjoining Commissioner Suehs from enforcing any part of the new rules against the plaintiffs. USCA The State immediately appealed. USCA

20 Case: Document: Page: 20 Date Filed: 05/11/2012 The State also moved for an emergency stay of the injunction pending appeal in the Fifth Circuit on April 30. Emergency Motion to Stay Preliminary Injunction Pending Appeal, Planned Parenthood Ass n of Hidalgo County v. Suehs, No (5th Cir. April 30, 2012). A single judge granted the stay and ordered the plaintiffs to file a response the next day. Order, Planned Parenthood Ass n of Hidalgo County v. Suehs, No (5th Cir. April 30, 2012). Four days later, a three-judge panel vacated the single-judge stay and ordered that the case be set for oral argument on the next available setting. Order, Planned Parenthood Ass n of Hidalgo County v. Suehs, No (5th Cir. May 4, 2012) (per curiam). The case has therefore been set for argument on June 7. STATEMENT OF FACTS In 2005, the Texas Legislature created the WHP to expand access to preventive health and family planning services for women. Act of May 30, 2005, 79th Leg., R.S., ch. 816, 1, 2005 Tex. Gen. Laws 2816, 2817 (codified at TEX. HUM. RES. CODE (a) (expired Sept. 1, 2011)). The WHP was enacted as a five-year Medicaid demonstration project pursuant to 42 U.S.C. 1315, which permits the United States 7

21 Case: Document: Page: 21 Date Filed: 05/11/2012 Secretary of Health and Human Services to waive specific requirements of certain federal programs and allow the States to enact pilot, experimental, and demonstration projects that promote the objectives of the federal programs. The State obtained a waiver from the Secretary, which allowed the State to receive federal Medicaid reimbursement for the WHP services that the State provided. USCA5 18. The WHP provides a variety of medical services to women whose net family income is at or below 185 percent of the federal poverty level and who meet other requirements. TEX. HUM. RES. CODE (b). When enacting the WHP, the Legislature included a statutory provision forbidding HHSC to spend WHP funds to perform or promote elective abortions, and prohibiting HHSC from contracting with entities that perform or promote elective abortions or that affiliate with entities that perform or promote elective abortions. Id (h). In the same year that the Legislature enacted the WHP, the Texas Department of Health (TDH) was involved in litigation with several Planned Parenthood entities regarding a similar (but more narrow) statutory limitation on the use of Title X funds. See Planned Parenthood of Houston & Se. Tex. v. Sanchez, 403 F.3d 324, (5th 8

22 Case: Document: Page: 22 Date Filed: 05/11/2012 Cir. 2005). The district court in Sanchez had determined that the State s efforts to withhold Title X funds from abortion-performing entities were preempted by federal statutes governing the Title X program, but the Fifth Circuit reversed. Id. at The Fifth Circuit held that the federal statutes governing the Title X program would not preempt the State s statute, so long as state officials permitted Planned Parenthood entities to continue receiving Title X funds by segregating their abortion-performing activities into separate affiliated entities. Id. at The Fifth Circuit did not consider or rule on whether the State s ban on providing Title X funds to abortionperforming entities violated the unconstitutional conditions doctrine on which the plaintiffs in this case rely. On remand, the TDH and Planned Parenthood reached a settlement under which the parties agreed to guidelines governing affiliates under the Title X program. Planned Parenthood of Houston & Se. Tex. v. Sanchez, 480 F.3d 734, 737 (5th Cir. 2007). Until 2012, HHSC applied those same affiliation guidelines to WHP providers even though the federal Title X statutes do not govern the WHP, and even though the state statute governing the WHP explicitly withheld funds from the affiliates of abortion- 9

23 Case: Document: Page: 23 Date Filed: 05/11/2012 providing or abortion-promoting entities. USCA ; see also TEX. HUM. RES. CODE (h). In 2011, the five-year demonstration project expired, and the Legislature appropriated funds for the WHP. That funding was contingent on receiving a waiver from the federal Secretary of Health and Human Services. Act of May 28, 2011, 82d Leg., R.S., ch. 1355, 2011 Tex. Gen. Laws 4025, 4228 (Rider 62). The Legislature also amended the statute governing the WHP. Act of June 28, 2011, 82d Leg., 1st C.S., ch. 7, 1.19, 2011 Tex. Gen. Laws 5390, The Legislature enacted Texas Human Resources Code (c-1), which provides as follows: The department shall ensure that money spent for purposes of the demonstration project for women s health care services under former Section , Human Resources Code, or a similar successor program is not used to perform or promote elective abortions, or to contract with entities that perform or promote elective abortions or affiliate with entities that perform or promote elective abortions. Pursuant to the 2011 amendments to the Human Resources Code, HHSC proposed rules intended to ensure that dollars appropriated for WHP would not be used to perform or promote elective abortions. Id. To that end, HHSC proposed rules defining the terms promote and 10

24 Case: Document: Page: 24 Date Filed: 05/11/2012 affiliate. The proposed rules were published in the Texas Register on August 26, Tex. Reg (2011) (to be codified at 1 TEX. ADMIN. CODE ). After a period of comment, the rules were adopted to be effective on March 14, Tex. Reg (2012) (adopting 1 TEX. ADMIN. CODE ). The final rules define promotes as [a]dvocates or popularizes by, for example, advertising or publicity. 1 TEX. ADMIN. CODE (6). Affiliate is defined to include: (A) An individual or entity that has a legal relationship with another entity, which relationship is created or governed by at least one written instrument that demonstrates: (i) common ownership, management, or control; (ii) a franchise; or (iii) the granting or extension of a license or other agreement that authorizes the affiliate to use the other entity's brand name, trademark, service mark, or other registered identification mark. (B) The written instruments referenced in subparagraph (A) of this paragraph may include a certificate of formation, a franchise agreement, standards of affiliation, bylaws, or a license. 11

25 Case: Document: Page: 25 Date Filed: 05/11/2012 Id (1). Section (a)(2) then provides that a health clinic that performs or promotes elective abortions, or that affiliates with a corporate entity that performs or promotes elective abortions, cannot be a WHP provider. After the new rules were adopted, two significant events occurred. First, the United States Secretary of Health and Human Services refused to renew the waiver that Texas needed to qualify for federal Medicaid reimbursement of WHP expenditures, and began a ninemonth process to wind down federal funding for the WHP. USCA In response, the Governor directed HHSC to identify state sources of revenue that could fully fund the program after the federal wind-down is completed. USCA The issues surrounding the denial of the waiver and the process of transitioning the WHP into a state-funded program are not part of this lawsuit. Second, a group of Planned Parenthood entities filed the current lawsuit against HHSC, alleging that the new rules impose an unconstitutional condition by requiring them to forgo constitutionally protected conduct in order to participate as a provider in WHP. USCA The plaintiffs assert that HHSC s rules would render them 12

26 Case: Document: Page: 26 Date Filed: 05/11/2012 ineligible to administer the WHP on the State s behalf on four primary grounds. USCA5 22. First, each of the plaintiffs either promotes elective abortion by engaging in abortion-related advocacy, or else affiliates with an entity that promotes elective abortion in this manner. Id. Second, all but one of the plaintiffs is affiliated with an abortion-performing entity. Id. Third, all of the plaintiffs use the Planned Parenthood registered service mark, which qualifies as affiliating with an abortion-promoting entity under the new rules. Id. Fourth, all of the plaintiffs are affiliates, or ancillary organizations of affiliates, of Planned Parenthood Federation of America, which advocates for abortion rights. Id. The plaintiffs were therefore unable to certify that they comply with the new rules. The district court granted the plaintiffs preliminary injunctive relief on their unconstitutional conditions claim, and the issue is now before this Court. USCA The State filed a motion to clarify the district court s preliminary injunction order on May 11, 2012, but as of the time of this filing, the motion had not yet been ruled on. 13

27 Case: Document: Page: 27 Date Filed: 05/11/2012 SUMMARY OF THE ARGUMENT The district court s preliminary injunction must be vacated for six independent reasons: 1. First, many of the plaintiff entities in this case have pleaded themselves out of court. Under Regan v. Taxation with Representation, 461 U.S. 540 (1983), and F.C.C. v. League of Women Voters of California, 468 U.S. 364 (1984), a State can refuse to grant public money to advocacy groups, so long as those groups are capable of relegating their advocacy programs to affiliate entities that will not receive taxpayer funds. Some of the plaintiff entities admit in their complaint that they promote elective abortion, within the meaning of (c-1) of the Texas Human Resources Code, by directly engaging in abortion-related advocacy. The Texas Legislature has declined to fund such advocacy, and because these entities are capable of relegating their abortion-promoting advocacy to affiliated entities that will not receive taxpayer funds, the Supreme Court s rulings in Taxation with Representation and League of Women Voters are directly on point and allow the Legislature to withhold taxpayer subsidies from plaintiffs. 14

28 Case: Document: Page: 28 Date Filed: 05/11/ Second, all of the plaintiff entities (even those who have not pleaded themselves out of court) have failed to make a clear showing that they will likely succeed on the merits. The district court s injunction contradicts Taxation with Representation (and other Supreme Court precedents) by holding that the Constitution forbids States to withhold any subsidy or government benefit on account of constitutionally protected activity that occurs outside the scope of the government program even when the recipient organization directly engages in political advocacy that the State legislature declines to subsidize. Yet in Taxation with Representation, the Supreme Court held that the government may withhold taxpayer subsidies from an entire entity if any part of that entity engages in lobbying, even when that lobbying is privately funded and occurs outside the scope of the government program. And it is only one of many Supreme Court rulings permitting governments to withhold taxpayer subsidies on account of constitutionally protected conduct that occurs outside the scope of a taxpayer-funded program. The district court did not address those decisions, relying instead on Rust v. Sullivan, 500 U.S. 173 (1991). But Rust does not even 15

29 Case: Document: Page: 29 Date Filed: 05/11/2012 suggest that a State violates the Constitution by withholding a taxpayer subsidy on account of behavior that occurs outside a government program. The Rust Court upheld a series of abortion regulations on the ground that the government can refuse to subsidize speech it deems not to be in the public interest. Under Rust, the government may withhold taxpayer money from an entity on account of speech that occurs inside a government program. Rust does not state or imply that withholding money for speech outside the program would be unconstitutional per se or subject to strict scrutiny; Rust merely indicates that those situations present a different type of case. 3. Third, even under the district court s erroneous outside the program analysis, the plaintiff entities are still unlikely to prevail on the merits. The district court incorrectly asserted that the State was excluding the plaintiff entities from the Women s Health Program solely on account of speech activity that takes place outside of the government program. But, in fact, the State excluded the plaintiffs from the program for speech that occurs within the scope of the program: Plaintiff entities intend to use the Planned Parenthood trademark while they simultaneously administer the Texas Women s 16

30 Case: Document: Page: 30 Date Filed: 05/11/2012 Health Program on behalf of the State. See 1 TEX. ADMIN. CODE (1)(A)(iii). Further, in administering WHP, Plaintiffs use the Planned Parenthood trademark to identify their offices at the same time that their affiliates use the very same trademark in providing and promoting elective abortion, a practice barred by state law and the affiliate rule. That is speech activity inside the program, and Texas is entitled to deny taxpayer subsidies to the plaintiffs on account of their desire to carry out the Texas Women s Health Program under the registered service mark of an organization that promotes and provides elective abortions. Rust permits the State to control the speech of agents when they administer state programs. The Texas Legislature is thus authorized to prohibit those who carry out the Women s Health Program on behalf of the State from using or displaying the trademarks of organizations that promote or perform abortions. Incorporating such speech into the WHP directly conflicts with the program s purpose of reducing elective abortion. 4. Fourth, the injunction should be vacated for the independent reason that the district court erred by characterizing Texas s exclusion 17

31 Case: Document: Page: 31 Date Filed: 05/11/2012 of Planned Parenthood from the Women s Health Program as a penalty rather than a constitutionally permissible nonsubsidy under South Dakota v. Dole, 483 U.S. 203 (1987). As Dole makes clear, a condition on government funding is often treated as a choice not to extend the funding in the first instance, rather than a penalty on preexisting speech. Thus, conditioning federal highway funds on the adoption of a particular drinking age did not penalize the States from adopting lower drinking ages. Rather, as a condition on entry to the federal highway program in the first instance, the federal government s withholding of funds operated as a nonsubsidy, a constitutionally permissible affirmative choice not to spend government money in the first instance. In the district court s view, every denial of a government benefit on account of constitutionally protected activity outside the program is a penalty. But the district court s approach is foreclosed by Dole (and other cases). Only when the condition is unrelated or non-germane to the government benefit will the failure to subsidize be considered a penalty rather than a constitutionally permitted nonsubsidy. Here, the regulations excluding abortion-promoting entities (and their 18

32 Case: Document: Page: 32 Date Filed: 05/11/2012 affiliates) are undeniably germane to benefits provided by the Women s Health Program. One significant benefit of the program is to subsidize birth control strategies that prevent unwanted pregnancies. The abortion-reducing benefits of these subsidies would be counteracted, however, if WHP were simultaneously used to subsidize an organization that performs or promotes abortions. Even if the plaintiff organizations expressly earmark their taxpayer subsidies for family planning services, the subsidy would free up other resources within the organization that plaintiffs can use to perform or promote abortion. Moreover, such a partnership with a state program would boost plaintiffs profile, which effectively subsidizes its efforts to promote itself and elective abortion services. Cf. Roemer v. Bd. of Pub. Works of Maryland, 426 U.S. 736, 747 (1976) ( [I]n aiding a religious institution to perform a secular task, the State frees the institution s resources to be put to sectarian ends. ). The district court erred by failing to conduct a germaneness analysis before characterizing the rules as a penalty on (rather than a nonsubsidy of) plaintiffs abortion-related advocacy. 5. Fifth, the district court s injunction should also be vacated because it is overbroad. The injunction bars the State from enforcing 19

33 Case: Document: Page: 33 Date Filed: 05/11/2012 any provision of the regulations against the plaintiffs in any circumstance even though some of the provisions have undeniably constitutional applications. This violates numerous Supreme Court and Fifth Circuit pronouncements holding that courts cannot facially invalidate a statute or regulation in this manner unless no set of circumstances exists under which the statute or regulation would be valid. See Rust v. Sullivan, 500 U.S. 173, 183 (1991). 6. Finally, putting aside plaintiffs likelihood of success on the merits, the district court s injunction rests on three legal errors. First, a mere temporary loss of income the only injury plaintiffs assert is insufficient by itself to establish irreparable harm. E.g., Miss. Power & Light Co. v. United Gas Pipe Line Co., 760 F.2d 618, (5th Cir. 1985). Second, the balance of harms is in Texas s favor because this injunction prevents state officials from complying with state law duly enacted by the Texas legislature. See New Motor Veh. Bd. v. Orrin W. Fox Co., 434 U.S. 1345, 1351 (1977) (Rehnquist, J., Circuit Justice). Third, the district court failed to comply with Rule 65(c) because it did not require plaintiffs to post a bond. FED. R. CIV. P. 65(c); see Nichols v. Alcatel USA, Inc., 532 F.2d 364, 379 (5th Cir. 2008). 20

34 Case: Document: Page: 34 Date Filed: 05/11/2012 STANDARD OF REVIEW A preliminary injunction is an extraordinary and drastic remedy, one that should not be granted unless the movant, by a clear showing, carries the burden of persuasion. Mazurek v. Armstrong, 520 U.S. 968, 972 (1997) (per curiam); see also Ex Parte Young, 209 U.S. 123, 166 (1908) ( [N]o injunction ought to be granted unless in a case reasonably free from doubt. ). A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest. Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). The ultimate decision to grant a preliminary injunction is reviewed for an abuse of discretion. Byrum v. Landreth, 566 F.3d 442, 445 (5th Cir. 2009). But the decision is to be reviewed de novo to the extent it is grounded in erroneous legal principles or turns on a mixed question of law and fact. Pendergest-Holt v. Certain Underwriters at Lloyd s of London, 600 F.3d 562, 569 (5th Cir. 2010). 21

35 Case: Document: Page: 35 Date Filed: 05/11/2012 ARGUMENT I. PLANNED PARENTHOOD CANNOT MAKE THE REQUISITE CLEAR SHOWING, THAT IS REASONABLY FREE FROM DOUBT, THAT IT WILL PREVAIL ON THE MERITS OF ITS LAWSUIT. The government can spend taxpayer money in a manner that promotes alternatives to abortion over abortion. See, e.g., Rust v. Sullivan, 500 U.S. 173, 193 (1991) (holding that government may subsidize family planning services which will lead to conception and childbirth, and declin[e] to promote or encourage abortion ) (internal quotation marks omitted); Maher v. Roe, 432 U.S. 464, 474 (1977) (holding that government may make a value judgment favoring childbirth over abortion, and... implement that judgment by the allocation of public funds. ). Consistent with this principle, Texas has adopted a strong public policy preventing taxpayer funds from subsidizing the provision or promotion of elective abortion. See TEX. HUM. RES. CODE (c-1). The plaintiffs and the district court both recognize the State s right not to fund abortions and abortion advocacy. USCA5 42, 277. After all, there is no freestanding constitutional obligation for the government to provide services to its citizens in any circumstance. Cf. 22

36 Case: Document: Page: 36 Date Filed: 05/11/2012 DeShaney v. Winnebago County Dep t of Soc. Servs., 489 U.S. 189, 196 (1989). Yet plaintiffs and the district court assert that Texas forfeited its prerogative not to fund abortion merely by establishing WHP to provide access to women s preventive and reproductive care without including abortion. This notion is in considerable tension with the Supreme Court s recognition that States may subsidize family planning services which will lead to conception and childbirth, [while] declining to promote or encourage abortion. Rust, 500 U.S. at 193. It is also impossible to reconcile with the Supreme Court s holdings in Regan v. Taxation with Representation, 461 U.S. 540 (1983), and F.C.C. v. League of Women Voters of California, 468 U.S. 364 (1984). Some of the plaintiff entities in this case assert that they promote elective abortions within the meaning of (c-1) by engaging in abortion-related advocacy, but do not segregate their advocacy activities into separate affiliated entities. See USCA5 210 (Decl. of Patricio Gonzalez admitting that Planned Parenthood Association of Hildalgo County advocate[s] to protect and facilitates access to safe and legal abortion ); USCA5 222 (Decl. of Karen Hildebrand admitting that Planned Parenthood of West Texas does 23

37 Case: Document: Page: 37 Date Filed: 05/11/2012 engage in advocacy designed to promote access to safe and legal abortion ). Others do not specify whether they promote elective abortions themselves or whether they do so only through affiliated entities that do not receive WHP money. See USCA5 203 (Decl. of Ken Lambrecht stating PPFA affiliates are required, either themselves or through an ancillary corporation, to engage in advocacy designed to protect access to safe and legal abortion (which [Planned Parenthood of North Texas] does) ); USCA5 216 (Decl. of Tara Haskell stating PPFA s standards of affiliation and bylaws... require, among other things, that PPAL, either itself or through an ancillary corporation, advocate to protect access to safe and legal abortion, which we do by participating in the Planned Parenthood state-wide public affairs committee ). But the pleadings are susceptible to the reading that all of the plaintiffs engage in advocacy activities in their own right, without segregating those activities in an affiliate entity, because they consistently say that all the plaintiffs engage in advocacy either directly or through an affiliate program. USCA5 12, 22, 33, 38. Every plaintiff who appears on this preliminary record to promote elective abortions within the meaning of (c-1) 24

38 Case: Document: Page: 38 Date Filed: 05/11/2012 without segregating these abortion-promoting activities into a separate affiliated entity can be excluded from WHP funding consistent with Regan and League of Women Voters. Taxation with Representation holds that governments may withhold taxpayer subsidies from an entire entity if any component engages in lobbying, even though lobbying is protected First Amendment activity. 461 U.S. at 546, 550. The Supreme Court s Taxation with Representation holding remains valid even if the organization s lobbying is paid for entirely with private funds; the First Amendment permits the government to demand that the organization s lobbying activity be conducted exclusively through a separate affiliate entity that does not receive the taxpayer subsidy Whether Texas can take the additional step of withholding taxpayer subsidies from organizations that do not directly promote elective abortions, but merely affiliate with entities that do, is outside the scope of the decision. The Supreme Court noted in Taxation with Representation that it... appears that TWR can obtain tax deductible contributions for its non-lobbying activity by returning to the dual structure it used in the past, with a 501(c)(3) organization for non-lobbying activities and a 501(c)(4) organization for lobbying. 461 U.S. at 544 (emphasis added). But the majority opinion attributed no constitutional significance to this observation and did not even attempt to resolve whether the Internal Revenue Code would actually allow this maneuver. Id. Justice Blackmun s concurrence in Taxation with Representation opines that the Constitution requires the IRS to accommodate an organization s lobbying efforts by allowing it to establish a lobbying affiliate that will not qualify for tax-exempt status under section 501(c)(3). See id. at (Blackmun, J., concurring). But it is only a concurrence. 25

39 Case: Document: Page: 39 Date Filed: 05/11/2012 League of Women Voters likewise recognizes that a State may withhold taxpayer funding from an organization on account of its First Amendment activities if the entity has a ready network of nontaxpayer-funded affiliate entities capable of performing the First Amendment work on its behalf. In disapproving a statute that barred federally funded noncommercial educational broadcasting stations from editorializing, the Court noted that recipient stations were not capable of segregat[ing] [their] activities according to the source of... funding. 468 U.S. at 400. Taxation with Representation authorizes the State to exclude abortion providers and their affiliates from receiving taxpayer subsidies from the WHP on that basis alone. Plaintiffs themselves engage in abortion-related advocacy that the Texas Legislature, exercising its prerogatives, elected not to fund. So Taxation with Representation applies directly. 3 League of Women Voters forecloses funding 3. Taxation with Representation cannot be distinguished on the ground that the statute in that case withheld taxpayer subsidies from entities that engage in any kind of lobbying, see 461 U.S. at 542 n.1, while the rules at issue in this case withhold taxpayer subsidies from entities that promote abortion but not from entities that oppose abortion, see 1 TEX. ADMIN. CODE for two reasons. First, Rust holds that government may choose to subsidize anti-abortion and abortion-neutral speech over pro-abortion speech. 500 U.S. at 193. Abortion (unlike, say, religion) is an issue on which the government is permitted to support 26

40 Case: Document: Page: 40 Date Filed: 05/11/2012 restrictions when a recipient is incapable of segregating its activities. Here, by contrast, plaintiffs could easily relegate their abortionpromoting advocacy to already-established affiliated entities that do not receive taxpayer subsidies under WHP. Indeed, the heart of their claim is that any restriction on their funding is unconstitutional because of the actions of these segregated entities. USCA , Plaintiffs own complaint and attachments thus defeat their legal claims. * * * For plaintiffs that admit that they engage in abortion-promoting advocacy, their unconstitutional conditions claim is barred by Taxation with Representation. Those who refuse to say whether they engage in abortion-promoting activity on their own or solely through an affiliated entity have failed to make the clear showing of likelihood of success needed for preliminary injunctive relief. See Mazurek, 520 U.S. one side with taxpayer dollars. Second, the rules are viewpoint-neutral in effect. There is no evidence or allegation that any WHP recipient advocates against abortion, nor is there any assertion that an anti-abortion advocacy group would seek to participate in the WHP. 27

41 Case: Document: Page: 41 Date Filed: 05/11/2012 at 972. Either way, the preliminary injunction must be vacated in its entirety. II. THE DISTRICT COURT ERRED BECAUSE IT MISUNDERSTOOD AND MISAPPLIED THE UNCONSTITUTIONAL CONDITIONS DOCTRINE. Plaintiffs assert that governments may not withhold taxpayer subsidies on account of the would-be recipient s constitutionally protected conduct outside of the government program. USCA5 42 (emphasis added). They concede that governments may withhold taxpayer subsidies on account of what the recipient plans to do with the money. Id. But, they argue, governments may never withhold a taxpayer subsidy because the would-be recipient engages in constitutionally protected conduct on the side. USCA The district court adopted this argument. See USCA5 327 ( By requiring Plaintiffs to certify that they do not promote elective abortions and that they do not affiliate with entities that perform or promote elective abortions, as defined by the rule, Texas is reaching beyond the scope of the government program and penalizing Plaintiffs for their protected conduct. (emphasis added)). 28