RANDALL CALLAHAN, KATRYNA GRISSON, CANDICE SEAMAN, MICHAEL WINGATE, EMORY UNIVERSITY, d.b.a. Emory University Hospital, HENRY FORD HEALTH SYSTEM, INDIANA UNIVERSITY HEALTH, OREGON HEALTH & SCIENCE UNIVERSITY, PIEDMONT HEALTHCARE, THE RECTOR AND VISITORS OF THE UNIVERSITY OF VIRGINIA, on behalf of its Medical Center, THE REGENTS OF THE UNIVERSITY OF MICHIGAN, on behalf of its academic medical center, Michigan Medicine, SAINT LUKE'S HOSPITAL OF KANSAS CITY, UNIVERSITY OF IOWA, UNIVERSITY OF KANSAS HOSPITAL AUTHORITY, a body politic and corporate and an independent instrumentality of the State of Kansas, UNIVERSITY OF KENTUCKY, VANDERBILT UNIVERSITY MEDICAL CENTER, VIRGINIA COMMONWEALTH UNIVERSITY HEALTH SYSTEM AUTHORITY, THE WASHINGTON UNIVERSITY, BARNES-JEWISH HOSPITAL, Plaintiffs - Appellants,
UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, through ALEX M. AZAR II in his official capacity as Secretary of the United States Department of Health and Human Services, UNITED NETWORK FOR ORGAN SHARING, Defendants-Appellees, SUSAN JACKSON, CHARLES BENNETT, Intervenor Appellees.
from the United States District Court for the Northern
District of Georgia D.C. Docket No. 1:19-cv-01783-AT
WILSON and NEWSOM, Circuit Judges, and COOGLER, [*] District Judge.
NEWSOM, CIRCUIT JUDGE:
liver is one of the human body's most vital and versatile
organs. Among its 500-some-odd functions, the liver cleans
the blood, regulates amino acids, produces critical proteins,
manages blood clotting, and facilitates digestion. But
that's when things go right. Far too often-and due to a
variety of causes- things can go wrong, and when they do
modern medicine has to step in. For minor liver
complications, medication and dietary changes will usually do
the trick. When liver failure sets in, though-when things go
really wrong-there is often only one long-term
case centers on the high-stakes rules that determine which
patients- among the more than 12, 000 currently on the
national waiting list-receive the liver transplants they
need. In December 2018, a private nonprofit entity tasked by
the Department of Health and Human Services (HHS) with
coordinating the nation's organ-transplant system adopted
a new policy for allocating donated livers. This suit
followed. Plaintiffs, four liver-transplant candidates and
more than a dozen transplant hospitals, challenged the policy
in federal district court on a variety of grounds and moved
for preliminary injunctive relief barring the policy's
implementation. The district court denied the motion, and
plaintiffs filed an interlocutory appeal.
central question we face is one of regulatory construction.
In particular, we must determine whether 42 C.F.R. §
121.4(b) required the Secretary of HHS to take two procedural
steps that all agree he did not: (1) referral of the new
liver-allocation policy to an entity called the Advisory
Committee on Organ Transplantation and (2) publication of the
new policy in the Federal Register for public comment. We
hold that the Secretary was not required to do so, and we
therefore affirm-at least in that regard-the district
court's denial of plaintiffs' preliminary-injunction
motion. Because the district court failed to address two of
plaintiffs' claims, however, we remand for consideration
of them in the first instance.
diving into the merits, we first need to canvass the
statutory and regulatory landscape, some factual background,
and the case's procedural posture. Fair warning: This
United States, organ transplants are a public-private affair.
The National Organ Transplant Act of 1984 requires HHS to
appoint and oversee the Organ Procurement and Transplant
Network (OPTN)-a private nonprofit responsible for
coordinating foundational aspects of the nation's
organ-transplant system. See 42 U.S.C. § 274.
Under the Act, the OPTN must maintain a list of transplant
candidates, implement a system for allocating donated organs,
and ensure the organs' equitable distribution. See
id. § 274(b).
the Act describes the OPTN's duties in broad strokes,
HHS's implementing regulation-the "Final
Rule"-covers the nitty-gritty, from the OPTN's Board
of Directors to its record-maintenance policy. See
42 C.F.R. §§ 121.1–.13. Most
importantly for present purposes, the Final Rule prescribes
the procedures that the OPTN must follow when developing new
organ-transplant policies, as well as the circumstances under
which-and extent to which-HHS must review those policies.
See id. § 121.4.
get way down into the regulatory weeds in due time,
complete with a dense block quote of the Final Rule's
pertinent text-but for now it's enough to summarize the
Rule's key features. As an initial matter, the Final Rule
states that whenever the OPTN proposes any new policy, its
Board of Directors must give OPTN members and other
"interested parties" an opportunity to comment on
it, and the Board must "take [those comments] into
account" in developing and adopting the policy.
Id. § 121.4(b)(1). Separately, the Rule
requires the OPTN to provide the Secretary of HHS with two
types of proposed policies at least 60 days prior to their
intended implementation: (1) those that the OPTN Board
"recommends to be enforceable"; and (2) those that relate to "such
other matters as the Secretary directs." Id. at
§ 121.4(b)(2). Finally, as part of the same
subsection-and as you'll see soon enough, this is where
the debate hinges-the Final Rule requires the Secretary to
refer "significant proposed policies" to the
Advisory Committee on Organ Transplantation and to publish
those policies in the Federal Register for "public
organization called the United Network for Organ Sharing has
served as the OPTN for the past 35 years. In 2013, United
Network approved and implemented the liver-allocation policy
that remains in place today. The current policy distributes
livers based on two geographic criteria:
"Regions"-11 groups of states-and "Donation
Service Areas" (DSAs)-58 smaller, geographically
irregular areas (within and among states) that surround the
entities that United Network has tasked with collecting
recent years, the use of DSAs has come under fire. Critics of
the DSA-based system contend that because DSAs are neither
geographically uniform nor designed to minimize transit of
donated organs, reliance on them can lead to bizarre
allocation results. They argue, for instance, that organs can
end up traveling greater distances to less-sick
patients. Defenders of the DSA-based
system, by contrast, insist that aligning organ allocation
with the organ-procurement organizations encourages
communication between the entities that collect organs and
those that perform transplants.
2016, United Network had decided that things needed to
change. After more than a year of exploring alternatives,
United Network approved a new liver-allocation policy in
December 2017. That policy-which retained DSAs but reduced
their impact on allocation decisions-was set to take effect
in December 2018. In May 2018, however, a group of patients
awaiting liver transplants filed a comment with the Secretary
pursuant to 42 C.F.R. § 121.4(d) criticizing any continued use of
DSAs in liver-allocation determinations. Two months later, in
July 2018, the Secretary instructed United Network's
Board to scrap the December 2017 policy and adopt a new one
that eliminated the use of Regions and DSAs altogether.
Network went back to the drawing board, but it faced an
extremely tight timeline. The Secretary's July 2018
instruction imposed a December 3, 2018 deadline for
promulgating the new liver-allocation policy. By September,
the Liver and Intestinal Transplantation Committee-a
specialized group within United Network that makes
recommendations to the Board-had homed in on two alternative,
DSA-less approaches for allocating livers: the "Acuity
Circles" model and the "Broader 2-Circle"
model. When the Committee published its
policy proposal on October 6, it identified the Broader
2-Circle model as the "preferred" policy, but it
sought public comment on both options. At the Committee
meeting on November 2, the Broader-2 Circle model prevailed
by a narrow 11-9 vote.
Network's Board, however, went the other way. On December
3, 2018-the HHS-imposed deadline-the Board adopted the Acuity
Circles model. This model, the Board found, would result in
"lower waitlist mortality rate[s]" and "more
equity in access" for liver-transplant candidates.
United Network later set the policy's implementation date
for April 30, 2019.
this point, HHS had remained on the sidelines. Of course, the
Secretary had initiated the process by directing United
Network to adopt a new, DSA-less allocation policy. But once
the new policy's development began, HHS didn't
actively intervene. As particularly relevant here, consistent
with HHS's treatment of prior organ-allocation policies,
the Secretary didn't refer the new policy to the Advisory
Committee on Organ Transplantation or publish it in the
Federal Register for public comment.
policy's detractors, however, brought HHS into the mix.
Just as critics of the December 2017 policy had done, a group
of hospitals that opposed the new policy filed a comment with
the Secretary asking him to suspend the new policy's
implementation until something better could be developed.
This time, though, the policy survived the challenge. Acting
on the Secretary's behalf, the Administrator of HHS's
Health Resources and Services Administration responded to the
comment, announcing that no further action was warranted and
that the new policy would take effect as scheduled.
April 22, 2019-eight days before the new policy's
official implementation date-a collection of hospitals and
individual patients sued HHS and United Network in the United
States District Court for the Northern District of
Georgia. Plaintiffs' complaint
challenged the new liver-allocation policy on three grounds:
(1) that HHS failed to follow legally required procedures
during the development of the new policy, in violation of the
Administrative Procedures Act (APA); (2) that HHS's and
United Network's actions were-both substantively and
procedurally-arbitrary, capricious, and otherwise not in
accordance with the law, also in violation of the APA; and
(3) that HHS's and United Network's conduct violated
the Due Process Clause of the Fifth Amendment. Asserting the
same grounds, plaintiffs also filed a motion for a temporary
restraining order, asking the district court to prevent the
new policy's impending implementation.
HHS's agreement to delay implementation by two weeks, the
district court received expedited briefing and held a hearing
on plaintiffs' TRO motion. On May 13, 2018, the district
court-in an order that addressed only plaintiffs' first
claim-denied the motion. The following day, the new
liver-allocation policy went into effect for the first time.
Its force, however, was short lived. Plaintiffs immediately
noticed this appeal and sought an injunction pending its
disposition, which the district court granted. As a result,
HHS reinstated the prior (and once again current) policy.
we are. After years of development, thousands of public
comments, and several revisions, the nation's policy for
allocating donated livers hangs in the balance.
standard for obtaining preliminary injunctive relief is a
familiar one. Such relief is appropriate if-but only if-the
movant shows "(1) substantial likelihood of success on
the merits; (2) irreparable injury will be suffered unless
the injunction issues; (3) the threatened injury to the
movant outweighs whatever damage the proposed injunction may
cause the opposing party; and (4) if issued, the injunction
would not be adverse to the public interest."
McDonald's Corp. v. Robertson, 147 F.3d 1301,
1306 (11th Cir. 1998). Because a preliminary injunction
"is an extraordinary and drastic remedy, " relief
may not be granted ...