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Analysis Law and Policy

How Conservatives Are Using a 2012 Supreme Court Health-Care Case to Challenge Trans Rights

Jessica Mason Pieklo

Buried in the legal complaint challenging the Obama administration's recent agency actions on transgender rights is a legal claim designed to appeal directly to conservative judges.

Back in 2012, when conservatives’ first challenge to the Affordable Care Act (ACA) landed before the U.S. Supreme Court, the Court ruled that much of the health-care reform law was constitutional. But buried in that opinion was a poison pill—one with which conservatives are trying to kill off the Obama administration’s recent actions to protect transgender rights.

Eleven states and their officials sued the Obama administration in Texas federal court on Wednesday over its recent federal guidance advising public schools to allow transgender students to use bathrooms that align with their gender identity. Much of the joint lawsuit argues, essentially, that the Obama administration is illegally trying to rewrite federal civil rights statutes in a series of administrative agency actions called “guidances.” Such claims are effectively baseless, as Rewire Senior Legal Analyst Imani Gandy has already done an excellent job demonstrating here and here.

But still, buried in the lawsuit filed Wednesday is one additional claim that could prove irresistible for a conservative federal court judge in Texas—namely, District Judge Reed O’Connor, a 2007 President George W. Bush appointee who is expected to hear the case.

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The bulk of the Obama administration’s guidance lets some schools and employers know that it is the official, legal position that current civil rights statutes like Title VII and Title IX protect transgender students from discrimination on the basis of their sex. Should those entities instate policies that conflict with that interpretation, then they risk a loss of federal funding. Conservatives argue that threat of funding loss is unconstitutional. And they point to National Federation of Independent Businesses (NFIB) v. Sebelius, the decision that largely upheld the Affordable Care Act, for support.

“The threatened loss of over 10 percent of a State’s overall budget is economic dragooning that leaves the States with no real option but to acquiesce in the Medicaid expansion,” the Court wrote in NFIB. “[T]he expansion accomplishes a shift in kind, not merely degree,” the Court continued. “The original program was designed to cover medical services for particular categories of vulnerable individuals. Under the Affordable Care Act, Medicaid is transformed into a program to meet the health care needs of the entire nonelderly population with income below 133 percent of the poverty level.” The effect of that decision was to prevent the Obama administration from using that funding as the carrot to induce all states into setting up their own health-care exchanges and expanding Medicaid.

That question—whether the Obama administration’s guidance in the reading of Title VII and Title IX is a fundamental shift, or more of a shift in degree—is exactly what conservatives are pressing a federal district court judge to answer.

“By placing in jeopardy a substantial percentage of Plaintiffs’ budgets if they refuse to comply with the new rules, regulations, guidance and interpretations of Defendants, Defendants have left Plaintiffs no real choice but to acquiesce in such policy,” the complaint challenging the Obama administration guidance states.

That, right there, is the same “coercion” argument advanced and accepted by the Supreme Court in 2012.

The lawsuit challenging the transgender guidances borrows heavily from the language in NFIB‘s opinion, including quoting that the federal government “puts a gun to the head” of states when it makes the receipt of federal dollars dependent on doing or not doing a particular action.

But the thing is, the Obama administration’s guidance on transgender rights and its notice that certain federal funds hinge on compliance is not at all like the fight in NFIB. This is because of one key, compelling reason: In NFIB, states were not required to buy into the Affordable Care Act. The law was just written in a way that was designed to entice them into doing so.

That is not the case with the Obama administration’s guidance on transgender rights. Schools and federal agencies—in other words, recipients of federal funds—are already required to comply with federal law. Should they not, whether it be in the form of implementing discriminatory bathroom policies or refusing to hire an employee based on their gender identity, those federal funds recipients risk losing those federal dollars.

Think of it this way. The law describes the kind of “spending” relationship between the states and the federal government like it’s a contract. The federal government “offers” the states money to support certain state programs, whether they be public schools or health-care centers. But that “offer” has conditions, and one of those conditions is that the state recipient of those dollars obeys federal law. And in this case, obeying federal law means allowing transgender people to use the bathroom that aligns with their identity.

But the challengers argue that, effectively, the Obama administration has changed the terms of their contract; they say Title VII and IX were never intended to protect transgender students, and instead demand the laws require sex-segregated facilities like bathrooms and locker rooms.

“Defendants have conspired to turn workplaces and educational settings across the country into laboratories for a massive social experiment, flouting the democratic process, and running roughshod over commonsense policies protecting children and basic privacy rights,” the complaint states.

The argument advanced by conservatives that federal agencies lack the power to interpret the statutes they are charged with enforcing is disingenuous at best. But it’s also an argument conservative federal courts have been willing to accept in the past, so it’s entirely likely a conservative judge would accept that argument here too. Which is exactly why of the 11 states joined in the lawsuit, conservatives chose Texas—and the ultra-conservative Fifth Circuit Court of Appeals—to bring this claim.

There are a lot of unanswered questions regarding the legitimacy of Wednesday’s lawsuit. It’s not entirely clear the plaintiffs have standing to bring this suit in the first place, and that’s not even touching on all the legal deficiencies Gandy already mentioned. But if we’ve learned anything from the health-care reform litigation, it’s that conservatives care very little if the facts and law are on their side, so long as at least one federal court is willing to enable their attacks on policies they lack the legislative and political power to block in the first place.

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