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Johnson v. United States Office of Personnel Management

United States Court of Appeals, Seventh Circuit

April 14, 2015

RON JOHNSON and BROOKE ERICSON, Plaintiffs-Appellants,
v.
UNITED STATES OFFICE OF PERSONNEL MANAGEMENT and KATHERINE ARCHULETA, Director of the Office of Personnel Management, Defendants-Appellees

Page 656

[Copyrighted Material Omitted]

Page 657

Argued: January 21, 2015.

Appeal from the United States District Court for the Eastern District of Wisconsin. No. 1:14-cv-00009 -- William C. Griesbach, Chief Judge.

For RON JOHNSON, Senator, Brooke Ericson, Plaintiffs - Appellants: Richard M. Esenberg, Attorney, Wisconsin Institute For Law & Liberty, Milwaukee, WI; Paul D. Clement, Attorney, David Zachary Hudson, Attorney, Bancroft Pllc, Washington, DC.

For United States Office of Personnel Management, KATHERINE ARCHULETA, in her capacity as Director of the Office of Personnel Management, Defendants - Appellees: Alisa B. Klein, Attorney, Mark B. Stern, Attorney, Department of Justice, Civil Division, Appellate Staff, Washington, DC.

For Judicial Education Project, Members of The United States Congress, Amicus Curiae: Gregory G. Katsas, Attorney, Jones Day, Washington, DC.

Before BAUER, FLAUM, and WILLIAMS, Circuit Judges.

OPINION

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Flaum, Circuit Judge.

The Office of Personnel Management (" OPM" ) negotiates and regulates health benefit plans that are offered to federal employees. Most federal employees receive these benefits through the Federal Employee Health Benefits Program (" FEHBP" ). Prior to the passage of the Patient Protection and Affordable Care Act (" ACA" ), Pub. L. No. 111-148 (2010), members of the U.S. Senate and House of Representatives, as well as their staff members, were eligible for FEHBP insurance plans, just like other federal employees. A provision of the ACA, however, limited the health care options available to members of Congress and their staffs, mandating that the only health plans that the federal government could make available to those individuals were plans created under the ACA or offered through a health insurance exchange established under the ACA; they could no longer receive insurance through the FEHBP. See 42 U.S.C. § 18032(d)(3)(D).

Following the passage of the ACA, OPM conducted notice-and-comment rulemaking to implement this provision of the ACA, and issued the final rule, 78 Fed. Reg. 60653-01, that is at issue in this case. The plaintiffs, United States Senator Ron Johnson, of Wisconsin, and his legislative counsel, Brooke Ericson, filed suit in federal court to enjoin the enforcement and implementation of the OPM rule. They contend that the rule is contrary to the ACA and other law because it allows the government to make pre-tax employer contributions to non-FEHBP plans and makes members of Congress and their staffs eligible for an ACA insurance exchange reserved for small businesses.

The defendants--OPM and its director, Katherine Archuleta (collectively, " OPM" )--moved to dismiss, arguing that the plaintiffs lack standing to bring this suit. The district court granted the motion, finding that the plaintiffs had not identified a judicially cognizable injury that is traceable to the aspects of the OPM regulation that they challenge. We affirm.

I. Background

The federal government offers employer-sponsored group health insurance to its employees pursuant to the Federal Employees Health Benefits Act of 1959 (" FEHBA" ), 5 U.S.C. § 8901-8914. See Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 682, 126 S.Ct. 2121, 165 L.Ed.2d 131 (2006). That insurance is provided through the FEHBP. The FEHBA " assigns to OPM responsibility for negotiating and regulating health-benefits plans for federal employees." Id. at 683. The government pays for up to seventy-five percent of the premiums for plans provided through the FEHBP, 5 U.S.C. § 8906(b)(1)--(2), and those contributions, like all employer contributions to employer-sponsored group health insurance, are tax free.

Members of Congress and their staffs (collectively, " Members" ) are among those defined by the FEHBA as federal employees, 5 U.S.C. § 8901(1)(B)--(C), and, prior to the 2010 enactment of the ACA, those individuals were eligible for health plans offered through the FEHBP. The ACA, though, changed the status quo by mandating that Members are now eligible only for health plans created under the ACA or offered through an ACA health insurance exchange:

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Notwithstanding any other provision of law, after the effective date of this subchapter, the only health plans that the Federal Government may make available to Members of Congress and congressional staff with respect to their service as a Member of Congress or congressional staff shall be health plans that are--
(I) created under this Act (or an amendment made by this Act); or
(II) offered through an Exchange established under this Act (or an amendment made by this Act).

42 U.S.C. § 18032(d)(3)(D)(i). The statute defines " Member of Congress" as " any member of the House of Representatives or the Senate" and defines " congressional staff" as " all full-time and part-time employees employed by the official office of a Member of Congress, whether in Washington, DC or outside of Washington, DC." § 18032(d)(3)(D)(ii). According to the plaintiffs, this provision " was passed so that Members of Congress and their staffs would be subject to the ACA in the same way as Members' constituents" and to preclude Members from receiving government contributions. Congress took this action, they say, " to address criticisms that it was reserving special 'Cadillac' benefits for itself or was unwilling to live with the health insurance it was mandating on the rest of the Nation."

OPM was charged with the task of implementing this statutory provision. It conducted notice-and-comment rulemaking and issued a final rule, 78 Fed. Reg. 60653-01 (the " OPM Rule" or " Rule" ) on October 2, 2013. The Rule adopts the statutory definitions of " Member of Congress" and " congressional staff." 5 C.F.R. § 890.101. The implementing regulation states:

The following employees are not eligible to purchase a health benefit plan for which OPM contracts or which OPM approves under this paragraph ... but may purchase health benefit plans, as defined in 5 U.S.C. 8901(6), that are offered by an appropriate SHOP as determined by ...

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