Sherley v. Sebelius: A win but the fight continues

[This analysis is written by Neal Goldfarb (Butzel Long Tighe Patton, PLLC; LAWnLinguistics), who wrote GPI’s amicus brief in the Sherley case.]

Summary

By a vote of 2–1, a panel of the U.S. court of appeals in Washington, D.C. has overturned the preliminary injunction issued last summer prohibiting the federal government from funding research involving human embryonic stem-cells (hESCs). The court held that funding such research is not prohibited by a statute (known as the Dickey-Wicker Amendment) that prohibits federal funding of “research in which a human embryo or embryos are destroyed[.]” The court also held—contrary to the lower court—that enjoining hESC research would cause harm to the government significantly greater than the harm that the plaintiffs would suffer without an injunction.

However, the fight is not over. The court of appeals did not address two additional arguments that had been made by the plaintiffs challenging hESC funding. Those issues remain to be decided by the Judge Lamberth, the judge who issued the injunction. In addition, the plaintiffs are likely to pursue further appeals of the appeals-court decision—either to the full court of appeals or to the Supreme Court.

Background

Last August, federal district-court judge Royce Lamberth held that the Dickey-Wicker Amendment prohibited the federal government from funding hESC research and enjoined the government from continuing such funding. This decision was generally interpreted as prohibiting even the limited funding that had been allowed under the Bush administration. The government appealed the injunction and asked Judge Lamberth to stay (i.e., suspend) the injunction while the appeal was pending, but that request was denied. The government then sought a stay from the court of appeals, and this time a stay was granted. That has enabled funding of hESC research to continue.

Judge Lamberth’s ruling was based on his conclusion that hESC research was “research in which a human embryo or embryos are destroyed” and therefore that federal funding was prohibited by the Dickey-Wicker Amendment. The plaintiffs also made two other arguments, which Judge Lamberth did not address. First, they contended that hESC research was also prohibited under the  separate prohibition in Dickey-Wicker against federal funding of research in which human embryos are “knowingly subjected to risk of injury or death greater than that allowed for research on fetuses in utero[.]” The plaintiffs argued that funding for hESC research endangered embryos by creating a demand for additional stem-cell lines and therefore increasing the chances that a particular embryo might be used as a source of stem cells. Second, they contended that when NIH had adopted the new funding rules for hESC research, it had violated the Administrative Procedure Act, which governs rulemaking by federal agencies.

The appeals court’s ruling

The appeal was heard by three Republican-appointed judges: Douglas Ginsburg, Karen Henderson, and Thomas Griffith. The vote was 2–1, with Ginsburg and Griffith in the majority and Henderson dissenting.

The court decided two overall issues. First, it held that funding of hESC research is not prohibited under the portion of the Dickey-Wicker Amendment that bars federal funding of research “in which a human embryo or embryos are destroyed[.]” Second, it ruled that the government would be harmed by the granting of an injunction much more than the plaintiffs would be harmed by the not granting one.

Dickey-Wicker. The Dickey-Wicker issue was decided under a legal rule called the Chevron doctrine, which applies when a federal agency’s interpretation of a statute is challenged. The court first decides whether the statute unambiguously addresses the specific issue raised by the challenge. If the answer is yes, the court decides for itself whether the agency interpretation is correct. But if the answer is no, the court will defer to the agency’s interpretation if that interpretation is reasonable one—even if the court would otherwise have interpreted the statute differently. Thus, the Chevron rule is favorable to the government in cases where the statute itself doesn’t clearly resolve the issue.

Here the court concluded that the Dickey-Wicker Amendment is ambiguous. On the one hand, it could be read to prohibit funding of hESC research, but on the other hand it could be read to permit it. This means that the NIH rules allowing such funding will be upheld if they represent a reasonable interpretation of Dickey-Wicker. The court concluded that the rules passed that test.

The court also relied on the fact that Congress has reenacted the Dickey-Wicker Amendment without change each year with the knowledge that at least some hESC research is eligible for federal funding. (Recall that under the Bush-administration rules, NIH could fund research on stem-cell lines that had been derived before those rules took effect.) This is an indication that Congress “intended the Agency’s interpretation, or at least understood the interpretation as statutorily permissible.”

The balance of harms. The other major issue in the case is whether Judge Lamberth had been correct in finding that an injunction (1) was necessary to protect the plaintiffs from serious harm and (2) would not seriously harm the government. Lamberth had said that an without an injunction, federal funding for hESC research would “threaten [the plaintiffs’] very livelihood, while granting an injunction “would simply preserve the status quo and would not interfere with [hESC researchers’] ability to obtain private funding.”

The appeals court ruled that Judge Lamberth was wrong on both counts. While the expanded scope of funding for hESC research does increase the competition for federal grants, “it is necessarily uncertain whether invalidating the Guidelines would result in the plaintiffs getting any more grant money from the NIH. In contrast, “the hardship a preliminary injunction would impose upon ESC researchers…would be certain and substantial.”

Further appeals

The plaintiffs will undoubtedly try to get the appeals court’s decision overturned; the question is exactly how and when they will seek further review. They have several options:

  • Asking the full court of appeals (i.e., all 13 judges) to set aside the decision, and if that does not succeed, asking the Supreme Court to hear the case.
  • Asking for review by the full court of appeals, but deferring a petition by the Supreme Court until after the remaining issues in the case (discussed below) are decided.
  • Asking the Supreme Court to hear the case now, without first seeking review by the full court of appeals.
  • Deferring any petition to the Supreme Court until the case is completely decided, and not asking for review by the full court.

You will note from these options that the plaintiffs can wait until the entire case is decided before asking for the Supreme Court to hear the case. In addition, if the plaintiffs seek Supreme Court now but the Court doesn’t take the case, the plaintiffs would be able to ask again after the entire case is decided.

Any request for review by the full court of appeals would have to be filed by June 14. If the plaintiffs don’t file such a request, any petition to the Supreme Court would be due by July 29.

Back to Judge Lamberth

The court of appeals decision resolved only one of the issues raised by the plaintiffs. Two additional issues remain, and they will be decided by Judge Lamberth. These are the issues that Judge Lamberth did not address in his ruling back in August.

First, is hESC research prohibited under the portion of the Dickey-Wicker Amendment forbidding federal funding of research in which human embryos are “knowingly subjected to risk of injury or death greater than that allowed for research on fetuses in utero[.]” The plaintiffs argued that funding for hESC research endangered embryos by creating a demand for additional stem-cell lines and therefore increasing the chances that a particular embryo might be used as a source of stem cells.

Second, when NIH adopted the new funding rules for hESC research, did its decisionmaking process violate the Administrative Procedure Act?

Once these issues are decided, there will be another round of appeals. If Judge Lamberth’s decision is once again in favor of the plaintiffs, the government will undoubtedly ask again that the decision be stayed pending appeal. At that point, the ruling by the court of appeals on the “balance of harms” issue will become very important. The balance of harms is one of the factors that a court must consider in deciding whether to grant a stay pending appeal, and the appeals-court’s decision (if it is not overturned on further review) definitively resolves that issue in favor of the government.

Conclusion

We have won this battle, but the fight continues.