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Click here for the full text of this decision FACTS: Under federal regulations, public and private agencies receiving public health funds under Title X of the Public Health Services Act or Title XX of the Social Security Act cannot use those funds to finance abortions or abortion-related activity. Agencies receiving Title X or Title XX grants must file certifications with the appropriate agency in the state that administers the grant programs, certifying that the funding restrictions are being complied with. Planned Parenthood of Houston and Southeast Texas was one of the entities which received Title X and Title XX funds, followed the restrictions and made the requisite certifications. In June 2003, as part of its general appropriations bill, the Texas Legislature passed a provision called “Rider 8,” which further restricted the distribution of federal family-planning money under Titles X and XX. Section (b) stated that it was the intent of the legislature that no funds be distributed to individuals or entities that perform elective abortion procedures or that contract with or provide funds to individuals or entities for the performance of elective abortion procedures. Section (c) stated that, if the Texas Department of Health, whic implements the Title X and Title XX distributions, concluded that compliance with (b) would result in a significant reduction in family planning services in any public health region of the state, the department may waive that section for the affected region to the extent necessary to avoid a significant reduction in family planning services to the region. This waiver provision would expire on Aug. 31, 2004, however, and no waiver shall extend beyond that date, the legislation states. TDH began plans to implement Rider 8. TDH planned to require additional certifications stating that no elective abortion procedures were being conducted or that entities that did provide elective abortions were not be contracted with. Planned Parenthood filed suit just two weeks after the bill was passed. Planned Parenthood argued that Rider 8 imposed an unconstitutional condition on its eligibility for federal funds; that it imposed an unconstitutional burden on a woman’s right to an abortion; and that it violated the Supremacy Clause by imposing additional eligibility requirements on its receipt of federal funds that were inconsistent with the federal funding statutes. The trial court determined that Planned Parenthood had demonstrated a likelihood of success on the unconstitutional condition claim and the Supremacy Clause claim. The district court issued a temporary restraining order four days later and a preliminary injunction in early August, barring TDH’s enforcement of sections (b) or (c). TDH appeals. HOLDING: Reversed and remanded. The court addresses the Supremacy Clause claim first. Planned Parenthood argued that Rider 8 violated the Supremacy Clause, because it added eligibility requirements to the receipt of federal funds. Where, as here, a state law purportedly conflicts with federal statutes enacted under the spending clause, courts often proceed without invoking preemption. Some courts have explicitly found that preemption was not an issue in such cases, while others have expressed ambivalence. The growing consensus, however, is to analyze such claims under traditional preemption doctrine, the court stated. The district court here referred to TDH having “willingly tapped into the federal fisc,” so the court here applied preemption terminology and framework. The 5th Circuit determined that the district court properly exercised jurisdiction over Planned Parenthood’s preemption claim. The 5th Circuit disagreed, too, with TDH’s argument that, even with federal jurisdiction over the claim, the district court improperly resolved the issue, because Planned Parenthood was not seeking to vindicate rights or enforce any duty running to them, which TDH saw as necessarily an argument that Rider 8 was preempted by federal Spending Clause legislation. The court said it had little difficulty holding that Planned Parenthood had an implied right of action to assert a preemption claim seeking injunctive and declaratory relief. The court further rejected TDH’s assertion that Planned Parenthood must meet the requirements for an action under 42 U.S.C. 1983. After establishing jurisdiction, the court then turned to the preemption claim itself. The court started with a presumption that Rider 8 is valid, and asked whether Planned Parenthood had met the burden of overcoming that presumption. The mere fact that a state program imposes an additional “modest impediment” to eligibility for federal funds does not provide a sufficient basis for preemption, but a state eligibility standard that altogether excludes entities that might otherwise be eligible for federal funds is invalid under the Supremacy Clause. State participation in federal funding programs is voluntary, the court added, but once a state has accepted federal funds, it is bound by the strings that accompany them. The court held that nothing in Rider 8′s language precluded the creation of affiliates to perform abortion services with no Title X or Title XX support. “Rider 8 only prohibits contracting for the performance of abortions. It does not prohibit all contracting with an entity that performs abortions. As such, Rider 8 does not preclude a family planning services provider from maintaining a contract with TDH while simultaneously creating a separate legal entity that performs abortions and receives no federal funds.” This holding, the court explained, was controlling in this case because if Rider 8 were interpreted to not allow for affiliates, it would be totally preempted. The Texas legislation attempted to impose regulations that restricted the scope of a federal program. If it did not allow for affiliates, Rider 8 would do far more than require physical separation of funds; it would require that entities not engage in abortion activities even with private funds and in separate facilities. “At this point, under the affiliate-permissible interpretation of Rider 8, there are two possibilities: either the affiliate requirement is a relatively empty formalism or it is a more substantial obstacle. The former is permissible, while the latter likely is not.” “On remand, unless Appellees can show that the burden of forming affiliates in forthcoming years would in practical terms frustrate their ability to receive federal funds, Rider 8 should be upheld and the injunction dissolved. While creating affiliates might entail some time and expense, and might not be the most convenient arrangement, this extra effort alone would not relegate the state statute to preemption.” OPINION: Higginbotham, J.; Higginbotham, Dennis and Clement, JJ.

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