Supreme Court Hears Oral Arguments on OSHA ETS and CMS Rule on Vaccination

On January 7, the US Supreme Court debated a range of complex issues in a pair of oral arguments over challenges to two federal regulations requiring workplace COVID-19 precautions. Although it is unlikely the Court will issue definitive opinions for several days or weeks, the Court could quickly issue a temporary “administrative” stay while it deliberates, or an unreasoned order with opinions to follow.

The first challenged federal regulation was the Occupational Safety and Health Administration’s (OSHA) Vaccination and Testing Emergency Temporary Standard (ETS). The second was the Center for Medicare and Medicaid Services’ (CMS) Interim Final Rule (IFR) on COVID-19 Health Care Staff Vaccination. During the ETS argument, the parties challenging the standard asked the Court to reimpose a stay of its enforcement. During the CMS argument, the federal government asked the Court to lift injunctions of the IFR upheld by the US Court of Appeals for the Fifth and Eighth Circuits.

OSHA ETS Background

The Fifth Circuit stayed enforcement of the ETS in a ruling on November 6, 2021, the day after OSHA released the rule. Various cases challenging the rule were consolidated and transferred to the Sixth Circuit, which lifted the Fifth Circuit stay on December 17. Parties challenging the ETS immediately filed emergency applications with the Supreme Court requesting it to reimpose the stay, and on December 22, the Court directed the parties to present oral arguments on January 7, 2022.

CMS IFR Background

CMS issued its IFR on the same day as the ETS, November 5, 2021. A federal district court in Missouri granted a preliminary injunction blocking CMS from enforcing the rule in 10 states on November 29. That order was upheld by the Eighth Circuit on December 13. Meanwhile, a federal district court in Louisiana granted an injunction in the remaining states, and the Fifth Circuit upheld the injunction but limited its geographic reach to the 14 states that had filed the lawsuit. The federal government filed emergency applications with the Supreme Court on December 16 seeking to overturn the injunction. As with the OSHA ETS, the Supreme Court ordered the parties to present oral arguments on this question on January 7, 2022.

Oral Argument

The Court asked counsel on all sides pointed questions on a range of issues, but there were two main themes in both arguments:

• Do the agencies have the authority to regulate without specific congressional authorization? Much of the discussion focused on whether OSHA and CMS have the statutory authority to issue the challenged regulations. For the OSHA ETS, some justices questioned whether the Occupational Safety and Health Act grants OSHA authority to issue an economy-wide regulation across many different types of workplaces on a novel public health matter like COVID-19. The views of the justices on the “major questions” doctrine, which holds that courts should not assume Congress granted an agency broad authority to address major policy questions absent specific statutory language, could play a large role in answering that. For the CMS IFR, a similar discussion shifted to statutory provisions allowing the agency to establish conditions for Medicaid and Medicare participants and statutory provisions addressing specific healthcare institutions, such as long-term care facilities. In the background for both regulations was some justices’ suggestion that the Court preserve a role for Congress and the states in calibrating policy responses to COVID-19.
• Are the regulations an appropriate means of addressing the risks from COVID-19? Although the Court seemed reticent to express its own views on the appropriateness of the two regulations as a policy matter, the legal issues before them may make those questions impossible to avoid. For instance, the Occupational Safety and Health Act permits OSHA to issue emergency temporary standards when such standards are “necessary” to protect employees from “grave danger.” Several justices asked questions about whether OSHA’s ETS is “necessary” in the relevant sense, particularly given the breadth of its application. The Court seemed to agree, however, that COVID-19 is a grave emergency that could justify a forceful response from policymakers. In both cases, moreover, the challengers tried to identify potential costs to the regulations, in terms of compliance expense and loss of talent. Even so, for some justices, such tradeoffs were considerations for the agencies to navigate, not issues for the Supreme Court to second-guess.

Takeaway for Employers

Although the legal questions and subject matter in the two oral arguments overlap to a considerable degree, there is no guarantee that the Court will rule the same way—either for or against the regulation—in both sets of cases. Justices who may provide deciding votes gave some sign during argument that they might see distinctions between the regulations that could lead them to stay the OSHA ETS but leave the CMS IFR in force.

As noted above, detailed opinions are not expected before next week. The Supreme Court may quickly issue a brief administrative stay in the ETS case or an unreasoned opinion noting the Court’s bottom-line rulings in the cases with detailed opinions to follow.

If the Supreme Court does not issue an opinion prior to the January 10 ETS deadline, many employers will grapple with whether to (1) hold back their ETS policies and accept the (however unlikely) OSHA enforcement risk while waiting for the Court to decide; or (2) roll out an ETS policy to their employee population only to change or rescind it depending on how the Court rules. Morgan Lewis is here to work through these questions with you.

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CONTACTS

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Houston
Stefanie Moll

Los Angeles
Jason S. Mills

Orange County
Daryl S. Landy

Philadelphia
A. Klair Fitzpatrick
Brandon J. Brigham

Princeton
Emily Cuneo DeSmedt

Washington, DC
Kaiser H. Chowdhry
Alana F. Genderson
Sharon Perley Masling
Jonathan L. Snare
Michael E. Kenneally