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Federal Register / Vol. 86, No. 7 / Tuesday, January 12, 2021 / Rules and Regulations
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parent on the basis of race, color, or national origin, 42 U.S.C. 671a18, and contended that the Department had unlawfully expanded such statutory provisions through those regulatory provisions.7 The State also argued that the provisions violated the Constitution and RFRA because they require certain child placing agencies to abandon their religious beliefs or forgo the available public licensure and funding. In granting the exception, the Department, through its Office for Civil Rights OCR
and the Administration for Children and Families ACF, respectively, found that requiring the States subgrantee to comply with the religious nondiscrimination provision would substantially burden its religious beliefs in violation of RFRA 8 and that application of the regulatory requirement would cause a significant programmatic burden for South Carolinas foster care program by impeding the placement of children into foster care.9 Finding that other foster care agencies were available to facilitate adoptions for those who did not share the particular subrecipients religious beliefs, the Department granted South Carolinas request for an exception with respect to the particular subgrantee and other similarly situated subgrantees, in order to facilitate the participation of faith-based entities in the recruitment of families for South Carolinas foster care program. The Department also reviewed 75.300c and concluded that it likely exceeded the nondiscrimination provisions for the foster care program specifically enacted by Congress.10
7 The request was subsequently narrowed to a request for an exception from the religious nondiscrimination provision in 75.300c.
8 In reaching this conclusion, OCR found, among other things, that 1 the religious nondiscrimination provision in section 75.300c exceeds the scope of the nondiscrimination provisions found in the federal statutes applicable to the foster care program, and provides no exception for religious organizations as found in other statutes prohibiting religious discrimination, 2 the OMB UAR does not include analogous provisions to section 75.300c, and 3 HHS UAR
permits the awarding agency to grant exceptions to applicable provisions on a case-by-case basis.
9 South Carolina had provided information to the Department that it needs more child placing agencies, that faith-based organizations are essential to recruiting more families for child placement, and that it would have difficulty continuing to place all children in need of foster care without the participation of such faith-based organizations.
10 Two lawsuits were filed against the Department, challenging the Departments decision to grant an exception to South Carolina. In Maddonna v. Department of Health and Human Services, 19cv448 D.S.C. 2019, a Catholic plaintiff challenged the exception granted to South Carolina and its subrecipient bringing claims against the Department under the Administrative Procedure Act, and the First and Fifth Amendment;
while the complaint was dismissed without prejudice because of lack of standing, the plaintiff
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The State of Texas also expressed concerns about the legality of 75.300c and d. The Texas Attorney General first sent a letter to the Secretary and to several components of the Department from which it received grants, notifying them that it considered the gender-identity and sexualorientation nondiscrimination requirements of 75.300c, and the treatment of same-sex-marriage requirement of 75.300d, to be contrary to law and that it did not intend to comply with such provisions in the operation of its programs funded with Department grants. In a subsequent communication, the Texas Attorney Generals Office stated that 75.300c and d suffer from various legal flaws, asked the Department to repeal the provisions, and, in the alternative, requested that ACF grant an exception from the application of those provisions for any faith-based, child-welfare service provider in Texass Title IVE
foster care and adoption program.
Another letter reiterated the arguments and requests made in the preceding letters. The Department, through ACF
and OCR, reached out to the State on several occasions, but was unable to determine whether specific faith-based organizations were being affected by the provisions. One day before the Department posted the proposed rule in this rulemaking to its website, see https www.hhs.gov/about/news/2019/
11/01/hhs-issues-proposed-rule-toalign-grants-regulation.html, Texas, joined by the Archdiocese of GalvestonHouston, instituted a lawsuit challenging the regulations under the Administrative Procedure Act APA, RFRA, the First Amendment, and the Spending Clause. Texas and the Archdiocese alleged that the application of 75.300c and d to the States Title IVE Foster Care and Adoption Assistance program violates RFRA
because it requires current and potential program participants, including the Archdiocese, which seeks to participate in Texass Title IVE program, to refrain from discriminating on the basis of sexual orientation, gender identity, and same-sex-marriage status as a condition of participation in the program. Texas v.
Azar, 3:19cv0365 S.D. Tex 2019.11
has filed a further lawsuit. In Rogers v. HHS, 19
cv01567TMC D.S.C. 2019, a Unitarian same-sex couple challenged the exception as a violation of the First and Fifth Amendments as well.
11 On March 5, 2020, the Departments Office for Civil Rights OCR issued a letter to the Texas Attorney General indicating that OCR has concluded that RFRA prohibits the Department from applying i.e., enforcing section 75.300c and d to Texas with respect to the Archdiocese or other similarly situated entities. In analyzing the issue, OCR noted.

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Pursuant to the Departments motion to dismiss, on August 5, 2020, the district court dismissed the complaint as moot and entered judgment for the Department. Texas v. Azar, 2020 WL
4499128 Aug. 5, 2020.
In addition to the litigation referenced above, the Department has also been subject to several other lawsuits concerning these provisions. As noted, in Buck v. Gordon, 429 F.Supp.3d 447
W.D. Mich. 2019, a district court preliminarily enjoined the Department from enforcing 75.300c with respect to plaintiffs. One of the plaintiffs in that lawsuit, a Catholic charity, was willing to place children for adoption with same-sex couples once they were certified by the State or another agency, but could not, consistent with its religious beliefs, provide such certifications. Michigan had not sought an exception, but had required subrecipients to comply with nondiscrimination conditions as adoption placement agencies, even though doing so violated the sincerely held religious beliefs of the plaintiff Catholic charity in the lawsuit.12
Plaintiffs sued both Michigan and the Department. As noted, the court entered a preliminary injunction against the Department, prohibiting it from taking any enforcement action against Michigan based on the faith-based organizations protected religious exercise or Michigans obligations under the preliminary injunction to accommodate that religious exercise.
Against the backdrop of multiple requests for exceptions, communications and other complaints The Archdioceses sincerely held religious beliefs with respect to marriage.
Application of 75.300d and certain provisions in 75.300c to require Texas to exclude the Archdiocese or similarly situated entities from its foster care and adoption programs would constitute a substantial burden on the Archdioceses religious exercise by compelling it to choose between religious exercise and participation in the program.
Applying those provisions to Texas with respect to the Archdiocese is not the least restrictive means of advancing a compelling governmental interest because doing so would likely reduce the effectiveness of the Title IVE program and the Departments compelling interest is in increasing the number of providers, including faith-based providers, who are willing to participate in the foster care program; the governmental interest in ensuring that potential foster care or adoptive parents with whom certain providers cannot partner still have opportunities to participate in the Title IVE program can be accomplished through other means, such as promoting the availability of alternative providers; the OMB UAR does not contain provisions analogous to the provisions at issue; and part 75 provides a mechanism for granting exceptions from the requirements of that part.
12 Michigan imposed this requirement independent of the requirements imposed by the Department in 75.300c and d.

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