After CASA, Is Universal Vacatur Next on the Chopping Block?

Last week, the federal government filed a petition for certiorari in U.S. Department of Health & Human Services v. Texas Medical Association (No. 26-491), asking the Supreme Court to decide whether the Administrative Procedure Act (APA) authorizes courts to grant universal vacatur of agency rules. Federal courts of appeals have unanimously agreed that the APA’s direction to “set aside agency action” found unlawful empowers courts to vacate agency rules as to all parties — including those not before the court.

The government has argued with increasing frequency, however, that the APA grants no such authority and that APA relief must be plaintiff-specific. The Supreme Court decided a somewhat related question last year in Trump v. CASA, holding that universal injunctions barring enforcement of federal laws exceed courts’ equitable authority. At the same time, the Court expressly declined to address universal vacatur. Now, if the Court grants the petition in Texas Medical Association and ultimately rules for the government, it could effect another sea change in administrative law.

The Government’s Petition in Texas Medical Association

Texas Medical Association involves an APA challenge to rules promulgated by the Departments of Health and Human Services, Labor, and Treasury to implement portions of the No Surprises Act adopted in 2021. The Fifth Circuit, sitting en banc, held that the agencies’ rules contravened the statute’s plain text and declared them unlawful. Generally, when courts conclude that a rule is unlawful, they either vacate it nationwide or leave it in place while remanding the rule to the agency to fix the errors. Following that practice, the district court in Texas Medical Association had vacated the rules nationwide, and the government appealed, arguing in part that the court lacked that power. The en banc Fifth Circuit disagreed with the government, affirming in relevant part and holding that vacatur of the agencies’ actions accorded with its precedent and the APA.

The government has now petitioned for Supreme Court review, arguing that the APA does not authorize courts to vacate agency rules for everyone and thereby bar them from being enforced against nonparties. In its petition, the government contends that Section 706(2)’s direction to “set aside” unlawful agency action describes a rule of decision, meaning that a court simply disregards the unlawful rule in resolving the dispute before it. In the government’s view, that language does not create a remedy, let alone one that extends beyond the parties. Nothing in the APA’s text or history, the government reasons, displaces the traditional equitable rule limiting relief to the litigants before the court, a rule reinforced in CASA. Even if vacatur is available under the APA, the government adds, it should be treated as a standard remedy subject to ordinary equitable principles, rather than as the default result when a rule is found unlawful.

Texas Medical Association is the government’s first petition for certiorari squarely challenging universal vacatur, although the Solicitor General has taken positions opposing it in APA cases across multiple administrations, dating back at least to Summers v. Earth Island Institute, decided in 2009. The government drew greater attention to the issue in 2023 in United States v. Texas, arguing that the APA did not authorize universal vacatur of immigration enforcement guidelines. Although the majority resolved the case on standing grounds, Justices Thomas and Barrett joined Justice Gorsuch in a concurrence (as we noted in a prior post) expressing skepticism that the APA authorizes universal vacatur and suggesting the question “is worth a closer look.”

Chief Justice Roberts, in contrast, characterized the government’s position at oral argument as “fairly radical and inconsistent with” longstanding practice in the D.C. Circuit, which hears an outsized number of APA challenges. Justice Kavanaugh penned a concurrence making a somewhat similar point the next term in Corner Post v. Board of Governors of the Federal Reserve System, explaining that the plaintiff business there could challenge an agency rule regulating banks “only because the APA authorizes vacatur of agency rules.”

Certiorari requires four votes, and three justices have already indicated skepticism of universal vacatur, while two others have expressed views on the issue. Given that the Court grants petitions from the Solicitor General with much greater frequency than it grants petitions from private petitioners, there is a reasonable chance that the Court will grant the Texas Medical Association petition and decide the question.

Key Impacts

A Supreme Court decision holding that the APA authorizes only party-specific relief from unlawful agency rules would transform administrative law in several ways.

• Individual Actions. Absent universal vacatur, a party might be able to obtain relief from an unlawful rule only by joining or filing a lawsuit against the relevant federal agency. Regulated parties would be unable to rely on third parties to challenge rules. This could lead to a multiplicity of lawsuits to obtain judicial decrees on behalf of each regulated entity. The gap could potentially be bridged by class actions under Rule 23(b)(2) of the Federal Rules of Civil Procedure, or by lawsuits brought by trade associations or other representative organizations. Separate litigation as to each plaintiff (or several groups of plaintiffs) may also increase the workload of federal courts.
• Patchworks of Applicable Rules. In a world without universal vacatur, different parties would be subject to varying rules depending on whether they had been party to a lawsuit declaring those rules unlawful. One business might be subject to an agency rule, for example, that its competitor is not. Federal regulations may also vary in practice across federal circuits and districts, based on existing judicial precedent.
• Lawsuits by Unregulated Plaintiffs. It remains unclear how, under the government’s view, unregulated plaintiffs suffering an injury would obtain relief. As Justice Kavanaugh explained in Corner Post, a party injured by the government’s application of a regulation to third parties can obtain relief only if its lawsuit precludes application of the rule to those third parties.
• Limiting Effects of Corner Post. Prior posts discussed the effects of Corner Post, which permits plaintiffs to file suit challenging agency actions taken at any time, notwithstanding the six-year federal statute of limitations, so long as the plaintiff was first injured by the action within the six years preceding the complaint. The decision has the potential to unsettle longstanding regulations. If such challenges can obtain only party-specific relief, however, then Corner Post would have only a limited effect beyond the newly injured plaintiff.

Arnold & Porter will continue to monitor developments affecting the scope of relief in challenges to federal government actions. Our team has extensive experience in administrative and regulatory litigation, including challenges to presidential and agency actions. If you have questions, please reach out to one of the authors of this post or your regular Arnold & Porter contact. 

© Arnold & Porter Kaye Scholer LLP 2026 All Rights Reserved. This Blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.