At oral argument in United States v. Texas, 599 U.S. 670 (2023), Chief Justice John Roberts bristled at the government’s position that the Administrative Procedure Act (APA) does not authorize federal courts to “vacate” unlawful regulations, characterizing that position as “fairly radical” and joking that “those of us who were on the D.C. Circuit” would vacate regulations “five times before breakfast.” The federal government has again teed up the question in a recent petition for certiorari filed with the Supreme Court. In Department of Health and Human Services v. Texas Medical Association (No. 26-491), the government asks the Supreme Court to hold that the APA does not authorize courts to universally vacate unlawful agency rules or, at a minimum, that vacatur is a discretionary remedy rather than the default consequence of finding a rule unlawful. This petition is worth watching because the question presented has significant consequences for regulated businesses, trade associations and others that rely on one party to successfully challenge agency regulations rather than filing identical challenges themselves.

Background

For decades, the ordinary consequence of winning an APA challenge has been that the unlawful rule is vacated and ceases to exist for everyone, not just the plaintiff. That remedy is how a single trade association’s suit can relieve an entire industry of an unlawful mandate and how a hospital can obtain relief from a payment rule that is formally directed at insurers rather than providers.

On October 13, the government renewed its request to the Court to end that practice. The underlying dispute concerns the No Surprises Act, which caps what patients pay for out-of-network care and routes provider-insurer payment disputes through arbitration keyed to a “qualifying payment amount” calculated by insurers. Texas physicians, a hospital and several air-ambulance providers persuaded a federal district court in Texas—and ultimately the en banc US Court of Appeals for the Fifth Circuit—that the agencies’ methodology for that calculation violated the statute. The courts vacated the offending provisions nationwide.

In its petition, the government does not ask the Supreme Court to review the underlying statutory holding. Rather, it presents a single question on remedy: “Whether the Administrative Procedure Act authorizes courts, in Section 706(2), to enter universal vacatur of agency rules that courts have held unlawful and, if so, in what circumstances.” According to the government, Section 706(2)’s direction that a reviewing court “hold unlawful and set aside” invalid agency action instructs the court how to decide the case before it; it does not create a freestanding remedy allowing a single district judge to formally nullify a rule as to nonparties. The government asserts that the APA does not displace the traditional judicial practice of providing relief only to the parties before the court. Alternatively, it argues, even if Section 706(2) permits vacatur, vacatur should be treated as a discretionary equitable remedy rather than the automatic or default response whenever agency action is held unlawful. That alternative position could itself materially change APA litigation by requiring plaintiffs to justify the breadth of the requested remedy and by making remand without vacatur more common.

The Vehicle

The Court has encountered the issue before. In United States v. Texas, 599 U.S. 670 (2023), the government argued that Section 706 does not authorize universal vacatur, but the Court resolved the case on other grounds. In Corner Post v. Board of Governors, 603 U.S. 799 (2024), several Justices discussed vacatur as part of the broader debate over APA remedies, but the question was not presented and remained unresolved. Three things make this time different, creating a real prospect that the Court will decide the question.

First, unlike in United States v. Texas, where the vacatur issue accompanied questions on standing and immigration law, the government is not asking the Supreme Court to revisit the merits in Texas Medical Association. It has conceded the merits loss and is challenging only the remedy. That arguably makes this a clean vehicle.

Second, the petition relies on the Supreme Court’s intervening decision in Trump v. CASA, 606 U.S. 831 (2025), which held that universal injunctions are inconsistent with traditional principles of equity. Although CASA expressly declined to resolve whether the APA permits universal vacatur, the government argues that the current approach under the APA permits the now-forbidden universal injunction to survive under a different label.

Third, three Justices already signaled their support for limiting universal vacatur in United States v. Texas. Justice Neil Gorsuch, joined by Justices Clarence Thomas and Amy Coney Barrett, wrote that Section 706 “does not say anything about ‘vacating’ agency action” and that the Court “will have to address” the issue “sooner or later.” In contrast, there and in Corner Post, Justice Brett Kavanaugh defended vacatur as an established APA remedy. The visibly divided Supreme Court now has the question squarely teed up.

If Vacatur Is Vacated

This is a decision to watch because the practical consequences would be significant, reshaping how administrative law challenges are litigated and by whom. We have identified some preliminary issues below, though the consequences will obviously turn on whether and how the Court decides the question.

• Relief obtained by others may no longer protect an entire industry. Under the prevailing approach, vacatur is not limited to the named plaintiffs and renders unlawful agency action inoperative as to anyone. Accordingly, one regulated entity or trade association can challenge a rule while similarly situated parties benefit from the resulting judgment. If the Supreme Court adopts the government’s position, regulated entities will need to consider associational standing (as described below) or litigate for themselves, intervene or attempt to certify a class (a procedure that the Court itself acknowledged in CASA is poorly suited to challenges against the federal government).

• Indirectly regulated parties could lose meaningful relief altogether. Party-specific relief may be difficult to administer when the plaintiff is affected by a rule directed formally at someone else. The No Surprises Act case illustrates the problem. Providers do not calculate the qualifying payment amount; insurers do. “Party-specific” relief for a physician group has no obvious operational meaning. The same is true for many downstream businesses impacted by regulations directly applicable to others.

• National regulatory programs could operate differently for different parties. Eliminating universal vacatur could produce circumstances in which an agency rule remains enforceable against some regulated entities but not others. Compliance planning, pricing and contracting all would become more complex.

• Trade associations could face new remedial questions. Nothing in the suit would prevent a trade association from suing on behalf of its members. But if vacatur is eliminated or narrowed, courts will have to decide what “party-specific” relief means when the party is an association. Is relief extended to all members, only identified members or only members who independently demonstrate injury? Several Justices flagged concerns in CASA about associational and third-party litigation being used to approximate universal relief, and a government win here would make those questions unavoidable in the next round of cases. If the government prevails, associations should expect agencies to begin contesting the breadth of member-level relief as a matter of course.

• Even a partial win for the government matters. The government’s fallback position is that vacatur, if available, is a discretionary equitable remedy that plaintiffs must justify, rather than the default remedy. That alone would shift the burden in every APA case and invite agencies to argue for “remand without vacatur” as a matter of course, significantly changing the dynamics of APA litigation.

Next Steps

Because the Solicitor General has presented the Court with a direct and recurring question that several Justices already have identified, regulated entities should closely monitor the case over the next few months. If the Court does grant certiorari, clients should give careful consideration to amicus participation. Regulated entities may be able to provide concrete examples showing how an agency rule operates across interconnected markets and why relief limited to the named plaintiffs would be incomplete or impractical. Trade associations have a particular interest in ensuring the Court understands how member-level relief would operate in practice and in preserving the full scope of relief available in associational suits. Similarly, indirectly regulated parties may want to explain how party-limited injunctive and declaratory relief is not administrable and could leave many of the most significant impacts of nationwide regulations without any meaningful remedy.

WilmerHale’s Administrative Law practice has extensive experience across the full spectrum of APA litigation. Our lawyers have challenged and defended federal agency action, advised regulated entities and agencies on the consequences of vacated regulations, and developed litigation, regulatory and public-policy strategies in high-stakes administrative-law disputes. We will continue to monitor this issue and help clients protect their interests in an evolving legal landscape.