The court issued the order on April 23, rejecting the DOJ’s arguments that it committed manifest errors of law or fact when it previously quashed the subpoena. The underlying dispute centers on whether the DOJ had statutory authority under 18 U.S.C. § 3486(a)(1)(A)(i)(I) to demand the hospital’s records for an investigation into federal health care offenses.
In its original order, the court determined that the DOJ did not issue the subpoena to investigate a federal health care offense. Instead, the court found that Seattle Children’s carried its burden of showing the subpoena was issued for an improper purpose, citing executive orders and public statements indicating the government’s goal was to end gender-affirming care rather than investigate fraud or unlawful off-label promotion.
The DOJ’s motion to alter the judgment argued that the court shifted and heightened its burden of proof, failed to provide an opportunity to make a showing, and incorrectly discounted the Attorney General’s stated purpose. The court rejected these arguments, noting that the DOJ failed to demonstrate manifest error and instead relied on arguments and evidence that were available but not previously presented.
The court emphasized that the DOJ’s administrative subpoena power is a delegation from Congress limited to investigating federal health care offenses, not a tool for achieving policy goals. The court found that the DOJ presented only broad, conclusory statements to justify the subpoena and did not identify any specific conduct at Seattle Children’s related to a federal health care offense.
The order also addressed the DOJ’s claim that the court applied an improper probable cause standard. The court clarified that it required the DOJ to establish a prima facie case, which the government failed to do because its primary evidence—a declaration by Acting Director Lisa Hsiao—contained only conclusory statements and lacked specific information about an investigation into the hospital.
The court noted that other courts considering virtually identical subpoenas have reached similar conclusions, finding the demands unenforceable or pretextual. The court stated that no decision identified by either party rules in the DOJ’s favor, and it reiterated its finding that the subpoena was likely pretextual based on the record presented.
The court concluded that the DOJ did not conflate illegal practices with unfavorable ones, but rather acted outside the scope of authority granted by Congress. The motion to alter or amend the judgment was denied, leaving the original order quashing the subpoena in place.