State Employee Appealing Contraceptive Coverage Mandate Asks 8th Circuit For Injunction Pending Appeal

Last month in Wieland v.U.S. Department of Health and Human Services a Missouri federal district court dismissed on standing grounds a suit by a Missouri state employee and his wife who claim that the Affordable Care Act contraceptive coverage mandate forces them to violate their religious opposition to contraception, sterilization, and abortifacients. (See prior posting.) Yesterday, plaintiffs filed with the 8th Circuit Court of Appeals a motion for a preliminary injunction pending appeal and a 20-page memorandum (full text) in support of their motion.

Report Says Bishops Are Seeking Exit Strategy From Their Strong Opposition To Contraceptive Coverage Mandate

According to the National Catholic Reporter on Friday, despite strong disapproval of the Affordable Care Act contraceptive coverage mandate expressed in a Special Message issued Nov. 13 by U.S. Catholic Bishops at the conclusion of their Fall General Assembly, the bishops are not as united in their opposition as it may seem:

[A]fter repeatedly drawing that line in the sand, a growing number of bishops have begun to push back, arguing that such hard-line rhetoric has put them in an untenable position. These bishops do not want to close Catholic institutions over a birth control policy -- and they say they actually can't do so in most cases.

In addition, they argue that there is no reason to try -- the exemptions and accommodations in the mandate are sufficient, some say, and the church's teaching that access to good, affordable health care is a basic right should outweigh any remaining reservations.

That's why those familiar with the deliberations in Baltimore note that the statement is carefully worded to acknowledge that each bishop can make his own arrangements on health insurance -- as some are doing -- and it begins to provide cover for the entire hierarchy as the prelates try to find an exit strategy.

[Thanks to Perry Dane for the lead.] 

Federal Court Says Contraceptive Coverage Accommodation For Religious Non-Profits Likely Violates RFRA As Non-Profit Suits Keep Being Filed

Yesterday a Pennsylvania federal district court became the first to weigh in on the merits of the accommodation provided for religious non-profit educational and charitable organizations that object to the Affordable Care Act contraceptive coverage mandate.  The court, finding a likelihood of success on the merits in plaintiffs' RFRA challenge to the final rules that were adopted in June, issued an expedited preliminary injunction.  In Zubik v. Sebelius, (WD PA, Nov. 21, 2013), the court said in part:

[A]lthough the “accommodation” legally enables Plaintiffs to avoid directly paying for the portion of the health plan that provides contraceptive products, services, and counseling, the “accommodation” requires them to shift the responsibility ... onto a secular source. The Court concludes that Plaintiffs have a sincerely-held belief that “shifting responsibility” does not absolve or exonerate them from the moral turpitude created by the “accommodation”; to the contrary, it still substantially burdens their sincerely-held religious beliefs.....

The application of these two regulations – one an exemption and one an accommodation – has the effect of dividing the Catholic Church into two separate entities. Now, one regulation (the “exemption”) applies to the worship arm of the Catholic Church and thus applies to all of those employees who work inside a church’s walls. While the other regulation (the “accommodation”) applies to the “good works” arms of the Catholic Church, and thus applies to those who stand on the church steps and pass out food and clothes to the needy.... [B]y dividing the Catholic Church in such a manner ..., the Government has created a substantial burden on Plaintiffs’ right to freely exercise their religious beliefs.

The court went on to hold that the exemption for churches themselves "is an acknowledgment of the lack of a compelling governmental interest" at least as to some employers. It then reasoned:

If the Court were to conclude that the Government’s stated interests were sufficiently “compelling” to outweigh the legitimate claims raised by the nonprofit, religious affiliated/related Plaintiffs, the net effect ... would be to allow the Government to cleave the Catholic Church into two parts: worship, and service and “good works,” thereby entangling the Government in deciding what comprises “religion.”

Pittsburgh Post-Gazette reports on the decision. [Thanks to Luke Goodrich for the lead.]

Meanwhile, another religious non-profit whose challenge originally posed ripeness problems (see prior posting)  has filed a new lawsuit challenging the contraceptive coverage mandate. The case is Belmont Abbey College v. Sebelius,(D DC, filed 11/20/2013) (full text of complaint; press release from Becket Fund).

Developments In Challenges To Contraceptive Coverage Mandate

On Tuesday, a petition for certiorari (full text) was filed with the U.S. Supreme Court in Eden Foods Inc. v. Sebeius, (cert. filed 11/12/2013).  In the case, the 6th Circuit Court denied a preliminary injunction to a for-profit natural foods corporation and its Catholic owners who claim that the contraceptive coverage mandate under the Affordable Care Act violates their free exercise rights as protected by the Religious Freedom Restoration Act. (See prior posting.) Thomas More Law Center announced the filing of the cert. petition.

In June (see prior posting), a Pennsylvania federal district court granted Geneva College a preliminary injunction pending a decision on the merits in its challenge to the requirement that it include in its student health plans coverage for contraceptives that it considers abortifacients. As reported by BNA Daily Report for Executives [subscription required], the Christian college has now filed a motion and supporting Memorandum of Law (full text) seeking a similar preliminary injunction for the health plan covering its employees. The case is Geneva College v. Sebelius, (WD PA, motion filed 11/12/2013).

7th Circuit In 2-1 Decision Grants Preliminary Injunction To For-Profit Corporations and Their Owners In Contraceptive Mandate Challenge

In Korte v. Sebelius, (7th Cir., Nov. 8, 2013), the U.S. 7th Circuit Court of Appeals, in a 2-1 decision in a consolidated appeal of suits by two unrelated small businesses and their Catholic owners, held that a preliminary injunction should be granted barring enforcement of the Affordable Care Act contraceptive coverage mandate on religious freedom grounds.  The companies involved are Korte & Luitjohan Contractors, Inc., an Illinois construction company, and Grote Industries, Inc., an Indiana manufacturer of vehicle safety systems.

The majority, in a 64-page opinion, held that for-profit corporations are "persons" whose religious exercise is protected by the Religious Freedom Restoration Act, saying:

It’s common ground that nonprofit religious corporations exercise religion in the sense that their activities are religiously motivated. So unless there is something disabling about mixing profit-seeking and religious practice, it follows that a faith-based, for-profit corporation can claim free-exercise protection to the extent that an aspect of its conduct is religiously motivated.

The majority then concluded that the mandate imposes a substantial burden on the religious exercise of both the corporations and their individual owners and managers that is not justified by a compelling governmental interest and is not achieved by the least restrictive means.

Judge Rovner wrote a very interesting 89-page dissent. Early in her opinion, she sets out several hypotheticals that follow from the majority's decision, involving employers who object on religious grounds to paying for coverage for other kinds of medical treatment for their employees.  Later in her opinion, she discusses at length what she describes as "significant logical difficulties posed by attributing religious rights to secular corporations."  She says in part:

First, to the extent that a corporation’s religious principles and identity derive from its owners, what if the owners have diverse beliefs, diverse degrees of devotion, and diverse notions as to whether and how the corporation ought to reflect their religious beliefs?...

Second, suppose that the company’s ownership changes. What happens then to the beliefs we have attributed to the corporation based on its ownership?....

Third, are the religious beliefs of corporate owners solely determinative of the corporation’s religious principles? Suppose ... that a corporation’s owners have entirely entrusted the management of the corporation to its longtime CEO.... Are her beliefs attributable to the corporation?  Or suppose ... the focus of the corporation is on serving members of a particular religion-- selling kosher or halal food products, for example....  Can the corporation be said to hold the religious beliefs of its target market, even if its owners and managers do not?....

[I]f a corporation has free exercise rights because the Dictionary Act suggests it is among the "persons" to which RFRA grants the right to make such a claim... then why does a corporation of large, diverse, or even public ownership not have free exercise rights also? And how would the beliefs of a public corporation be determined—by a vote at the annual shareholders’ meeting, for example?

The 7th Circuit had previously granted an injunction pending appeal in the case. (See prior posting.)

New Contraceptive Coverage Challenge-- Individual Employee Seeks Religious Exemption

In the wake of dozens of lawsuits by for-profit businesses challenging the Affordable Care Act contraceptive coverage mandate on religious liberty grounds, yesterday the other shoe dropped as an individual-- who happens to also be a state legislator-- sued to obtain a court order allowing him to opt out of contraceptive coverage provided in his employer's plan. The complaint (full text) in Wieland v. U.S. Department of Health and Human Services, (ED MO, filed 8/14/2013), alleges that previously legislator Paul Wieland and his wife were able to choose a state health plan that did not cover contraceptives, abortifacients or sterilization, but that because of the mandate his insurer notified him that effective August 1 he would be placed in a plan that covers contraception and sterilization.  The complaint contends that plaintiffs, because of their Christian religious beliefs, do not want to furnish this coverage for their three daughters, age 12, 18 and 19. It contends that their premiums went up to pay for contraceptive and sterilization coverage, and that their premiums also partially fund medical services to other employees covered under the same plan.

In the complaint, plaintiffs cite Mo. Rev. Stat. § 191.724, enacted last year, that provides: "No employee... shall be compelled to obtain coverage for, or be discriminated against or penalized for declining or refusing coverage for, abortion, contraception, or sterilization in a health plan if such items or procedures are contrary to the religious beliefs or moral convictions of such employee or person."  A related provision of Missouri law was declared invalid by a federal court last year. (See prior posting.) The complaint filed yesterday contends that the mandate violates plaintiffs' rights under RFRA, the 1st and 5th Amendments and the Administrative Procedure Act. Thomas More Society announced the filing of the lawsuit. The St. Louis Post Dispatch reports on the suit.

Split 3rd Circuit Denies En Banc Rehearing In Contraceptive Coverage Case

By a vote of 7-5 yesterday the U.S. 3rd Circuit Court of Appeals denied an en banc rehearing in Conestoga Wood Specialties Corp. v. Secretary of U.S. Department of Health and Human Services. In the case, a 3-judge panel in a 2-1 decision last month denied a preliminary injunction sought by a family-owned business to stop enforcement of the Affordable Care Act contraceptive coverage mandate. (See prior posting.) Alliance Defending Freedom announced that it would now petition the U.S. Supreme Court to review the decision.

3rd Circuit Rejects ACA Challenge: For-Profit Corporations Cannot Engage In Religious Exercise

In Conestoga Wood Specialties Corp. v. Secretary of U.S. Department of Health and Human Services, (3rd Cir., July 26, 2013), the U.S. 3rd Circuit Court of Appeals in a 2-1 decision denied a preliminary injunction sought by a family-owned business to stop enforcement of the Affordable Care Act contraceptive coverage mandate.  Rejecting free exercise and RFRA claims, Judge Cowan's majority opinion held that "for-profit, secular corporations cannot engage in religious exercise," and the conscience rights of the owners of a corporation do not pass through to the corporation.  Cowan in his majority opinion wrote, in part:

We are unable to determine that the "nature, history, and purpose" of the Free Exercise Clause supports the conclusion that for-profit, secular corporations are protected under this particular constitutional provision....

We recognize the fundamental importance of the free exercise of religion.... Thus, our decision here is in no way intended to marginalize the Hahns' commitment to the Mennonite faith. We accept that the Hahns sincerely believe that the termination of a fertilized embryo constitutes an ―intrinsic evil and a sin against God to which they are held accountable ... and that it would be a sin to pay for or contribute to the use of contraceptives which may have such a result. We simply conclude that the law has long recognized the distinction between the owners of a corporation and the corporation itself. A holding to the contrary—that a for-profit corporation can engage in religious exercise—would eviscerate the fundamental principle that a corporation is a legally distinct entity from its owners.

Judge Jordan, dissenting, wrote in part:

 My colleagues, at the government's urging, are willing to say that the Hahns' choice to operate their business as a corporation carries with it the consequence that their rights of conscience are forfeit.

That deeply disappointing ruling rests on a cramped and confused understanding of the religious rights preserved by Congressional action and the Constitution. The government takes us down a rabbit hole where religious rights are determined by the tax code, with non-profit corporations able to express religious sentiments while for-profit corporations and their owners are told that business is business and faith is irrelevant. Meanwhile, up on the surface, where people try to live lives of integrity and purpose, that kind of division sounds as hollow as it truly is.

[Thanks to Jeffrey Pasek for the lead.] 

10th Circuit En Banc Gives Big Win To Hobby Lobby In Challenge To Contraceptive Coverage Mandate

Yesterday an 8-judge en banc panel of the U.S. 10th Circuit Court of Appeals gave an important win in a high profile case to for-profit businesses challenging the Affordable Care Act's contraceptive coverage mandate. In Hobby Lobby Stores, Inc. v. Sebelius, (10th Cir., June 27, 2013), in six separate opinions spanning 165 pages, the court held that two related family-owned corporate businesses, Hobby Lobby Stores and Mardel, Inc., had demonstrated a likelihood of success on their claim that their free exercise rights were substantially burdened in violations of the Religious Freedom Restoration Act.  The corporations and their owners objected to providing coverage for those contraceptives they regard as abortifacients.  Four of the 8 judges would have remanded with instructions for the district court to issue a preliminary injunction, but lacking a 5th vote for that, the court instead remanded for the district court to resolve two other issues as to whether an injunction should issue-- the balance of equities and the public interest-- before issuing the injunction.

Five of the 8 judges (those who joined Part V of Judge Tymkovich's opinion) held that corporations have free exercise rights, and that here they were substantially burdened without a compelling governmental interest.  Judge Tymkovich said in part:

... Congress did not exclude for-profit corporations from RFRA’s protections. Such corporations can be “persons” exercising religion for purposes of the statute.  ....  It is beyond question that associations—not just individuals—have Free Exercise rights: “An individual’s freedom to speak, to worship, and to petition the government for the redress of grievances could not be vigorously protected from interference by the State unless a correlative freedom to engage in group effort toward those ends were not also guaranteed.” ....

[T]he protections of the Religion Clauses extend beyond the walls of a church, synagogue, or mosque to religiously motivated conduct, as well as religious belief.... The distinction gains force here because religious conduct includes religious expression, which can be communicated by individuals and for-profit corporations alike......

... [S]incerely religious persons could find a connection between the exercise of religion and the pursuit of profit. Would an incorporated kosher butcher really have no claim to challenge a regulation mandating non-kosher butchering practices? The kosher butcher, of course, might directly serve a religious community—as Mardel, a Christian bookstore, does here. But we see no reason why one must orient one’s business toward a religious community to preserve Free Exercise protections. A religious individual may enter the for profit realm intending to demonstrate to the marketplace that a corporation can succeed financially while adhering to religious values. As a court, we do not see how we can distinguish this form of evangelism from any other.....

Judge Tymkovich went on to find that the corporation's religious beliefs were substantially burdened. Saying that "substantial burden" is a question of the intensity of coercion, not the theological merit of the belief, and explaining:

It is not the employees’ health care decisions that burden the corporations’ religious beliefs, but the government’s demand that Hobby Lobby and Mardel enable access to contraceptives that Hobby Lobby and Mardel deem morally problematic.... [W]e must accept Hobby Lobby and Mardel’s beliefs.

Judge Tymkovich then rejected the argument that the government has a compelling interest in imposing the mandate. The asserted interests in public health and gender equality are broadly formulated and do not justify refusal to grant exemptions for religious objectors. Moreover, tens of millions of people are already exempt from the mandate because they are insured under grandfathered plans or work for small employers.

Four, but only 4, of the 8 judges also concluded that the individual shareholders have standing to assert claims here as well. The other judges concluded that they need not reach that issue. Becket Fund issued a press release announcing the decision. AP reports on the decision.

3rd Circuit Hears Oral Arguments In Business' Contraceptive Mandate Challenge

As reported by Fox 43 News, on Thursday the U.S. 3rd Circuit Court of Appeals heard oral argument in Conestoga Wood Specialties Corp. v. Sebelius. An audio recording of the full oral arguments are now available. (.wma file). In the case, a Pennsylvania federal district court refused to issue a preliminary injunction against enforcement of the Affordable Care Act’s contraceptive coverage mandate in a suit brought by a small wood specialties manufacturing company and its five Mennonite Christian owners. (See prior posting.) The 3rd Circuit refused to grant a stay pending appeal. (See prior posting.)