The mandate that businesses provide contraceptive coverage to their employees under the Affordable Care Act (“ACA”) or face substantial fines has led to more than 50 lawsuits against the federal government in federal courts across the country. To date there has been a split among federal judges on the central question at issue: Does the mandate constitute an improper substantial burden on the religious exercise of the business or its owners, officers, and shareholders if they view contraception as being against their personal religious beliefs?
The Department of Health and Human Services mandates, as part of the ACA, that “commencing in plan years after August 1, 2012, and unless ‘grandfathered’ or otherwise exempt, employee group health benefit plans and health insurance issuers must include coverage, without cost sharing, for all FDA approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity.” Employers with more than 50 employees who do not comply with the mandate face fines of $2,000 per employee.
This requirement has led to a slew of lawsuits from businesses with a religious purpose, as well as business owners who hold religious beliefs that advise against the provision of contraceptives. These cases have unleashed a wide array of opinions from judges who have evaluated what constitutes a substantial burden on religious exercise under the Religious Freedom Restoration Act (“RFRA”). The Religious Land Use and Institutionalized Persons Act (“RLUIPA”) employs a substantial burden analysis that is identical to RFRA, meaning these cases will likely have an impact on future RLUIPA litigation, an area in which Dalton & Tomich, plc, has become a national leader.
To date, the contraceptive mandate cases have taken two very different tracks, based in no small part on the facts of the case.
In March, Judge Lawrence Zatkoff of the U.S. District Court for the Eastern District of Michigan granted a preliminary injunction against the contraceptive mandate to the sole owner and shareholder of Domino’s Farms, Tom Monaghan, in Domino’s Farms Corp. v. Sebelius. Compliance with the mandate, Monaghan alleged, would violate his religious beliefs as a member of the Catholic Church. Judge Zatkoff began by finding that a closely held corporation has standing to assert the free exercise rights of its owner if the owner’s rights are indistinguishable from that of the corporation.
Judge Zatkoff found that Monaghan faced a particular substantial burden on his free exercise under RFRA. “Monaghan’s ‘particular burden’ is that he is being compelled to provide coverage for the Preventive Services. Thus, the substantial burden on Monaghan’s free exercise ‘inheres in the coerced coverage’ of the Preventive Services, ‘not—or perhaps more precisely, not only—in the later purchase or use of contraception or related services.’” Thus, Judge Zatkoff found that “the mandate pressures Monaghan to modify his behavior and violate his beliefs because Monaghan would be forced to refrain from or change the way he exercises his faith through DF. His only other choice is to suffer severe financial harm to his company.” Judge Zatkoff concluded that the contraceptive mandate was not narrowly tailored to fulfill a compelling governmental interest, and issued the requested preliminary injunction.
While Judge Zatkoff’s opinion is in line with many around the nation, the opposite conclusion has been reached in other cases. In Hobby Lobby Stores, Inc. v. Sebelius in the Western District of Oklahoma, Hobby Lobby and some of its individual officers and owners brought claims alleging that the mandate violated their sincerely held religious beliefs. Judge Heaton quickly determined that Hobby Lobby, as a corporation, did not have any rights to the free exercise of religion. The court then turned to the individual officers and owners, and attempted to set a standard to apply.
Judge Heaton denied the Motion for Preliminary Injunction, finding that Hobby Lobby’s owners and officers had not shown a likelihood of success on the merits of its RFRA claim. The court said that the burden placed on the religious exercise of the party under RFRA is evaluated to “the degree to which the challenged government action operates directly and primarily on the individual’s religious exercise is a significant factor to be evaluated in determining whether a ‘substantial burden’ is present.” Additionally, “Other cases decided by the Tenth Circuit under RFRA/RLUIPA are consistent with the view that some reasonably direct and personal connection between the religious exercise and the restraint in question must be present.” Hobby Lobby Stores, Inc. v. Sebelius. (Western Dist. Okla. 2012).
The officers and owners of Hobby Lobby could not successfully argue their religious exercise had been burdened because it was Hobby Lobby, not the individual owners and officers, who provided health benefits to employees. “Such an indirect and attenuated relationship appears unlikely to establish the necessary ‘substantial burden.’”
For now, it appears that small, religious-based organizations have been more likely to win preliminary injunctions against the contraception mandate, while individual shareholders or officers of larger corporations are less likely to win such a preliminary injunction. There are now more than 50 cases across the nation that are challenging the contraception mandate. The Becket Fund has represented many of the plaintiffs in challenges to the mandate and has a useful database of the cases.
The attorneys at Dalton & Tomich, plc, continue to monitor these and other cases and their potential impact on the substantial burden analysis that is applied to religious land use cases and other matters. If you believe you or your religious institution’s religious exercise has been substantially burdened through land use decisions, please do not hesitate to contact us.
