Telios Law

Must Christian For-Profit Companies Comply With the HHS Mandate?

Recent Court Cases Go Both Ways. Five recent decisions on the HHS mandate involve Christian for-profit companies. Each of these companies objected to providing contraceptives and sterilization, abortifacients, or both on religious grounds, and filed a lawsuit to avoid having to do so. Three decisions granted a preliminary injunction to plaintiffs so they would not have to provide the contraceptive coverage during the case. Two decisions went against the companies, one dismissing its claim, and one denying the preliminary injunction.

All five companies are for-profit organizations and have more than 50 employees (so they fall under the mandate). None of their plans were exempt. 

Hercules Industries, Inc. is owned by the Newland family.1 Hercules manufactures and distributes HVAC products. They are devout Catholics and object to providing contraceptives, sterilization, or abortifacients. The company is self-insured. Hercules won its preliminary injunction.

O’Brien Industrial Holdings (OIH) is in the mining and processing industry.2 O’Brien is a devout Catholic who also objects to providing contraceptives, sterilization, or abortifacients. OIH has purchased insurance. The O’Brien case was dismissed. (Update: the dismissal was appealed, and on November 28, the 8th Circuit granted a temporary injunction giving relief against the mandate.)

Weingartz Supply Company is family- owned and makes power equipment.3 Daniel Weingartz is a devout Catholic who also objects to providing contraceptives, sterilization, or abortifacients. Weingartz won its preliminary injunction.

Tyndale publishes Christian books and Bibles.4 It is owned by Christian entities and run by evangelicals and its CEO is Mark Taylor, the son of the founder. Tyndale objects to providing abortifacients. Tyndale is self-insured. Tyndale won its preliminary injunction.

Hobby Lobby (with Mardel, Inc.) is owned by the Green family, who are devout evangelicals. The companies deal in arts and crafts and books.5 The Greens object to providing abortifacients. Hobby Lobby is self-insured. Hobby Lobby lost its preliminary injunction and is supposed to start providing insurance almost immediately.

The courts considered several issues. The most critical was the Religious Freedom Restoration Act (RFRA). This Act provides that the government may not “substantially burden” a person’s exercise of religion unless it (1) furthers a “compelling governmental interest” and (2) is the “least restrictive means” of furthering that interest.

Several of the cases considered whether complying with the HHS mandate was in fact a “substantial burden.” The O’Brien case said there was no substantial burden but only a slight burden:

The burden of which plaintiffs complain is that funds, which plaintiffs will contribute to a group health plan, might, after a series of independent decisions by health care providers and patients covered by OIH’s plan, subsidize someone else’s participation in an activity that is condemned by plaintiffs’ religion.

The Newland court also considered the RFRA argument. It did not completely decide the question of whether ordinary corporations can exercise religion. But it did reject the government's “substantial burden” argument, later adopted in O'Brien, based on Supreme Court precedent saying that courts cannot draw moral lines for religious claimants. It further said that the government had not shown either a compelling interest (because it had exempted so many people) or the least restrictive means (because it had not addressed Newlands’ proposed alternatives).

The Tyndale court found there was a substantial burden, because the mandate "places the plaintiffs in the untenable position of choosing either to violate their religious beliefs by providing coverage of the contraceptives at issue or to subject their business to the continual risk of the imposition of enormous penalties for noncompliance." The fact that Tyndale was self-insured made some difference to the court. The Tyndale court also found no compelling governmental interest, partly because at least 191 million people were exempted.

The Weingartz court said that the company had standing to assert the free exercise rights of its president, Daniel Weingartz. It determined there was likely a substantial burden. And it questioned whether the government has a compelling interest, and if so, whether it had adopted the least restrictive means to further its interest.

The Hobby Lobby court said that RFRA was not a protection, because there was no substantial burden. It adopted the O’Brien standard that plaintiffs would only have to subsidize someone else’s participation in an activity condemned by their religion. That, the court held, was too indirect and attenuated for a “substantial burden.”

Only two of the cases decided the First Amendment free exercise argument. Because the O’Brien court did not think there was a RFRA argument, it had to decide the First Amendment argument. Likewise, the Hobby Lobby case decided the First Amendment argument. The courts held that the First Amendment standard defers to government action and decided against plaintiffs.

A significant preliminary question was whether a corporation can exercise religious rights. The O’Brien, Newland, and Tyndale courts did not answer that question, but for different reasons. For instance, the Newland court said this question required further consideration, but still granted the preliminary injunction. The Tyndale and Weingartz courts decided that the question was not dispositive because a closely-held corporation has standing to assert the free exercise rights of its owners, who are burdened by a government mandate in running their business. The Hobby Lobby court did not think the corporation could exercise religious rights, but agreed that the owners could, so it did not decide the case on that basis.

Although there were other arguments in each of the cases, it is fair to say that the cases turned on whether the court thought that RFRA applied. The cases where the court found no substantial burden went against the plaintiffs, and the cases where the court thought RFRA protected them went in their favor. Each of these cases has been or will likely be appealed, so look for more exciting constitutional law to come!

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Newland et al. v. Sebelius, 1:12-cv-1123-JLK, July 27, 2012
District of Colorado
Represented by Alliance Defending Freedom

2 O’Brien v. U.S. Dep’t of Health & Human Servs., 4:12-CV-476, September 28, 2012
Eastern District of Missouri
Represented by the American Center for Law and Justice

3Legatus, et al. v. Sebelius, 2:12-cv-12061-RHC-MJH, October 31, 2012
Eastern District of Michigan
Represented by the Thomas More Society

4 Tyndale House Publishers, Inc. v. Sebelius, 1:12-cv-01635, November 16, 2012
District of Columbia
Represented by Alliance Defending Freedom

5 Hobby Lobby Stores, Inc. v. Sebelius, 5:12-cv-01000-HE, November 19, 2012
Western District of Oklahoma
Represented by the Becket Fund for Religious Liberty

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