Liberty University, Inc. v. Timothy Geithner
Filing
PUBLISHED AUTHORED OPINION filed. Originating case number: 6:10-cv-00015-nkm-mfu. [999148105]. [10-2347]
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PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 10-2347
LIBERTY UNIVERSITY, INCORPORATED, a Virginia Nonprofit
Corporation; MICHELE G. WADDELL; JOANNE V. MERRILL,
Plaintiffs - Appellants,
and
MARTHA A. NEAL; DAVID STEIN, M.D.; PAUSANIAS ALEXANDER; MARY
T. BENDORF; DELEGATE KATHY BYRON; JEFF HELGESON,
Plaintiffs,
v.
JACOB LEW, Secretary of the Treasury of the United States,
in his official capacity; KATHLEEN SEBELIUS, Secretary of
the United States Department of Health and Human Services,
in her official capacity; SETH HARRIS, Acting Secretary of
the United States Department of Labor, in his official
capacity; ERIC H. HOLDER, JR., Attorney General of the
United States, in his official capacity,
Defendants - Appellees.
-------------------------------------MOUNTAIN STATES LEGAL FOUNDATION; REVERE AMERICA FOUNDATION;
AMERICAN CIVIL RIGHTS UNION; FAMILY RESEARCH COUNCIL; BREAST
CANCER PREVENTION INSTITUTE; LIFE LEGAL DEFENSE FOUNDATION;
LANDMARK LEGAL FOUNDATION; PROJECT LIBERTY; DAVID BOYLE;
MEMBERS OF LEGATUS; CATHOLIC MEDICAL ASSOCIATION; FOUNDATION
FOR MORAL LAW; VIRGINIA FAMILY FOUNDATION; WEST VIRGINIA
FAMILY POLICY COUNCIL; MARYLAND FAMILY ALLIANCE; NORTH
CAROLINA FAMILY POLICY COUNCIL; PALMETTO FAMILY COUNCIL;
AMERICANS UNITED FOR LIFE; ALLIANCE DEFENDING FREEDOM,
Amici Supporting Appellants,
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AMERICAN CIVIL LIBERTIES UNION; AMERICAN CIVIL LIBERTIES
UNION
OF
VIRGINIA,
INCORPORATED;
AMERICAN
NURSES
ASSOCIATION; AMERICAN ACADEMY OF PEDIATRICS, INCORPORATED;
AMERICAN MEDICAL STUDENT ASSOCIATION; CENTER FOR AMERICAN
PROGRESS, d/b/a Doctors for America; NATIONAL HISPANIC
MEDICAL ASSOCIATION; NATIONAL PHYSICIANS ALLIANCE; HARRY
REID, Senate Majority Leader; NANCY PELOSI, House Democratic
Leader; DICK DURBIN, Senator, Assistant Majority Leader;
CHARLES SCHUMER, Senator, Conference Vice Chair; PATTY
MURRAY, Conference Secretary; MAX BAUCUS, Senator, Committee
on Finance Chair; TOM HARKIN, Senator, Committee on Health,
Education, Labor and Pensions Chair; PATRICK LEAHY, Senator,
Committee on the Judiciary Chair; BARBARA MIKULSKI, Senator,
HELP Subcommittee on Retirement and Aging Chair; JOHN D.
ROCKEFELLER, IV, Senator, Committee on Commerce Chair; STENY
HOYER, Representative, House Democratic Whip; JAMES E.
CLYBURN, Representative, Democratic Assistant Leader; JOHN B
LARSON, Representative, Chair of Democratic Caucus; XAVIER
BECERRA, Representative, Vice Chair of Democratic Caucus;
JOHN D DINGELL, Representative, Sponsor of House Health Care
Reform Legislation; HENRY A. WAXMAN, Representative, Ranking
Member, Committee on Energy and Commerce; FRANK PALLONE,
JR., Representative, Ranking Member, Commerce Subcommittee
on Health; SANDER M LEVIN, Representative, Ranking Member,
Committee
on
Ways
and
Means;
FORTNEY
PETE
STARK,
Representative, Ranking Member, Ways and Means Subcommittee
on Health; ROBERT E. ANDREWS, Representative, Ranking
Member, Education and Workforce Subcommittee on Health;
JERROLD NADLER, Representative, Ranking Member, Subcommittee
on Constitution; GEORGE MILLER, Representative, Ranking
Member, Education and the Workforce Committee; JOHN CONYERS,
JR., Representative, Ranking Member, Committee on the
Judiciary; JACK M BALKIN, Knight Professor of Constitutional
Law and the First Amendment, Yale Law School; GILLIAN E
METZGER, Professor of Law, Columbia Law School; TREVOR W
MORRISON, Professor of Law, Columbia Law School; AMERICAN
ASSOCIATION OF PEOPLE WITH DISABILITIES; THE ARC OF THE
UNITED STATES; BREAST CANCER ACTION; FAMILIES USA; FRIENDS
OF CANCER RESEARCH; MARCH OF DIMES FOUNDATION; MENTAL HEALTH
AMERICA;
NATIONAL
BREAST
CANCER
COALITION;
NATIONAL
ORGANIZATION FOR RARE DISORDERS; NATIONAL PARTNERSHIP FOR
WOMEN AND FAMILIES; NATIONAL SENIOR CITIZENS LAW CENTER;
NATIONAL WOMEN’S HEALTH NETWORK; THE OVARIAN CANCER NATIONAL
ALLIANCE; AMERICAN HOSPITAL ASSOCIATION; ASSOCIATION OF
AMERICAN MEDICAL COLLEGES; FEDERATION OF AMERICAN HOSPITALS;
NATIONAL ASSOCIATION OF PUBLIC HOSPITALS AND HEALTH SYSTEMS;
CATHOLIC HEALTH ASSOCIATION OF THE UNITED STATES; NATIONAL
2
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ASSOCIATION OF CHILDREN’S HOSPITALS; CHRISTINE O GREGOIRE,
Governor; DR. DAVID CUTLER, Deputy, Otto Eckstein Professor
of Applied Economics, Harvard University; DR. HENRY AARON,
Senior Fellow, Economic Studies Bruce and Virginia MacLaury
Chair, The Brookings Institution; DR. GEORGE AKERLOF,
Koshland Professor of Economics, University of CaliforniaBerkeley, 2001 Nobel Laureate; DR. STUART ALTMAN, Sol C.
Chaikin Professor of National Health Policy, Brandeis
University; DR. KENNETH ARROW, Joan Kenney Professor of
Economics and Professor of Operations Research, Stanford
University, 1972 Nobel Laureate; DR. SUSAN ATHEY, Professor
of Economics, Harvard University, 2007 Recipient of the John
Bates Clark Medal for the most influential American
economist under age 40; DR. LINDA J. BLUMBERG, Senior
Fellow, The Urban Institute, Health Policy Center; DR.
LEONARD E. BURMAN, Daniel Patrick Moynihan Professor of
Public Affairs at the Maxwell School, Syracuse University;
DR. AMITABH CHANDRA, Professor of Public Policy Kennedy
School of Government, Harvard University; DR. MICHAEL
CHERNEW, Professor, Department of Health Care Policy,
Harvard Medical School; DR. PHILIP COOK, ITT/Sanford
Professor of Public Policy, Professor of Economics, Duke
University; DR. CLAUDIA GOLDIN, Henry Lee Professor of
Economics, Harvard University; DR. TAL GROSS, Department of
Health Policy and Management, Mailman School of Public
Health, Columbia University; DR. JONATHAN GRUBER, Professor
of Economics, MIT; DR. JACK HADLEY, Associate Dean for
Finance and Planning, Professor and Senior Health Services
Researcher, College of Health and Human Services, George
Mason University; DR. VIVIAN HO, Baker Institute Chair in
Health
Economics
and
Professor
of
Economics,
Rice
University; DR. JOHN F. HOLAHAN, Ph. D., Director, Health
Policy Research Center, The Urban Institute; DR. JILL
HORWITZ, Professor of Law and Co-Director of the Program in
Law & Economics, University of Michigan School of Law; DR.
LAWRENCE KATZ, Elisabeth Allen Professor of Economics,
Harvard University; DR. FRANK LEVY, Rose Professor of Urban
Economics, Department of Urban Studies and Planning, MIT;
DR. PETER LINDERT, Distinguished Research Professor of
Economics,
University of California, Davis; DR. ERIC
MASKIN, Albert O. Hirschman, Professor of Social Science at
the Institute for Advanced Study, Princeton University, 2007
Nobel Laureate; DR. ALAN C. MONHEIT, Professor of Health
Economics, School of Public Health, University of Medicine &
Dentistry of New Jersey; DR. MARILYN MOON, Vice President
and Director Health Program, American Institutes for
Research; DR. RICHARD J. MURNANE, Thompson Professor of
3
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Education and Society, Harvard University; DR. LEN M.
NICHOLS, George Mason University; DR. HAROLD POLLACK, Helen
Ross Professor of Social Service Administration, University
of Chicago; DR. MATTHEW RABIN, Edward G. and Nancy S. Jordan
Professor of Economics, University of California-Berkeley,
2001 Recipient of the John Bates Clark Medal for the most
influential American economist under age 40; DR. JAMES B.
REBITZER, Professor of Economics, Management, and Public
Policy, Boston University School of Management; DR. MICHAEL
REICH, Professor of Economics, University of California at
Berkeley; DR. THOMAS RICE, Professor, UCLA School of Public
Health; DR. MEREDITH ROSENTHAL, Department of Health Policy
and Management, Harvard University, Harvard School of Public
Health; DR. CHRISTOPHER RUHM, Professor of Public Policy and
Economics, Department of Economics, University of Virginia;
DR. JONATHAN SKINNER, Professor of Economics,
Dartmouth
College, and Professor of Community and Family Medicine,
Dartmouth Medical School; DR. KATHERINE SWARTZ, Professor,
Department of Health Policy and Management, Harvard School
of Public Health; DR. KENNETH WARNER, Dean of the School of
Public Health and Avedis Donabedian Distinguished University
Professor of Public Health, University of Michigan; DR. PAUL
N. VAN DE WATER, Senior Fellow, Center on Budget and Policy
Priorities; DR. STEPHEN ZUCKERMAN, Senior Fellow, The Urban
Institute; NATIONAL WOMEN’S LAW CENTER; AMERICAN ASSOCIATION
OF UNIVERSITY WOMEN; AMERICAN FEDERATION OF STATE, COUNTY
AND
MUNICIPAL
EMPLOYEES;
AMERICAN
MEDICAL
WOMEN’S
ASSOCIATION; ASIAN & PACIFIC ISLANDER AMERICAN HEALTH FORUM;
BLACK WOMEN'S HEALTH IMPERATIVE; CHILDBIRTH CONNECTION; IBIS
REPRODUCTIVE HEALTH; INSTITUTE OF SCIENCE AND HUMAN VALUES;
MARYLAND WOMEN’S COALITION FOR HEALTH CARE REFORM; MENTAL
HEALTH AMERICA; NATIONAL ASIAN PACIFIC AMERICAN WOMEN’S
FORUM; NATIONAL ASSOCIATION OF SOCIAL WORKERS; NATIONAL
COALITION FOR LGBT HEALTH; NATIONAL COUNCIL OF JEWISH WOMEN;
NATIONAL
COUNCIL
OF
WOMEN’S
ORGANIZATIONS;
NATIONAL
EDUCATION
ASSOCIATION;
NATIONAL
LATINA
INSTITUTE
FOR
REPRODUCTIVE HEALTH; OLDER WOMEN’S LEAGUE; PHYSICIANS FOR
REPRODUCTIVE CHOICE AND HEALTH; RAISING WOMEN’S VOICES;
SARGENT SHRIVER NATIONAL CENTER ON POVERTY LAW; SOUTHWEST
WOMEN’S LAW CENTER; WIDER OPPORTUNITIES FOR WOMEN; WOMEN’S
LAW CENTER OF MARYLAND, INCORPORATED; WOMEN’S LAW PROJECT;
PHYSICIANS FOR REPRODUCTIVE HEALTH; AMERICAN COLLEGE OF
OBSTETRICIANS
AND
GYNECOLOGISTS;
AMERICAN
SOCIETY
FOR
EMERGENCY CONTRACEPTION; ASSOCIATION OF REPRODUCTIVE HEALTH
PROFESSIONALS; AMERICAN SOCIETY FOR REPRODUCTIVE MEDICINE;
SOCIETY FOR ADOLESCENT HEALTH AND MEDICINE; AMERICAN MEDICAL
WOMEN’S
ASSOCIATION;
NATIONAL
ASSOCIATION
OF
NURSE
4
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PRACTITIONERS IN WOMEN’S HEALTH; SOCIETY OF FAMILY PLANNING;
JAMES TRUSSELL; SUSAN F. WOOD; DON DOWNING; KATHLEEN
BESINQUE; AMERICANS UNITED FOR SEPARATION OF CHURCH AND
STATE; THE ANTI-DEFAMATION LEAGUE; THE INTERFAITH ALLIANCE
FOUNDATION; THE NATIONAL COALITION OF AMERICAN NUNS; THE
NATIONAL COUNCIL OF JEWISH WOMEN; THE RELIGIOUS COALITION
FOR REPRODUCTIVE CHOICE; THE RELIGIOUS INSTITUTE; THE
UNITARIAN
UNIVERSALIST
ASSOCIATION;
THE
UNITARIAN
UNIVERSALIST WOMEN’S FEDERATION,
Amici Supporting Appellees.
On Remand from the Supreme Court of the United States.
(S. Ct. No. 11-438)
Argued:
May 16, 2013
Decided:
July 11, 2013
Before MOTZ, DAVIS, and WYNN, Circuit Judges.
Affirmed by published opinion.
Judge Wynn wrote the opinion.
Judge Motz, Judge Davis, and
ARGUED: Mathew D. Staver, LIBERTY COUNSEL, Maitland, Florida,
for Appellants.
Alisa Beth Klein, UNITED STATES DEPARTMENT OF
JUSTICE, Washington, D.C., for Appellees.
ON BRIEF: Anita L.
Staver, LIBERTY COUNSEL, Maitland, Florida; Stephen M. Crampton,
Mary E. McAlister, LIBERTY COUNSEL, Lynchburg, Virginia, for
Appellants. Timothy J. Heaphy, United States Attorney, Roanoke,
Virginia; Neal Kumar Katyal, Acting Solicitor General, Tony
West, Assistant Attorney General, Beth S. Brinkmann, Deputy
Assistant Attorney General, Mark B. Stern, Samantha L. Chaifetz,
UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for
Appellees.
Joel M. Spector, MOUNTAIN STATES LEGAL FOUNDATION,
Lakewood, Colorado, for Amicus Mountain States Legal Foundation.
Brian S. Koukoutchos, Mandeville, Louisiana; Charles J. Cooper,
David H. Thompson, COOPER & KIRK, PLLC, Washington, D.C., for
Amicus Revere America Foundation. Peter Ferrara, AMERICAN CIVIL
RIGHTS UNION, Falls Church, Virginia; Daniel M. Gray, LAW
OFFICES OF DANIEL M. GREY, LLC, Falls Church, Virginia; Richard
B. Rogers, RICHARD B. ROGERS,PLC, Alexandria, Virginia, for
Amicus American Civil Rights Union.
Kenneth A. Klukowski,
FAMILY RESEARCH COUNCIL, Washington, D.C., for Amicus Family
5
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Research Council.
Scott J. Ward, Timothy R. Obitts, GAMMON &
GRANGE, P.C., McLean, Virginia; Catherine W. Short, LIFE LEGAL
DEFENSE FOUNDATION, Ojai, California, for Amici Breast Cancer
Prevention Institute and Life Legal Defense Foundation. Richard
P. Hutchison, LANDMARK LEGAL FOUNDATION, Kansas City, Missouri;
Mark R. Levin, Michael J. O'Neill, Matthew C. Forys, LANDMARK
LEGAL FOUNDATION, Leesburg, Virginia, for Amicus Landmark Legal
Foundation. Stephen B. Presser, Raoul Berger Professor of Legal
History,
NORTHWESTERN
UNIVERSITY
SCHOOL
OF
LAW,
Chicago,
Illinois; Kathleen Cassidy Goodman, LAW OFFICE OF KATHLEEN
CASSIDY GOODMAN, Helotes, Texas; Steven W. Fitschen, THE
NATIONAL LEGAL FOUNDATION, Virginia Beach, Virginia; Allen E.
Parker, R. Clayton Trotter, THE JUSTICE FOUNDATION, San Antonio,
Texas, for Amicus Project Liberty.
David Boyle, Long Beach,
California, for Amicus David Boyle.
Nikolas T. Nikas, Dorinda
C. Bordlee, BIOETHICS DEFENSE FUND, Scottsdale, Arizona, for
Amici 281 Members of Legatus and Catholic Medical Association.
John A. Eidsmoe, FOUNDATION FOR MORAL LAW, Montgomery, Alabama,
for Amicus Foundation for Moral Law.
M. Casey Mattox, Michael
J.
Norton,
Steven
H.
Aden,
ALLIANCE
DEFENDING
FREEDOM,
Washington, D.C.; Anna R. Franzonello, Mailee Smith, AMERICANS
UNITED FOR LIFE, Washington, D.C., for Amici The Virginia Family
Foundation, West Virginia Family Policy Council, Maryland Family
Alliance, North Carolina Family Policy Council, Palmetto Family
Council, Americans United for Life and Alliance Defending
Freedom.
Rebecca Glenberg, AMERICAN CIVIL LIBERTIES UNION OF
VIRGINIA, Richmond, Virginia; Daniel Mach, AMERICAN CIVIL
LIBERTIES UNION FOUNDATION, Washington D.C.; Andrew D. Beck,
Brigitte Amiri, AMERICAN CIVIL LIBERTIES UNION FOUNDATION, New
York, New York, for Amici The American Civil Liberties Union,
The American Civil Liberties Union of Virginia, Americans United
for Separation of Church and State, The Anti-Defamation League,
The Interfaith Alliance Foundation, The National Coalition of
American Nuns, The National Council of Jewish Women, The
Religious Coalition for Reproductive Choice, The Religious
Institute, The Unitarian Universalist Association, and The
Unitarian Universalist Women’s Federation.
Ian Millhiser,
CENTER FOR AMERICAN PROGRESS, Washington, D.C., for Amici
American Nurses Association, American Academy of Pediatrics,
American Medical Student Association, Center for American
Progress D/B/A Doctors for America, National Hispanic Medical
Association, and National Physicians Alliance. Professor Walter
Dellinger, Washington, D.C.; Professor H. Jefferson Powell,
GEORGE WASHINGTON UNIVERSITY LAW SCHOOL, Washington, D.C., for
Amici Senate Majority Leader Harry Reid, House Democratic Leader
Nancy
Pelosi,
and
Congressional
Leaders
and
Leaders
of
Committees of Relevant Jurisdiction. Gillian E. Metzger, Trevor
6
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W. Morrison, New York, New York; Andrew J. Pincus, Charles A.
Rothfeld, Paul W. Hughes, Michael B. Kimberly, MAYER BROWN LLP,
Washington, D.C., for Amici Constitutional Law Professors.
Rochelle Bobroff, Simon Lazarus, NATIONAL SENIOR CITIZENS LAW
CENTER, Washington, D.C., for Amici The American Association of
People with Disabilities, The Arc of the United States, Breast
Cancer Action, Families USA, Friends of Cancer Research, March
of Dimes Foundation, Mental Health America, National Breast
Cancer Coalition, National Organization for Rare Disorders,
National Partnership for Women And Families, National Senior
Citizens Law Center, National Women’s Health Network, and The
Ovarian Cancer National Alliance.
Sheree R. Kanner, Catherine
E. Stetson, Dominic F. Perella, Michael D. Kass, Sara A. Kraner,
HOGAN LOVELLS US LLP, Washington, D.C.; Melinda Reid Hatton,
Maureen D. Mudron, AMERICAN HOSPITAL ASSOCIATION, Washington,
D.C.; Ivy Baer, Karen Fisher, ASSOCIATION OF AMERICAN MEDICAL
COLLEGES, Washington, D.C.; Jeffrey G. Micklos, FEDERATION OF
AMERICAN HOSPITALS, Washington, D.C.; Larry S. Gage, President,
NATIONAL ASSOCIATION OF PUBLIC HOSPITALS AND HEALTH SYSTEMS,
Washington,
D.C.;
Lisa
Gilden,
Vice
President,
General
Counsel/Compliance Officer, THE CATHOLIC HEALTH ASSOCIATION OF
THE UNITED STATES, Washington, D.C.; Lawrence A. McAndrews,
President and Chief Executive Officer, NATIONAL ASSOCIATION OF
CHILDREN’S HOSPITALS, Washington, D.C., for Amici American
Hospital Association, Association of American Medical Colleges,
Catholic Health Association of the United States, Federation of
American
Hospitals,
National
Association
of
Children’s
Hospitals, and National Association of Public Hospitals and
Health Systems.
Kristin Houser, Adam Berger, Rebecca J. Roe,
William
Rutzick,
SCHROETER,
GOLDMARK
&
BENDER,
Seattle,
Washington, for Amicus The Governor of Washington.
Richard L.
Rosen, ARNOLD & PORTER LLP, Washington, D.C., for Amici Economic
Scholars.
Marcia D. Greenberger, Emily J. Martin, Judith G.
Waxman, Lisa Codispoti, NATIONAL WOMEN’S LAW CENTER, Washington,
D.C.; Melissa Hart, UNIVERSITY OF COLORADO LAW SCHOOL, Boulder,
Colorado, for Amici The National Women’s Law Center, American
Association of University Women, American Federation of State,
County
and
Municipal
Employees,
American
Medical
Women’s
Association, Asian & Pacific Islander American Health Forum,
Black Women’s Health Imperative, Childbirth Connection, Ibis
Reproductive Health, Institute of Science and Human Values,
Maryland Women’s Coalition for Health Care Reform, Mental Health
America, National Asian Pacific American Women’s Forum, National
Association of Social Workers, National Coalition for LGBT
Health, National Council of Jewish Women, National Council of
Women’s Organizations, National Education Association, National
Latina Institute for Reproductive Health, Older Women’s League,
7
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Physicians for Reproductive Choice and Health, Raising Women’s
Voices, Sargent Shriver National Center on Poverty Law,
Southwest Women’s Law Center, Wider Opportunities for Women,
Women’s Law Center of Maryland, Incorporated, and Women’s Law
Project.
B. Robert Piller, Jennifer Blasdell, PHYSICIANS FOR
REPRODUCTIVE HEALTH, New York, New York; Bruce H. Schneider,
Michele L. Pahmer, STROOCK & STROOCK & LAVAN LLP, New York, New
York, for Amici Physicians for Reproductive Health, American
College of Obstetricians and Gynecologists, American Society for
Emergency Contraception, Association of Reproductive Health
Professionals, American Society for Reproductive Medicine,
Society for Adolescent Health and Medicine, American Medical
Women’s Association, National Association of Nurse Practitioners
in Women’s Health, Society of Family Planning, James Trussell,
Susan F. Wood, Don Downing, and Kathleen Besinque.
8
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MOTZ, DAVIS, and WYNN, Circuit Judges:
Liberty University and certain individuals (collectively,
“Plaintiffs”) brought this action challenging two provisions of
the Patient Protection and Affordable Care Act:
the “individual
mandate,” which requires individuals to purchase a minimum level
of health insurance coverage, and the “employer mandate,” which
requires
certain
employers
to
offer
employees and their dependents.
such
coverage
to
their
The district court dismissed
the lawsuit, upholding the constitutionality of both mandates.
On appeal we held that the Anti-Injunction Act barred us from
considering
district
Plaintiffs’
court
jurisdiction.
with
claims
and
instructions
remanded
to
the
dismiss
case
for
to
the
lack
of
See Liberty Univ., Inc. v. Geithner, 671 F.3d 391
(4th Cir. 2011).
The Supreme Court granted Plaintiffs’ petition
for certiorari, vacated our judgment, and remanded for further
consideration
in
light
of
National
Federation
of
Independent
Business v. Sebelius, 132 S. Ct. 2566 (2012) (“NFIB”).
Liberty Univ. v. Geithner, 133 S. Ct. 679 (2012).
consideration
of
that
case,
we
affirm
the
See
After careful
judgment
of
the
district court.
I.
On
March
23,
2010,
President
Obama
signed
the
Patient
Protection and Affordable Care Act (“Affordable Care Act” or
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“the Act”) into law.
(2010).
Pg: 10 of 62
See Pub. L. No. 111-148, 124 Stat. 119
Liberty and two unaffiliated individuals challenge the
individual mandate, which will become effective in 2014, and the
employer mandate, which will become effective in 2015.
Before
resolving the legal questions, we summarize the requirements of
the mandates and the relevant facts and procedural history of
this case.
A.
1.
With limited exceptions, the individual mandate imposes a
“penalty” on any taxpayer who is an “applicable individual” and
fails
to
obtain
“minimum
essential
coverage.”
26
U.S.C.
§ 5000A(a)-(b).
“Minimum essential coverage” includes coverage
under
government-sponsored
various
sponsored
plan,
or
a
health
plan
programs,
offered
in
an
employer-
the
individual
market within a state, as well as certain other coverage.
Id.
§ 5000A(f).
Any individual who does not qualify for a listed exemption
is an “applicable individual.”
provides
two
religion-based
Id. § 5000A(d)(1).
exemptions.
The
The Act
“[r]eligious
conscience exemption” applies to an individual who is “a member
of
a
recognized
§ 5000A(d)(2)(A),
religious
and
“an
sect
adherent
or
of
division
thereof,”
established
tenets
id.
or
teachings of such sect or division by reason of which he is
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conscientiously opposed to acceptance of the benefits of any
[life, disability, old-age, retirement, or medical] insurance,”
id. § 1402(g)(1).
times
since
[its]
dependent
ministry”
The sect must have been in existence at all
December
31,
members.”
exemption
organization
1950,
that
Id.
applies
“has
and
been
The
to
in
must
a
“make
provision
“[h]ealth
member
existence
of
at
all
care
a
for
sharing
501(c)(3)
times
since
December 31, 1999,” the “members of which share a common set of
ethical or religious beliefs[,] . . . share medical expenses
among members in accordance with those beliefs,” and “retain
membership even after they develop a medical condition.”
Id.
§ 5000A(d)(2)(B).
The
penalty
for
failing
to
obtain
minimum
essential
coverage is tied to the individual’s income but cannot exceed
the cost of “the national average premium for qualified health
plans” meeting a certain level of coverage.
See id. § 5000A(c).
The Secretary of the Treasury has the authority to “assess[] and
collect[] [the penalty] in the same manner” as a tax.
Id.
§§ 5000A(g)(1), 6671(a).
2.
If
an
“applicable
large
employer”
fails
to
provide
affordable health care coverage to its full-time employees and
their
dependents,
the
employer
“assessable payment” by the employer.
11
mandate
may
require
Id. § 4980H(a)-(b).
an
The
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Act defines an “applicable large employer” as an employer who
employed an average of at least fifty full-time employees during
the preceding year.
Such
least
an
one
Id. § 4980H(c)(2).
employer
of
its
must
make
full-time
an
assessable
employees
payment
qualifies
if
for
at
“an
applicable premium tax credit or cost-sharing reduction” to help
pay for health care coverage.
Id. § 4980H(a)-(b).
An employee
is eligible for an “applicable premium tax credit” or “costsharing reduction” if the employer fails to offer the employee
“affordable”
coverage
providing
“minimum
value”
and
the
employee’s income falls between 100% and 400% of the poverty
line.
Id.
§§
4980H(c)(3),
36B(a)-(c);
Affordable
Care
Act
§ 1402(a), (b), (f)(2) (codified at 42 U.S.C. § 18071(a), (b),
(f)(2)). 1
The
amount
of
the
assessable
payment
that
an
employer
required to make such a payment must pay depends on whether the
employer offers “minimum essential coverage” to its full-time
employees and their dependents.
the
employer
fails
to
offer
26 U.S.C. § 4980H(a)-(b).
such
1
coverage,
the
If
assessable
Coverage is “affordable” if the employee’s required
contribution to the plan does not exceed an indexed percentage
of his household income.
26 U.S.C. § 36B(c)(2)(C)(i).
A plan
fails to provide “minimum value” if the plan’s share of the
employee’s health costs is less than 60% of total costs.
Id.
§ 36B(c)(2)(C)(ii).
12
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payment is
Filed: 07/11/2013
calculated
by
Pg: 13 of 62
multiplying
$2000
by
the
number
of
full-time employees (less thirty), prorated over the number of
months
the
employer
(c)(2)(D)(i).
is
liable.
Id.
§
4980H(a),
(c)(1),
If the employer does offer such coverage, the
assessable payment is calculated by multiplying $3000 by the
number of employees receiving an applicable premium tax credit
or cost-sharing reduction, prorated on a monthly basis.
§ 4980H(b)(1).
The
amount
of
the
payment
under
§
Id.
4980H(b)
cannot exceed the amount the employer would owe if liable under
§ 4980H(a).
Id. § 4980H(b)(2).
As with the individual mandate,
the Secretary of the Treasury has the authority to assess and
collect
the
exaction
in
the
same
manner
as
a
tax.
Id.
§§ 4980H(d)(1), 6671(a).
“Minimum
essential
coverage”
includes
coverage
under
an
“eligible employer-sponsored plan,” other than coverage of only
certain excepted benefits (like limited scope dental or vision
benefits),
which
does
not
qualify.
Id.
§§
4980H(a)(1),
5000A(f)(2)-(3); Public Health Service Act § 2791(c) (codified
at 42 U.S.C. § 300gg-91(c)).
plan”
includes
established
or
a
“group
maintained
An “eligible employer-sponsored
health
by
an
plan,”
employer
which
for
the
is
a
plan
purpose
providing medical care to employees and their dependents.
U.S.C.
§ 5000A(f)(2);
§ 1002(1).
42
U.S.C.
§
300gg-91(a);
29
of
26
U.S.C.
Thus, employer-provided health care coverage would
13
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seem
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to
Filed: 07/11/2013
qualify
as
minimum
Pg: 14 of 62
essential
coverage
coverage applies only to excepted benefits.
§ 4980H(a)
imposes
an
assessable
unless
that
In effect, then,
payment
on
an
applicable
employer who fails to offer coverage to its full-time employees
and their dependents, while § 4980H(b) imposes an assessable
payment on an applicable employer who provides coverage that
does not satisfy the mandate’s affordability criteria.
B.
On
March
Affordable
against
23,
Care
the
Act
“the
that
the
into
Secretary
(collectively,
declaration
2010,
the
of
day
the
President
law,
Plaintiffs
the
Treasury
Secretary”).
individual
filed
and
signed
this
other
Plaintiffs
and
employer
the
action
officials
sought
mandates
a
are
invalid and an order enjoining their enforcement.
1.
In
their
second
amended
complaint,
the
individual
plaintiffs, Michele G. Waddell and Joanne V. Merrill, assert
that they have “made a personal choice not to purchase health
insurance
coverage
and
[do]
not
want
to”
do
so. 2
Further,
Waddell and Merrill allege that the Act will force them to “pay
2
The district court found that three of the individual
plaintiffs, David Stein, Kathy Byron, and Jeff Helgeson, lacked
standing. Liberty Univ., Inc. v. Geithner, 753 F. Supp. 2d 611,
621-22 (W.D. Va. 2010).
Plaintiffs do not challenge that
determination on appeal.
14
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Pg: 15 of 62
for health insurance coverage that is not necessary or desirable
or face significant penalties.”
Christians
“who
abortions,
except
pregnant
have
mother,
sincerely
where
are
They also assert that they are
held
necessary
murder
and
to
religious
beliefs
save
life
morally
the
repugnant”
of
and
that
the
that
“they should play no part in such abortions, including no part
in
facilitating,
subsidizing,
easing,
funding,
or
supporting
such abortions since to do so is evil and morally repugnant
complicity.”
Liberty alleges that it employs approximately 3900 fulltime faculty and staff, and that it is self-insured and offers
“health savings accounts, private insurance policies and other
health
care
reimbursement
options
to
qualified
employees.”
Liberty asserts that “depending upon how the federal government
defines
‘minimum
index,”
the
insufficient
essential
University
“to
satisfy
coverage’
could
the
be
and
found
federal
the
to
affordability
offer
definition
of
coverage
minimum
essential coverage or coverage that is deemed unaffordable . . .
and therefore could be subjected to significant penalties” and
“substantial financial hardship.”
Liberty also alleges that the
employer mandate will “increase the cost of care . . . [and]
will
directly
and
negatively
affect
[the
University]
by
increasing the cost of providing health insurance coverage and
15
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thus directly affect the ability of the University to carry on
its mission.”
Finally,
Liberty
asserts
that
it
“is
a
Christian
educational institution whose employees are Christians who have
sincerely held religious beliefs that abortions, except where
necessary to save the life of the pregnant mother, are murder
and morally repugnant.”
beliefs
bar
It further explains that its religious
from
“play[ing]
[any]
including
it
part
in
[any]
facilitating,
part
in
abortions,
subsidizing,
easing,
funding, or supporting abortions since to do so is evil and
morally repugnant complicity.”
2.
Before
the
district
court,
Plaintiffs
asserted
that
the
individual and employer mandates exceeded Congress’s Article I
powers and violated the Tenth Amendment, the Establishment and
Free
Exercise
Clauses
of
the
First
Amendment,
the
Religious
Freedom Restoration Act, the Fifth Amendment, the right to free
speech
Article
and
free
I,
capitation
or
association
Section
direct
9
under
the
prohibition
taxes,
and
the
First
Amendment,
against
Guarantee
the
unapportioned
Clause.
The
Secretary moved to dismiss the second amended complaint for lack
of
jurisdiction,
arguing
that
Plaintiffs
lacked
that the Anti-Injunction Act barred the suit.
standing
and
Alternatively,
the Secretary moved to dismiss all counts for failure to state a
16
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claim upon which relief could be granted.
concluded
that
it
possessed
The district court
jurisdiction
but
granted
the
Secretary’s motion to dismiss for failure to state a claim.
See
Liberty Univ., Inc. v. Geithner, 753 F. Supp. 2d 611 (W.D. Va.
2010).
Plaintiffs
Establishment
appealed
Clause,
Free
only
Exercise
as
to
Clause,
the
Article
Religious
I,
Freedom
Restoration Act, and Fifth Amendment claims.
When we considered the case on appeal, we did not reach the
merits
of
those
claims
because
we
concluded
Injunction Act deprived us of jurisdiction.
671 F.3d 391.
v.
Geithner,
Supreme
Court
that
the
Anti-
See Liberty Univ.,
After initially denying certiorari, Liberty Univ.
133
S.
granted
Ct.
60
(2012),
certiorari,
on
vacated
reconsideration
our
judgment,
the
and
directed us to give further consideration to the case in light
of NFIB, see Liberty Univ., 133 S. Ct. 679.
In NFIB, the Court
held that the Anti-Injunction Act did not bar a challenge to the
individual mandate and upheld that mandate as a lawful exercise
of Congress’s taxing power.
132 S. Ct. at 2584, 2600.
Five
members of the Court, however, concluded that the individual
mandate exceeds Congress’s power under the Commerce Clause.
at
2593
(Roberts,
C.J.);
id.
at
2644-50
(Scalia,
Id.
Kennedy,
Thomas, and Alito, JJ., dissenting) (“joint dissent”).
On remand, we must decide whether the Anti-Injunction Act
bars this pre-enforcement challenge to the employer mandate, and
17
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whether Plaintiffs have standing to challenge the mandates.
If
neither jurisdictional hurdle prevents our consideration of the
merits of the case, we must determine whether Congress acted
within the scope of its constitutionally delegated powers when
it enacted the employer mandate.
Finally, if we find that the
mandates are a valid exercise of Congress’s Article I powers, we
must address Plaintiffs’ religion-based arguments. 3
is de novo.
Inc.,
637
Our review
E.I. du Pont de Nemours & Co. v. Kolon Indus.,
F.3d
435,
440
(4th
Cir.
2011)
(reviewing
de
novo
district court’s grant of motion to dismiss for failure to state
a claim under Fed. R. Civ. P. 12(b)(6)); Estate of Michael ex
rel.
Michael
v.
Lullo,
173
F.3d
503,
506
(4th
Cir.
1999)
(reviewing de novo district court’s decision whether to dismiss
for lack of jurisdiction).
II.
The Anti-Injunction Act (“AIA”) provides that “no suit for
the purpose of restraining the assessment or collection of any
3
The plaintiffs raise on appeal new arguments that the
Affordable Care Act violates the Origination Clause and
impermissibly conflicts with various state laws. Plaintiffs had
the opportunity to raise these arguments in the district court
and in the original briefing in this case but did not do so;
thus the arguments are waived.
See Wash. Metro. Area Transit
Auth. v. Precision Small Engines, 227 F.3d 224, 227-28 (4th Cir.
2000).
18
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tax shall be maintained in any court by any person.”
§ 7421(a).
26 U.S.C.
Where it applies, the AIA thus deprives courts of
jurisdiction
to
entertain
pre-enforcement
enjoin the collection of federal taxes.
suits
seeking
to
See Enochs v. Williams
Packing & Navigation Co., 370 U.S. 1, 5 (1962). 4
Liberty’s
challenge
to
the
employer
mandate
is
a
pre-
enforcement suit to enjoin the collection of an exaction that is
codified in the Internal Revenue Code, and which the Secretary
of the Treasury is empowered to collect in the same manner as a
tax.
In NFIB, however, the Supreme Court made clear that the
AIA does not apply to every exaction that functions as a tax or
even
to
every
exaction
constitutional purposes.
Congress intends it to.
that
passes
muster
as
a
tax
for
Rather, the AIA applies only where
See NFIB, 132 S. Ct. at 2583 (noting
that, although “Congress cannot change whether an exaction is a
tax
.
.
.
for
constitutional
purposes,”
the
AIA
and
the
Affordable Care Act “are creatures of Congress’s own creation”
and “[h]ow they relate to each other is up to Congress”).
4
We note that Plaintiffs request declaratory as well as
injunctive relief.
The Declaratory Judgment Act authorizes
federal courts to issue declaratory judgments, except “with
respect to Federal taxes.”
28 U.S.C. § 2201(a).
Because the
Declaratory Judgment Act’s tax exception is coextensive with the
AIA, the following analysis also applies to Plaintiffs’ request
for declaratory relief. See Sigmon Coal Co. v. Apfel, 226 F.3d
291, 299 (4th Cir. 2000).
19
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When concluding that Congress did not intend to bar preenforcement challenges to the individual mandate, the Court in
NFIB found it most significant that Congress chose to describe
the shared responsibility payment as a “penalty” rather than a
“tax.”
See id. (noting that “[t]here is no immediate reason to
think that a statute applying to ‘any tax’ would apply to a
‘penalty’”).
Thus, we begin our AIA inquiry with particular
attention to how Congress characterized the exaction set forth
in the employer mandate.
In
maintaining
that
the
AIA
bars
this
challenge
to
the
employer mandate, the Secretary relies heavily on the fact that
the
Act
“tax.”
twice
refers
to
the
employer
mandate
See 26 U.S.C. § 4980H(b)(2), (c)(7).
Secretary
virtually
ignores
the
fact
that
exaction
as
a
In doing so, the
the
Act
consistently characterize the exaction as a tax.
does
not
Rather, the
Act initially identifies the employer mandate exaction as an
“assessable
payment.”
See
id.
§
4980H(a).
The
Act
then
proceeds to characterize the exaction as an “assessable payment”
six more times.
(d)(2),
(d)(3).
exaction
as
See id. § 4980H(b)(1), (c)(2)(D)(i)(I), (d)(1),
Additionally,
an
“assessable
the
Act
once
penalt[y].”
refers
to
See
the
id.
§ 4980H(c)(2)(D).
Further,
on
one
of
the
two
occasions
in
which
the
Act
refers to the employer mandate exaction as a “tax,” it does so
20
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in a tax-specific context, where the use of another word would
create confusion.
deduction
for
275(a)(6).”
the
Section 4980H(c)(7) provides:
tax
imposed
by
this
“For denial of
section,
see
section
Section 275(a) states that “[n]o deduction shall be
allowed for the following taxes” and then lists various taxes,
including “[t]axes imposed by chapter[] . . . 43.”
mandate is codified in chapter 43 of the Code.
The employer
Thus, the Act
presumably refers to the employer mandate exaction as a “tax”
when
cross-referencing
§
275(a)(6)
to
make
clear
that,
for
purposes of determining deductibility, the exaction is a tax
imposed by chapter 43.
There may be no equally obvious explanation for the other
instance in which the Act characterizes the employer mandate
exaction as a “tax.”
that
the
coverage
“aggregate
that
is
See 26 U.S.C. § 4980H(b)(2) (providing
amount
of
unaffordable
tax”
cannot
assessed
exceed
for
the
offering
amount
the
employer would owe under section 4980H(a) for failing to offer
minimum essential coverage).
But we simply cannot place much
significance on a single unexplained use of that term.
Because
Congress initially and primarily refers to the exaction as an
“assessable
payment”
and
not
a
“tax,”
the
statutory
text
suggests that Congress did not intend the exaction to be treated
as a tax for purposes of the AIA.
21
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Furthermore, Congress did not otherwise indicate that the
employer mandate exaction qualifies as a tax for AIA purposes,
though of course it could have done so.
pointed
out
“penalties
in
and
NFIB,
26
U.S.C.
liabilities”
§
found
As the Supreme Court
6671(a)
in
provides
subchapter
that
68B
the
of
the
Internal Revenue Code are “treated as taxes” for purposes of the
AIA.
See NFIB, 132 S. Ct. at 2583.
The employer mandate, like
the individual mandate, is not included in subchapter 68B, and
no
other
provision
indicates
that
“assessable payment” as a tax.
we
are
to
treat
its
See id. (making the same point
with regard to the individual mandate).
Finally, we note that to adopt the Secretary’s position
would
lead
to
an
anomalous
result.
The
Supreme
Court
has
expressly held that a person subject to the individual mandate
can
bring
a
pre-enforcement
suit
challenging
that
provision.
But, under the Secretary’s theory, an employer subject to the
employer
mandate
challenging
that
could
bring
provision.
only
It
a
seems
post-enforcement
suit
highly
that
unlikely
Congress meant to signal -- with two isolated references to the
term “tax” –- that the mandates should be treated differently
for
purposes
Government
of
has
the
AIA’s
pointed
to
applicability.
no
differential treatment.
22
rationale
Tellingly,
supporting
the
such
Appeal: 10-2347
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For
exaction,
Filed: 07/11/2013
these
reasons,
like
the
we
Pg: 23 of 62
hold
individual
that
the
mandate
constitute a tax for purposes of the AIA.
employer
exaction,
mandate
does
not
Therefore, the AIA
does not bar this suit.
III.
The Secretary argues that another jurisdictional hurdle –standing -- prevents our consideration of the merits of this
case.
To establish standing at the motion to dismiss stage, a
plaintiff must plausibly allege that:
“(1) it has suffered an
injury in fact that is (a) concrete and particularized and (b)
actual or imminent, not conjectural or hypothetical; (2) the
injury
is
defendant;
fairly
and
traceable
(3)
it
is
to
the
challenged
likely,
as
action
opposed
to
of
the
merely
speculative, that the injury will be redressed by a favorable
decision.”
Friends of the Earth, Inc. v. Laidlaw Envtl. Servs.
(TOC), Inc., 528 U.S. 167, 180–81 (2000) (internal quotation
marks omitted); see Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007) (at motion to dismiss stage, plaintiff must allege
sufficient
facts
to
render
claim
plausible).
The
Secretary
contends that all plaintiffs lack standing because they allege
no
actual
or
imminent
injury.
We
address
first
standing and then that of the individual plaintiffs.
23
Liberty’s
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A.
Liberty has more than fifty full-time employees, and the
Secretary
does
not
contest
that
it
is
an
employer” subject to the employer mandate.
“applicable
large
Nevertheless, the
Secretary argues that Liberty has failed to establish standing
because it is speculative whether Liberty will be subject to an
assessable payment under 26 U.S.C. § 4980H.
Specifically, the
Secretary
coverage
contends
that
the
health
care
Liberty
acknowledges it already provides to its employees qualifies as
minimum essential coverage that may also satisfy the employer
mandate’s affordability criteria.
The Secretary’s argument may well be correct -– as far as
it goes. 5
an
But Liberty need not show that it will be subject to
assessable
payment
to
establish
5
standing
if
it
otherwise
Liberty alleges that it “could be determined to not offer
coverage sufficient to satisfy the federal definition of minimum
essential coverage or coverage that is deemed unaffordable . . .
and therefore could be subjected to significant penalties.” But
“minimum essential coverage” seems to include coverage under any
employer-sponsored plan, unless that plan covers only excepted
benefits. See 26 U.S.C. §§ 4980H(a), 5000A(f)(2)-(3). Liberty
does not suggest its current plan covers only excepted benefits.
Thus, by definition that plan appears to meet the “minimum
essential coverage” requirement.
Further, while it is possible
that Liberty’s current plan fails to provide affordable
coverage, subjecting Liberty to an assessable payment under
§ 4980H(b), Liberty alleges only that its coverage “could” be
deemed
unaffordable.
The
Supreme
Court
has
held
that
“threatened injury must be certainly impending to constitute
injury in fact” and “[a]llegations of possible future injury are
not sufficient.” Clapper v. Amnesty Int’l USA, 133 S. Ct. 1138,
1147 (2013) (internal quotation marks omitted).
24
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alleges
facts
Filed: 07/11/2013
that
establish
Pg: 25 of 62
standing.
In
this
case,
in
addition to alleging that it “could” be subject to an assessable
payment,
Liberty
alleges
that
the
employer
mandate
and
its
“attendant burdensome regulations will . . . increase the cost
of care” and “directly and negatively affect [it] by increasing
the cost of providing health insurance coverage.”
“[G]eneral factual allegations of injury resulting from the
defendant’s conduct may suffice, for on a motion to dismiss we
presum[e] that general allegations embrace those specific facts
that are necessary to support the claim.”
Lujan v. Defenders of
Wildlife, 504 U.S. 555, 561 (1992) (internal quotation marks
omitted); see Bennett v. Spear, 520 U.S. 154, 167-68 (1997).
Thus, to establish standing, Liberty need not prove that the
employer mandate will increase its costs of providing health
coverage; it need only plausibly allege that it will.
Liberty’s allegation to this effect is plausible.
the
coverage
Liberty
currently
provides
Even if
ultimately
proves
sufficient, it may well incur additional costs because of the
administrative burden of assuring compliance with the employer
mandate,
or
due
to
an
increase
in
the
cost
of
care.
See
generally Ass’n of Private Sector Colls. & Univs. v. Duncan, 681
F.3d 427, 457-58 (D.C. Cir. 2012) (increased compliance costs
constitute injury in fact sufficient to confer standing); N.Y.
Civil Liberties Union v. Grandeau, 528 F.3d 122, 131 (2d Cir.
25
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2008)
Doc: 217
Filed: 07/11/2013
(administrative
burden
Pg: 26 of 62
constitutes
injury
in
fact
for
standing purposes); Frank v. United States, 78 F.3d 815, 823-24
(2d Cir. 1996) (same), vacated on other grounds, 521 U.S. 1114
(1997).
Moreover,
Liberty’s
injury
is
imminent
even
though
the
employer mandate will not go into effect until January 1, 2015,
as Liberty must take measures to ensure compliance in advance of
that date.
392-93
See Virginia v. Am. Booksellers Ass’n, 484 U.S. 383,
(1988)
(holding
booksellers
had
standing
though
challenged law had not yet been enforced because they “w[ould]
have
to
take
significant
their
and
costly
interpretation
of
compliance
the
measures”
beforehand
“if
statute
[wa]s
correct”).
Thus, Liberty has standing to challenge the employer
mandate.
B.
The individual plaintiffs, after alleging that they do not
have or want to purchase health insurance coverage, assert that
the individual mandate “will create a financial hardship in that
[they] will have to either pay for health insurance coverage
. . . or face significant penalties.”
The Secretary maintains that the individual plaintiffs lack
standing because they may be exempt from the individual mandate
penalty,
either
because
their
income
is
below
the
mandate’s
threshold level or because they qualify for a proposed hardship
26
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exemption.
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Pg: 27 of 62
See 26 U.S.C. § 5000A(e)(2) (exempting individuals
with income below filing threshold); 78 Fed. Reg. 7348, 7354-55
(Feb. 1, 2013) (describing proposed hardship exemptions).
again,
at
this
early
stage,
plaintiffs
“general factual allegations of injury.”
561.
need
only
But,
provide
Lujan, 504 U.S. at
And, we must “accept[] all well-pleaded allegations in the
plaintiff’s complaint as true.”
De’Lonta v. Angelone, 330 F.3d
630, 633 (4th Cir. 2003).
The
individual
plaintiffs
allege
the
individual
mandate
will obligate them to buy insurance or pay a penalty, and their
alleged lack of insurance provides sufficient support for that
allegation
at
this
stage
of
the
proceedings.
Further,
the
individual plaintiffs’ injury is imminent because they must make
preparations to obtain insurance before the mandate goes into
effect.
See Am. Booksellers Ass’n, 484 U.S. at 392-93.
Thus,
standing
to
we
conclude
challenge
that
the
the
individual
individual
mandate.
plaintiffs
We
have
therefore
proceed to the merits.
IV.
A.
Liberty argues that the employer mandate exceeds Congress’s
commerce
power
because
Congress
does
not
have
“the
power
to
order employers to provide government-defined health insurance
27
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Filed: 07/11/2013
to their employees.”
Liberty
employers
unwanted
contends,
to
Post-Remand Opening Br. 18.
because
engage
product,”
Pg: 28 of 62
in
the
particular
contrary
Remand Reply Br. 16.
employer
to
the
This is so,
mandate
conduct
dictates
or
of
“compel[s]
purchase
NFIB.
an
Post-
In Liberty’s view, “[a]llowing Congress to
mandate that employers provide health insurance . . . goes far
beyond regulations of wages and hours upheld under the Commerce
Clause.”
Post-Remand Opening Br. 19.
The Secretary counters that the employer mandate is a valid
exercise
of
Congress’s
authority
under
the
Commerce
Clause
because “[h]ealth coverage benefits form part of an employee’s
compensation
Court
package,
precedent
that
and
‘it
Congress
is
has
well-established
the
terms and conditions of employment.’”
(quoting
Liberty
Univ.,
753
F.
power
to
in
Supreme
regulate
the
Post-Remand Resp. Br. 25.
Supp.
2d
at
635).
More
specifically, the Secretary argues that
[i]f employees put their insurance at risk when they
change jobs, they may be “reluctant to switch jobs in
the first place (a phenomenon known as ‘job lock’).”
[Congressional Budget Office, Key Issues in Analyzing
Major
Health
Insurance
Proposals
8
(Dec.
2008)
[hereinafter
“CBO,
Key
Issues”]].
As
Congress
understood, the prospect of losing employee insurance
benefits may obstruct interstate mobility, which the
Constitution
generally,
and
the
commerce
power
specifically, were designed to prevent.
Original Resp. Br. 46–47.
The Secretary further contends that
Congress found that “employers who do not offer health
insurance to their workers gain an unfair economic
28
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advantage relative to those employers who do provide
coverage, and millions of hard-working Americans and
their families are left without health insurance.”
H.R. Rep. No. 111-443(II), at 985 (2010). Congress
noted that this state of affairs results in “a vicious
cycle
because
these
uninsured
workers
turn
to
emergency rooms for health care which in turn
increases costs for employers and families with health
insurance,” making it more difficult for employers to
provide coverage. Id. at 985–86.
Id. at 53.
health
forms
Thus, the Secretary concludes, “[t]he provision of
coverage
of
substantially
compensation
and
affects
terms
of
commerce
just
employment
do,
as
other
and
the
businesses run by large employers likewise substantially affect
commerce.”
Post-Remand Resp. Br. 27–28.
We think the Secretary
has the better argument.
B.
“[T]he determinative test of the exercise of power by the
Congress
under
the
Commerce
Clause
is
simply
whether
the
activity sought to be regulated is commerce which concerns more
States than one and has a real and substantial relation to the
national
States,
interest.”
379
omitted).
U.S.
Heart
241,
255
of
Atlanta
(1964)
Motel,
(internal
Inc.
v.
quotation
United
marks
“The power of Congress in this field is broad and
sweeping . . . .”
Katzenbach v. McClung, 379 U.S. 294, 305
(1964); see also NFIB, 132 S. Ct. at 2585 (Roberts, C.J.) (“[I]t
is now well established that Congress has broad authority under
the [Commerce] Clause.”).
“[T]he power to regulate commerce is
29
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the
Doc: 217
power
protection
Filed: 07/11/2013
to
or
enact
all
Pg: 30 of 62
appropriate
advancement;
to
adopt
legislation
measures
to
for
its
promote
its
growth and insure its safety; to foster, protect, control, and
restrain.”
NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1,
36–37 (1937) (internal citations and quotation marks omitted).
Among Congress’s expansive Commerce Clause powers is the
authority
to
regulate
“those
affect interstate commerce.”
U.S. 598, 609 (2000).
regulate
effect
activity
upon
activities
that
substantially
United States v. Morrison, 529
So broad is this power that Congress may
without
interstate
showing
that
commerce,”
it
so
has
long
“any
specific
as,
“in
the
aggregate,” the activity “would represent ‘a general practice
. . . subject to federal control.’”
Citizens Bank v. Alafabco,
Inc., 539 U.S. 52, 56-57 (2003) (ellipsis in original) (quoting
Mandeville Island Farms, Inc. v. Am. Crystal Sugar Co., 334 U.S.
219, 236 (1948)).
activity
“taken
Moreover, Congress need not show that the
in
the
aggregate,
substantially
affect[s]
interstate commerce in fact,” but only that “a ‘rational basis’
exists for so concluding.”
Gonzales v. Raich, 545 U.S. 1, 22
(2005) (emphasis added) (quoting United States v. Lopez, 514
U.S. 549, 557 (1995)).
To be sure, Congress’s authority under the Commerce Clause
is not without limits.
Court
found
that
the
In NFIB, five justices of the Supreme
individual
30
mandate
exceeded
Congress’s
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commerce power.
2644–50
Pg: 31 of 62
132 S. Ct. at 2585–93 (Roberts, C.J.); id. at
(joint
dissent).
Although
“[t]here
has
been
considerable debate about whether the statements [in NFIB] about
the Commerce Clause are dicta or binding precedent,” 6 these five
justices agreed that the Commerce Clause does not grant Congress
the authority to “compel” or “mandate” an individual to enter
commerce by purchasing a good or service.
See NFIB, 132 S. Ct.
at 2587 (Roberts, C.J.) (finding the individual mandate beyond
Congress’s
commerce
power
because
it
“compels
individuals
to
become active in commerce by purchasing a product”) (emphasis in
original);
“mandating
id.
of
at
economic
Commerce Clause).
Commerce
2646–47
Clause
(joint
activity”
is
dissent)
beyond
the
(noting
scope
of
that
the
Rather, these justices concluded that the
permits
Congress
to
regulate
only
existing
activity.
Chief
joint
Justice
dissenters’
Roberts’s
--
--
analysis
and,
to
focused
a
on
large
the
degree,
text
of
the
the
Commerce Clause, the Court’s cases interpreting that clause, and
6
United States v. Henry, 688 F.3d 637, 641 n.5 (9th Cir.
2012) (citing David Post, Commerce Clause “Holding v. Dictum
Mess” Not So Simple, The Volokh Conspiracy (July 3, 2012, 8:17
AM), http://www.volokh.com/2012/07/03/commerce-clause-holding-vdictum-mess-not-so-simple/), cert. denied, 133 S. Ct. 996
(2013); see also United States v. Roszkowski, 700 F.3d 50, 58
n.3 (1st Cir. 2012) (declining to “express [an] opinion as to
whether the . . . Commerce Clause discussion was indeed a
holding of the Court”).
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the practical effect and operation of the individual mandate.
As to the text, Chief Justice Roberts noted that the Commerce
Clause “grants Congress the power to ‘regulate Commerce.’”
Id.
at 2586 (emphasis in original) (citing U.S. Const. art. I, § 8,
cl. 3).
In the Chief Justice’s view, “[t]he power to regulate
commerce presupposes the existence of commercial activity to be
regulated.”
Id. (emphasis in original).
In the same vein, the
joint dissenters cited definitions of “regulate” common at the
time of the Constitution’s drafting, and concluded that under
these definitions “regulate” “can mean to direct the manner of
something but not to direct that something come into being.”
Id. at 2644.
As to the Court’s prior cases, the Chief Justice noted that
“all have one thing in common:
They uniformly describe the
power
Id.
as
reaching
‘activity.’”
at
2587;
see
also
id.
(citing Lopez, 514 U.S. at 560; Perez v. United States, 402 U.S.
146, 154 (1971); Wickard v. Filburn, 317 U.S. 111, 125 (1942);
NLRB,
301
U.S.
at
37).
The
joint
dissenters
similarly
distinguished the Commerce Clause cases on which the government
relied
as
“involv[ing]
commercial
activity,”
id.
at
2648
(emphasis in original), and “not represent[ing] the expansion of
the federal power to direct into a broad new field,” id. at
2646.
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Finally,
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both
Chief
Pg: 33 of 62
Justice
Roberts
and
the
joint
dissenters expressed substantial concern about the practical and
operational effects of the individual mandate.
Chief Justice
Roberts suggested that construing the commerce power to allow
Congress
to
mandate
the
purchase
of
health
insurance
would
“permit Congress to regulate individuals precisely because they
are
doing
nothing,”
and
“would
bring
countless
decisions
an
individual could potentially make within the scope of federal
regulation . . . .”
Id. at 2587 (emphasis in original).
The
joint dissenters expressed a similar concern, stating that
[i]f Congress can reach out and command even those
furthest
removed
from
an
interstate
market
to
participate in the market, then the Commerce Clause
becomes a font of unlimited power, or in Hamilton’s
words, “the hideous monster whose devouring jaws . . .
spare neither sex nor age, nor high nor low, nor
sacred nor profane.”
Id. at 2646 (ellipsis in original) (citing The Federalist No.
33, at 202 (Clinton Rossiter ed., 1961)).
C.
For the reasons set forth within, we find that the employer
mandate is no monster; rather, it is simply another example of
Congress’s
longstanding
authority
to
regulate
employee
compensation offered and paid for by employers in interstate
commerce.
To begin, we note that unlike the individual mandate
(as construed by five justices in NFIB), the employer mandate
does not seek to create commerce in order to regulate it.
33
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contrast
to
Filed: 07/11/2013
individuals,
all
Pg: 34 of 62
employers
nature, engaged in economic activity.
market for labor.
are,
by
their
very
All employers are in the
And to the extent that the employer mandate
compels employers in interstate commerce to do something, it
does not compel them to “become active in commerce,” NFIB, 132
S. Ct. at 2587 (Roberts, C.J.) (emphasis in original); it merely
“regulate[s]
existing
commercial
activity,”
id.,
i.e.,
the
compensation of employees, see Congressional Budget Office, CBO,
Key
Issues
health
5
(observing
insurance
compensation”).
between
that
coverage]
Liberty
individuals
“[e]mployers’
are
fails
not
simply
to
otherwise
a
contributions
form
recognize
engaged
of
the
in
[to
[employee]
distinction
commerce
and
employers necessarily so engaged.
Further,
mandate
does
product.”
contrary
not
to
require
Liberty’s
employers
Post-Remand Reply Br. 16.
assertion,
to
“purchase
the
employer
an
unwanted
Although some employers
may have to increase employee compensation (by offering new or
modified health insurance coverage), employers are free to selfinsure, and many do.
See 78 Fed. Reg. 7314, 7318 (Feb. 1, 2013)
(confirming that a self-insured group health plan is an eligible
employer-sponsored plan satisfying the Act’s “minimum essential
coverage”
requirement);
Paul
Fronstin,
“Self-Insured
Health
Plans: State Variation and Recent Trends by Firm Size,” Notes
(Employee Benefit Research Inst.), Nov. 2012, at 2 (“In 2011,
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68.5 percent of workers in firms with 50 or more employees were
in self-insured plans . . . .”). 7
Having found that the provision regulates existing economic
activity (employee compensation), and therefore stands on quite
a
different
conclude
footing
that
the
from
the
employer
individual
mandate
is
mandate,
a
valid
we
further
exercise
Congress’s authority under the Commerce Clause.
of
It has long
been settled that Congress may impose conditions on terms of
employment
that
substantially
affect
interstate
commerce,
see
United States v. Darby, 312 U.S. 100 (1941) (upholding minimum
wage and overtime provisions of the Fair Labor Standards Act);
NLRB,
301
1935,
which
activities
mobility,
U.S.
1
(upholding
prohibited
that
see
unfair
have
Heart
a
of
National
labor
Labor
practices),
substantial
Atlanta
Relations
impact
Motel,
Inc.,
and
on
379
Act
of
regulate
interstate
U.S.
241
(prohibiting discrimination by hotel operators); Katzenbach, 379
U.S.
294
(prohibiting
discrimination
by
restaurant
owners).
Here, Congress did both.
First, the employer mandate regulates a term of employment
(compensation) that substantially affects interstate commerce.
7
We express no opinion as to whether the limitation on the
commerce power announced by five justices in NFIB constitutes a
holding of the Court.
Rather, we assume without deciding that
it does, and conclude that the employer mandate is not
restricted by that limitation.
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Health insurance provided as part of employees’ compensation “is
the primary source of coverage for the nonelderly,” CBO, Key
Issues 4, and “[h]ealth insurance and health care services are a
significant
part
of
the
national
economy,”
42
U.S.C.
§ 18091(2)(B).
National health spending is projected to increase from
[$2.5 trillion], or 17.6 percent of the economy, in
2009 to [$4.7 trillion] in 2019.
Private health
insurance spending is projected to be [$854 billion]
in 2009, and pays for medical supplies, drugs, and
equipment that are shipped in interstate commerce.
Id.
“[E]mployers who do not offer health insurance to their
workers
gain
an
unfair
economic
advantage
relative
to
those
employers who do provide coverage,” and perpetuate a “vicious
cycle,” H.R. Rep. No. 111-443(II), at 985 (2010):
“uninsured
workers turn to emergency rooms for health care” they cannot
afford, id.; “health care providers pass on the cost [of the
uncompensated
care]
§ 18091(2)(F);
and
to
insurers
private
“pass
insurers,”
on
the
cost
42
to
U.S.C.
families”
through premium increases, id., making it more expensive -- and
thus, more difficult -- for employers to insure their employees.
“The cost of providing uncompensated care to the uninsured was
[$43 billion] in 2008,” id., and “[t]he economy loses up to
[$207 billion] a year because of the poorer health and shorter
lifespan of the uninsured,” id. § 18091(2)(E).
36
Accordingly,
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health insurance provided as part of employee compensation has a
substantial impact on interstate commerce.
Second,
(employee
the
employer
compensation)
interstate mobility.
mandate
that
regulates
substantially
an
activity
affects
workers’
The availability and breadth of employer-
sponsored health coverage varies, see, e.g., CBO, Key Issues 44
(observing
that
“large
employers
are
more
likely
than
small
employers to offer health insurance”), and “[t]he availability
of health insurance options can affect people’s incentives to
enter the labor force, work fewer or more hours, retire, change
jobs, or even prefer certain types of firms or jobs,” id. at
162.
“[E]mployees and their dependents typically have to change
plans when changing jobs and could become uninsured if their new
employer does not offer coverage,” id. at 8; “[e]mployment-based
insurance
offers
a
number
of
advantages,”
including
“lower
administrative costs” and “favorable tax treatment” that “may be
difficult
or
impossible
for
workers
insurance individually,” id. at 164.
to
obtain
by
purchasing
And “[p]eople who have
medical problems (or have family members with medical problems)
can have an incentive to stay in a job that provides health
insurance
benefits
in
if
order
conditions,
even
more
elsewhere.”
Id. at 164–65.
to
cover
productive
those
preexisting
opportunities
exist
Thus, health insurance provided as
37
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part of employee compensation substantially affects interstate
mobility, and thereby interstate commerce.
Our
employer
recognition
mandate
does
of
Congress’s
not
“open
a
authority
new
and
to
enact
the
potentially
vast
domain to congressional authority,” NFIB, 132 S. Ct. at 2587
(Roberts, C.J.), or “enable the Federal Government to regulate
all private conduct,” id. at 2643 (joint dissent).
Requiring
employers
level
of
akin
to
to
compensation
offer
through
their
employees
a
certain
health
insurance
coverage
is
requiring employers to pay their workers a minimum wage, Darby,
312 U.S. at 115, or “time and a half for overtime,” Overnight
Motor Transp. Co. v. Missel, 316 U.S. 572, 577 (1942).
Thus,
our conclusion fits squarely within the existing core of the
Supreme Court’s jurisprudence, including the admonition of five
justices in NFIB that Congress may not, through its commerce
power, seek to create commerce in order to regulate it.
D.
For
all
these
reasons,
we
conclude
that
Congress
had
a
rational basis for finding that employers’ provision of health
insurance
coverage
substantially
affects
interstate
commerce,
see Raich, 545 U.S. at 22, and Congress’s regulation of this
activity does not run afoul of NFIB’s teachings.
Accordingly,
we
exercise
hold
that
the
employer
mandate
is
a
valid
Congress’s authority under the Commerce Clause.
38
of
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V.
A.
Plaintiffs
contend
that
“[t]he
Taxing
and
Spending
or
General Welfare Clause does not vest Congress with the authority
to
enact
the
[individual
Opening Br. 40.
and
employer]
mandates.”
Original
But in NFIB, the Supreme Court held that the
individual mandate exaction constituted a tax and that Congress
acted
well
within
the
scope
authority in imposing it.
of
its
constitutionally
132 S. Ct. at 2594-2600.
granted
Clearly,
then, Plaintiffs’ contention fails with regard to the individual
mandate.
with
an
And although NFIB did not present the Supreme Court
opportunity
to
address
the
constitutionality
of
the
employer mandate, we are convinced that the NFIB taxing power
analysis inevitably leads to the conclusion that the employer
mandate exaction, too, is a constitutional tax.
B.
The Constitution unambiguously grants Congress the power to
“lay and collect Taxes . . . .”
U.S. Const. art. I, § 8, cl. 1.
The Supreme Court has defined a tax as a “pecuniary burden laid
upon individuals or property for the purpose of supporting the
government,”
(1942),
and
extensive,”
United
States
described
v.
New
Congress’s
York,
taxing
315
U.S.
power
510,
as
License Tax Cases, 72 U.S. 462, 471 (1866).
39
515
“very
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In
Filed: 07/11/2013
NFIB,
“functional
the
Supreme
approach”
for
Pg: 40 of 62
Court
gleaned
determining
from
whether
an
whatever Congress calls it, constitutes a tax.
2595.
precedent
a
exaction,
132 S. Ct. at
Under that approach, the “essential feature” of any tax
is that “it produces at least some revenue for the Government.”
Id. at 2594.
include:
the
Additional characteristics indicative of a tax
the absence of a scienter requirement, collection by
Internal
Revenue
Service
through
the
normal
means
of
taxation, and the absence of negative legal consequences beyond
requiring payment to the IRS.
Id. at 2595-97.
The Supreme
Court illustrated its functional approach with a hypothetical:
Suppose Congress enacted a statute providing that
every taxpayer who owns a house without energy
efficient windows must pay $50 to the IRS. The amount
due is adjusted based on factors such as taxable
income and joint filing status, and is paid along with
the taxpayer’s income tax return.
Those whose income
is below the filing threshold need not pay.
The
required payment is not called a “tax,” a “penalty,”
or anything else.
No one would doubt that this law
imposed a tax, and was within Congress’s power to tax.
. . .
Interpreting such a law to be a tax would
hardly
“[i]mpos[e]
a
tax
through
judicial
legislation.”
Rather, it would give practical effect
to the Legislature’s enactment.
Id. at 2597-98 (citation omitted).
By
contrast,
the
Supreme
Court
dismissed
as
largely
irrelevant the “regulatory motive or effect of revenue-raising
measures.”
older
Id.
cases
at 2599.
suggested
The Court recognized that some of its
a
dichotomy
40
between
regulatory
and
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revenue-raising taxes:
[of
Congress’s
Pg: 41 of 62
“A few of our cases policed the[] limits
ability
to
use
its
conduct] aggressively . . . .”
taxing
power
to
influence
Id. (citing United States v.
Butler, 297 U.S. 1 (1936); Bailey v. Drexel Furniture Co., 259
U.S. 20 (1922)).
regulatory
But the Court rejected the revenue-versus-
distinction
as
defunct.
Id.
Accordingly,
that
Congress “plainly designed” the Affordable Care Act “to expand
health insurance coverage” did not impact the Court’s taxing
power analysis in NFIB.
Id. at 2596.
The Court did, however,
attempt to distinguish taxes from penalties, explaining that “if
the concept of penalty means anything, it means punishment for
an unlawful act or omission.”
Id. (quotation marks omitted).
C.
First, we examine the factors the Supreme Court considered
in upholding the individual mandate exaction as a constitutional
tax.
In applying its “functional approach” to that exaction,
the Supreme Court concluded that it “looks like a tax in many
respects.”
Id. at 2594.
First and foremost, it will produce
“at least some revenue for the Government” -- namely “about $4
billion
per
year
by
2017.”
Id.
Further
attributes
that
convinced the Supreme Court that the individual mandate exaction
constitutes a tax include:
its “pa[yment] into the Treasury by
taxpayers when they file their tax returns”; the fact that “its
amount is determined by such familiar factors as taxable income,
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of
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dependents,
and
Pg: 42 of 62
joint
filing
status”;
and
its
inclusion “in the Internal Revenue Code and enforce[ment] by the
IRS, which . . . must assess and collect it in the same manner
as taxes.”
omitted).
mandate
Id. (citations, quotation marks, and alterations
The Supreme Court also distinguished the individual
tax
from
an
exaction
the
Court
invalidated
as
impermissible penalty in Bailey v. Drexel Furniture Co.
an
The
Court noted that the individual mandate, unlike the provision at
issue in Drexel, contains no scienter requirement and does not
constitute
“prohibitory
financial
punishment.”
Id.
at
2596
(internal quotation marks omitted).
Underscoring that the exaction was no penalty, the Supreme
Court stated that “[n]either the [Affordable Care] Act nor any
other law attaches negative legal consequences to not buying
health insurance, beyond requiring a payment to the IRS . . . .
[I]f someone chooses to pay rather than obtain health insurance,
they have fully complied with the law.”
Id. at 2597.
The Court
noted that an exaction may become so punitive that the taxing
power no longer authorizes it.
the
individual
mandate
Id. at 2599-2600.
exaction
easily
passed
But because
taxing
power
muster, the Court refrained from delving deeper into that issue.
Id. at 2600 (“[T]he shared responsibility payment’s practical
characteristics
pass
muster
as
a
interpretations of the taxing power.
42
tax
under
our
narrowest
Because the tax at hand is
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within even those strict limits, we need not here decide the
precise point at which an exaction becomes so punitive that the
taxing
power
does
not
authorize
it.”
(internal
citation
omitted)).
Finally,
the
Supreme
Court
swiftly
dispelled
any
notion
that the individual mandate constituted a direct tax subject to
the constitutional apportionment requirement.
See id. at 2598-
99; see also U.S. Const. art. I, § 9, cl. 4 (“No Capitation, or
other direct, Tax shall be laid, unless in Proportion to the
Census . . . .”).
Having recognized only two types of direct
taxes
individuals
--
those
on
as
individuals
and
those
on
property -- the Supreme Court held that the individual mandate
payment fits into neither category.
NFIB, 132 S. Ct. at 2598-
99.
At the end of the day, the Supreme Court concluded that
when an exaction “need not be read to do more than impose a
tax[,]” “[t]hat is sufficient to sustain it.”
Id. at 2598.
The
Court held that because the Affordable Care Act’s individual
mandate could be read simply as imposing a tax, Congress had the
power to enact it.
The Supreme Court thus squarely rejected
Plaintiffs’ contention that the individual mandate exaction is
not a constitutional tax.
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D.
Turning now to the employer mandate, it is clear from the
provision’s face that it possesses the “essential feature” of
any
tax:
“it
produces
at
least
some
revenue
for
the
Government.”
NFIB, 132 S. Ct. at 2594; see 26 U.S.C. § 4980H.
Indeed,
Congressional
the
Budget
Office
estimated
that
the
employer mandate exaction will generate $11 billion annually by
2019.
See Liberty Univ., 671 F.3d at 419 (Wynn, J., concurring)
(citing Letter from Douglas W. Elmendorf, Dir., Cong. Budget
Office,
to
Hon.
Representatives,
Nancy
tbl.
4
Pelosi,
(Mar.
Speaker,
20,
U.S.
of
available
2010),
House
at
http://www.cbo.gov/ftpdocs/113xx/doc11379/AmendReconProp.pdf).
Looking
beyond
the
“essential
feature”
to
other
“functional” characteristics, the exaction the Affordable Care
Act
imposes
respects.”
on
large
employers
“looks
Cf. NFIB, 132 S. Ct. at 2594.
like
a
tax
in
many
The exaction is paid
into the Treasury, “found in the Internal Revenue Code[,] and
enforced by the IRS,” which “must assess and collect it in the
same manner as” a tax.
6671(a).
Further,
Id.; see also 26 U.S.C. §§ 4980H(d)(1),
the
employer
mandate
lacks
a
scienter
requirement, does not punish unlawful conduct, and leaves large
employers with a choice for complying with the law -- provide
adequate, affordable health coverage to employees or pay a tax.
26 U.S.C. § 4980H(a)-(b).
And finally, because the exaction
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taxes neither individuals as such nor property, it is not a
direct tax subject to the apportionment requirement.
Cf. NFIB,
132 S. Ct. at 2598-99.
Relying exclusively on Drexel, Liberty contends that the
employer mandate exaction nevertheless “cross[es] the line” from
a
reasonable
payment
unconstitutional
to
penalty.
a
“potentially
Post-Remand
destructive”
Opening
Br.
24-25.
Fatally for Liberty’s argument, Drexel is easily distinguishable
from the case at hand.
In Drexel, the Supreme Court invalidated a “so-called tax
on employing child laborers” as an impermissible penalty.
See
NFIB, 132 S. Ct. at 2595 (citing Drexel, 259 U.S. 20).
The
Supreme
(1)
Court
did
so
ostensibly
because
the
penalty:
carried a scienter requirement “typical of punitive statutes,
because
Congress
often
wishes
to
punish
only
those
who
intentionally break the law”; (2) imposed an “exceedingly heavy”
financial burden -- 10 percent of an offender’s net income -even if the offender employed only one child laborer for only
one day of the year; and (3) was enforced at least in part by
the
Department
collecting
of
revenue
Labor,
but
an
agency
rather
for
responsible
punishing
not
for
labor
law
violations.
NFIB, 132 S. Ct. at 2595 (citing Drexel, 259 U.S.
at 36-37).
In stark contrast to the penalty the Court struck
down in Drexel, the employer mandate exaction is devoid of any
45
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scienter
requirement
Further,
the
and
exaction
is
does
Pg: 46 of 62
not
collected
Treasury in the same manner as a tax.
punish
by
unlawful
the
behavior.
Secretary
of
the
26 U.S.C. §§ 4980H(d)(1),
6671(a).
Moreover, the amount of the employer mandate exaction is
proportionate rather than punitive.
If Liberty offers adequate
health coverage, but that coverage fails to satisfy the employer
mandate’s affordability and minimum value requirements, Liberty
will be taxed $3000 times the number of employees who receive
government assistance, prorated on a monthly basis and subject
to a cap.
Id. § 4980H(b)(1)-(2); see supra at 13.
And if
Liberty fails to offer adequate health coverage to its full-time
employees, it will be taxed $2000 times thirty less than its
number
of
full-time
employees
--
presumably
all
of
whom
are
being deprived of coverage -- prorated over the number of months
for which Liberty is liable.
26 U.S.C. § 4980H(a), (c)(1),
(c)(2)(D)(i); see supra at 12-13.
We therefore reject Liberty’s argument that the employer
mandate imposes a penalty rather than a tax.
E.
In conclusion, the Supreme Court has already upheld the
individual mandate exaction as a constitutional tax.
S. Ct. at 2594-2600.
NFIB, 132
Similarly, the employer mandate exaction
“need not be read to do more than impose a tax.”
46
Id. at 2598.
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Accordingly, Congress had the power to enact it, and we must
uphold it.
in
Part
For these reasons, as well as those provided supra
IV,
we
reject
Plaintiffs’
contention
that
Congress
lacked authority under Article I of the Constitution to enact
the employer mandate.
VI.
Finally, Plaintiffs challenge the Act on various religionbased grounds.
In their second amended complaint, Plaintiffs
allege that the Act violates their rights under the First and
Fifth
Amendments
and
the
Religious
(“RFRA”), 42 U.S.C. § 2000bb-1.
Freedom
Restoration
Act
For the first time on this
appeal, they also seek to challenge on religious grounds certain
regulations implementing the Act.
We initially consider the
claims alleged in the second amended complaint and then those
raised for the first time on this appeal.
A.
1.
Plaintiffs maintain that both the employer mandate and the
individual mandate violate their free exercise rights under the
First Amendment and RFRA.
Specifically, they allege that the
mandates unlawfully force them to violate their religious belief
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that
Doc: 217
“they
Filed: 07/11/2013
should
play
.
Pg: 48 of 62
.
.
no
part
in
facilitating,
subsidizing, easing, funding, or supporting . . . abortions.” 8
The Free Exercise Clause provides that “Congress shall make
no law . . . prohibiting the free exercise” of religion.
Const. amend. I.
U.S.
However, the Clause does not compel Congress
to exempt religious practices from a “valid and neutral law of
general
Smith,
applicability.”
494
omitted).
U.S.
872,
Emp’t
879
Div.,
(1990)
Dep’t
of
(internal
Human
Res.
quotation
v.
marks
This is so even if such a law “has the incidental
effect of burdening a particular religious practice.”
Church of
the Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520,
531 (1993).
A
neutral
law
of
general
applicability
violate the Free Exercise Clause.
thus
does
not
The Act is just such a law.
It has no object that “infringe[s] upon or restrict[s] practices
because of their religious motivation,” id. at 533 (emphasis
added), and imposes no “burden[] only on conduct motivated by
religious
belief,”
id.
at
543
(emphasis
8
added).
Relying
on
Plaintiffs have also attempted to characterize their
complaint as raising other religious liberty claims, for
example, that “[t]hey are Christians who believe in living out
their sincerely held religious beliefs in everyday life,
including in the lifestyle choices they make, of which managing
their health care privately is but one example.”
See, e.g.,
Original Opening Br. 10. But, as the district court recognized,
“[a] fair reading of the complaint does not support this novel
characterization, and the parties have not briefed these
issues.” Liberty Univ., 753 F. Supp. 2d at 641 n.17.
48
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Lukumi,
Filed: 07/11/2013
Plaintiffs
contend
“religious gerrymander[].”
Pg: 49 of 62
that
the
Act
somehow
effects
Original Opening Br. 45; see Lukumi,
508 U.S. at 534-35 (internal quotation marks omitted).
does
no
such
Lukumi, the
group.
thing.
Act
Unlike
does
a
not
the
set
ordinances
apart
See 508 U.S. at 535-38.
any
struck
particular
But it
down
in
religious
The Act therefore does not
violate the Free Exercise Clause.
Plaintiffs’
that,
“even
applicability,”
person’s
claim
the
burden
the
if
RFRA
“Government
exercise
of
fares
no
results
religion
better.
from
may
a
RFRA
rule
of
substantially
only
if
it
provides
general
burden
demonstrates
a
that
application of the burden to the person -- (1) is in furtherance
of
a
compelling
restrictive
interest.”
governmental
means
of
interest;
furthering
that
and
(2)
is
compelling
the
least
governmental
42 U.S.C. § 2000bb-1(a)-(b).
Thus, by its own terms, RFRA directs application of strict
scrutiny
religious
only
if
the
practice.
Government
Id.;
see
“substantially
also
Goodall
by
burden[s]”
Goodall
v.
Stafford Cnty. Sch. Bd., 60 F.3d 168, 171 (4th Cir. 1995) (“[I]f
the [plaintiffs] cannot show that their exercise of religion is
substantially
burdened
by
the
[government’s]
policy,
the
[government] is not required to come forth with proof of its
interest.”).
A
substantial
burden,
in
turn,
requires
“substantial pressure on an adherent to modify his behavior and
49
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to violate his beliefs.”
Pg: 50 of 62
Thomas v. Review Bd. of Ind. Emp’t
Sec. Div., 450 U.S. 707, 718 (1981).
Plaintiffs
substantially
present
burdens
no
plausible
their
free
claim
exercise
that
of
the
religion,
Act
by
forcing them to facilitate or support abortion or otherwise.
The Act specifically provides individuals the option to purchase
a plan that covers no abortion services except those for cases
of rape or incest, or where the life of the mother would be
endangered.
See
42
U.S.C.
§
18054(a)(6)
(requiring
that
at
least one plan on each exchange exclude non-excepted abortions
from coverage).
The Act also does nothing to prevent employers
from providing such a plan.
Furthermore, the Act allows an
individual to obtain, and an employer to offer, a plan that
covers no abortion services at all, not even excepted services.
See 42 U.S.C. § 18023(b)(1)(A)(i). 9
Given that the mandates themselves impose no substantial
burden,
the
option
of
paying
a
tax
to
avoid
the
requirements certainly imposes no substantial burden.
9
mandates’
On the
Plaintiffs also argue that a requirement “that individuals
and employers pay at least one dollar per person per month
directly into an account to cover elective abortions” unlawfully
burdens their religious exercise.
Post-Remand Opening Br. 37
(citing 42 U.S.C. § 18023(b)(2)).
But this provision applies
only if individuals choose to enroll in a plan through a health
insurance exchange that elects to cover abortions, for which
federal funding may not be used.
Post-Remand Resp. Br. 34-35
n.13; see 42 U.S.C. § 18023(b)(1)(B)(i), (b)(2)(A)-(B).
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contrary, this option underscores the “lawful choice” Plaintiffs
have to avoid any coverage they might consider objectionable.
See NFIB, 132 S. Ct. at 2600; see also Goodall, 60 F.3d at 171
(“It is well established that there is no substantial burden
placed on an individual’s free exercise of religion where a law
or policy merely operates so as to make the practice of the
individual’s
religious
beliefs
more
expensive.”
(internal
quotation marks omitted)).
To
the
extent
Plaintiffs
contend
that
the
tax
payment
itself is a substantial burden, as the district court explained,
the
Act
“contains
strict
safeguards
at
multiple
levels
to
prevent federal funds from being used to pay for [non-excepted]
abortion services.”
Liberty Univ., 753 F. Supp. 2d at 642-43;
see 42 U.S.C. § 18023(b)(2)(A) (prohibiting use of the Act’s
cost-sharing reduction or tax credits for abortion coverage);
id.
§ 18023(b)(2)(B)-(C)
(requiring
separate
premiums
for
coverage of abortion services); Exec. Order No. 13,535, 75 Fed.
Reg.
15,599
restrictions).
permitted
to
(Mar.
29,
2010)
(implementing
abortion
We note also that “[t]axpayers generally are not
avoid
payment
of
a
tax
when
their
objections
concern the manner in which government revenues are expended.”
Olsen v. Comm’r, 709 F.2d 278, 282 (4th Cir. 1983) (collecting
cases); see also Doremus v. Bd. of Educ., 342 U.S. 429, 433
(1952) (“[T]he interests of a taxpayer in the moneys of the
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federal treasury are too indeterminable, remote, uncertain and
indirect to furnish a basis for an appeal to the preventive
powers of the Court over their manner of expenditure.”).
Accordingly, Plaintiffs’ free exercise claims –- both under
the Constitution and under RFRA -- fail.
2.
Plaintiffs also allege that the two religious exemptions in
the
Act
violate
Amendment
equal
existence
of
the
Establishment
protection
religious
constitutional problem.
Clause
rights.
exemptions
and
their
Fifth
Of
in
course,
the
a
statute
poses
mere
no
Rather, the Constitution freely permits
exemptions that will allow “religious exercise to exist without
sponsorship and without interference.”
U.S.
664,
669
(1970).
Permissible
Walz v. Tax Comm’n, 397
benevolence
morphs
into
impermissible sponsorship only when the “proposed accommodation
singles out a particular religious sect for special treatment.”
Bd. of Educ. of Kiryas Joel Vill. Sch. Dist. v. Grumet, 512 U.S.
687, 706-07 (1994).
Thus, a court applies strict scrutiny only
to statutes that “make[] explicit and deliberate distinctions
between different religious organizations.”
Larson v. Valente,
456 U.S. 228, 246-47 & n.23 (1982).
A statute without such distinctions, even one that has a
disparate impact on different denominations, need only satisfy
the less rigorous test set forth in Lemon v. Kurtzman, 403 U.S.
52
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602 (1971).
See Hernandez v. Comm’r, 490 U.S. 680, 695 (1989);
Koenick
Felton,
v.
(“[U]ntil
the
190
Supreme
F.3d
Court
259,
264-65
overrules
(4th
Lemon
and
Cir.
1999)
provides
an
alternative analytical framework, this Court must rely on Lemon
in
evaluating
the
constitutionality
of
legislation
under
the
Establishment Clause.” (internal quotation marks omitted)); cf.
Cutter
v.
Wilkinson,
544
U.S.
709,
717
n.6,
720
(2005)
(rejecting an Establishment Clause challenge to a statute making
no
explicit
religious
distinction,
without
reaching
Lemon,
“because it alleviates exceptional government-created burdens on
private
religious
secular
legislative
. . .
that
exercise”).
neither
The
Lemon
purpose,”
a
“principal
advances
nor
inhibits
test
or
requires
primary
religion,”
“excessive government entanglement with religion.”
“a
effect
and
no
403 U.S. at
612-13 (internal quotation marks omitted).
The first exemption Plaintiffs challenge is the individual
mandate’s
religious
§ 5000A(d)(2)(A).
conscience
exemption.
Plaintiffs
maintain
See
that
this
26
U.S.C.
exemption
discriminates against their religious practice by applying only
to
sects
provide
that
for
conscientiously
their
December 31, 1950.
own
oppose
members,
and
all
were
insurance
benefits,
established
before
The religious conscience exemption adopts an
exemption of the Social Security Amendments of 1965 under 26
U.S.C.
§
1402(g),
which
courts
53
have
consistently
found
Appeal: 10-2347
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constitutional
Amendment.
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under
the
Pg: 54 of 62
Establishment
Clause
and
the
Fifth
See, e.g., Droz v. Comm’r, 48 F.3d 1120, 1124-25
(9th Cir. 1995); Hatcher v. Comm’r, 688 F.2d 82, 84 (10th Cir.
1979) (per curiam); Jaggard v. Comm’r, 582 F.2d 1189, 1189-90
(8th Cir. 1978) (per curiam); Henson v. Comm’r, 66 T.C. 835,
838-40 (1976); Palmer v. Comm’r, 52 T.C. 310, 314-15 (1969).
the
Supreme
Court
explained
with
respect
to
the
§
As
1402(g)
exemption, “Congress granted an exemption . . . [to] a narrow
category which was readily identifiable,” i.e., “persons in a
religious community having its own ‘welfare’ system.”
United
States v. Lee, 455 U.S. 252, 260-61 (1982).
Moreover, this exemption makes no “explicit and deliberate
distinctions” between sects, Larson, 456 U.S. at 246 n.23, and
so is subject only to the Lemon test, see Droz, 48 F.3d at 1124.
The exemption passes the Lemon test because it has a secular
purpose:
“to ensure that all persons are provided for, either
by the [Act’s insurance] system or by their church.”
Id.; see
also Corp. of Presiding Bishop of the Church of Jesus Christ of
Latter-Day Saints v. Amos, 483 U.S. 327, 335 (1987) (“[I]t is a
permissible
governmental
legislative
interference
purpose
with
organizations
to
define
missions.”).
The
exemption’s
advance
nor
inhibit
and
to
the
alleviate
ability
carry
out
principal
religion,
54
but
of
religious
their
religious
effects
only
significant
also
assure
neither
that
all
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individuals are covered, one way or the other.
excessive entanglement with religion.
Harris,
536
U.S.
639,
668
(2002)
And there is no
Cf. Zelman v. Simmons-
(O’Connor,
J.,
concurring)
(noting that the Court has previously “folded the entanglement
inquiry into the primary effect inquiry,” which “ma[kes] sense
because both inquiries rely on the same evidence”); Madison v.
Riter, 355 F.3d 310, 319 (4th Cir. 2003) (same).
The
second
individual
mandate
exemption
challenged
Plaintiffs is the health care sharing ministry exemption.
26
U.S.C.
§
5000A(d)(2)(B).
unconstitutionally
selects
Plaintiffs
an
cutoff
unconstitutional.
suggests
any
date
that
it
formation
arbitrary
is
See
maintain
date
of
December 31, 1999 as the eligibility cutoff.
exemption’s
by
But even if the
arbitrary,
it
is
not
For neither the cutoff’s text nor its history
deliberate
attempt
particular religious groups.
satisfy the Lemon test.
to
distinguish
between
Accordingly, the cutoff need only
See Hernandez, 490 U.S. at 695-96; cf.
Larson, 456 U.S. at 254 (applying strict scrutiny only when the
legislative history demonstrated “the provision was drafted with
the
explicit
intention
of
including
particular
religious
denominations and excluding others”).
Applying
Lemon,
the
legislative purpose[s].”
ensures
that
the
date
serves
at
403 U.S. at 612.
ministries
provide
55
care
least
two
“secular
First, the cutoff
that
possesses
the
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reliability that comes with historical practice.
accommodates
religious
floodgates
for
any
circumvent
the
health
Act.
accordingly
group
care
to
“primary
advances
“neither
without
establish
The
nor
Second, it
a
new
effect”
inhibits
opening
the
ministry
of
the
to
cutoff
religion.”
Id.
Further, given that it applies only secular criteria, the cutoff
does
not
“foster
religion.”
an
excessive
government
entanglement
with
Id. at 613 (internal quotation marks omitted).
Plaintiffs
conscience
additionally
exemption
and
contend
the
that
health
both
care
the
religious
sharing
ministry
exemption violate their Fifth Amendment equal protection rights.
In
furtherance
of
this
argument
they
maintain
that
both
exemptions are subject to the heightened scrutiny that applies
“if the plaintiff can show the basis for the distinction was
religious . . . in nature.”
Opening Br. 56.
Olsen, 709 F.2d at 283; Post-Remand
Of course, “[i]f the justification for the
distinction is secular, it need only be rational.”
Olsen, 709
F.2d at 283; see also City of Cleburne v. Cleburne Living Ctr.,
473 U.S. 432, 441-42 (1985).
Here, the distinction made between
sects that oppose insurance and provide for themselves in their
own welfare system and those that do not, and the distinction
made
between
after,
review.
are
ministries
secular
and
formed
thus
before
subject
See Olsen, 709 F.2d at 283.
56
1999
only
and
to
those
formed
rational
basis
Both distinctions are
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rationally related to the Government’s legitimate interest in
accommodating religious practice while limiting interference in
the
Act’s
overriding
purposes.
Cf.
Corp.
of
the
Presiding
Bishop, 483 U.S. at 335.
We therefore conclude that Plaintiffs have failed to state
any plausible claim that the Establishment Clause or the Fifth
Amendment provide a basis for relief.
B.
In
length
their
recent
that
post-remand
certain
briefs,
regulations
Plaintiffs
implementing
argue
neither
at
the
individual nor the employer mandate but another portion of the
Act -- § 1001, codified in part at 42 U.S.C. § 300gg-13 -violate their religious rights. 10
Br.
2-5,
43-44.
These
new
See, e.g., Post-Remand Opening
regulations
require
group
plans to cover all FDA-approved contraceptive methods.
C.F.R.
§
Services:
147.130(a)(1)(iv)
(2011);
HRSA,
Women’s
health
See 45
Preventive
Required Health Plan Coverage Guidelines, available
at http://www.hrsa.gov/womensguidelines.
Plaintiffs’
second
amended
complaint
mentions
neither
§ 1001 of the Affordable Care Act nor 42 U.S.C. § 300gg-13.
10
Section 1001 of the Affordable Care Act, inter alia,
amended the Public Health Service Act to require “[a] group
health plan and a health insurance issuer offering group or
individual health insurance” to provide, “with respect to
women,” free “preventative care and screenings.”
57
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Further, the complaint does not mention contraception.
To be
sure, the complaint specifies that Plaintiffs have “sincerely
held religious beliefs that abortions . . . are murder and . . .
they should play . . . no part in facilitating, subsidizing,
easing,
funding,
or
supporting
.
.
.
abortions.”
But
the
complaint gives no notice that Plaintiffs challenge methods of
contraception or include within their challenge to “abortion”
all the forms of contraception they now label “abortifacients.” 11
Moreover, Plaintiffs did not challenge these regulations,
or make any argument related to contraception or abortifacients,
in the district court, in their first appeal before us, or in
their Supreme Court briefs.
The Supreme Court in turn ordered a
limited remand simply “for further consideration in light of
National Federation of Independent Business v. Sebelius,” which
did not discuss this issue.
See Liberty Univ., 133 S. Ct. 679.
11
In their new briefs, Plaintiffs seek to challenge as
abortifacients forms of FDA-approved contraception that may act
after fertilization, including emergency contraceptive pills and
intra-uterine devices.
See Post-Remand Opening Br. 3-5.
But
the
Government
does
not
define
such
contraceptives
as
abortifacients or abortion.
Well-established federal law
defines “pregnancy” to “encompass[] the period of time from
implantation until delivery.” 45 C.F.R. 46.202(f) (2001). The
forms of contraception that Plaintiffs now challenge, as they
themselves recognize, do not act after implantation, so they do
not terminate a “pregnancy” as defined in this regulation. See
FDA, Birth Control: Medicines To Help You, available at
http://www.fda.gov/ForConsumers/ByAudience/ForWomen/FreePublicat
ions/ucm313215.htm.
58
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Nevertheless,
briefs,
for
Plaintiffs
the
seek
Pg: 59 of 62
first
to
time
in
challenge
their
these
post-remand
regulations.
Generally, “a federal appellate court does not consider an issue
not passed upon below.”
Singleton v. Wulff, 428 U.S. 106, 120
(1976); accord Muth v. United States, 1 F.3d 246, 250 (4th Cir.
1993).
This rule applies with equal force when a party attempts
to raise an issue for the first time after remand.
See Rowland
v. Am. Gen. Fin., Inc., 340 F.3d 187, 191 n.1 (4th Cir. 2003).
Of course, in our discretion, we can make “[e]xceptions to
this
general
circumstances.”
rule”
but
we
do
so
Muth, 1 F.3d at 250.
“only
in
very
limited
The Supreme Court has
explained that we are “justified” in making such an exception
when the “proper resolution is beyond any doubt” or “injustice
might otherwise result.”
Singleton, 428 U.S. at 121 (internal
quotation marks omitted).
We have also recognized that certain
other
“limited
circumstances”
may
justify
such
action,
e.g.,
when refusal to do so would constitute plain error or result in
a fundamental miscarriage of justice, Muth, 1 F.3d at 250, or
where there is an intervening change in the case law, Holland v.
Big River Minerals Corp., 181 F.3d 597, 605 (4th Cir. 1999).
Plaintiffs
do
not
contend
circumstances” apply here.
does.
that
any
of
these
“limited
There is good reason for this; none
We recognize that the Government initially promulgated
the regulations in question while this case was pending (i.e.,
59
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Doc: 217
approximately
opinion).
(Aug.
a
month
before
Pg: 60 of 62
the
issuance
of
our
earlier
See Liberty Univ., 671 F.3d 391; 76 Fed. Reg. 46,621
3,
“become
Filed: 07/11/2013
2011).
a
But
vehicle
a
new
implementing
for
converting
regulation
plaintiffs’
lawsuit
cannot
into
a
challenge to the new regulation” when a “challenge to th[at]
regulation would raise substantially different legal issues from
the
.
.
.
arguments
[already]
propounded
in
th[e]
lawsuit.”
Phillips v. McLaughlin, 854 F.2d 673, 676-77 (4th Cir. 1988);
see also Kinney v. Dist. of Columbia, 994 F.2d 6, 10 (D.C. Cir.
1993) (“[T]he term ‘intervening change in the law,’ [does] not
refer[]
to
a
prospective
[regulatory]
change
that
could
not
affect rights already accrued . . . .”).
Furthermore,
several
compelling
reasons
counsel
against
taking up Plaintiffs’ challenge to the new regulations here.
do
so
would
require
us
not
only
to
resolve
a
claim
To
not
considered below, but also to do this in a second appeal three
years after the initiation of this lawsuit.
require
provision
us
of
complaint. 12
to
the
interpret
Act
never
new
To do so would also
regulations,
challenged
in
the
implementing
second
a
amended
And to do so would require us to consider at this
12
Contrary to the Plaintiffs’ assertion, the second amended
complaint’s reference to § 1302 of the Affordable Care Act did
not preserve for our review a challenge to 42 U.S.C. § 300gg-13.
See Post-Remand Reply Br. 17–20 & n.7 (arguing that the
definition
of
“‘minimum
essential
coverage’
requires
a
(Continued)
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Pg: 61 of 62
premature stage an argument that other appellate courts have
before them in cases in which plaintiffs have properly pled the
issue and a district court has addressed it.
Indeed, several of our sister circuits are considering such
cases,
timely
filed
after
the
regulations
at
issue
were
promulgated.
See, e.g., Hobby Lobby Stores, Inc. v. Sebelius,
No.
2013
12-6294,
WL
3216103
(10th
Cir.
June
27,
2013)
(en
banc); Gilardi v. U.S. Dep’t of HHS, No. 13-5069 (D.C. Cir.
docketed
Mar.
5,
2013);
Conestoga
Wood
Specialties
Corp.
v.
Sec’y of HHS, No. 13-1144, 2013 WL 1277419 (3d Cir. Feb. 8,
circuitous trip through various sections of the Act,” including
§ 1302, which defines “essential health benefits” to “include at
least preventive and wellness services partially defined in 42
U.S.C. § 300gg-13” and “has been part of Plaintiffs’ challenges
from the outset”). Section 1302, codified at 42 U.S.C. § 18022,
gives the Secretary authority to define what must be included in
an “essential health benefits package,” a “wholly different
term” from “minimum essential coverage.” Florida ex rel. Att’y
Gen. v. U.S. Dep’t of HHS, 648 F.3d 1235, 1251 (11th Cir. 2011),
rev’d in part on other grounds, NFIB, 132 S. Ct. 2566.
The term “essential health benefits package” refers to
the comprehensive benefits package that must be
provided by plans in the individual and small group
markets by 2014.
The Act does not impose the
essential health benefits package on plans offered by
large group employers to their employees . . . .
“Minimum essential coverage” is the type of plan
needed to satisfy the individual mandate . . . . Many
. . . plan types will satisfy the mandate even if they
do not have the “essential health benefits package”
and regardless of the level of benefits or coverage.
Id. at 1250–51 (internal citations omitted).
61
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Pg: 62 of 62
2013); Grote v. Sebelius, 708 F.3d 850 (7th Cir. 2013); Annex
Med., Inc. v. Sebelius, No. 13-1118 (8th Cir. docketed Jan. 14,
2013); Korte v. Sebelius, No. 12-3841, 2012 WL 6757353 (7th Cir.
Dec. 28, 2012); Autocam Corp. v. Sebelius, No. 12-2673 (6th Cir.
docketed Dec. 26, 2012); Wheaton Coll. v. Sebelius, 703 F.3d 551
(D.C. Cir. 2012); O’Brien v. U.S. Dep’t of HHS, No. 12-3357 (8th
Cir. docketed Oct. 4, 2012).
Finding no circumstance justifying a premature resolution
of Plaintiffs’ new arguments and compelling reasons for refusing
to do so in this case, we decline to reach Plaintiffs’ challenge
to the new regulations. 13
VII.
In sum, in light of the Supreme Court’s teachings in NFIB,
we hold that we have jurisdiction to decide this case.
On the
merits, we affirm the judgment of the district court dismissing
the complaint in its entirety for failure to state a claim upon
which relief can be granted.
AFFIRMED
13
For similar reasons, we decline to address Plaintiffs’
post-remand arguments that the regulations exempting religious
employers from required contraception coverage and accommodating
eligible non-profit employers unconstitutionally discriminate
against their religious views.
See 45 C.F.R. 147.130; 78 Fed.
Reg. 39,869 (July 2, 2013).
62
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