Annex Medical, Inc. et al v. Sebelius et al
Filing
37
ORDER denying 7 Motion for Preliminary Injunction (Written Opinion). Signed by Senior Judge David S. Doty on 1/8/2013. (PJM)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 12-2804(DSD/SER)
ANNEX MEDICAL, INC., STUART
LIND and TOM JANAS,
Plaintiffs,
ORDER
v.
KATHLEEN SEBELIUS, in her official
capacity as Secretary of the United
States Department of Health and
Human Services; HILDA SOLIS, in her
official capacity as Secretary of
the United States Department of Labor;
TIMOTHY GEITHNER, in his official
capacity as Secretary of the United States
Department of the Treasury; UNITED STATES
DEPARTMENT OF HEALTH AND HUMAN SERVICES;
UNITED STATES DEPARTMENT OF LABOR;
and UNITED STATES DEPARTMENT OF THE
TREASURY,
Defendants.
Erick G. Kaardal, Esq. and Mohrman & Kaardal, P.A., 33
South Sixth Street, Suite 4100, Minneapolis, MN 55402 and
Kaylan L. Phillips, Noel H. Johnson and Zac S. Kester,
ActRight Legal Foundation, 209 West Main Street,
Plainfield, IN 46168, counsel for plaintiffs.
Bradley P. Humphreys, U.S. Department of Justice, 20
Massachusetts Avenue N.W., Washington, D.C. 20530, Ann M.
Bildtsen, U.S. Attorney’s Office, 400 South Fourth
Street, Suite 600, Minneapolis, MN 55415; Haley N.
Schaffer, Esq., William Z. Pentelovitch, Esq. and Maslon,
Edelman, Borman & Brand, 90 South Seventh Street, Suite
3300, Minneapolis, MN 55402; Brigitte Amiri and Teresa J.
Nelson, ACLU, 125 Broad Street, 18th Floor, New York NY
10004 and 2300 Myrtle Avenue, Suite 180, St. Paul, MN
55114, counsel for defendants.
This matter is before the court upon the November 21, 2012,
motion for preliminary injunction by plaintiffs Annex Medical, Inc.
(Annex) and Stuart Lind.1
Based on a review of the file, record,
arguments of counsel and proceedings herein, and for the following
reasons, the court denies the motion for preliminary injunction.
BACKGROUND
This healthcare dispute arises from the March 23, 2010,
implementation of the Patient Protection and Affordable Care Act
(ACA).
Affordable Care Act
The ACA states that group health care plans must provide nocost “preventative care and screening” for women “as provided for
in comprehensive guidelines supported by the Health Resources and
Services Administration” (HRSA).2
response,
defendants3
requested
42 U.S.C. § 300gg-13(a)(4).
that
the
HRSA
determine
“preventative care and screening” was required by the ACA.
In
what
In
conjunction with a recommendation from the Institute of Medicine,
1
Tom Janas is also a plaintiff in the underlying action, but
does not join Annex and Lind in the motion for preliminary
injunction.
2
The HRSA is a subagency of the Department of Health and
Human Services.
3
Defendants include Kathleen Sebelius, in her official
capacity as Secretary of the Department of Health and Human
Services; Hilda Solis, in her official capacity as Secretary of the
Department of Labor; Timothy Geithner, in his official capacity as
Secretary of the Department of the Treasury; the Department of
Health and Human Services; the Department of Labor; and the
Department of the Treasury.
2
the
HRSA
proposed
Administration
that
the
approved
ACA
cover
contraceptive
“[a]ll
Food
methods,
and
Drug
sterilization
procedures, and patient education and counseling for all women with
reproductive
include
capacity.”4
diaphragms,
contraceptives
Contraceptive
and
oral
FDA-approved
contraceptive
intrauterine
Services).5
contraceptive
On
pills,
devices
February
15,
methods
emergency
(collectively,
2012,
defendants
published rules adopting the HRSA recommendation (the Mandate).
See 77 Fed. Reg. 8725, 8726 (Feb. 15, 2012).
Although employer-sponsored health care plans must comply with
the Mandate, the ACA only requires entities with fifty or more
employees to provide health care coverage.
See 26 U.S.C. § 4980H.
As a result, employers need not comply with the Mandate if they
have less than fifty employees and choose to discontinue their
group health plan.
See id. § 4980H(c)(2)(A).
Individual Plaintiffs
Annex
is
a
medical devices.
Minnesota-based
corporation
Ver. Compl. ¶ 36.
time and two part-time employees.
that
manufactures
Annex employs sixteen fullId. ¶ 63.
The Annex mission
statement provides that the company strives “to manufacture medical
4
HRSM, Women’s Preventive Services: Required Health Plan
Coverage Guidelines, http://www.hrsa.gov/womensguidelines/ (last
visited Jan. 7, 2012).
5
FDA Office of Women’s Health, Birth Control Guide,
http://www.fda.gov/downloads/ForConsumers/ByAudience/ForWomen/
FreePublications/UCM282014.pdf (last updated Aug. 2012).
3
products of high quality and good value, while conducting business
in a way that is pleasing to God and is faithful to Biblical
principles and values.”
Id. ¶ 71.
Lind is a citizen of Minnesota and is the President and Chief
Executive
Catholic[]
Officer of
who
[is]
Annex.
Id.
steadfastly
¶
35.
committed
Lind
to
is
a
“devout
following
the
religious, ethical and moral teachings of the Catholic Church.”
Id. ¶ 44.
In his operation of Annex, Lind strives to adhere to the
teachings of the Catholic faith.
teachings
explain
that
“[h]uman
See id. ¶¶ 45-46.
life
must
by
These
respected
protected absolutely from the moment of conception.”
and
Id. ¶ 47
(alteration in original) (citation and internal quotation marks
omitted).
In other words, “Lind ... believe[s] that any action
which either before, at the moment of, or after sexual intercourse,
is specifically intended to prevent procreation is a grave sin.”
Id. ¶ 48 (citation and internal quotation marks omitted).
As a
result, Lind considers the use of any Contraceptive Service to be
“intrinsically evil and immoral” and believes that “compliance with
the Mandate is in direct violation of the Catholic faith.”
Id.
¶¶ 49-50.
Lind also believes that he has “a duty, when possible, to
provide for the needs of others, including their health care.” Id.
¶ 58.
As part of this commitment, Annex contracts with Blue Cross
and Blue Shield of Minnesota (Blue Cross) to provide a group health
4
plan for its employees.
Id. ¶¶ 59-60.
plan year began on July 1, 2012.
Annex’s current Blue Cross
Id. ¶ 78.
As such, Annex will
not be subject to the Mandate until July 1, 2013, the first day of
its next scheduled renewal.
Id. ¶¶ 79-80.
Sometime after July 27, 2012, Lind discovered that Annex’s
health care plan provided Contraceptive Services. Id. ¶ 82-83. In
response, he requested that Blue Cross modify Annex’s plan to
exclude Contraceptive Services.
Id. ¶ 85.
Blue Cross informed
Lind that it would be unable to make any changes because it
requires group health plans with fewer than fifty subscribers to
provide Contraceptive Services.
Id. ¶ 86.
Lind inquired with
three other Minnesota insurers, but each stated that they would not
provide a plan without Contraceptive Services.
Id. ¶¶ 87-88.
In
response, on October 22, 2012, Lind notified Annex employees that
Annex would discontinue its health care plan on January 31, 2013.
Id. ¶ 94.
On November 2, 2012, plaintiffs filed suit alleging violations
of (1) the Religious Freedom Restoration Act (RFRA), (2) the First
Amendment (3) and the Administrative Procedures Act.
On November
21, 2012, Annex and Lind moved for a preliminary injunction,
arguing that the Mandate violates RFRA.
The court issued a
briefing schedule for the parties and for prospective amici curiae.
On
December
27,
2012,
the
court
granted
the
American
Civil
Liberties Union and the American Civil Liberties Union of Minnesota
5
(collectively, ACLU) amicus curiae status.
The court heard oral
argument on January 4, 2013, and all parties and amicus curiae
appeared through counsel.
DISCUSSION
A preliminary injunction is an extraordinary remedy, and the
movant bears the burden of establishing its propriety.
Inc. v. Lewis, 346 F.3d 841, 844 (8th Cir. 2003).
considers
injunction
four
factors
should
in
issue:
determining
(1)
the
whether
likelihood
of
a
Watkins
The court
preliminary
the
movant’s
ultimate success on the merits, (2) the threat of irreparable harm
to the movant in the absence of relief, (3) the balance between
that harm and the harm that the relief may cause the non-moving
party, and (4) the public interest.
Dataphase Sys., Inc. v. C.L.
Sys., Inc., 640 F.2d 109, 114 (8th Cir. 1981) (en banc).
I.
Likelihood of Success on the Merits
RFRA prohibits the government from “substantially burden[ing]
a person’s exercise of religion even if the burden results from a
rule of general applicability.”
42 U.S.C. § 2000bb-9(a).
A
substantial burden is permissible, however, if the government
“demonstrates that application of the burden to the person — (1) is
in furtherance of a compelling governmental interest; and (2) is
the
least
restrictive
governmental interest.”
means
of
furthering
that
compelling
Id. § 2000bb-1(b); see Gonzales v. O
6
Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 424
(2006) (same).
In other words, the court applies strict scrutiny
to federal statutes that substantially burden the free exercise of
religion.
Exercise of religion is defined as “any exercise of religion,
whether or not compelled by, or central to, a system of religious
belief.”
42 U.S.C. § 2000cc-5(7)(A).6
In other words, RFRA’s
“guarantee of free exercise is not limited to beliefs which are
shared by all of the members of a religious sect.”
Love v. Reed,
216 F.3d 682, 688 (8th Cir. 2000) (citation and internal quotation
marks
omitted).
Neither
“substantial burden.”
RFRA
nor
RLUIPA
define
the
term
The Eighth Circuit explains, however, that
[s]ubstantially burdening one’s free exercise
of religion means that the regulation must
significantly inhibit or constrain conduct or
expression that manifests some central tenet
of a person’s individual religious beliefs;
must meaningfully curtail a person’s ability
to express adherence to his or her faith; or
must deny a person reasonable opportunity to
engage
in
those
activities
that
are
fundamental to a person’s religion.
United
States
v.
Ali,
682
F.3d
705,
709-10
(8th
Cir.
2012)
(alteration in original) (citations and internal quotation marks
omitted); Civil Liberties for Urban Believers v. City of Chi., 342
F.3d 752, 761 (7th Cir. 2003) (“[A] substantial burden on religious
6
This definition is from the Religious Land Use and
Institutionalized Persons Act (RLUIPA), which adopted RFRA’s
substantial burden inquiry.
7
exercise
is
one
that
necessarily
bears
direct,
primary,
and
fundamental responsibility for rendering religious exercise ...
effectively impracticable.”).
As explained by the Sixth Circuit,
“[i]n the ‘Free Exercise’ context, the Supreme Court has made clear
that the ‘substantial burden’ hurdle is high.” Living Water Church
of God v. Charter Twp. of Meridian, 258 F. App’x 729, 734 (6th Cir.
2007).
A.
Eighth Circuit Stay
Plaintiffs first argue that a likelihood of success exists
because the Eighth Circuit issued a stay in O’Brien v. U.S.
Department of Health & Human Services, No. 12-3357, slip op. at 1
(8th Cir. Nov. 28, 2012).
Specifically, plaintiffs argue that the
court should interpret the Eighth Circuit’s stay as tantamount to
a preliminary injunction.
See Am. Pulverizer Co. v. U.S. Dep’t of
Health & Human Servs., No. 12-3459, slip op. at 1 (W.D. Mo. Dec.
20, 2012) (explaining that O’Brien “established precedent that on
facts similar to those presented ... [p]laintiffs are likely to
succeed on the merits”); see also Korte v. Sebelius, No. 12-3841,
2012 WL 6757353, at *4 (7th Cir. Dec. 28, 2012) (“[T]he Eighth
Circuit granted a motion for an injunction pending appeal ...
albeit without discussion.”).
8
In O’Brien the district court dismissed the amended complaint
under Rule 12, thereby rendering moot plaintiffs’ motion for
preliminary injunction.
See O’Brien v. U.S. Dep’t of Health &
Human Servs., No. 4:12-CV-476, 2012 WL 4481208, at *15 (E.D. Mo.
Sept. 28, 2012), staying enforcement of district court opinion
pending decision on merits, No. 12-3357 (8th Cir. Nov. 28, 2012).
In response, plaintiffs appealed the decision on the merits and
requested the issuance of a preliminary injunction pending appeal.
Instead of granting the injunction, the Eighth Circuit - in a onesentence divided motions panel opinion - issued a stay pending
appeal.
Citing Pulverizer in support, plaintiffs argue that the court
should interpret the Eighth Circuit stay as akin to a preliminary
injunction and conclude that a likelihood of success on the merits
exists. Defendants respond that the Eighth Circuit may merely have
been staying enforcement of the judgment of the district court
pending appeal.
The O’Brien panel did not provide a rationale for
its decision, and the court concludes that it cannot, with a
reasonable level of certainty, interpret the stay pending appeal as
9
indicating a likelihood of success on the merits.7
the
court
engages
in
an
independent
analysis
As a result,
of
plaintiffs’
likelihood of success on the merits.
B.
Independent Analysis
Plaintiffs
argue
that
their
exercise
of
religion
is
substantially burdened because they must choose between providing
health care in accordance with the Mandate or eliminate their
employer-sponsored health plan.
Both options, according to the
plaintiffs, will substantially burden their practice of religion.
Plaintiffs are either forced to provide health care that includes
Contraceptive Services or forego an employer-sponsored health care
plan and neglect the needs of their employees.
The defendants
respond that any burden imposed by the Mandate is too attenuated to
constitute a substantial burden under RFRA.
The court finds persuasive the reasoning from the district
court in O’Brien:
[P]laintiffs remain free to exercise their
religion, by not using contraceptives and by
discouraging
employees
from
using
contraceptives.
The
burden
of
which
plaintiffs complain is that funds, which
plaintiffs will contribute to a group health
plan, might, after a series of independent
decisions by health care providers and
patients covered by [the] plan, subsidize
7
The court also notes that “[d]ecisions by motions panels are
summary in character, made often on a scanty record, and not
entitled to the weight of a decision made after plenary
submission.” In re Rodriquez, 258 F.3d 757, 759 (8th Cir. 2001)
(per curium) (citation and internal quotation marks omitted).
10
someone else’s participation in an activity
that is condemned by plaintiffs’ religion.
This Court rejects the proposition that
requiring indirect financial support of a
practice,
from
which
plaintiff
himself
abstains
according
to
his
religious
principles, constitutes a substantial burden
on plaintiff’s religious exercise.
Id. at *6 (emphasis omitted).
In separate challenges to the
Mandate, two circuit courts used substantially similar reasoning to
deny injunctive relief.
See Autocam Corp. v. Sebelius, No. 12-
2673, slip op. at 2-3 (6th Cir. Dec. 28, 2012); Hobby Lobby Stores,
Inc. v. Sebelius, No. 12-6294, slip op. at 7 (10th Cir. Dec. 20,
2012), application for injunction denied by Circuit Justice, No.
12A644 (U.S. Dec. 26, 2012) (Sotomayor, J., in chambers).
In response, plaintiffs explain that the Seventh Circuit
recently enjoined
enforcement
of
the
Mandate.
See
Korte v.
Sebelius, No. 12-3841, 2012 WL 6757353, at *4-5 (7th Cir. Dec. 28,
2012).
The Seventh Circuit, however, uses a “sliding scale”
inquiry that evaluates whether an adequate remedy at law exists and
if there is some likelihood of success on the merits.
*2.
See id. at
Once these threshold requirements are met, the court then
balances each party’s likelihood of success against the potential
harm. Id. The Seventh Circuit’s preliminary injunction inquiry is
different than Dataphase, and the court in Korte concluded only
that plaintiffs had “a reasonable likelihood of success on the
merits.”
Id.
The Eighth Circuit, meanwhile, requires that the
movant establish a “substantial likelihood of success on the
11
merits.”
Planned Parenthood Minn., N.D., S.D. v. Rounds, 530 F.3d
724, 731-32 (8th Cir. 2008) (citation and internal quotation marks
omitted).
The Sixth and the Tenth Circuit use a similar standard.
See Autocam Corp., No. 12-2673, at 1 (noting “relevant factor ...
[as] whether the movant has shown a strong likelihood of success on
the merits”); Hobby Lobby, No. 12-6294, at 3 (“[T]he movant must
show ... a substantial likelihood of success on the merits ....”).
Because the Eighth Circuit’s preliminary injunction inquiry is
analogous to the Sixth and Tenth Circuit’s inquiry, the court finds
persuasive their treatment of similar cases.
In so stating, the court acknowledges that other districts
have reached differing opinions regarding plaintiffs’ likelihood of
success on the merits in challenges to the Mandate,8 but concludes
8
The court is aware of thirteen cases. Three courts denied
injunctive relief. See Autocam Corp., No. 12-2673, at 2-3 (denying
preliminary injunction; Hobby Lobby, No. 12-6294, at 7 (same);
Grote Indus. v. Sebelius, No. 4:12-cv-00134, 2012 WL 6725905, at
*6-7 (S.D. Ind. Dec. 27, 2012) (same).
Nine courts granted
injunctive relief. See Korte v. Sebelius, 2012 WL 6757353, at *1
(granting preliminary injunction); Triune Health Grp., Inc. v. U.S.
Dep’t of Health & Human Servs., No. 12 C 6756, slip op. at 1 (N.D.
Ill. Jan. 3, 2012) (same); Sharpe Holdings, Inc. v. U.S. Dep’t of
Health & Human Servs., No. 2:12-CV-92, slip op. at 1 (E.D. Mo. Dec.
31, 2012) (granting temporary restraining order); Monaghan v.
Sebelius, No. 12-15488, 2012 WL 6738476, at *3-6 (E.D. Mich. Dec.
30, 2012) (same); Conestoga Wood Specialties Corp. v. Sebelius, No.
12-6744, slip op. at 1 (E.D. Pa. Dec. 28, 2012) (same); Am.
Pulverizer Co., No. 12-3459, at 1 (granting preliminary
injunction); Tyndale House Publishers, Inc. v. Sebelius, No. 121635, 2012 WL 5817323, at *10-18 (D.D.C. Nov. 16, 2012) (same);
Legatus v. Sebelius, No. 12-12061, 2012 WL 5359630, at *6 (E.D.
Mich. Oct. 31, 2012) (same); Newland v. Sebelius, No. 1:12-cv-1123,
2012 WL 3069154, at *6-8 (D. Colo. July 27, 2012) (same), appeal
(continued...)
12
that RFRA was not designed to “protect against the slight burden on
religious exercise that arises when one’s money circuitously flows
to support the conduct of other free-exercise-wielding individuals
who hold religious beliefs that differ from one’s own.”
2012 WL 4481208, at *6.
O’Brien,
As a result, the court concludes that the
Mandate places only a de minimis, not substantial, burden on
plaintiffs’ practice of religion under RFRA.9
See Seven-Sky v.
Holder, 661 F.3d 1, 5 n.4 (D.C. Cir. 2011) (holding that plaintiffs
who
objected
to
medical
care
on
religious
grounds
were
not
substantially burdened under RFRA when forced to choose between
obtaining health insurance or paying annual fee), abrogated on
other grounds by Nat’l Fed’n of Indep. Bus. v. Sebelius, 132 S. Ct.
2566 (2012).
As such, the court need not engage in an analysis of
the Mandate under strict scrutiny.
Therefore, the court concludes
8
(...continued)
docketed, No. 12-1380 (10th Cir. Sept. 26, 2012).
As already
explained, the court is uncertain of how to interpret the Eighth
Circuit’s treatment of O’Brien.
9
In so stating, the court need not determine whether a
secular, for-profit corporation, such as Annex, is capable of
exercising religion. See Hobby Lobby Stores, Inc. v. Sebelius, 870
F. Supp. 2d 1278, 1291-92 (W.D. Okla. 2012) (finding that “forprofit corporations ... are not ‘persons’ for purposes of the
RFRA.”), aff’d, No. 12-6294 (10th Cir. Dec. 20, 2012) (denying
preliminary injunction but declining to determine whether forprofit corporation can be a “person” under RFRA), application for
injunction denied by Circuit Justice, No. 12A644 (U.S. Dec. 26,
2012) (Sotomayor, J., in chambers).
But see Legatus, 2012 WL
5359630, at *4 (noting that corporation has standing to assert
free-exercise rights as a “pass-through instrumentality” of its
owners).
13
that plaintiffs cannot demonstrate a substantial likelihood of
success on the merits, and this Dataphase factor weighs against
entry of injunctive relief.
II.
Irreparable Harm
To establish irreparable harm, “a party must show that the
harm is certain and great and of such imminence that there is a
clear and present need for equitable relief.”
Iowa Utils. Bd. v.
F.C.C., 109 F.3d 418, 425 (8th Cir. 1996) (per curiam) (citations
omitted).
“Irreparable harm occurs when a party has no adequate
remedy at law, typically because its injuries cannot be fully
compensated through an award of damages.”
Gen. Motors Corp. v.
Harry Brown’s, LLC, 563 F.3d 312, 319 (8th Cir. 2009).
The court concludes that plaintiffs did not demonstrate a
substantial likelihood of success on the merits, indicating that
irreparable harm is unlikely.
At this stage in the proceedings,
however, the record is not developed and “a decision on the merits”
has
not
been
rendered.
Hubbard
Feeds,
Inc.
v.
Animal
Feed
Supplement, Inc., 182 F.3d 598, 603 (8th Cir. 1999) (citations
omitted).
As a result, the court examines the potential harm
alleged by plaintiffs.
Where, as here, a plaintiff alleges a violation of RFRA,
“courts [hold] that a plaintiff satisfies the irreparable harm
analysis.”
Kikumura v. Hurley, 242 F.3d 950, 963 (10th Cir. 2001)
(citations
omitted).
This
is
14
because
“[t]he
loss
of
First
Amendment
freedoms,
for
even
minimal
periods
of
time,
unquestionably constitutes irreparable injury.” Lowry ex rel. Crow
v. Watson Chapel Sch. Dist., 540 F.3d 752, 762 (8th Cir. 2008)
(citation
and
internal
quotation
marks
omitted).
Therefore,
plaintiffs can demonstrate the possibility of irreparable harm, and
this Dataphase factor weighs in favor of injunctive relief.
III.
Balance of Equities
Under the balance of equities, “a court should flexibly weigh
the
case’s
particular
circumstances
to
determine
whether
...
justice requires the court to intervene to preserve the status
quo.”
United Indus. Corp. v. Clorox Co., 140 F.3d 1175, 1179 (8th
Cir. 1998) (citation and internal quotation marks omitted). In the
present action, however, plaintiffs ask the court to enter a
preliminary injunction to alter, not preserve, the status quo.
Annex’s current health care plan provides Contraceptive Services,
and plaintiffs request that the court order Blue Cross or another
health provider to make available a plan without Contraceptive
Services.
Moreover, Annex has been paying for such services,
albeit unintentionally, for over a year.
As a result, the court is
unpersuaded that plaintiffs’ alleged irreparable harm outweighs the
government’s interest in providing for the health of women and
children. Therefore, this Dataphase factor weighs against entry of
injunctive relief.
15
IV.
Public Interest
“[T]he determination of where the public interest lies ... is
dependent on the determination of the likelihood of success on the
merits of the First Amendment challenge because it is always in the
public interest to protect constitutional rights.” Phelps-Roper v.
Nixon, 545 F.3d 685, 690 (8th Cir. 2008) (citations omitted),
overruled on other grounds by Phelps-Roper v. City of Manchester,
Mo., 697 F.3d 678 (8th Cir. 2012) (en banc).
As already explained,
plaintiffs have not established a substantial likelihood of success
on the merits.
Therefore, this Dataphase factor weighs against
entry of injunctive relief. Accordingly, based upon a balancing of
the Dataphase factors, a preliminary injunction is not warranted.
CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that
plaintiffs’ motion for preliminary injunction [ECF No. 7] is
denied.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated:
January 8, 2013
s/David S. Doty
David S. Doty, Judge
United States District Court
16
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