Sharpe Holdings, Inc. et al v. United States Department of Health and Human Services et al

Filing 84

MEMORANDUM AND ORDER IT IS HEREBY ORDERED that the motion of plaintiffs CNS International Ministries, Inc. and Heartland Christian College for leave to file an overlength memorandum in support of their pending motion (Doc. 63) is sustained. IT IS FURTHER ORDERED that the motion of plaintiffs CNS International Ministries, Inc. and Heartland Christian College a temporary restraining order and preliminary injunction (Doc. 64) is sustained. The preliminary injunction and stay currently in effect (Docs. 56 , 57 ) are extended to plaintiffs CNS International Ministries, Inc. and Heartland Christian College. re: 63 62 . Signed by Magistrate Judge David D. Noce on 12/30/13. (KKS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
NORTHERN DIVISION

SHARPE HOLDINGS, INC., et al.,
Plaintiffs,
v.
UNITED STATES DEPARTMENT OF
HEALTH AND HUMAN SERVICES, et al.,
Defendants.

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No. 2:12 CV 92 DDN

MEMORANDUM AND ORDER
This action is before the court on the motion of plaintiffs CNS International Ministries,
Inc. and Heartland Christian College for a temporary restraining order and preliminary
injunction. (Doc. 62.) The parties have consented to the exercise of plenary authority by the
undersigned United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). (Doc. 69.)
On December 20, 2012, plaintiffs Sharpe Holdings, Inc., Rita Joanne Wilson, Judi
Dianne Schaefer, and Charles N. Sharpe commenced this action against defendants United States
Department of Health and Human Services, United States Department of the Treasury, United
States Department of Labor, and Kathleen Sebelius, Timothy Geitner, and Hilda Solis in their
official capacities as the respective secretaries of the defendant departments.

(Doc 1.)

Collectively, defendants are the departments and officials responsible for adopting,
administering, and enforcing the regulations at issue.
The Patient Protection and Affordable Care Act, Pub. L. 111-148, and the Health Care
and Education Reconciliation Act, Pub. L. 111-152, (the Act) both enacted in March 2010,
regulates the national health insurance market by directly regulating group health plans and
health insurance issuers. The Act contains a preventive services coverage provision which
provides:
“A group health plan and a health insurance issuer offering group or individual
health insurance coverage shall, at a minimum provide coverage for and shall not
impose any cost sharing requirements for[,] with respect to women, such
additional preventive care and screenings . . . as provided for in comprehensive

guidelines supported by the Health Resources and Services Administration for
purposes of this paragraph.”
42 U.S.C. § 300gg–13(a)(4).
The Health Resources and Services Administration has issued guidelines requiring
coverage for “[a]ll Food and Drug Administration approved contraceptive methods, sterilization
procedures, and patient education and counseling for all women with reproductive capacity.”
Women's Preventive Services: Required Health Plan Coverage Guidelines, Health Resources and
Services Administration, http://www.hrsa.gov/womensguidelines/ (last visited Dec. 31, 2012).
The FDA has approved several contraceptive methods, including Plan B, Ella, and copper
intrauterine devices (IUDs).1

Birth Control Guide, FDA Office of Women's Health,

www.fda.gov/downloads/ForConsumers/ByAudience/ForWomen/FreePublications/UCM282014
.pdf.
The government issued a regulation (contraceptive mandate) that adopted the Health
Resources and Service Administration guidelines as final. 77 Fed. Reg. 8725. Group health
plans and health insurance issuers are required to provide coverage consistent with the
guidelines, without cost sharing, in plan or policy years beginning on or after August 1, 2012.
Id. at 8725-26.
Employers failing to meet the requirements of the Act and contraceptive mandates
subject themselves to a number of liabilities. First, failure to provide an employee health
insurance plan is penalized with a fine in the amount equal to one-twelfth of $2000 multiplied by
the number of full-time employees on a monthly basis. 26 U.S.C. § 4980H. Further, failure to
meet the group plan health requirements is penalized in the amount of $100 per day for each
affected employee. 26 U.S.C. § 4980D. However, employers with fewer than fifty full-time
employees are not subject to penalties and fines for failure to provide their employees with
health insurance, but if they choose to provide employees with insurance, they must provide the
minimum essential coverage. See 26 U.S.C. §§ 4980D, 4980H. Moreover, the fines and
penalties do not apply until January 1, 2015.
Implement

the

ACA

in

a

U.S. Dept. of the Treasury, Continuing to
Careful,

Thoughtful

Manner,

http://www.treasury.gov/connect/blog/Pages/Continuing-to-Implement-the-ACA-in-a-Careful                                                            
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Plaintiffs refer to these particular contraceptive methods as abortifacients.
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Thoughtful-Manner-.aspx (last visited December 12, 2013). Additionally, 29 U.S.C. § 1132
authorizes private enforcement suits for failure to meet the requirements of the Act.
On December 31, 2012, the court issued a temporary restraining order, prohibiting the 
enforcement of the ACA Mandate regulations regarding abortifacient devices and related

counseling. (Doc. 20.) On January 14, 2013, the temporary restraining order was continued
until the court’s determination regarding additional injunctive relief. (Doc. 31.) On June 14,
2013, plaintiffs filed a first amended complaint to add Ozark National Life Insurance Company,
N.I.S. Financial Services, Inc., and CNS Corporation as plaintiffs. (Doc. 52.) On June 28, 2013,
the court sustained plaintiffs’ request for a preliminary injunction. (Doc. 56.) On September 30,
2013, the court left the preliminary injunction in effect and stayed the proceedings pending the
resolution of “the appeal in O'Brien v. HHS, No. 12-3357, or in Annex Medical, Inc. v. Sebelius,
No. 13-1118, whichever occurs first, including the time any proper applications for relief is
before the Supreme Court.” (Doc. 57.)
On December 11, 2013, plaintiffs filed a second amended complaint to add CNS
International Ministries, Inc. and Heartland Christian College as plaintiffs. (Doc. 61.) Plaintiff
CNS International Ministries is a Missouri non-profit corporation that provides full-time
residential services to men, women, and children who suffer from alcohol or drug dependencies
and behavioral problems. (Id. at ¶ 6.) It employs more than fifty people and offers health
insurance to its employees through its own self-insured program. (Id.) Plaintiff Heartland
Christian College is a Missouri non-profit corporation that provides post-secondary higher
education to employees and residents of CNS International Ministries and their dependents. (Id.
at ¶ 7.) It offers health insurance to its employees through its own self-insured program. (Id.)
Their plans expire on December 31, 2014. (Id. at ¶ 126.)
In accordance with their sincerely held religious beliefs and practices, plaintiffs oppose
the use, funding, provision, or support of abortion on demand and believe that use of Plan B,
Ella, and copper IUDs constitute abortion on demand. (Id. at ¶¶ 48-58.) Further, adherence to
these tenets is integral to them. (Id. at ¶ 47.)
In their complaint, plaintiffs allege violation of the Religious Freedom Restoration Act
(RFRA), violations of the First Amendment Free Exercise Clause, Establishment Clause, the
right against compelled speech, and the right of expressive association, as well as violation of the
Administrative Procedure Act. (Id.) Plaintiffs seek declarations that the contraceptive mandate
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and defendants’ enforcement thereof violate the First and Fifth Amendments, RFRA, and the
Administrative Procedure Act; an order prohibiting defendants’ enforcement of the contraceptive
mandate with respect to Plan B, ella, copper IUDs, and related education and counseling; and
costs and reasonable attorney and expert fees under 42 U.S.C. 1988. (Id.)
Plaintiffs CNS International Ministries, Inc. and Heartland Christian College allege that
they do not qualify for the religious employer exemption from the contraceptive mandate. (Id. at
¶¶ 109-11.); see 45 C.F.R. § 147.130(a)(iv)(B). However, they allege that they are eligible for
the religious employer accommodation.

(Doc. 61 at ¶ 123.)

The regulations provide an

accommodation for an organization that: (1) “opposes providing coverage for some or all of the
contraceptive services required”; (2) “is organized and operates as a nonprofit entity”; (3) “holds
itself out as a religious organization”; and (4) “self-certifies that it satisfies the first three
criteria.” 45 C.F.R. § 147.131(b). Organizations seeking this accommodation must self-certify
prior to the beginning of the first plan year and deliver it to the insurer or, in the case of the selfinsured, the third party administrator. Id. § 147.131(c)(1). The third party administrator must
then exclude contraceptive coverage from the group health insurance coverage and provide
separate payments for contraceptive services for the plan beneficiaries. Id. § 147.131(c)(2). The
third party administrator must also notify the plan beneficiaries of this contraceptive payment
benefit. Id. § 147.131(d).
In essence, plaintiffs CNS International Ministries, Inc. and Heartland Christian College
argue that although the accommodation alters the means, they continue to be required to take
affirmative steps to facilitate access to abortifacient services in violation of their First
Amendment rights. The court has already granted injunctive relief to the other plaintiffs in this
case, and the arguments for those plaintiffs are substantially similar to the arguments now before
the court. The resolution of the O'Brien or Annex Medical appeals will also likely facilitate the
resolution of the arguments of plaintiffs CNS International Ministries, Inc. and Heartland
Christian College. Thus, the court extends the preliminary injunction and stay currently in effect
to plaintiffs CNS International Ministries, Inc. and Heartland Christian College. See Zubik v.
Sebelius, 2013 WL 6118696 (W.D. Pa. 2013).

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For the reasons stated above,
IT IS HEREBY ORDERED that the motion of plaintiffs CNS International Ministries,
Inc. and Heartland Christian College for leave to file an overlength memorandum in support of
their pending motion (Doc. 63) is sustained.
IT IS FURTHER ORDERED that the motion of plaintiffs CNS International Ministries,
Inc. and Heartland Christian College a temporary restraining order and preliminary injunction
(Doc. 64) is sustained.  The preliminary injunction and stay currently in effect (Docs. 56, 57) are
extended to plaintiffs CNS International Ministries, Inc. and Heartland Christian College.

/S/ David D. Noce______________
UNITED STATES MAGISTRATE JUDGE
Signed on December 30, 2013.

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