CONESTOGA WOOD SPECIALITIES CORPORATION et al v. SEBELIUS et al
Filing
49
MEMORANDUM AND/OR OPINIONSIGNED BY HONORABLE MITCHELL S. GOLDBERG ON 1/11/13. 1/11/13 ENTERED AND COPIES MAILED, E-MAILED.(ti, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
CONESTOGA WOOD SPECIALITIES :
CORPORATION, et al.
:
:
:
v.
:
:
KATHLEEN SEBELIUS, et al.
:
CIVIL ACTION
No. 12-6744
Goldberg, J.
January 11, 2013
MEMORANDUM OPINION
This case presents issues of first impression as to whether the Women’s Preventive
Healthcare regulations under the recently enacted Patient Protection and Affordable Care Act pass
muster under the First Amendment and the Religious Freedom Restoration Act of 1993. In resolving
these questions we also decide whether the United States Supreme Court’s decision in Citizens
United v. Federal Election Commission, 130 S. Ct. 876 (2010), which granted political free speech
rights to corporations, also extends to the First Amendment’s Free Exercise of Religion Clause.
Plaintiffs, Conestoga Wood Specialties Corporation, and five of its owners, Norman Hahn,
Elizabeth Hahn, Norman Lemar Hahn, Anthony H. Hahn and Kevin Hahn, brought suit against
Kathleen Sebelius in her official capacity as Secretary of the United States Department of Health and
1
Human Services, along with other United States government officials and agencies,1 seeking
declaratory and injunctive relief.
Plaintiffs allege that various regulations and guidelines
implemented in connection with the Patient Protection and Affordable Care Act of 2010, Pub. L. No.
111-148, violate the Religious Freedom Restoration Act, 42 U.S.C. § 2000bb, et seq., the First and
Fifth Amendments to the United States Constitution and the Administrative Procedure Act, 5 U.S.C.
§ 701, et seq.
Specifically, Plaintiffs object to regulations regarding Women’s Preventive
Healthcare—which Plaintiffs refer to as “the Mandate”— that allegedly “force [them] to pay for and
otherwise facilitate the insurance coverage and use of contraception with an abortifacient effect and
related education and counseling.” Plaintiffs claim that these regulations conflict with their
sincerely-held religious beliefs. (Am. Compl. ¶¶ 2, 4.)
Plaintiffs filed a motion for preliminary injunction on December 7, 2012, and the Court held
an evidentiary hearing on January 4, 2013.2 We have also accepted and considered an amicus brief
from the American Civil Liberties Union Foundation and the American Civil Liberties Union of
Pennsylvania.
For the reasons that follow, we find that Plaintiffs have not shown that they are entitled to
a preliminary injunction, and, as such, the motion will be denied.
1
The complete list of Defendants is as follows: 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.
2
On December 28, 2012, we entered an Order for a temporary stay pending an evidentiary
hearing. (Doc. No. 35.) Absent this temporary stay, Conestoga would have been required to comply
with the regulations on January 1, 2013.
2
I.
FACTUAL AND PROCEDURAL BACKGROUND3
A.
The Affordable Care Act
The Patient Protection and Affordable Care Act (“ACA”), which was signed into law on
March 23, 2010, requires employers with fifty or more full-time employees to provide their
employees with a minimum level of health insurance. One aspect of this minimum level of coverage
is that employers and health insurance companies are required to cover women’s “preventive health
services,” and are prohibited from imposing cost-sharing for plan beneficiaries. 42 U.S.C. § 300gg13(a)(4).
The Health Resources and Services Administration (“HRSA”) delegated the creation of
guidelines on this issue to the Institute of Medicine (“IOM”). See 77 FR 8725-01 (Feb. 15, 2012).
On August 1, 2011, the HRSA adopted the recommended guidelines published by the IOM, which
included required coverage for “the full range of Food and Drug Administration-approved
contraceptive methods, sterilization procedures, and patient education and counseling for women
with reproductive capacity.” INSTITUTE
OF
MEDICINE , CLINICAL PREVENTIVE SERVICES
FOR
WOMEN : CLOSING THE GAPS 109-10 (2011) (hereinafter “CLOSING THE GAPS”); see also 76 Fed.
Reg. 46621-01 (Aug. 3, 2011).
Under the regulations adopted pursuant to Women’s Preventive Healthcare, group health
plans and health insurance issuers are required to provide coverage consistent with the HRSA
guidelines in plan years beginning on or after August 1, 2012, unless the employer or plan is exempt.
Women’s Preventive Services: Required Health Plan Coverage Guidelines, U.S. DEPT . OF HEALTH
AND
HUMAN SVCS., http://www.hrsa.gov/womensguidelines/ (last visited Jan. 8, 2013) (“HRSA
3
All facts are undisputed, unless otherwise noted.
3
Guidelines”). The interim final regulations and guidelines were adopted without change on April
16, 2012. 77 FR 8725-01 (Feb. 15, 2012).
Congress required coverage of Women’s Preventive Healthcare in order to address inequities
in the current healthcare system, which leads “women of childbearing age [to] spend 68 percent more
in out-of-pocket health care costs than men.” 155 Cong. Rec. at S12027 (daily ed. Dec. 1, 2009)
(statement of Sen. Gillibrand). Studies have found “more than half of women delay[ ] or avoid[ ]
preventive care because of its cost,” id. at S12028, and that unplanned pregnancies have a higher rate
of health risks for both mother and child than planned pregnancies. CLOSING THE GAPS, supra, at
103.
If an employer fails to comply with these regulations, it faces staunch penalties. Non-exempt
employers who choose to exclude health coverage for abortifacient contraception face a penalty of
$100 each day per offending employee. 26 U.S.C. § 4980D(b)(1). If an employer fails to provide
health insurance altogether, it faces an annual penalty for each employee. See 26 U.S.C. § 4980H.
Additionally, the Department of Labor and plan participants may bring suit against an employer that
fails to comply with the regulations. 29 U.S.C. § 1132.
The Women’s Preventive Healthcare regulations contain numerous exemptions for specific
subsets of employers. One such exemption is for “grandfathered” plans—“coverage provided by a
group health plan . . . in which an individual was enrolled as of March 23, 2010,” the date on which
the ACA was enacted.
45 C.F.R. § 147.140(a).
An exemption with regard to women’s
contraception also exists for certain “religious employers.” A religious employer is defined as an
organization meeting all of the following requirements:
(1) The inculcation of religious values is the purpose of the organization.
4
(2) The organization primarily employs the religious tenets of the organization.
(3) The organization serves primarily persons who share the religious tenets of the
organization.
(4) The organization is a nonprofit organization. . . .
45 C.F.R. § 147.130(a)(1)(iv)(B); 77 FR 8725-01 (Feb. 15, 2012). Finally, employers with fewer
than fifty full-time employees are required to provide coverage for Women’s Preventative Healthcare
within any health plan provided to employees, but are permitted to entirely forego providing
insurance without penalty. 26 U.S.C. § 4980H(c)(2)(A).
Upon receiving feedback from organizations that objected to contraception coverage on
religious grounds but also did not fit under the definition of “religious employer,” the Department
of the Treasury, Department of Labor and Department of Health and Human Services released an
advance notice of proposed amendments to the regulations. 77 FR 16501-01 (Mar. 21, 2012). The
agencies gave notice of a safe harbor for certain non-profit organizations that object to the mandatory
coverage of contraception. Under this safe harbor, a qualifying organization would not be subject
to penalties for failing to comply with the regulations regarding Women’s Preventive Healthcare
until the first plan year on or after August 1, 2013. This respite would allow the agencies time to
potentially amend the definition of religious employer. Id. The safe harbor applies to organizations
meeting all of the following requirements:
(1) The organization is organized and operates as a non-profit entity.
(2) From February 10, 2012 onward, contraceptive coverage has not been provided
at any point by the group health plan established or maintained by the organization,
consistent with any applicable State law, because of the religious beliefs of the
organization.
(3) . . . [T]he group health plan established or maintained by the organization . . .
must provide to participants [a]n attached notice . . . which states that contraceptive
5
coverage will not be provided. . . .
(4) The organization self-certifies that it satisfies criteria 1-3 above. . . .
Guidance on the Temporary Enforcement Safe Harbor for Certain Employers, CTR. FOR CONSUMER
INFO . & INS . OVERSIGHT & CTRS.
FOR
MEDICARE & MEDICAID SVCS. (Feb. 10, 2012),
http://cciio.cms.gov/resources/files/Files2/02102012/20120210-Preventive-Services-Bulletin.pdf.
B.
The Plaintiffs
Plaintiff, Conestoga Wood Specialties Corporation (“Conestoga”), is a closely-held, for-profit
Pennsylvania corporation that manufactures wood cabinets and wood specialty products. It is owned
and operated by Plaintiffs Norman Hahn, Elizabeth Hahn, Norman Lemar Hahn, Anthony H. Hahn,
and Kevin Hahn (“the Hahns”), the founder of Conestoga, his wife and their sons, respectively.4 In
addition to being shareholders, the Hahns maintain various positions on the board of directors, and
Plaintiff Anthony H. Hahn serves as President and Chief Executive Officer of Conestoga. The
corporation presently employs approximately 950 full-time employees. (Am. Compl. ¶¶ 11-16, 37.)
The Hahns are practicing Mennonite Christians whose faith requires them to operate
Conestoga in accordance with their religious beliefs and moral principles. (Id. at ¶¶ 2, 27.)
Conestoga’s mission statement includes the following language: “We operate in a professional
environment founded upon the highest ethical, moral, and Christian principles reflecting respect,
support, and trust for our customers, our suppliers, our employees and their families.” (Pls.’ Br., Ex.
1.) Both Conestoga and the Hahns make annual contributions to various charities and community
organizations in accordance with the Hahns’ religious beliefs. (Am. Compl. ¶ 35.) Further, on
4
These five members of the Hahn family possess 100% of the voting shares of Conestoga’s
stock. Additional, non-voting shares are held by other members of the Hahn family. (Hrg. Tr., Jan.
4, 2013, pp. 11, 19.)
6
October 31, 2012, the board of directors adopted “The Hahn Family Statement on the Sanctity of
Human Life.”5 (Pls.’ Br., Ex. 5.) Conestoga’s Articles of Incorporation are silent as to any religious
purpose or belief. (Defs.’ Br., Ex. 1.)
Conestoga provides employees with a health insurance plan that covers a number of women’s
preventive health expenses, such as pregnancy-related care, routine gynecological care and testing for
sexually transmitted diseases. (Am. Compl. ¶ 84.) However, Conestoga’s health plan specifically
excludes coverage for “contraceptive prescription drugs” and “[a]ny drugs used to abort a pregnancy.”
(Pls.’ Br., Ex. 6.)
“The Mennonite Church teaches that taking of life which includes anything that terminates
a fertilized embryo is an intrinsic evil and a sin against God.” (Am. Compl. ¶ 30.) Therefore, the
Hahns believe it would be sinful for them to pay for, or contribute in any way to, the use of
abortifacient contraception, which they define as, any drug or device that may “terminate[ ] a
fertilized embryo.” (Id. at ¶¶ 30, 32.) The Hahns specifically object to prescription plan coverage of
5
This statement provides that:
“The Hahn family has always believed that the Bible is the inspired, infallible, and
authoritative written word of God, the one and only eternal God.
Found in the Bible, Exodus 20:13 (NIV) as one of the ‘Ten Commandments[,]’ God
commands, ‘You shall not murder[.]’
Found in the Bible, Psalms 139:13-16 (NIV), the writer acknowledges God in how he was
made and says[,] ‘For you created my inmost being; you knit me together in my mother’s womb.
I praise you because I am fearfully and wonderfully made; your works are wonderful, I know that
full well. My frame was not hidden from you when I was made in the secret place, when I was
woven together in the depths of the earth. Your eyes saw my unformed body; all the days ordained
for me were written in your book before one of them came to be.’
The Hahn Family believes that human life begins at conception (at the point where an egg
and sperm unite) and that it is a sacred gift from God and only God has the right to terminate human
life. Therefore it is against our moral conviction to be involved in the termination of human life
through abortion, suicide, euthanasia, murder, or any other acts that involve the deliberate taking of
human life.”
7
“Plan B,” commonly known as the “morning after pill,” and “Ella,” also known as the “week after
pill.”6 (Id. at ¶¶ 45-46.)
As a for-profit corporation, Conestoga does not fit into an exemption for religious employers,
nor does it fall under the safe harbor. Additionally, Conestoga’s health plan does not qualify as a
grandfathered plan under 26 C.F.R. § 54.9815-1251T. Therefore, Plaintiffs are currently left to
choose between providing coverage to employees for abortifacient contraception, which they contend
violates their right to religious freedom, or pay significant financial penalties. Confronted with this
choice, Plaintiffs filed the instant motion for preliminary injunction.
II.
STANDARD OF REVIEW
“Preliminary injunctive relief is ‘an extraordinary remedy’ and ‘should be granted only in
limited circumstances.’” Kos Pharm., Inc. v. Andrx Corp., 369 F.3d 700, 708 (3d Cir. 2004)
(quoting American Tel. & Tel. Co. v. Winback & Conserve Program, Inc., 42 F.3d 1421, 1427 (3d
Cir. 1994)). In order for a court to grant a motion for preliminary injunction, the moving party must
demonstrate: “(1) a likelihood of success on the merits; (2) that it will suffer irreparable harm if the
injunction is denied; (3) that granting preliminary relief will not result in even greater harm to the
nonmoving party; and (4) that the public interest favors such relief.” Id. at 708. “The injunction
shall issue only if the plaintiff produces evidence sufficient to convince the district court that all four
factors favor preliminary relief.” N.J. Hosp. Ass’n v. Waldman, 73 F.3d 509, 512 (3d Cir. 1995)
(citing American Tel & Tel Co., 42 F.3d at 1427).
In demonstrating the likelihood of success on the merits, a plaintiff need not show that it is
6
We note that Defendants do not agree that Plan B or Ella can cause the termination of a
fertilized egg. However, Defendants agree that it is Plaintiffs’ belief that these drugs can have an
abortifacient effect. (Hrg. Tr., Jan. 4, 2013, p. 69.)
8
more likely than not that he will succeed. Singer Mgmt. Consultants, Inc. v. Milgram, 650 F.3d 223,
229 (3d Cir. 2011). Instead, a plaintiff must “show[ ] a reasonable probability of success on the
merits.” American Express Travel Related Svcs., Inc. v. Sidamon-Eristoff, 669 F.3d 359, 366 (3d
Cir. 2012).
We note that other courts that have decided cases with similar facts and ruled in favor of
injunctive relief have generally applied a less rigorous standard. For example, in Tyndale House
Publishers, Inc. v. Sebelius, 2012 WL 5817323 (D.D.C. Nov. 16, 2012), when evaluating the
preliminary injunction factors, the district court applied a “sliding scale approach,” whereby an
unusually strong showing of one factor lessens a plaintiff’s burden in demonstrating a different
factor. Id. at *4; see also Korte v. Sebelius, 2012 WL 6757353, at *2 (7th Cir. Dec. 28, 2012) (“[w]e
evaluate a motion for an injunction pending appeal using the . . . ‘sliding scale’ approach”); Sharpe
Holdings, Inc. v. U.S. Dept. of Health & Human Svcs., 2012 WL 6738489, at *4 (E.D. Mo. Dec. 31,
2012) (“[i]n balancing the equities no single factor is determinative”) (quoting Dataphase Sys., Inc.
v. CL Sys. Inc., 640 F.2d 109, 113 (8th Cir. 1981)); Monaghan v. Sebelius, 2012 WL 6738476, at
*3 (E.D. Mich. Dec. 30, 2012) (same); American Pulverizer Co. v. U.S. Dept. of Health & Human
Svcs., No. 12-3459-CV-S-RED, slip op. at 4 (W.D. Mo. Dec. 20, 2012) (same); Legatus v. Sebelius,
2012 WL 5359630, at *3 (E.D. Mich. Oct. 31, 2012) (same). The United States Court of Appeals
for the Third Circuit, however, has no such “sliding scale” standard, and Plaintiffs must show that
all four factors favor preliminary relief. Pitt News v. Fisher, 215 F.3d 354, 365-66 (3d Cir. 2000).
III.
DISCUSSION
A.
Article III Standing
As a preliminary matter, we must determine whether a “case or controversy” exists, such that
9
this Court has jurisdiction under Article III. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560
(1992). A plaintiff bears the burden of demonstrating that he has Article III standing. ZF Meritor,
LLC v. Eaton Corp., 696 F.3d 254, 301 (3d Cir. 2012). To satisfy this burden, a plaintiff must show:
(1) that he is under a threat of suffering an injury in fact that is concrete and
particularized; the threat must be actual and imminent, not conjectural or
hypothetical; (2) a causal connection between the injury and the conduct complained
of; and (3) a likelihood that a favorable judicial decision will prevent or redress the
injury.
Id. (citing Summers v. Earth Island Inst., 555 U.S. 488, 493 (2009)) (internal quotation marks
omitted).
Defendants assert that Plaintiffs have not satisfied the standing requirement because
“[P]laintiffs cannot show that any injury purportedly caused by the preventive services coverage
regulations is fairly traceable to [D]efendants, as opposed to the result of [P]laintiffs’ own
independent choices.” (Defs.’ Br., pp. 9-10.) Specifically, Defendants argue that Conestoga’s
health insurance plan would have been exempt from the regulations as a grandfathered plan, but that
Plaintiffs failed to follow the requirements of 26 C.F.R. § 54.9815-1251T. Therefore, Defendants
urge that any injury is self-inflicted, and does not satisfy the requirements for Article III standing.
We disagree.
Under the second prong of the test for standing, Plaintiffs must demonstrate that the injury
is “fairly . . . trace[able] to the challenged action of the defendant, and not . . . th[e] result [of] the
independent action of some third party not before the court.” Ariz. Christian Sch. Tuition Org. v.
Winn, 131 S. Ct. 1436, 1442 (2011) (alteration in original) (quoting Lujan v. Defenders of Wildlife,
504 U.S. 555 (1992)) (internal quotation marks omitted). Although Plaintiffs admit that Conestoga
could have qualified for grandfathered status if it had maintained the same plan as that provided in
10
previous years, (Hrg. Tr., Jan. 4, 2013, pp. 61-62), Defendants acknowledge that “grandfathering is
not really a permanent ‘exemption,’ but rather, over the long term, a transition in the marketplace
with respect to . . . the preventive services coverage provision.” (Defs.’ Resp., p. 26.) Thus, it
cannot be said that Defendants play no role in the alleged injury to the Plaintiffs, since, according
to Defendants, Conestoga would be subject to the regulations eventually, even if it initially qualified
for grandfathered status. As such, we are satisfied that Plaintiffs have demonstrated Article III
standing.
B.
Likelihood of Success on the Merits
We are mindful that this case is one of many filed against the government in recent months
by secular, for-profit corporations and their owners regarding the Women’s Preventive Healthcare
regulations. These lawsuits, most of which have sought preliminary injunctions, present complicated
issues of first impression, such as whether a corporation has free exercise protections under the First
Amendment of the Constitution, and whether the Women’s Preventive Healthcare regulations create
a “substantial burden” on Plaintiffs’ exercise of religion under the Religious Freedom Restoration
Act (“RFRA”). Not surprisingly, courts who have considered these issues have reached different
outcomes.7
7
Compare Korte v. Sebelius, 2012 WL 6757353 (7th Cir. Dec. 28, 2012) (granting injunction
pending appeal), O’Brien v. U.S. Dept. of Health & Human Svcs., No. 12-3357 (8th Cir. Nov. 28,
2012) (granting “[a]ppellants’ motion for stay pending appeal,” without further comment), Sharpe
Holdings, Inc. v. U.S. Dept. of Health & Human Svcs., 2012 WL 6738489 (E.D. Mo. Dec. 31, 2012)
(granting motion for temporary restraining order), Monaghan v. Sebelius, 2012 WL 6738476 (E.D.
Mich. Dec. 30, 2012) (same), American Pulverizer Co. v. U.S. Dept. of Health & Human Svcs., No.
12-3459-CV-S-RED, slip op. (W.D. Mo. Dec. 20, 2012) (granting preliminary injunction), Tyndale
House Publishers, Inc. v. Sebelius, 2012 WL 5817323 (D.D.C. Nov. 16, 2012) (same), Legatus v.
Sebelius, 2012 WL 5359630 (E.D. Mich. Oct. 31, 2012) (same), and Newland v. Sebelius, 2012 WL
3069154 (D. Colo. July 27, 2012) (same), with Autocam Corp. v. Sebelius, No. 12-2673, slip op.
(6th Cir. Dec. 28, 2012) (denying preliminary injunction pending appeal), Hobby Lobby Stores, Inc.
11
In their motion, Plaintiffs argue the merits of their claims under the First Amendment and
the RFRA. We will address each of these claims in turn.
1.
The Free Exercise Clause of the First Amendment
The Free Exercise Clause of the First Amendment states: “Congress shall make no law
respecting an establishment of religion, or prohibiting the free exercise thereof.” U.S. CONST .
amend. I. Plaintiffs argue that the operation of Conestoga in accordance with the Hahns’ religious
beliefs constitutes the “exercise of religion” under the Free Exercise Clause, and that being forced
to provide coverage for all FDA-approved contraception substantially burdens their religious beliefs.
In resolving this issue, we must, as a threshold matter, determine whether Plaintiffs have
“free exercise” rights under the First Amendment. The Hahns certainly possess these rights. We
conclude, however, that Conestoga, as a for-profit, secular corporation, does not.
i.
Conestoga’s Free Exercise Rights
Neither the Supreme Court nor the Third Circuit have had occasion to decide whether forprofit, secular corporations possess the religious rights held by individuals. Certainly, a number of
constitutional freedoms have been extended to corporations. See e.g., Citizens United v. Fed.
Election Comm’n, 130 S. Ct. 876, 913 (2010) (“the Government may not suppress political speech
on the basis of the speaker’s corporate identity”); United States v. Martin Linen Supply Co., 430 U.S.
564 (1977) (applying the Fifth Amendment’s double jeopardy protections to a corporation); G.M.
Leasing Corp. v. United States, 429 U.S. 338 (1977) (extending Fourth Amendment search and
seizure protections to a corporation). However, there are certain “purely personal” guarantees that
v. Sebelius, No. 12-6294, slip op. (10th Cir. Dec. 20, 2012) (same), and Grote Indus., LLC v.
Sebelius, 2012 WL 6725905 (S.D. Ind. Dec. 27, 2012) (denying motion for preliminary injunction).
12
are unavailable to corporations. First Nat. Bank of Boston v. Bellotti, 435 U.S. 765, 778, n.14
(1978) (citing United States v. White, 322 U.S. 694, 698-701 (1944)); see also Wilson v. United
States, 221 U.S. 361, 382-86 (finding that the privilege against self-incrimination does not apply to
corporations); Cal. Bankers Ass’n v. Schultz, 416 U.S. 21, 65-67 (1974) (declining to extend to a
corporation the right to privacy to the same extent as individuals). “Whether or not a particular
guarantee is ‘purely personal’ or is unavailable to corporations for some other reason depends on the
nature, history, and purpose of the particular constitutional provision.” Bellotti, 435 U.S. at 778,
n.14.
Plaintiffs cite to Citizens United v. Federal Election Commission, 130 S. Ct. 876 (2010), for
the proposition that a secular, for-profit corporation has free exercise rights under the Constitution.
In Citizens United, the Supreme Court held a provision of the Bipartisan Campaign Reform Act of
2002 unconstitutional because it impeded corporations’ abilities to engage in political discourse in
violation of the Free Speech Clause of the First Amendment. Id. at 917. In reaching its decision,
the Court focused on the history and purpose of free speech rights, particularly political speech,
noting that “[t]he First Amendment has its fullest and most urgent application to speech uttered
during a campaign for political office.” Id. at 898 (quoting Eu v. San Francisco Cnty. Democratic
Central Comm., 489 U.S. 214, 223 (1989)) (quotation marks omitted). Citizens United built upon
the long-accepted principle that corporations have free speech rights protected by the Constitution.
See id. at 899-900 (citing numerous cases that found corporations to have free speech rights under
the First Amendment). However, we find no such historical support for the proposition that a
secular, for-profit corporation possesses the right to free exercise of religion.
Plaintiffs urge that the rights to free speech and free exercise of religion are inseparable, and
13
thus Citizens United must extend to the Free Exercise Clause. (Hrg. Tr., Jan. 4, 2013, p. 27.) This
argument assumes too much. Although they reside within the same constitutional amendment, these
two provisions have vastly different purposes and precedents, and we decline to make the significant
leap Plaintiffs ask of us without clear guidance from Congress or the Supreme Court.8
Plaintiffs also urge this Court to find that Conestoga has free exercise rights by citing to cases
in which religious organizations were granted free exercise protections.
While religious
organizations, as a means by which individuals practice religion, have been afforded free exercise
rights, see Hosanna-Tabor Evangelical Lutheran Church & Sch. v. EEOC, 132 S. Ct. 694, 706 (2012)
(“the text of the First Amendment . . . gives special solicitude to the rights of religious
organizations”); see also Gonzales v. O Centro Espirita Beneficente Uniao Do Vegetal, 546 U.S. 418
(2006); Church of the Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520 (1993), courts have
consistently limited such holdings to religious organizations.9 We find the distinction between
religious organizations and secular corporations to be meaningful, and decline to act as though this
8
We recognize that a number of courts that have considered this issue have cited Citizens
United for the proposition that secular corporations may have free exercise rights. See Korte v.
Sebelius, 2012 WL 6757353, at *3; Legatus, 2012 WL 5359630, at *4. However, these courts
provided little explanation for their findings, and we disagree for the reasons stated supra.
9
In determining whether an organization constitutes a “religious organization,” courts weigh
the following factors: “(1) whether the entity operates for a profit[;] (2) whether it produces a secular
product[;] (3) whether the entity’s articles of incorporation or other pertinent documents state a
religious purpose[;] (4) whether it is owned, affiliated with or financially supported by a formally
religious entity such as a church or synagogue[;] (5) whether a formally religious entity participates
in the management . . . [;] (6) whether the entity holds itself out to the public as secular or
sectarian[;] (7) whether the entity regularly includes prayer or other forms of worship in its
activities[;] (8) whether it includes religious instruction in its curriculum . . . [;] and whether its
membership is made up by coreligionists.” LeBoon v. Lancaster Jewish Cmty. Ctr. Ass’n, 503 F.3d
217, 226 (3d Cir. 2007).
Conestoga, as a for-profit company, creating a secular product, with no formal ties to a
church or other religious group, clearly does not meet the definition of a religious organization.
14
difference does not exist.
The purpose of the Free Exercise Clause is “to secure religious liberty in the individual by
prohibiting any invasions thereof by civil authority.” Sch. Dist. of Abington Twp. v. Schempp, 374
U.S. 203, 223 (1963) (emphasis added). Religious belief takes shape within the minds and hearts
of individuals, and its protection is one of the more uniquely “human” rights provided by the
Constitution. As recognized in Hobby Lobby Stores, Inc. v. Sebelius, 870 F. Supp. 2d 1278 (W.D.
Okla. 2012), “[g]eneral business corporations . . . do not pray, worship, observe sacraments or take
other religiously-motivated actions separate and apart from the intention and direction of their
individual actors.” Id. at 1291. Therefore, we conclude that the nature, history and purpose of the
Free Exercise Clause demonstrate that it is one of the “purely personal” rights referred to in Bellotti,
and as such, is unavailable to a secular, for-profit corporation.
Alternatively, Plaintiffs argue that, as a closely-held corporation, with shareholders who all
practice the Mennonite faith, Conestoga may act as the Hahns’ “alter-ego,” and thus assert the
Hahns’ religious rights on their behalf. Plaintiffs cite to Tyndale House Publishers, Inc. v. Sebelius,
2012 WL 5817323 (D.D.C. Nov. 16, 2012), a case in which the plaintiffs also challenged the ACA
Women’s Preventive Healthcare regulations, for support. Tyndale held that where the beliefs of a
closely-held corporation and its owners are indistinguishable, “united by their [ ] faith . . . [and]
shared, religious objectives[,]” the corporation has standing to assert the free exercise rights of its
owners. Id. at *7. Tyndale largely relied upon two cases from the United States Court of Appeals
for the Ninth Circuit in reaching this conclusion: Stormans, Inc. v. Selecky, 586 F.3d 1109 (9th Cir.
15
2009) and EEOC v. Townley Engineering and Manufacturing Co., 859 F.2d 610 (9th Cir. 1988).10
In Stormans and Townley, the Ninth Circuit held that a closely-held corporation that “does not
present any free exercise rights of its own different from or greater than its owners’ rights . . . has
standing to assert the free exercise rights of its owners.” Stormans, 586 F.3d at 1120; see also
Townley, 859 F.2d at 619-20. We are not persuaded by this line of reasoning.
“[I]ncorporation’s basic purpose is to create a distinct legal entity, with legal rights,
obligations, powers, and privileges different from those of the natural individuals who created it,
who own it, or whom it employs.” Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 163
(2001). “Even when a corporation is owned by one person or a family, the corporate form shields
the individual members of the corporation from personal liability.” Kelleytown Co. v. Williams, 426
A.2d 663, 668 (Pa. Super. Ct. 1981). It would be entirely inconsistent to allow the Hahns to enjoy
the benefits of incorporation, while simultaneously piercing the corporate veil for the limited purpose
of challenging these regulations. We agree with the Autocam court, which stated that this separation
between a corporation and its owners “at a minimum [ ] means the corporation is not the alter ego
of its owners for purposes of religious belief and exercise.”11 Autocam Corp. v. Sebelius, No. 1:12-
10
Plaintiffs also cite to Legatus v. Sebelius, 2012 WL 5359630, at *4 (E.D. Mich. Oct. 31,
2012), in which the court found “a strong case for standing, at least on a Stormans pass-through
instrumentality theory.” For the sake of simplicity, we will focus on the Tyndale decision in our
analysis.
11
We further note that the facts in the present case are distinguishable from the facts in
Tyndale. The Tyndale court relied on the plaintiff’s unique corporate structure in reaching its
decision. Tyndale House Publishers, Inc. is a Christian, faith-based book publisher that holds weekly
chapel service for its employees and is 96.5% owned by a religious non-profit organization.
Tyndale’s Articles of Incorporation make numerous references to the corporation’s religious purpose
and its board members and trustees are required to sign a statement of faith each year, demonstrating
their religious convictions. Tyndale, 2012 WL 5817323, at *6-7.
(continued...)
16
cv-1096, slip op. at 12 (W.D. Mich. Dec. 24, 2012) (emphasis in original).
Accordingly, we conclude that Conestoga cannot assert free exercise rights under the First
Amendment, and therefore, cannot demonstrate a likelihood of success on the merits for a free
exercise claim.
ii.
Hahns’ Free Exercise Rights
Next, we must assess the Hahns’ likelihood of success on their free exercise claim. “At a
minimum, the protections of the Free Exercise Clause pertain if the law at issue discriminates against
some or all religious beliefs or regulates or prohibits conduct because it is undertaken for religious
reasons.” Church of the Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520, 532 (1993).
Where a law is found to violate the Free Exercise Clause, “it is invalid unless it is justified by a
compelling interest and is narrowly tailored to advance that interest.” Id. at 533.
The Free Exercise Clause is not, however, violated by a “valid and neutral law of general
applicability on the ground that the law proscribes (or prescribes) conduct that [a plaintiff’s] religion
prescribes (or proscribes).” Emp’t Div., Dept. of Human Res. of Or. v. Smith, 494 U.S. 872, 879
(1990) (quoting United States v. Lee, 455 U.S. 252, 263, n.3 (1982)). A neutral law of general
applicability need only be “rationally related to a legitimate government objective” to be upheld.
Combs v. Homer-Ctr. Sch. Dist., 540 F.3d 231, 243 (3d Cir. 2008) (quoting Tenafly Eruv Ass’n, Inc.
v. Tenafly, 309 F.3d 144, 165, n. 24 (3d Cir. 2002)).
Plaintiffs first argue that the regulations are not generally applicable because they are
11
(...continued)
Conestoga, on the other hand, has none of these characteristics. We do not doubt that the
Hahns’ religious convictions have influenced the manner in which they operate Conestoga. (See
Exs. 1-5.) However, the substantial overlap of faith and business found in Tyndale is simply not
present here.
17
underinclusive. Specifically, Plaintiffs point to the exemptions for grandfathered plans, small
employers who may forego providing insurance without penalty and religious employers. A
regulation is not generally applicable “if it is enforced against a category of religiously motivated
conduct, but not against a substantial category of conduct that is not religiously motivated and that
undermines the purposes of the law to at least the same degree as the covered conduct that is
religiously motivated.” McTernan v. City of York, 564 F.3d 636, 648 (3d Cir. 2009) (internal
citations omitted). The Women’s Preventive Healthcare regulations, however, apply to all health
plans “not falling under an exemption, regardless of those employers’ personal religious
inclinations.” O’Brien v. U.S. Dept. of Health & Human Svcs., 2012 WL 4481208, at *8 (E.D. Mo.
Sept. 28, 2012). They are not specifically targeted at conduct motivated by religious belief.
Plaintiffs also argue that the Women’s Preventive Healthcare regulations are not neutral
because they exclude some religious employers but not others. “A law is ‘neutral’ if it does not
target religiously motivated conduct either on its face or as applied in practice.” Blackhawk v.
Pennsylvania, 381 F.3d 202, 209 (3d Cir. 2004). The fact that exemptions were made for religious
employers does not indicate that the regulations seek to burden religion. Instead, it shows that the
government made efforts to accommodate religious beliefs, which counsels in favor of the
regulations’ neutrality. See O’Brien, 2012 WL 4481208, at *8 (“the religious employer exemption
presents a strong argument in favor of neutrality”). It is clear from the history of the regulations and
the report published by the Institute of Medicine that the purpose of the Women’s Preventive
Healthcare regulations is not to target religion, but instead to promote public health and gender
equality, and Plaintiffs have not presented any evidence to the contrary. See Hobby Lobby, 870 F.
Supp. 2d at 1289-90; O’Brien, 2012 WL 4481208, at *7.
18
As Defendants can clearly demonstrate that the regulations are “rationally related to a
legitimate government objective,” the regulations do not offend the Free Exercise Clause.
Consequently, Plaintiffs have failed to show a likelihood of success on the merits of their free
exercise claim.
2.
The Religious Freedom Restoration Act
The Religious Freedom Restoration Act (“RFRA”) states that, “Government shall not
substantially burden a person’s exercise of religion even if the burden results from a rule of general
applicability,” unless the government can demonstrate that “the burden to the person (1) is in
furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering
that compelling governmental interest.” 42 U.S.C. § 2000bb-1.12 The plaintiff has the burden of
establishing the elements of a prima facie case: that application of the offensive law or policy would
substantially burden a sincere, religious exercise. See Norwood v. Strada, 249 Fed. Appx. 269, 271
(3d Cir. 2007). Once a prima facie case has been satisfied, the government bears the burden of
demonstrating a compelling interest and that the government employed the least restrictive means
in carrying out that interest. Adams v. Comm’r of Internal Revenue, 170 F.3d 173, 176 (3d Cir.
1999); see also Gonzales v. O Centro Espirita Beneficente Uniao Do Vegetal, 546 U.S. 418, 428-29
(2006) (under the RFRA, “the burdens at the preliminary injunction stage track the burdens at trial”).
12
The Supreme Court has held that the RFRA exceeds Congress’s power under Section 5 of
the Fourteenth Amendment, and is therefore unconstitutional as applied to the states. City of Boerne
v. Flores, 521 U.S. 507 (1997). Although the Third Circuit has never explicitly decided whether the
RFRA is constitutional as applied to the federal government, the parties do not contest the
constitutionality or applicability of the RFRA in this case. Therefore, we “assume without deciding
that [the] RFRA is constitutional as applied to the federal government.” Norwood v. Strada, 249
Fed. Appx. 269, 271, n. 3 (3d Cir. 2007) (quoting Adams v. Comm’r of Internal Revenue, 170 F.3d
173, 175 (3d Cir. 1999)).
19
Plaintiffs argue that the operation of Conestoga in accordance with the Hahns’ religious
beliefs constitutes the “exercise of religion” under the RFRA, and that the Women’s Preventative
Healthcare regulations impose a substantial burden upon their religion because “it directly mandates
that they violate th[eir] beliefs.” (Pls.’ Br., p. 9.) Additionally, Plaintiffs argue that Supreme Court
precedent dictates that we consider only the amount of pressure applied by the government, and not
interpret the confines of religious doctrine. (Id. at pp. 12-14.)
Defendants do not contest that the Hahns’ beliefs are sincerely held or religious in nature.
However, Defendants strongly assert that Conestoga cannot exercise religion within the meaning of
the RFRA, and that the Women’s Preventative Healthcare regulations do not pose a substantial
burden upon the Hahns’ beliefs because: (1) the regulations apply to Conestoga, not the Hahns; and
(2) any burden imposed by the regulations is too attenuated to constitute a substantial burden.
(Defs.’ Br., pp. 11-22.)
i.
Conestoga’s Rights Under the RFRA
For the reasons stated supra, we agree with Defendants that Conestoga cannot exercise
religion within the meaning of the RFRA.
Nonetheless, Plaintiffs persist that Conestoga is a “person” under the RFRA because the
general definition of “person” found in 1 U.S.C. § 1 states, “[I]n determining the meaning of any Act
of Congress, unless the context indicates otherwise . . . the words ‘person’ and ‘whoever’ includes
corporations.” As we have determined that a for-profit, secular corporation cannot exercise religion,
this would certainly be a situation where the “context indicates otherwise.” Therefore, Conestoga
cannot bring a claim under the RFRA.
We must next consider whether the Hahns have demonstrated that the regulations would
20
substantially burden their religious exercise.
ii.
Substantial Burden
The Supreme Court has not considered the issue of what constitutes a substantial burden in
a case involving the Women’s Preventive Healthcare regulations. See Hobby Lobby Stores, Inc. v.
Sebelius, 133 S. Ct. 641, 643 (2012) (Sotomayor, J.) (noting that the Supreme Court has not
considered the RFRA or free exercise claims brought by a closely-held, for-profit corporation and
shareholders alleging that regulations substantially burdened their exercise of religion). However,
in considering a free exercise of religion challenge in a different context,13 the Supreme Court has
observed:
Where the state conditions the receipt of an important benefit upon conduct
proscribed by a religious faith, or where it denies such a benefit because of
conduct mandated by a religious belief, thereby putting substantial pressure
on an adherent to modify his behavior and to violate his beliefs, a burden
upon religion exists. While the compulsion may be indirect, the infringement
upon free exercise is nonetheless substantial.
Thomas v. Review Bd. of Ind. Emp’t Sec. Div., 450 U.S. 707, 717-18 (1982).
In articulating the guidelines for when religious freedoms may be infringed, the Supreme
Court has also cautioned that: “every person cannot be shielded from all the burdens incident to
exercising every aspect of the right to practice religious beliefs. When followers of a particular sect
enter into commercial activity as a matter of choice, the limits they accept on their own conduct as
a matter of conscience and faith are not to be superimposed on the statutory schemes which are
binding on others in that activity.” United States v. Lee, 455 U.S. 252, 261 (1982).
13
When conducting an analysis under the RFRA, courts generally look to free exercise cases
decided prior to Employment Div., Dept. of Human Resources of Or. v. Smith, 494 U.S. 872 (1990),
for guidance, since those earlier cases employ the same standard as that codified by Congress in the
RFRA. See Adams v. Comm’r of Internal Revenue, 170 F.3d 173, 175-79 (3d Cir. 1999).
21
Neither has the Third Circuit applied the “substantial burden” standard to the Women’s
Preventive Healthcare regulations. Nevertheless, in examining the RFRA as applied to a different
statute, the Third Circuit has stated:
The RFRA does not explain what constitutes a “substantial burden” on the
exercise of religion. We have stated, however, that within the related context of
the Religious Land Use and Institutionalized Persons Act of 2000 (“RLUIPA”),
a “substantial burden” “exists where: 1) a follower is forced to choose between
following the precepts of his religion and forfeiting benefits otherwise generally
available to other inmates versus abandoning one of the precepts of his religion
in order to receive a benefit; OR [sic] 2) the government puts substantial
pressure on an adherent to substantially modify his behavior and to violate his
beliefs.”
Norwood v. Strada, 249 Fed. Appx. 269, 271 (3d Cir. 2007) (quoting Washington v. Klem, 497 F.3d
272, 280 (3d Cir. 2007)) (quotation marks omitted).
With this general precedential background from the Supreme Court and the Third Circuit in
mind, we note that the flurry of opinions recently issued in similar cases have all directly considered
the “substantial burden” test as applied to the Women’s Preventive Healthcare regulations. We
concur with the district court in the Western District of Oklahoma, which observed that, “[t]he
present circumstances require charting a course through the ‘treacherous terrain’ at the intersection
of the federal government’s duty to avoid imposing burdens on the individual’s practice of religion
and the protection of competing interests.” Hobby Lobby Stores, Inc. v. Sebelius, 870 F. Supp. 2d
1278, 1293 (W.D. Okla. 2012). That said, we believe that two opinions best explain and contrast
the differing views on this issue.
In Tyndale House Publishers, Inc. v. Sebelius, 2012 WL 5817323 (D.D.C. Nov. 16, 2012),
the district court granted a preliminary injunction, finding that the contraceptive coverage mandate
substantially burdened the plaintiffs’ religious exercise. In so holding, the court focused on the
22
financial pressure that the plaintiffs faced if they chose not to comply with the Women’s Preventive
Healthcare regulations. Id. at *12. The court concluded that this scenario creates a “Hobson’s
choice,” and “amply shows that the contraceptive coverage mandate substantially burdens the
plaintiffs’ religious exercise.” Id. In conducting its analysis, the Tyndale court primarily relied on
three cases. See Wisconsin v. Yoder, 406 U.S. 205, 218-19 (1972) (mandatory school attendance
law substantially burdens Amish faith); Sherbert v. Verner, 374 U.S. 398, 404 (1963) (substantial
burden to deny unemployment benefits to a worker fired for not working on her Sabbath); Thomas
v. Anchorage Equal Rights Comm’n, 165 F.3d 692, 714 (9th Cir. 1999) rev’d on other grounds en
banc, 220 F.3d 1134 (9th Cir. 2000) (law prohibiting discrimination in housing based on marital
status substantially burdened landlord’s religion).
Reaching a different result than Tyndale, the district court in Hobby Lobby, ruled that the
plaintiffs could not establish that the regulations created a substantial burden. 870 F. Supp. 2d at
1294-96. While recognizing that it is not within a court’s province to question a plaintiff’s religious
beliefs, the court emphasized that this precept does not mean that any burden on religion is
prohibited. Id. at 1293. Rather, the court stressed that the burden imposed by the law must be
substantial in order to violate the RFRA. Id. The Hobby Lobby court ultimately concluded that the
burden in question was too attenuated to be substantial. Id. at 1294.
Only a few weeks ago, the United States Court of Appeals for the Tenth Circuit affirmed the
district court’s reasoning in Hobby Lobby, agreeing that the plaintiffs could not establish a
substantial burden. The Tenth Circuit quoted the following statement by the district court with
approval:
[T]he particular burden of which plaintiffs complain is that funds, which plaintiffs
will contribute to a group health plan, might, after a series of independent decisions
23
by health care providers and patients covered by [the corporate] plan, subsidize
someone else’s participation in an activity that is condemned by plaintiff[s’]
religion. Such an indirect and attenuated relationship appears unlikely to establish
the necessary “substantial burden.”
Hobby Lobby Stores, Inc. v. Sebelius, No. 12-6294, slip op. at 7 (10th Cir. Dec. 20, 2012) (quoting
Hobby Lobby, 870 F. Supp. 2d at 1294) (emphasis in original). The Tenth Circuit went on to stress
that “other cases enforcing [the] RFRA have done so to protect a plaintiff’s own participation in (or
abstention from) a specific practice required (or condemned) by his religion.” Id. The court
concluded that the reach of the RFRA does not “encompass the independent conduct of third parties
with whom the plaintiffs have only a commercial relationship.” Id.
While we view the “substantial burden” issue to be a closer call than whether Conestoga,
acting as a corporation, can exercise religious rights, for the reasons that follow, we agree with the
reasoning expressed in the Hobby Lobby opinions, and find that the Hahns have not demonstrated
that these regulations constitute a substantial burden upon their religion.
First, we reject the notion expressed in Legatus v. Sebelius, 2012 WL 5359630 (E.D. Mich.
Oct. 31, 2012), that a plaintiff shows a burden to be substantial simply by claiming that it is. Id. at
*6 (citing United States v. Lee, 455 U.S. 252, 257 (1982); May v. Baldwin, 109 F.3d 557, 563 (9th
Cir. 1997) (where the court assumed that undoing dreadlocks imposed a substantial burden on
plaintiff’s exercise of religion)). While we wholeheartedly agree that “courts are not the arbiters of
scriptural interpretation,” Thomas v. Review Bd. of Ind. Emp’t Sec. Div., 450 U.S. 707, 718 (1981),
the RFRA still requires the court to determine whether the burden a law imposes on a plaintiff’s
stated religious belief is “substantial.” Essentially, the Legatus court bypassed a careful examination
of whether an objector’s stated burden was in fact substantial, and concluded that the substantial
24
burden test could be met simply because the objector proclaimed such a burden existed. This
reasoning presents a very slippery slope upon which we are not prepared to descend.14
If every plaintiff were permitted to unilaterally determine that a law burdened their religious
beliefs, and courts were required to assume that such burden was substantial, simply because the
plaintiff claimed that it was the case, then the standard expressed by Congress under the RFRA
would convert to an “any burden” standard. See Washington v. Klem, 497 F.3d 272, 279-81 (3d Cir.
2007) (arguing that finding a substantial burden whenever a government program has “any incidental
effect” on religious beliefs would “read ‘substantial’ out of the statute”). Aside from being contrary
to the plain language of the RFRA, this type of blind application would permit any religious objector
to refuse to comply with Congressional mandates based solely on stated religious objections, which
could include laws dealing with public and workplace safety, and discrimination. See Autocam Corp
v. Sebelius, No. 1:12-cv-1096, slip op. at 12-13 (W.D. Mich. Dec. 24, 2012) (opining that, if a court
cannot look beyond a plaintiff’s sincerely held assertion of religious based objections to determine
whether the regulations impose a substantial burden, every governmental regulation would be
susceptible to a “private veto”).
As noted previously, the Supreme Court in Lee recognized that free exercise protections are
not absolute, and that, while religious beliefs are to be accommodated, “there is a point at which
accommodations would ‘radically restrict the operating latitude of the legislature.’” Lee, 455 U.S.
at 260 (quoting Braunfeld v. Brown, 366 U.S. 599, 605 (1961)). The Hahns, in operating Conestoga,
14
The term “slippery slope,” a commonly used legal phrase, means “a course of action that
seems to lead inevitably from one action or result to another with unintended consequences.”
M E R R I A M - W E B S T E R
O N L I N E
D I C T I O N A R Y ,
http://www.merriam-webster.com/dictionary/slippery%20slope (last visited Jan. 9, 2013). This
definition aptly describes what would occur were we to follow the reasoning in Legatus.
25
understood that a commercial enterprise would be subject to numerous laws regulating commerce.
We agree with the district court in Hobby Lobby that, for those laws or regulations to violate the
RFRA, “there must be more than some burden on religious exercise. The burden must be
substantial.” Hobby Lobby, 870 F. Supp. at 1295.
With these principles in mind, we turn to the question of how the Women’s Preventive
Healthcare regulations burden the religious belief articulated by the Hahns. At the preliminary
injunction hearing, Plaintiffs’ counsel emphasized that the heart of Plaintiffs’ objections are focused
on the use of abortifacient contraceptives that can affect a fertilized egg. Counsel stated:
Because many of these drugs not only have some medical effect on the egg, but they
also affect the lining of a woman’s uterus and thus interfere with the implantation of
the egg, our concern and our clients’ deeply held religious concern, is that any
fertilized egg that’s prevented from implanting, that’s aborted the morning after or
a week after, any interruption of a woman’s lining of her uterus, any drug that would
do that, that would be involved in that, is what they are most sincerely and deeply
opposed to.
(Hrg. Tr., Jan. 4, 2013, pp. 67-68) (emphasis added). As this statement reflects, the core of the
Hahns’ religious objection is the effect of particular contraceptives on a fertilized egg. Given that
focus, it is worth emphasizing that the ultimate and deeply private choice to use an abortifacient
contraceptive rests not with the Hahns, but with Conestoga’s employees. The fact that Conestoga’s
employees are free to look outside of their insurance coverage and pay for and use any contraception,
including abortifacients, through the salary they receive from Conestoga, amply illustrates this point.
Autocam, No. 1:12-cv-1096, slip op. at 11 (noting that plaintiffs will be “paying indirectly for the
same services through wages” that their employees may choose to use “for contraception products
and services”).
We also find that any burden imposed by the regulations is too attenuated to be considered
26
substantial. A series of events must first occur before the actual use of an abortifacient would come
into play. These events include: the payment for insurance to a group health insurance plan that will
cover contraceptive services (and a wide range of other health care services); the abortifacients must
be made available to Conestoga employees through a pharmacy or other healthcare facility; and a
decision must be made by a Conestoga employee and her doctor, who may or may not choose to
avail themselves to these services.
The indirect nature of the burden15 imposed by the Women’s Preventive Healthcare
regulations also distinguishes this case from the precedent relied upon by the Tyndale court.16 For
example, in Yoder, the Amish plaintiffs were threatened with prosecution for their refusal to send
their children to school in violation of their religious beliefs. 406 U.S. at 218. In Sherbert, the
government denied the plaintiff’s unemployment benefits because she had been fired for refusing
to work on her Sabbath. 374 U.S. at 403-04. In Thomas, the plaintiffs were forced to comply with
a housing mandate based on marital status. 615 F.3d at 1137-38. And, in Gonzales, a case
mentioned only briefly in Tyndale, but heavily relied upon by Plaintiffs, prosecution was threatened
where members of a church received communion through the drinking of tea that contained a
15
Relying on the Supreme Court’s statement in Thomas v. Review Bd. of Ind. Emp’t Sec.
Div., that “[w]hile the compulsion may be indirect, the infringement upon free exercise is
nonetheless substantial,” 450 U.S. 707, 718 (1982), Plaintiffs strongly assert that the indirect nature
of the burden is not fatal to their claim. However, Plaintiffs’ misunderstand the principle asserted
in Thomas. While a compulsion may certainly be indirect and still constitute a substantial burden,
such as the denial of a benefit found in Thomas, “[t]o strike down, without the most critical scrutiny,
legislation which imposes only an indirect burden on the exercise of religion . . . would radically
restrict the operating latitude of the legislature.” Braunfeld v. Brown, 366 U.S. 599, 606 (1961).
16
The Tyndale court also considered it a “crucial distinction” that the plaintiff was selfinsured as this fact removed one of the “degrees” of separation. Tyndale, 2012 WL 5817323, at *13.
Here, Conestoga is not self-insured, thus creating further distance between the Women’s Preventive
Healthcare regulations and the possible use of abortifacients.
27
hallucinogen. 546 U.S. at 423. The common thread in these cases is that the government mandate
directly impacted the plaintiff’s participation in or abstention from a specific religious practice. That
is not the case here.
While compliance with the Women’s Preventive Healthcare regulations may impose some
burden upon the Hahns, any such burden on their ability to freely exercise their religion would be
indirect, unlike the statutes challenged in Yoder, Sherbert, Thomas and Gonzales. Importantly,
Plaintiffs remain free to make their own independent decisions about their use or non-use of different
forms of contraception, as that clearly remains a personal matter. See O’Brien v. U.S. Dept. of
Health & Human Svcs., 2012 WL 4481208, at *6 (Women’s Preventive Healthcare regulations do
not require “that plaintiffs alter their behavior in a manner that will directly and inevitably prevent
[them] from acting in accordance with their religious beliefs”).
Conestoga’s corporate form further separates the Hahns from the requirements of the ACA,
as the Women’s Preventive Healthcare regulations apply only to Conestoga, a secular corporation
without free exercise rights, not the Hahns. Whatever burden the Hahns may feel from being
involved with a for-profit corporation that provides health insurance that could possibly be used to
pay for contraceptives, that burden is simply too indirect to be considered substantial under the
RFRA.
Finally, we understand, and have carefully considered the fact that the Hahns may be less
focused on what Conestoga’s employees ultimately decide regarding the use of abortifacients, and
more concerned with the burden imposed on their religion by the requirement that they provide
insurance coverage that may be used to “pay for, facilitate, or otherwise support abortifacient drugs.”
(Am. Compl. ¶ 32.) We respect and fully appreciate this concern, and in no way dispute or denigrate
28
its legitimacy and its effect as a burden upon the Hahns’ religious beliefs. However, a line must be
drawn delineating when the burden on a plaintiff’s religious exercise becomes “substantial.” We
conclude that, here, that line does not extend to the speculative “conduct of third parties with whom
plaintiffs have only a commercial relationship.” Hobby Lobby, No. 12-6294, slip op. at 7 (10th Cir.
Dec. 20, 2012).
3.
The Establishment Clause
The “central purpose of the Establishment Clause [is] the purpose of ensuring governmental
neutrality in matters of religion.” Gillette v. United States, 401 U.S. 437, 449 (1971). Statutes
violate this central purpose if they either “prefer one religion over another,” Larson v. Valente, 456
U.S. 228, 246 (1982) (quoting Everson v. Bd. of Educ., 330 U.S. 1, 15 (1947)), or create an
“excessive government entanglement with religion,” Lemon v. Kurtzman, 403 U.S. 602, 613 (1971)
(quoting Walz v. Tax Comm’n, 397 U.S. 664, 674 (1970)).
Plaintiffs argue that the “religious employer” exemption does both. They argue that it
discriminates among religions because some organizations qualify for the exemption, while others
do not. Further, they claim that the decision about whether an organization qualifies for the
exemption involves excessive entanglement with religion because it requires the government to
“explore a religious organization’s purpose in impermissible ways.” (Pls.’ Br., p. 32.)
Defendants, on the other hand, argue that the Establishment Clause does not prohibit
provisions, such as the religious employer exemption, which accommodate religious organizations
by excusing their compliance with certain regulations. They assert that the Establishment Clause
only prohibits provisions that discriminate based upon religious denomination, not those that merely
distinguish between secular and religious organizations. Further, Defendants argue that the
29
exemption does not create excessive government entanglement with religion because the regulation
does not call for an analysis of an organization’s religious tenets. They assert that the intrusiveness
of the statute is particularly minimal in Plaintiffs’ case because Plaintiffs do not meet any of the
criteria for the religious exemption.
We agree with Defendants, and with the other courts that have considered the issue, that the
religious employer exemption does not violate the Establishment Clause. See Grote Indus., LLC v.
Sebelius, 2012 WL 6725905, at *8-9 (S.D. Ind. Dec. 27, 2012); O’Brien, 2012 WL 4481208, at *911. Although the exemption distinguishes between religious and secular organizations, it applies
equally to organizations of every faith, and does not favor any denomination over another. A statute
does not violate the Establishment Clause merely because it distinguishes between secular and
religious organizations. Corp. of the Presiding Bishop of the Church of Jesus Christ of Latter-Day
Saints v. Amos, 483 U.S. 327, 338 (1998) (“Where, as here, government acts with the proper
purpose of lifting a regulation that burdens the exercise of religion, we see no reason to require that
the exemption comes packaged with benefits to secular entities.”). Indeed, the Supreme Court has
repeatedly held that laws, such as the ACA’s religious employer exemption, which accommodate
religion, have a secular purpose and apply equally to all faiths, do not run afoul of the Establishment
Clause. See id. (exemption for religious organizations from Title VII’s prohibition on religious
discrimination in employment); see also Hosanna-Tabor Evangelical Lutheran Church & Sch. v.
E.E.O.C., 132 S.Ct. 694 (2012) (ministerial exception to Title VII’s employment discrimination
proscriptions); Cutter v. Wilkinson, 544 U.S. 709 (2005) (statute authorizing accommodations for
religious practices of institutionalized persons); Walz v. Tax Comm’n, 397 U.S. 664, 666 (1970)
(property tax exemption “to religious organizations for religious properties used solely for religious
30
worship”).
Neither does the religious employer exemption create excessive government entanglement
with religion. “The test [for excessive government entanglement] is inescapably one of degree.”
Walz, at 674. Some degree of involvement between government and religion is permissible, and
perhaps inevitable. Id. The court must consider “whether the involvement is excessive, and whether
it is a continuing one calling for official and continuing surveillance leading to an impermissible
degree of entanglement.” Id. at 675.
The “entanglement” created by the religious employer exemption is minimal. The regulation
requires a one-time assessment based upon minimally invasive criteria. Specifically, an organization
qualifies for an exemption if its purpose is the inculcation of religious values, it primarily employs
and serves persons who share the organization’s religious beliefs and it qualifies as a non-profit
organization under the Internal Revenue Code. 45 C.F.R. § 147.130(a)(1)(iv)(B). This inquiry is
far less invasive than other statutes the Supreme Court has previously upheld. See, e.g., Bowen v.
Kendrick, 487 U.S. 589 (1988) (regular monitoring of religious organizations’ use of federal funds
did not create excessive entanglement); Agostini v. Felton, 521 U.S. 203 (1997) (unannounced
monthly visits to monitor content taught by public employees in religious schools did not constitute
excessive entanglement). As applied specifically to Plaintiffs, the exemption is particularly
noninvasive since Conestoga does not even qualify as a non-profit organization. As such, the
government need not examine Plaintiffs’ religion at all to determine that they do not qualify for the
exemption.
The Supreme Court has consistently recognized that “[t]here is ample room under the
Establishment Clause for ‘benevolent neutrality which will permit religious exercise to exist without
31
sponsorship and without interference.’” Amos, 483 U.S. at 334 (quoting Walz, 397 U.S. at 669).
Where, as here, a statute provides for general religious accommodations while avoiding
discrimination among denominations and excessive government entanglement with religion, it is not
prohibited by the Establishment Clause.
4.
The Free Speech Clause
It is well established that the First Amendment, in addition to protecting the freedom to
speak, prohibits compelled speech. W. Va. State Bd. of Educ. v. Barnette, 319 US. 624, 642 (1943)
(law requiring recitation of the pledge of allegiance is unconstitutional). The right to be free from
compelled speech also encompasses the right to refuse to fund speech with which one disagrees.
United States v. United Foods, Inc., 533 U.S. 405, 410 (2001).
Plaintiffs argue that requiring them to purchase insurance that covers “patient education and
counseling for all women with reproductive capacity,” which may include advice about
abortifacients, improperly compels them to support speech with which they disagree. See HRSA
Guidelines, supra. Defendants offer two responses: (1) the regulation concerns the provision of a
health care plan, which is conduct rather than speech; and (2) the regulation is viewpoint neutral
because it is silent as to the content of the education and counseling, leaving that decision instead
to the patient and her doctor. Defendants emphasize that Plaintiffs remain free to discourage
employees from using contraceptives which they believe to be immoral.
We agree with Defendants that Plaintiffs’ Free Speech claim has little likelihood of success.17
17
We also note that, as with Plaintiffs’ Establishment Clause claim, every other court to
consider the issue has found that it is unlikely that the regulations violate the right to free speech.
See Grote Indus., LLC v. Sebelius, 2012 WL 6725905, at *9-10 (S.D. Ind. Dec. 27, 2012); Autocam
Corp. v. Sebelius, No. 12-cv-1096, slip op. at 14-15 (W.D. Mich. Dec. 24, 2012); O’Brien, 2012 WL
(continued...)
32
As the district court observed in Autocam, this claim is materially identical to the one rejected by
the Supreme Court in Rumsfeld v. Forum for Academic and Institutional Rights, 547 U.S. 47 (2006).
In that case, the Court upheld a statute that conditioned federal funding to law schools upon their
agreement to permit military recruiters on campus. The Court reasoned that the statute concerned
conduct that was “not inherently expressive . . . because the accommodation [of recruiters on
campus] does not sufficiently interfere with any message of the school.” Id. at 64. Importantly, the
statute neither compelled the law schools to convey their support for the recruiters, nor prohibited
them from expressing their disagreement. Id. at 64-65.
A similar analysis applies to the regulation challenged by Plaintiffs. The provision “affects
what [Plaintiffs] must do . . . not what they may or may not say.” Id. at 60 (emphasis in original).
The conduct it requires of Plaintiffs—the purchase of certain health care coverage—is not inherently
expressive. Purchasing a healthcare plan does not normally convey agreement with every medical
procedure covered by the plan, or every health care decision made by a patient and her doctor.
See Texas v. Johnson, 491 U.S. 397, 404 (1989) (conduct is inherently expressive when “[a]n intent
to convey a particularized message was present, and . . . the likelihood was great that the message
would be understood by those who viewed it.” (quoting Spence v. State of Wash., 418 U.S. 405,
410-11 (1974))). Further, the regulations do not interfere with Plaintiffs’ expression of their
opinions regarding contraceptives. Like the law schools in Rumsfeld, Plaintiffs “remain free under
the statute to express whatever views they may have on the [use of contraceptives].” Rumsfeld, 547
U.S. at 60.
17
(...continued)
4481208, at *11-13.
33
The regulation challenged by Plaintiffs is further distinguishable from those invalidated in
the Supreme Court’s compelled-speech cases because it does not advocate any particular viewpoint.
See, e.g., Barnette, 319 U.S. at 642; United Foods, 533 U.S. at 411 (the government may not
“compel a particular citizen, or a discrete group of citizens, to pay special subsidies for speech on
the side that it favors . . .”) (emphasis added). While the regulations mandate that employers provide
coverage for “education and counseling” for women of reproductive capacity, which may include
information about the contraceptives which Plaintiffs believe to be immoral, the regulations are
silent as to the content of the counseling given to a patient by her doctor. See HRSA Guidelines,
supra. The script that conversation follows is instead determined by the particular doctor and patient.
See O’Brien, 2012 WL 4481208, at *12. As such, it cannot be said that Plaintiffs are being required
to fund the advocacy of a viewpoint with which they disagree. Plaintiffs’ concern that a doctor may,
in some instances, provide advice to a patient that differs from the Hahns’ religious beliefs is not one
protected by the First Amendment.
IV.
CONCLUSION
Plaintiffs have been unable to demonstrate a likelihood of success on the merits of their First
Amendment and RFRA claims. As such, we need not decide whether Plaintiffs have demonstrated
a right to relief under the other three preliminary injunction factors. Because Plaintiffs have not met
their burden, Plaintiffs’ motion will be denied.
An appropriate Order follows.
34
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