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December 27, 2012

Appellate, Supreme courts dismiss commercial employers' request for injunction against contraception mandate

By Sarah E. Baumann, JD

Two closely held for-profit corporations and their owners did not demonstrate that the Patient Protection and Affordable Care Act's (PPACA's) (P.L. 111-148) requirement that they offer employees insurance plans that cover FDA-approved contraceptive devices substantially burdened their exercise of religion (Hobby Lobby Stores, Inc. v Sebelius, December 20, 2012). Because they were unlikely to succeed on the merits of their case, the Tenth Circuit Court of Appeals denied their motion for injunctive relief. Supreme Court Justice Sonia Sotomayor also denied the request for an injunction at the Supreme Court level.

Background. PPACA required most group health plans to cover preventive care for women, which, according to an HHS interim final rule, included contraceptives approved by the FDA. HHS created an exemption for certain religious employers and enacted a temporary safe harbor provision for others. However, no provision of law exempts commercial employers from the requirement. Hobby Lobby, Inc., a chain of arts and crafts stores; Mardel, Inc., a chain of Christian bookstores; and their owners (collectively Hobby Lobby) filed suit against the government, alleging that the provision required them to offer insurance plans covering morning-after and week-after pills, which they believe cause abortions, and substantially burdened their free exercise of religion, as prohibited by the Religious Freedom Restoration Act of 1993 (RFRA) (P.L. 103-141). They also filed a motion for an injunction asking the court to prevent the government from enforcing the rule, which will become effective for them on January 1, 2013, pending resolution of the lawsuit. A district court denied the motion for an injunction and Hobby Lobby filed a new motion for an injunction with the Tenth Circuit.

District court decision. The Tenth Circuit determined that Hobby Lobby did not demonstrate that it was substantially likely to succeed on the merits of its claim and denied the motion for injunction on that basis. The RFRA requires plaintiffs to demonstrate, among other requirements, that the law would substantially burden their exercise of religion. The Tenth Circuit agreed with the district court that Hobby Lobby's concern that, by funding health plans, it "might, after a series of independent decisions by health care providers and patients covered by [the corporate] plan, subsidize someone else's participation in an activity that its condemned by plaintiff[s'] religion," was too tenuous to create a substantial burden.

Supreme Court decision. Justice Sotomayor, the Circuit Justice for the Tenth Circuit, similarly denied Hobby Lobby's request for an injunction pursuant to the All Writs Act, which generally permits a Circuit Justice to issue injunctions when "legal rights at issue are indisputably clear." Justice Sotomayor determined that the rights were far from clear, noting that the Supreme Court had never addressed RFRA or free exercise claims involving similar corporations and the provision of employee benefits. Furthermore, lower courts reviewing similar requests for injunctive relief had issued different decisions and no court had yet granted permanent relief. Additionally, an injunction would not aid in jurisdiction. Justice Sotomayor noted, however, that Hobby Lobby could continue to litigate its case in district court and could eventually appeal an adverse decision to the Supreme Court.

The case number is 12-6294.

Eric Baxter, Stuart Kyle Duncan, Luke William Goodrich, Adele Auxier Keim, Mark Rienzi, Lori Halstead Windham (The Becket Fund for Religious Liberty), Derek Brandon Ensminger, Charles E. Geister, III (Hartzog, Conger, Cason & Neville) for Hobby Lobby Stores, Inc., Mardel, Inc., David Green, Barbara Green, Mart Green, Steve Green, Darsee Lett. Michelle Renee Bennett, Alisa Beth Klein, Mark B. Stern (U.S. Department of Justice) for Kathleen Sebelius, in her official capacity as Secretary of the United States Department of Health and Human Services; United States Department of Health and Human Services; Hilda Solis, Secretary of the United States Department of Labor; United States Department of Labor; Timothy Geithner, Secretary of the United States Department of the Treasury; United States Department of the Treasury.

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