ACA Birth-Control Mandate Burdens Closely Held Corporations, Supreme Court Says

WASHINGTON, D.C. — (Mealey’s) The Patient Protection and Affordable Care Act (ACA)’s contraceptive mandate substantially burdens closely held religious corporations’ religious rights, a divided U.S. Supreme Court held today (Burwell, Secretary of Health and Human Services, et al. v. Hobby Lobby Stores Inc., et al., No. 13-354, U.S. Sup.; Conestoga Woods Specialties Corp., et al. v. Burwell, Secretary of Health and Human Services, et al., No. 13-356, U.S. Sup.) [ subscribers may access Supreme Court briefs and an enhanced opinion for this case].

In dissent, Justice Ruth Bader Ginsburg called the majority opinion a “decision of startling breadth.”

Hobby Lobby Inc., Mardel Inc. and the companies’ owners David Green, Barbara Green, Steve Green, Mart Green and Darsee Lett sued the government in the U.S. District Court for the Western District of Oklahoma, seeking to enjoin enforcement of the ACA’s contraceptive mandate.  Under the ACA, all group health plans and health insurance issuers that offer nongrandfathered group or individual health coverage are required to provide coverage for certain preventive services without cost sharing, including for the full range of U.S. Food and Drug Administration-approved contraceptive methods, sterilization procedures and patient education and counseling for women with reproductive capacity.  Companies that don’t provide coverage face fines.

The District Court denied the plaintiffs’ motion for judgment.  The plaintiffs appealed, and a majority of the 10th Circuit U.S. Court of Appeals held that Hobby Lobby and Mardel have standing to sue and that the Anti-Injunction Act (AIA) does not apply to the case.  As to the merits, the majority held that the District Court erred in concluding that Hobby Lobby and Mardel had not demonstrated a likelihood of success of their Religious Freedom Restoration Act (RFRA) claim.  The majority also held that Hobby Lobby and Mardel satisfied the irreparable harm prong for the preliminary injunction standard.  The District Court, however, did not consider all the factors required for a preliminary injunction.  The court remanded the case with instructions for the District Court to address all required factors.  Upon remand, the District Court granted the injunction.

In a separate action, Norman Hahn, Elizabeth Hahn, Norman Lemar Hahn, Anthony H. Hahn and Kevin Hahn and Conestoga Wood Specialties Corp. sued the government in the U.S. District Court for the Eastern District of Pennsylvania.  In January 2013, the District Court denied the plaintiffs’ request for a preliminary injunction, and the Third Circuit U.S. Court of Appeals affirmed.

In both cases, the plaintiffs allege that the birth control mandate contained in the ACA violates their rights to freedom of religion, speech and association as secured by the First and Fifth Amendments to the U.S. Constitution and the RFRA.


Writing for the majority, Justice Samuel Anthony Alito Jr. said that the RFRA requires that the government provide closely held corporate objectors with the same accommodation available to nonprofit objectors.

Justice Alito said that “business practices compelled or limited by the tenets of a religious doctrine fall comfortably within the understanding of the ‘exercise of religion’ that this court set out in Employment Div., Dept. of Human Resources of Ore. v. Smith (494 U. S. 872, 877) [an enhanced version of this opinion is available to subscribers].”  The plain terms of the RFRA clearly reject the government’s arguments that for-profit corporations lose religious rights simply by seeking a profit, the majority said.

Justice Alito said the majority had “little trouble concluding” that the ACA’s contraceptive mandate substantially burdens the plaintiffs’ exercise of religion.  The plaintiffs face a choice between facilitating contraceptive coverage to which they object or dropping insurance coverage they believe they have a religious obligation to provide and paying heavy fines, Justice Alito said. 

Least Restrictive

Nor is the mandate the least restrictive method for the government to achieve its interests, the majority said, noting that the standard is “exceptionally demanding.”  The majority noted that the government already implemented a method for respecting nonprofits’ objections to the mandate and could itself provide for the cost of the contraceptives if it wished.

Justice Alito noted that the majority’s holding “is very specific.”  In rejecting Justice Ginsburg’s characterization of the ruling, Justice Alito said the ruling does not permit for-profit corporations or other commercial enterprises to avoid laws based on religious objections or to impose hardships on others and force the general public to pick up the costs.

Chief Justice John G. Roberts Jr. and Justices Antonin Scalia, Anthony M. Kennedy and Clarence Thomas joined in Justice Alito’s opinion.  Justice Kennedy filed a concurring opinion.  Justice Ginsburg filed a dissent in which Justice Sonia Sotomayor joined in full and Justices Stephen G. Breyer and Elena Kagan joined in part.  Justices Breyer and Kagan filed dissenting opinions.


In his concurrence, Justice Kennedy wrote that the ruling does not have the “breadth and sweep” that Justice Ginsburg describes.  Justice Kennedy wrote that the government simply has not shown that a less restrictive method of imposing the mandate does not exist.  The government may not burden one type of religious believer while freeing another from the same burden when it could offer both the same accommodation, Justice Kennedy said.


In her dissent, Justice Ginsburg wrote that the majority’s opinion allows, for the first time, commercial enterprises to take advantage of religious protections and opt out of any non-tax law as long as they have a religious-based objection and a less restrictive means of accomplishing the government’s goal exists. 

And such an alternative, the court suggests, there always will be whenever, in lieu of tolling an enterprise claiming a religion-based exemption, the government, i.e., the general public, can pick up the tab,” Justice Ginsburg said.

For-profit corporations do not draw on the same type of uniform beliefs as organizations traditionally protected by the RFRA, Justice Ginsburg said.

But even if the ACA substantially burdened the plaintiffs, the mandate furthers concrete and specific interests supported “by a wealth of empirical evidence,” Justice Ginsburg said.   Justice Ginsburg rejected the idea that the government could pay for the provision of such coverage, saying the ACA’s intent is to ensure employees faced as few logistical and administrative obstacles as possible.

Mark L. Rienzi and S. Kyle Duncan of The Beckett Fund for Religious Liberty in Washington and Paul Clement of Bancroft in Washington represent the plaintiffs in Hobby Lobby.  David A. Cortman of Alliance Defending Freedom in Lawrenceville, Ga., and Clement represent Conestoga Wood.  Donald B. Verrilli Jr. of the Department of Justice in Washington represents the government in both cases.

(This story is an excerpt from Mealey's Affordable Care Act Report.  For information on how to subscribe to this new monthly report, please contact your LexisNexis account representative or call 800-223-1940.)

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