DENVER - (Mealey's) A Colorado federal judge on July 27 granted a preliminary injunction in favor of a for-profit secular employer that will prevent the federal government from enforcing a mandate contained in the Patient Protection and Affordable Care Act (PPACA) that requires most employers to provide birth control coverage as part of their employee health plans (William Newland, et al. v. Kathleen Sebelius, in her official capacity as Secretary of the United States Department of Health and Human Services, et al., No. 12-12-1123, D. Colo.; 2012 U.S. Dist. LEXIS 104835).
(Opinion available. Document #31-120801-017Z.)
Hercules Industries Inc. manufactures and distributes heating, ventilation and air conditioning products and equipment. The company is owned by siblings William Newland, Paul Newland, James Newland and Christine Ketterhagen. William Newland serves as president and his son, Andrew Newland, serves as vice president.
Although the company is a for-profit secular employer, the Newlands say they adhere to the Catholic denomination of the Christian faith, and "they seek to run Hercules in a manner that reflects their sincerely held religious beliefs." The company maintains a self-insured group plan for its employees, but because the Catholic Church condemns the use of contraception, the self-insured plan does not include abortifacient drugs, contraception or sterilization.
As part of the PPACA signed into law in March 2010, the act requires group health plans to provide no-cost coverage for preventative care and screening for women, including services for birth control and sterilization. The Hercules plan is not "grandfathered" under the PPACA, and because it is a secular, for-profit corporation, Hercules does not qualify as a "religious employer" within the meaning of the preventative care regulations. The company's owners say the company also cannot seek refuge in the enforcement "safe harbor," so the company will be required to either include no-cost coverage for contraception in its group health plan or face monetary penalties.
In April, Hercules and the Newlands sued Kathleen Sebelius in her official capacity as secretary of the U.S. Department of Health and Human Services (DHHS), Hilda Solis in her official capacity as secretary of the U.S. Department of Labor (DOL), Timothy Geithner in his official capacity as secretary of the U.S. Department of Treasury (DOT) and the DHHS, DOL and DOT in the U.S. District Court for the District of Denver for violations of the Religious Freedom Restoration Act (RFRA), the free exercise clause, the establishment clause and the free speech clause contained in the First Amendment, the due process clause contained in the Fifth Amendment and the Administrative Procedure Act.
The plaintiffs filed a motion seeking a preliminary injunction, which the defendants opposed.
In granting the plaintiffs' motion, Judge John L. Kane said the plaintiffs established that they would suffer irreparable harm without the injunction.
Per terms of the mandate, coverage must begin on the start date of the first plan year following the effective date of the regulations, Nov. 1, 2012. Contrary to the defendants' contention that the harm in the future is not sufficiently imminent to justify injunctive relief, "[i]n light of the extensive planning involved in preparing and providing its employee insurance plan, and the uncertainty that this matter will be resolved before the coverage effective date, Plaintiffs have adequately established that they will suffer imminent irreparable harm absent injunctive relief," Judge Kane said.
Further, the public interest in free exercise of religion favors an injunction because as the 10th Circuit U.S. Court of Appeals said in O Centro Espirita Beneficente Uniao do Vegetal v. Ashcroft (389 F. 3e 973, 975 at 1010), "there is a strong public interest in the free exercise of religion even where that interest may conflict with [another statutory scheme]," he said.
Judge Kane said because the plaintiffs' RFRA challenge provided adequate grounds for the requested injunctive relief, he would decline to address the plaintiffs' other challenges.
In determining whether the plaintiffs have a likelihood of succeeding on the merits, Judge Kane said he must consider whether the plaintiffs demonstrated that the preventative care coverage mandate substantially burdens their free exercise of religion. If it does, Judge Kane said, he then must consider whether the government has demonstrated that the preventative care mandate is the least restrictive means to achieve a compelling interest.
It is well-settled that the promotion of public health is a compelling government interest, but the government has exempted more than 190 million health plan participants and beneficiaries from the preventative care coverage mandate; such a "massive exemption completely undermines any compelling interest in applying the preventative care coverage mandate to Plaintiffs," Judge Kane said.
Further, the government did not demonstrate that there are no feasible, less-restrictive alternatives, Judge Kane said.
The plaintiffs offered one alternative - the free provision of birth control by the government - and the defendants failed to make a showing of impracticality sufficient to refute the adequacy of the proposed alternative or that the proposed alternative would not advance the government's compelling interest in providing contraceptive services to women with no cost sharing, Judge Kane said.
Only Plaintiffs Affected
In granting the injunction, Judge Kane said that "[t]he government's arguments are largely premised upon a fear that granting an exemption to Plaintiffs will necessarily require granting similar injunction to all other for-profit, secular corporations voicing religious objections to the preventative care mandate. This injunction is, however, premised upon the alleged substantial burden on Plaintiffs' free exercise of religion - not to any alleged burden on any other party's free exercise of religion. It does not enjoin enforcement of the preventative care coverage mandate against any other party."
The injunction is to expire three months from entry of an order on the merits of the plaintiffs' challenge.
David Andrew Cortman of Alliance Defending Freedom-Lawrenceville in Lawrenceville, Ga., Erik William Stanley and Kevin H. Theriot of Alliance Defending Freedom-Leawood in Leawood, Ky., Gregory S. Baylor, Matthew Scott Bowman and Steven H. Aden of Alliance Defending Freedom-DC in Washington, D.C., and Michael Jeffrey Norton of Alliance Defending Freedom-Greenwood Village in Greenwood Village, Colo., represent the plaintiffs. Michelle Renee Bennett of the U.S. Department of Justice in Washington represents the defendants.
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