From my post at The Incidental Economist:
The Gilardi v. HHS decision is out today (on scribd), blocking the PPACA contraception mandate for the plaintiffs. Two brothers own Freshway Foods and a related company that offer a self-insured health plan to their 400 employees. For non-grandfathered plans with an annual enrollment period starting on or after September 23, 2010, PPACA required zero deductibles and cost sharing for a package of preventative services. One component of that package includes FDA-approved contraception. The Gilardi brothers claimed this requirement violates the Religious Freedom Restoration Act (RFFA). A majority of the Court agreed, sending the case back to the District Court for a reconsideration of the injunction.
This case raises an interesting point about pluralism in our society. When do we get to abstain from generally-applicable laws that violate our moral beliefs? Even more attenuated, when do we get to opt out because other people’s actions violate our beliefs? Can the Freshway companies decide to drop hospice care for their employees as violating their
Catholic beliefs? Could a Muslim employer prevent employees from bringing home the bacon with their paychecks? Could a Baptist employer fire employees for watching porn at home on HBO?
Judge Brown wrote for a 3-judge panel on the DC Court of Appeals. It is a complex 71-page split decision, with the justices disagreeing on several issues. On one level, it is not entirely surprising, as the Court had previously granted a temporary injunction for the Gilardi brothers.
The brothers, as Catholics, do not want to cover contraception, sterilization or abortion. The first question is whether the Freshway companies have free exercise rights. The majority looked to cases where religious corporations pursued free exercise rights as a community, and noted that Citizens United recognized corporate free speech, “separated only by a semicolon” from the religious clauses. But mere proximity was not enough to find that corporations can worship God:
When it comes to the free exercise of religion, however, the Court has only indicated that people and churches worship. As for secular corporations, the Court has been all but silent.
Nor did the Court permit the Freshway companies to exercise the religious rights of their owners, despite the moral implications of complicity.
To this point, the US Government is winning this case handily (or 2-1, as Randolph would leave the corporate worship issue undecided at this point). Their luck turns in the next section, where the majority grants standing to the Gilardi brothers themselves, suing in a derivative capacity. I must confess that this is the portion of the opinion that I understand the least, even though I teach derivative actions. This is not the sort of “direct” injury that is commonly recognized as the counterpart to derivative actions. The dissenting opinion by Judge Edwards agrees in this particular result, but with substantially clearer analysis based on Article III. They would grant contraception mandate standing to any closely-held company with religious owners. On this result, all 3 Judges agree.
According to the majority, the injury is being owning a company that is forced to “fill the basket of goods and services that constitute a healthcare plan” with contraception and sterilization. The majority analogizes this to compulsory church taxes and forcing the Amish to send their children to secular schools.
Given this framework, the majority then finds that the contraception mandate fails the strict scrutiny standard under RFRA. The employees don’t have a compelling interest in contraception (so says the majority) and the mandate is not the “least restrictive” means to achieve that objective. The various compromises by the Administration (grandfathered plans, small employers, religious employers) were cited as evidence that the government lacked a consistent approach to contraception. There is a lesson here.
One bright point for the Administration: the Court assumes that the contraception provisions are severable when it notes that “the comprehensive sweep of the Affordable Care Act will remain intact with or without the mandate.’
The dissent by Judge Edwards is longer than the main opinion. Judge Edwards agrees that the Freshway companies lack standing but agrees that the Gilardi brothers have standing under RFFA. Edwards allow their claim to be heard, but finds it “specious.”
The Supreme Court has never applied the Free Exercise Clause to find a substantial burden on a plaintiff’s religious exercise where the plaintiff is not himself required to take or forgo action that violates his religious beliefs, but is merely required to take action that might enable other people to do things that are at odds with the plaintiff’s religious beliefs.
Edward’s dissent focuses on the Supreme Court decisions that were not overthrown by RFFA, finding a more nuanced application of free exercise than the majority. The dissent also found that the contraception mandate did not substantially burden the brothers – they are not required to use contraception themselves, but only to provide insurance that might be used by others (employees and their dependents) for contraception. The government isn’t forcing the Amish to go to school. See my discussion on pluralism above.
The case attracted an unusual number of amicus briefs: 9 groups opposed the ACA contraception rule and 7 supported it. As a side note, this is the court where Majority Leader Reed is threatening the nuclear option if Republicans continue to block the President’s nominations from proceeding to the floor.