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Court Rejects Pa. Business' Challenge to Contraceptive Coverage Rules

Court Rejects Pa. Business' Challenge to Contraceptive Coverage Rules

July 29, 2013 — A divided appeals court on Friday rejected a challenge from a Mennonite-owned, secular business to the federal contraceptive coverage rules, Reuters reports. According to Reuters, the decision creates a division among federal appeals courts regarding compliance with the rules, which increases the likelihood that the issue will reach the Supreme Court (Stempel, Retuers, 7/26).

In December 2012, Conestoga Wood Specialties owner Norman Hahn and his family filed for a temporary injunction against the rules, explaining that they object to covering some forms of contraception, such as emergency contraception, that they believe cause abortion.

That same month, U.S. District Court Judge Mitchell Goldberg granted the company a 14-day temporary restraining order and barred federal officials from imposing fines. According to the plaintiffs, the 950-employee company would incur fines of $95,000 per day for violating the rules. They also argued that corporations' free-speech rights -- recognized in the Supreme Court's 2010 Citizens United decision -- should include religious rights.

In January, Goldberg denied the request for a temporary injunction, ruling that expanding free-speech rights recognized in Citizens United to include religious rights was a "significant leap" that he was not prepared to take (Women's Health Policy Report, 1/15).

Ruling Details

The 3rd U.S. Circuit Court of Appeals in a 2-1 ruling determined that "for-profit, secular corporations cannot engage in religious exercise" (Reuters, 7/26). The judges acknowledged that the court has repeatedly recognized free speech rights of corporations. However, they said there is a "total absence of caselaw" supporting the argument that corporations are similarly protected by the Constitution's guarantee of free exercise of religion (Barnes, Washington Post, 7/26).

"We simply conclude that the law has long recognized the distinction between the owners of a corporation and the corporation itself," the judges continued, adding, "A holding to the contrary -- that a for-profit corporation can engage in religious exercise -- would eviscerate the fundamental principle that a corporation is a legally distinct entity from its owners" (Bunis, CQ HealthBeat, 7/26).

The judges also argued that the contraceptive coverage mandate places compliance "squarely on Conestoga" and "does not impose any requirements on the Hahns." They added that the penalty for noncompliance similarly would "be brought against Conestoga, not the Hahns" (Baker, "Healthwatch," The Hill, 7/26).

However, Judge Kent Jordan in a dissenting opinion wrote that if there was a lack of case law substantiating corporations' religious rights, "that is in all probability because there has never before been a government policy that could be perceived as intruding on religious liberty as aggressively as the mandate" (Washington Post, 7/26). Adding that the ruling represents a "cramped and confused understanding" of the courts' protection of religious rights, Jordan explained that the "[g]overnment should be enjoined from telling sincere believers in the sanctity of life to put their consciences aside and support other people's reproductive choices" (Reuters, 7/26).

Court Division Increases Likelihood of Supreme Court Review

The varying opinions among district and circuit courts about whether private business owners can rightfully challenge the federal contraceptive rules "make it almost certain" that the Supreme Court ultimately will resolve the issue, according to CQ HealthBeat (CQ HealthBeat, 7/26).

Specifically, the 3rd Circuit Court's interpretation of Citizens United put it directly at odds with the 10th U.S. Circuit Court of Appeals, which on June 27 argued that Hobby Lobby has the right to sometimes assert religious rights (Reuters, 7/26).

Kyle Duncan -- general counsel of the Beckett Fund for Religious Liberty, which is active in opposing the contraceptive coverage rules -- and Marcia Greenberger of the National Women's Law Center both agreed that the issue is headed for a Supreme Court review (Washington Post, 7/26).

Plaintiff, ACLU Comment

Charles Proctor -- the Hahn's lead counsel -- in a news release said, "As government grows and pervades every detail of life, we risk what happened in this case: the government telling citizens that they need to subsidize something as controversial as drugs and devices that can result in the death of a new human life. Government must know that this creates a moral dilemma for millions of religious employers like the Hahn family."

Meanwhile, Louise Melling -- deputy legal director at the American Civil Liberties Union, which filed briefs in the case -- in a statement said, "While the Constitution ensures that we are entitled to our religious beliefs, it also safeguards against having someone else's beliefs imposed upon us." She added, "Businesses cannot deny women coverage for something as fundamental as contraception by using the owners' personal beliefs as an excuse for discrimination" (CQ HealthBeat, 7/26).