Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
As previously discussed, two Oklahoma corporations, Hobby Lobby Stores Inc. and Mardel Inc., have challenged certain birth control mandates in the Patient Protection and Affordable Care Act (ACA). The owners of the corporations are devoutly religious Christians, and contend that the mandates require them to violate their religious beliefs by providing employees with healthcare plans that cover several post-fertilization methods of birth control. Initially, the corporations sought a preliminary injunction precluding the government from enforcing the mandates, but were denied by the U.S. District Court for the Western District of Oklahoma.
The corporations, however, won a significant victory at the U.S. Court of Appeals for the Tenth Circuit Court on June 27, 2013. In that ruling, an en banc panel of the court of appeals held that (1) the corporations, even though they were for-profit, possessed standing to challenge the mandates regarding post-fertilization methods of birth control; (2) the corporations demonstrated that irreparable harm would occur if they were required to follow the mandates; and (3) the corporations were likely to succeed on the merits under the Religious Freedom Restoration Act (RFRA), which prevents the federal government from imposing a substantial burden on religious practices without a compelling state interest pursued through narrow means. The Tenth Circuit remanded the case to the district court for an analysis of two other factors to determine whether to issue a preliminary injunction: the balance of the equities between the parties, and the public’s interest in whether an injunction should be granted.
The district court heard oral argument on July 19, 2013, regarding these factors, and issued a short order granting the corporations’ request for a preliminary injunction. The court noted that the equities favored the corporations, given their “newly recognized religious rights as for-profit corporations” would be impaired, whereas the corporations’ employees would have several other pre-fertilization birth control options available to them. Moreover, the court found that because the ACA exempts hundreds of non-profit employers from the mandates entirely, the government’s argument that the mandates must be enforced against Hobby Lobby and Mardel was unavailing.
Next, the court noted that the public interest was best served by granting an injunction, given litigation is ongoing and that “preserving the status quo” was necessary to give the plaintiffs a full and fair opportunity to litigate their claims. The court wrote:
Given the importance of the interests at stake in this case, the fact that the ACA’s requirements raise new and substantial questions of law and public policy, and that substantial litigation as to the mandate at issue here is ongoing around the country, the court concludes there is an overriding public interest in the resolution of the legal issues raised by the mandate before Hobby Lobby and Mardel are exposed to the substantial penalties that are potentially applicable.
Notably, the injunction now gives plaintiffs the opportunity to continue to pursue their claims, absent the possibility of being subject to substantial fines for non-compliance with the ACA.
Last, the district court, under an agreement between the parties, stayed further proceedings until October 1, 2013 to give the government an opportunity to appeal the entry of the injunction. That appeal would likely go before a three-judge panel that would be bound by the court of appeals’ earlier ruling on the first two preliminary injunction factors, but could reverse the district court with respect to the second two factors. In turn, that decision would also likely be appealed, regardless of the outcome, to the U.S. Supreme Court.
While the recent order is certainly a victory for Hobby Lobby and Mardel, the issue of whether the ACA’s birth control mandates will ultimately apply to devoutly religious employers is far from settled.
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