Foothill Church v. Watanabe
2:15-cv-02165
E.D. Cal.Aug 25, 2022Background
- In Aug. 2014 DMHC sent letters to seven licensed health plans directing removal of plan language that limited or excluded coverage for abortion, explaining abortion is a Knox‑Keene “basic health care service.”
- Several plans complied; DMHC later approved at least one plan amendment permitting religious‑employer exceptions (limited to life‑threatening conditions and rape/incest) after plan submission and Office of Plan Licensing review.
- Three churches (Foothill Church, Calvary Chapel Chino Hills, Shepherd of the Hills) objected because their religious beliefs prohibit providing employee plans that cover elective abortion, including for rape/incest; they sought a religious exemption but did not request DMHC relief until 2018.
- DMHC’s position: its statutory exemption authority is exercised for plans/plan contracts, not for employers or individual plan customers; it will consider exemptions only if a plan submits amended contract language for approval.
- Procedural posture: case survived Ninth Circuit remand in light of Fulton; on cross‑motions for summary judgment, the district court granted summary judgment for the churches on their Free Exercise claim and for the State on the Equal Protection claim; parties ordered to brief remedies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether DMHC’s refusal to consider exemption requests from religious employers (rather than plans) violates Free Exercise by creating a mechanism for individualized exemptions and thus triggers strict scrutiny | DMHC’s statutory framework allows individualized exemptions for plans; refusing to entertain requests from religious employers while permitting plan exemptions is a system of individualized exceptions and burdens plaintiffs’ religion | DMHC contends it only has authority over plans/plan contracts and may permissibly limit exemption requests to plans to protect regulatory process and enrollees | Court: Because the statutory regime permits individualized exemptions and the director conceded strict scrutiny applies, DMHC’s categorical refusal to consider employer‑originated requests fails strict scrutiny and violates Free Exercise |
| Whether the State’s asserted interests (preventing a flood of requests and protecting enrollees/third parties) are sufficiently compelling and narrowly tailored to justify denying exemptions | Plaintiffs: the asserted harms are speculative and less burdensome alternatives exist (e.g., limiting requests to certain employers, requiring plan participation) | State: needs a bright‑line rule to avoid administrative overload and third‑party harms and to respect its statutory jurisdiction over plans | Court: the interests are not shown to be sufficiently compelling for this specific denial; the categorical rule is not narrowly tailored; alternative, less restrictive measures available |
| Whether plaintiffs have an Equal Protection claim showing discriminatory intent | Plaintiffs: DMHC letters and enforcement harmed religious employers; disparate treatment alleged | State: DMHC treated plans, not purchasers; it would consider equivalent exemptions if submitted by plans; no evidence of discriminatory purpose | Court: Plaintiffs failed to produce evidence of discriminatory intent or that they were treated differently than similarly situated entities; Equal Protection claim denied |
| Whether the church autonomy doctrine requires separate resolution or alters relief | Plaintiffs/amicus: mandate interferes with church autonomy and internal governance | State: not separately adjudicated | Court: did not reach the church‑autonomy claim because Free Exercise vindication provides the necessary relief |
Key Cases Cited
- Fulton v. City of Philadelphia, 141 S. Ct. 1868 (2021) (a law with a mechanism for individualized exemptions is not generally applicable and triggers strict scrutiny when it burdens religious exercise)
- Emp’t Div. v. Smith, 494 U.S. 872 (1990) (neutral law of general applicability does not violate Free Exercise)
- Church of Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520 (1993) (laws targeting religion are subject to strict scrutiny)
- Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682 (2014) (RFRA/Free Exercise analysis requires narrow tailoring and consideration of less restrictive means when substantial burdens exist)
- Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418 (2006) (courts must carefully scrutinize asserted harms of granting specific religious exemptions)
- Vill. of Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252 (1977) (tests for inferring discriminatory intent under Equal Protection)
- City of Cleburne v. Cleburne Living Ctr., 473 U.S. 432 (1985) (equal protection principle that similarly situated persons must be treated alike)
- Missionary Guadalupanas of Holy Spirit, Inc. v. Rouillard, 38 Cal. App. 5th 421 (2019) (California Court of Appeal: abortion services are included among Knox‑Keene’s basic health care services)