Gilardi v. United States Department of Health & Human Services
733 F.3d 1208
D.C. Cir.2013Background
- Freshway Foods and Freshway Logistics are closely-held Subchapter S corporations owned by Francis and Philip Gilardi.
- They operate a self-insured health plan and had religious objections to contraception, sterilization, and abortion.
- The Affordable Care Act contraceptive mandate required coverage for FDA-approved contraceptives with no cost-sharing, triggering RFRA challenges by the Gilardis and their companies.
- The district court denied their preliminary-injunction request; this appeal addressed whether RFRA, Free Exercise, and related claims are likely to succeed on the merits.
- The majority found a substantial burden on the Gilardis’ religious exercise and concluded the district court erred in denying a preliminary injunction against the mandate for the individuals, while upholding denial for the Freshway companies.
- The concurrence by Judge Edwards and the separate concurrence/dissent by Judge Edwards and Judge Brown frame standing, burden, and the government’s interests under RFRA and strict scrutiny.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who may challenge RFRA here? | Gilardis have standing; Freshway lacks standing. | Freshway (corporation) cannot pursue RFRA; only owners may. | Gilardis have standing; Freshway lacks standing. |
| Do corporations enjoy free-exercise protection under RFRA or the First Amendment? | Corporations (even secular) may exercise religion; Townley supports pass-through standing. | Corporations generally do not exercise religion; rights belong to individuals. | Court declines full corporate free-exercise right; analyzes ownership path to standing and burden on owners. |
| Did the contraceptive mandate substantially burden the Gilardis' religious exercise? | Mandate coerces endorsement of contraception by owners through the plan; substantial burden under RFRA. | Mandate is neutral and generally applicable; no personal burden on owners. | Yes, substantial burden established for RFRA analysis as applied to owners. |
| If a substantial burden exists, does the mandate survive strict scrutiny? | The mandate is not narrowly tailored; multiple exemptions show underinclusiveness. | Mandate serves compelling interests; exemptions are limited to preserve uniformity and adminstrability. | Mandate fails strict scrutiny; not least restrictive means; underinclusive. |
| Would RFRA permit a religious exemption for the Gilardis given the statutory scheme and alternatives? | RFRA permits exemptions via Sherbert/Yoder framework; exclusion would be workable with narrowing. | Uniform applicability required; exemptions would undermine the ACA framework and public health goals. | Court finds no workable, narrow tailoring; exemptions would threaten uniform scheme. |
Key Cases Cited
- Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114 (10th Cir. 2013) (corporate free-exercise and RFRA discussion guiding corporate-standing theory)
- Gonzales v. O Centro Espirita Beneficente União do Vegetal, 546 U.S. 418 (U.S. 2006) (RFRA requires balancing compelling interests; exemptions may be warranted)
- Employment Division, Department of Human Resources of Oregon v. Smith, 494 U.S. 872 (U.S. 1990) (Smith vitiated compelling-interest framework; RFRA repeals that effect)
- Sherbert v. Verner, 374 U.S. 398 (U.S. 1963) (establishes compelling-interest test for substantial burdens on religion)
- Lyng v. Northwest Indian Cemetery Protective Association, 485 U.S. 439 (U.S. 1988) (illustrates balancing government interests with religious exercise)
- United States v. Lee, 455 U.S. 252 (U.S. 1982) (limits on religious exemptions in commercial activity; uniform application)
- Rumsfeld v. Forum for Academic & Institutional Rights, Inc., 547 U.S. 47 (U.S. 2006) (government messaging and compelled associations signals in public programs)