Lead Opinion
OPINION
Appellants Conestoga Wood Specialties Corporation (“Conestoga”), Norman Hahn, Elizabeth Hahn, Norman Lemar Hahn, Anthony Hahn, and Kevin Hahn (collectively, “the Hahns”) appeal from an order of the District Court denying their motion for a preliminary injunction. In their Complaint, Appellants allege that regulations promulgated by the Department of Health and Human Services (“HHS”), which require group health plans and health insurance issuers to provide coverage for contraceptives, violate the Religious Freedom Restoration Act, 42 U.S.C. § 2000bb (“RFRA”) and the Free Exercise Clause of the First Amendment of the United States Constitution.
Before we can even reach the merits of the First Amendment and RFRA claims, we must consider a threshold issue: whether a for-profit, secular corporation is able to engage in religious exercise under the Free Exercise Clause of the First Amendment and the RFRA. As we conclude that for-profit, secular corporations cannot engage in religious exercise, we will affirm the order of the District Court.
I.
In 2010, Congress passed the Patient Protection and Affordable Care Act, Pub.L. No. 111-148 (March 23, 2010) (“ACA”). The ACA requires' employers with fifty or more employees to provide their employees with a minimum level of health insurance. The ACA requires nonexempt group plans to provide coverage without cost-sharing for preventative care and screening for women in accordance with guidelines created by the Health Resources and Services Administration (“HRSA”), a subagency of HHS. See 42 U.S.C. § 300gg-13(a)(4).
The HRSA delegated the creation of guidelines on this issue to the Institute of Medicine (“IOM”). The IOM recommended that the HRSA adopt guidelines that require non-exempt group plans to cover “[a]ll Food and Drug Administration approved contraceptive methods, sterilization procedures, and patient education and counseling for women with reproductive capacity.”
II.
The Hahns own 100 percent of the voting shares of .Conestoga. Conestoga is a Pennsylvania for-profit corporation that manufactures wood cabinets and has 950 employees. The Hahns practice the Mennonite religion. According to their Amended Complaint, the Mennonite Church “teaches that taking of life which
III.
We review a district court’s denial of a preliminary injunction for abuse of discretion, but review the underlying factual findings for clear error and questions of law de novo. Am. Express Travel Related Servs. v. Sidamon-Eristoff,
“A party seeking a preliminary injunction must show: (1) a likelihood of success oil the merits; (2) that it will suffer irreparable harm if the injunction is denied; (3) that granting preliminary relief will not result in even greater harm to the nonmoving party; and (4) that the public interest favors such relief.” Kos Pharms., Inc. v. Andrx Corp.,
IV.
A.
First, we turn to Conestoga’s claims under the First Amendment. Under the First Amendment, “Congress shall make no law respecting the establishment of religion or prohibiting the free exercise thereof.” The threshold question for this
In Citizens United, the Supreme Court held that “the Government may not suppress political speech on the basis of the speaker’s corporate identity,” and it accordingly struck down statutory restrictions on corporate independent expenditure. Citizens United v. Fed. Election Comm’n, 558 U.S. 310, 365,
While “a corporation is ‘an artificial being, invisible, intangible, and existing only in contemplation of law,’ ... a wide variety of constitutional rights may be asserted by corporations.” Consol. Edison Co. of N.Y., Inc. v. Pataki
Corporate identity has been determinative in several decisions denying corporations certain constitutional rights, such as the privilege against compulsory self-incrimination, Wilson v. United States, 221 U.S. 361, 382-386,31 S.Ct. 538 , 545-546,55 L.Ed. 771 (1911), or equality with individuals in the enjoyment of a right to privacy, California Bankers Assn. v. Shultz,416 U.S. 21 , 65-67,94 S.Ct. 1494 , 1519-1520,39 L.Ed.2d 812 (1974); United States v. Morton Salt Co.,338 U.S. 632 , 651-652,70 S.Ct. 357 , 368-369,94 L.Ed. 401 (1950), but this is not because the States are free to define the rights of their creatures without constitutional limit. Otherwise, corporations could be denied the protection of all constitutional guarantees, including due process and the equal protection of the laws. Certain “purely personal” guarantees, such as the privilege against compulsory self-incrimination, are unavailable to corporations and other organizations because the “historic function” of the particular guarantee has been limited to the protection of individuals. United States v. White,322 U.S. 694 , 698-701,64 S.Ct. 1248 , 1251-1252,88 L.Ed. 1542 (1944). Whether or not a particular guarantee is “purely personal” or - is unavailable to corporations for some other reason depends on the nature, history, and purpose of the particular constitutional provision.
Id. Thus, we must consider whether the Free Exercise Clause has historically pro
In Citizens United, the Supreme Court pointed out that it has “recognized that First Amendment protection extends to corporations.” Citizens United,
We thus find no support in the First or Fourteenth Amendment, or in the decisions of this Court, for the proposition that speech that otherwise would be within the protection of the First Amendment loses that protection simply because , its source is a' corporation that cannot prove, to the satisfaction of a court, a material effect on its business or property. [That proposition] amounts to an impermissible legislative prohibition of speech based on the identity of the interests that spokesmen may represent in public debate over controversial issues and a requirement that the speaker have a sufficiently great interest in the subject to justify communication.
Bellotti,
Citizens United is thus grounded in the notion that the Court has a long history of protecting corporations’ rights to free speech. Citizens United overruled Austin v. Michigan Chamber of Commerce,
We must consider the history of the Free Exercise Clause and determine whether there is a similar history of courts providing free exercise protection to corporations. We conclude that there is not. In fact, we are not aware of any case preceding the commencement of litigation about the Mandate, in which a for-profit, secular corporation was itself found to have free exercise rights.
After all, as the Supreme Court observed in Schempp, the purpose of the Free Exercise Clause “is to secure religious liberty in the individual by prohibiting any invasions thereof by civil authority.” Sch. Dist. of Abington Twp. v. Schempp,
We are unable to determine that the “nature, history, and purpose” of the Free Exercise Clause supports the conclusion that for-profit, secular corporations are protected under this particular constitutional provision. See Bellotti,
General business corporations do not, separate and apart from the actions or belief systems of their individual owners or employees, exercise religion. They do not pray, worship, observe sacraments or take other religiously-motivated actions separate and apart from the intention and direction of their individual actors.
Hobby Lobby Stores, Inc. v. Sebelius,
In urging us to hold that for-profit, secular corporations can exercise religion, Appellants, as well as the dissent, cite to cases in which courts have ruled in favor of free exercise claims advanced by religious organizations. See, e.g., Gonzales v. O Centro Espirita Beneficente Uniao Do Vegetal, 546 U.S, 418,
Appellants also argue that Citizens United is applicable to the Free Exercise Clause because “the authors of the First Amendment only separated the Free Exercise Clause and the Free Speech Clause by a semi-colon, thus showing the continuation of intent between the two.” (Appellants’ Br. at 34.) We are not persuaded that the use of a semi-colon means that each clause of the First Amendment must be interpreted jointly.
In fact, historically, each clause has been interpreted separately. Accordingly, the courts have developed different tests in an effort to apply these clauses. For example, while the various clauses of the First Amendment have been incorporated and made applicable to the states by the Due Process Clause of the Fourteenth Amendment, the Supreme Court did so at different times. Incorporation of the clauses of the First Amendment began with Gitlow v. New York,
Several years later, in Cantwell v. Connecticut,
Second, Appellants argue that Conestoga can exercise religion under a “passed through” theory, which was first developed by the Court of Appeals for the Ninth Circuit in EEOC v. Townley Engineering & Manufacturing Company,
In Townley, the plaintiff was a closely-held manufacturing company whose owners made a “covenant with God requiring] them to share the Gospel with all of their employees.” Townley,
The Ninth Circuit subsequently applied Townley’s reasoning in Stormans. There, a pharmacy brought a Free Exercise Clause challenge to a state regulation requiring it to dispense Plan B, an emergency contraceptive drug. Stormans,
Appellants argue that Conestoga is permitted to assert the free exercise claims of the Hahns, its owners, under the Toimley/Stormans “passed through” theory. After carefully considering the Ninth Circuit’s reasoning, we are not persuaded. We decline to adopt the Townley/Stormans theory, as we believe that it rests on erroneous assumptions regarding the very nature of the corporate form. In fact, the Ninth Circuit did not mention certain basic legal principles governing the status of a corporation and its relationship with the individuals who create and own the entity. It is a fundamental principle that “incorporation’s basic purpose is to create a distinct legal entity, with legal rights, obli: gations, powers, and privileges different from those of the natural individuals who created” the corporation. Cedric Kushner Promotions, Ltd. v. King,
Since Conestoga is distinct from the Hahns, the Mandate does not actually require the Hahns to do anything. All responsibility for complying with the Mandate falls on Conestoga. Conestoga “is a closely-held, family-owned firm, and [we] suspect there is a natural inclination for the owners of such companies to elide the distinction between themselves and the companies they own.” Grote v. Sebelius,
B.
Next, we consider Conestoga’s RFRA claim. Under the RFRA, “[g]overnment shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability [unless the burden] (1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.” 42 U.S.C. §§ 2000bb-l(a)-(b). As with the inquiry under the Free Exercise Clause, our preliminary inquiry is whether a for-profit, secular corporation can assert a claim under the RFRA. Under the plain language of the statute, the RFRA only applies -to a “person’s exercise of religion.” Id. at § 2000bb-l(a).
Our conclusion that a for-profit, secular corporation cannot assert a claim under the Free Exercise Clause necessitates the conclusion that a for-profit, secular corporation cannot engage in the exercise of religion. Since Conestoga cannot exercise religion, it cannot assert a RFRA claim. We thus need not decide whether such a corporation is a “person” under the RFRA.
V.
Finally, we consider whether the Hahns, as the owners of Conestoga, have viable Free Exercise Clause and RFRA claims on their own. For the same rea
VI.
As Appellants have failed to show that they are likely to succeed on the merits of their Free Exercise Clause and RFRA claims, we need not decide whether Appellants have shown that they will suffer irreparable harm, that granting preliminary relief will not result in even greater harm to the Government, and that the public interest favors the relief of a preliminary injunction. See NutraSweet Co.,
We recognize the fundamental importance of the free exercise of religion. As Congress stated, in passing the RFRA and restoring the compelling interest test to laws that substantially burden religion, “the framers of the Constitution, recognizing free exercise of religion as an unalienable right, secured its protection in the First Amendment to the Constitution.” 42 U.S.C. § 2000bb(a). Thus, our decision here is in no way intended to marginalize the Hahns’ commitment to the Mennonite faith. We accept that the Hahns sincerely believe that the termination of a fertilized embryo constitutes an “intrinsic evil and a sin against God to which they are held accountable,” (Compl. • ¶ 30), and that it would be a sin to pay for or contribute to the use of contraceptives which may have such a result. We simply conclude that the law has long recognized the distinction between the owners of a corporation and the corporation itself. A holding to the contrary — that a for-profit corporation can engage in religious exercise — would eviscerate the fundamental principié that a corporation is a legally distinct entity from its owners.
Notes
. The Complaint also alleges that the regulations violate the Establishment Clause, the Free Speech Clause, the Due Process Clause, and the Administrative Procedure Act. While the District Court’s opinion addressed some of these additional claims, Appellants have limited their appeal to whether the regulations violate the RFRA and the Free Exercise Clause.
. See Women's Preventive Services: Required Health Plan Coverage Guidelines, available at www.hrsa.gov/womensguidelines (last visited July 25, 2013).
. These regulations were updated on July 2, 2013. See 78 Fed.Reg. 39870 (July 2, 2013). The recent changes have no impact on this litigation.
.The exemptions encompass "grandfathered” plans, which are plans that were in existence on March 23, 2010, see 45 C.F.R. § 147.140 and "religious employers,” see 45 C.F.R. § 147.130(a)(l)(iv)(B). Additionally, the ACA requirement to provide employer sponsored health insurance to employees is entirely inapplicable to employers that have fewer than 50 employees. See 26 U.S.C. § 4980H(a), (c)(2)(A).
. In addition, on October 31, 2012, Conestoga’s Board of Directors adopted "The Hahn Family Statement on the Sanctity of Human Life,” which provides, amongst other things, that "The Hahn Family believes that human life begins at conception (at the point where an egg and sperm unite) and that it is a sacred gift from God and only God has the right to terminate human life. Therefore, it is against our moral conviction to be involved in the termination of human life through abortion, suicide, euthanasia, murder, or any other acts that involve the taking of human life." (Id. at ¶ 92.)
. The dissent has undertaken a scholarly survey of the proper standard for obtaining a preliminary injunction throughout the country. However, Appellants never took an appeal of the preliminary injunction standard applied by the District Court. (See Appellants’ Br. at 4-6 (statement of issues presented for review).) Moreover, the dissent acknowledges that it "may be true” that the plaintiff’s failure to satisfy any element in its favor renders a preliminary injunction inappropriate. (Dissenting Op. at 392-93.)
. We acknowledge that the Court of Appeals for the Tenth Circuit, in an eight judge en
Dissenting Opinion
dissenting.
Having previously dissented from the denial of a stay pending appeal in this case, I now have a second opportunity to consider the government’s violation of the religious freedoms of Conestoga Wood Specialties Corporation (“Conestoga”) and its owners, the Hahns, a family of devout Mennonite Christians who believe in the sanctity of human life. The Hahns do not want to be forced to pay for other people to obtain contraceptives and sterilization services, particularly the drugs known as “Plan B” (or the “morning after pill”) and “Ella” (or the “week after pill”), which they view as chemical killers of actual lives in being. Sadly, the outcome for the Hahns and their business is the same this time as it was the last time they were before us. My colleagues, at the government’s urging, are willing to say that the Hahns’ choice to operate their business as a corporation carries with it the consequence that their rights of conscience are forfeit.
That deeply disappointing ruling rests on a cramped and confused understanding
I. Background
Five members of the Hahn family — Norman,. Elizabeth, Norman Lemar, Anthony, and Kevin — own 100 percent of Conestoga, which Norman founded nearly fifty years ago and which, as noted by the Majority, is a Pennsylvania corporation that manufactures wood cabinets. (Maj. Op. at 381.) The Hahns are hands-on owners. They manage their business and try to turn a profit, with the help of Conestoga’s 950 full-time employees. It is undisputed that the Hahns are entirely committed to their faith, which influences all aspects of their lives. They feel bound, as the District Court observed, “to operate Conestoga in accordance with their religious beliefs and moral principles.” Conestoga Wood Specialties Corp. v. Sebelius,
[t]he Hahn Family believes that human life begins at conception (at the point where an egg and sperm unite) and that it is a sacred gift from God and only God has the right to terminate human life. Therefore it is against our moral conviction to be involved in the termination of human life through abortion, suicide, euthanasia, murder, or any other acts that involve the deliberate taking of human life.
Id. at 403 n. 5.
Accordingly, the Hahns believe that facilitating the use of contraceptives, especially ones that destroy a fertilized ovum,
Conestoga and the Hahns now argue that the Mandate is forcing them, day by day, to either disobey their religious convictions or to incur ruinous fines. That Hobson’s choice, they say, violates both the First Amendment and the Religious Freedom Restoration Act of 1993 (“RFRA”), 42 U.S.C. § 2000bb-l. I agree.
II. Standard of Review
To qualify for preliminary injunctive relief, a litigant must demonstrate “(1) a likelihood of success on the merits; (2) that it will suffer irreparable harm if the injunction is denied; (3) that granting preliminary relief will not result in even greater harm to the nonmoving party; and (4) that the public interest favors such relief.” Kos Pharm., Inc. v. Andrx Corp.,
The Majority gives short shrift to the dispute over the standard of review that emerged during the earlier appeal in this case. My colleagues say simply that “[a] plaintiffs failure to establish any element in its favor renders a preliminary injunction inappropriate.” (Maj. Op. at 382 (quoting NutraSweet Co. v. Vit-Mar Enters., Inc.,
It is true that we have not used the label “sliding scale” to describe our standard for preliminary injunctions, as numerous other circuit courts of appeals have.
Unlike the Majority, which tacitly endorses the District Court’s application of an incorrect and unduly restrictive standard of review, I would apply the standard mandated by our own case law and used in the vast majority of our sister circuits.
III. Discussion
The Majority, like the District Court, evaluates only one of the four preliminary injunction factors: the likelihood of the Hahns’ and Conestoga’s success on the merits.
A. Likelihood of Success on the Merit
This case is one of many filed against the government in recent months by for-profit corporations and their owners seeking protection from the Mandate. Conestoga Wood Specialties Corp.,
To demonstrate a likelihood of success on the merits, a “plaintiff need only prove a prima facie case, not a certainty that he or she will win.” Highmark, Inc. v. UPMC Health Plan, Inc.,
1. Conestoga’s Right to Assert RFRA and First Amendment Claims
I begin where the Majority begins and ends, with the issue of Conestoga’s claim to religious liberty.
The Majority declares that there is no “history of courts providing free exercise protection to corporations.” (Maj. Op. at 384.) As my colleagues see it, “ ‘[rjeligious belief takes shape within the minds and hearts of individuals, and its protection is one of the more uniquely human rights provided by the Constitution’ ” (id. at 384-85 (quoting Conestoga Wood Specialties Corp.,
Taking the argument to be somewhat narrower, though — that it is only for-profit corporations that are sealed off from First Amendment religious liberty — it still fails. There is no reason to suppose that a profit motive places a corporation further away from what is “inherently human” than other sorts of motives, so the distinction the Majority draws has no intrinsic logic to recommend it. It also places far too much weight on a supposed lack of precedent. While authority is admittedly scanty, 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, so there has been little reason to address the issue.
The Majority slips away from its own distinction between for-profit and nonprofit entities when it tries to support its holding with a citation to the Supreme Court’s observation that the Free Exercise Clause “ ‘secure[s] religious liberty in the individual by prohibiting any invasions thereof by civil authority.’” (Maj. Op. at 385 (quoting Sch. Dist. of Abington Twp. v. Schempp,
Religious opinions and faith are in this respect akin to political opinions and passions, which are held and exercised both individually and collectively. “An individual’s freedom to speak, to worship, and to petition the government for the redress of grievances could not be vigorously protected from interference by the State unless a correlative freedom to engage in group effort toward those ends were not also guaranteed.” Roberts v. U.S. Jaycees,
I am not suggesting that corporations enjoy all of the same constitutionally grounded rights as individuals do. They do not, as the Supreme Court noted in First National Bank of Boston v. Bellotti, saying, “[cjertain purely personal guarantees ... are unavailable to corporations and other organizations because the historic function of the particular guarantee has been limited to the protection of individuals.”
Contrary to the Majority’s conclusion, there is nothing about the “nature, history, and purpose” of religious exercise that limits it to individuals. Quite the opposite; believers have from time immemorial sought strength in numbers. They lift one another’s faith and, through their combined efforts, increase their capacity to meet the demands of their doctrine. The use of the word “congregation” for religious groups developed for a reason. Christians, for example, may rightly understand the Lord’s statement that,
Wait, says the government in response to such reasoning; don’t get carried away by facts; any collective right to religious exercise must be limited to organizations that are specifically and exclusively dedicated to religious ends. As the government and the Majority see it, religious rights are more limited than other kinds of First Amendment rights. All groups can enjoy secular free expression and rights to assembly, but only “religious organizations” have a right to religious liberty. (See Appellee’s Br. at 17 (“[Wjhereas the First Amendment freedoms of speech and association are ‘right[s] enjoyed by religious and secular groups alike,’ the First Amendment’s Free Exercise Clause ‘gives special solicitude to the rights of religious organizations.’ ” (quoting Hosanna-Tabor Evangelical Lutheran Church & Sch. v. EEOC, — U.S.-,
Assuming, however, that the government had the competence to decide who is religious enough to qualify as a “religious organization,”
In spite of that history of zealous protection, the Majority relegates religious liberty to second-class status, saying that, because Supreme Court case law incorporated the Free Exercise and Free Speech Clauses into the Fourteenth Amendment’s Due Process clause at different times, “it does not automatically follow that all clauses of the First Amendment must be interpreted identically.” (Maj. Op. at 386.) Implicit in the Majority’s position is that the Free Exercise Clause may be afforded less protection than the Free Speech Clause, and that is indeed the effect of the Majority’s ruling. I wholeheartedly disagree with that inversion of the special solicitude historically shown for the free exercise of religion. And to any who might try to obfuscate what has happened today by saying, “different doesn’t mean worse,” please note: courts in this Circuit and elsewhere have never questioned the First Amendment rights of corporations advancing abortion rights, Planned Parenthood of Se. Pa. v. Casey,
Given the special place the First Amendment plays in our free society, the Supreme Court in Bellotti instructed that, instead of focusing on “whether corporations ‘have’ First Amendment rights and, if so, whether they are coextensive with those of natural persons,” “the question •must be whether” the activity at issue falls
But even if it were appropriate to ignore the Supreme Court’s advice and focus on the person asserting the right rather than on the right at stake, there is a blindness to the idea that an organization like a closely held corporation is something other than the united voices of its individual members. The Majority detects no irony in its adoption of the District Court’s comment that “ ‘[rjeligious belief takes shape within the minds and hearts of individuals, and its protection is one of the more uniquely human rights provided by the Constitution’ ” (Maj. Op. at 398 (quoting Cones toga Wood Specialties Corp.,
And what is the rationale for this “I can’t see you” analysis? It is that for-profit corporations like Conestoga were “created to make money.” (Id. at 385.) It is the profit-making character of the corporation, not the corporate form itself, that the Majority treats as decisively disqualifying Conestoga from seeking the protections of-the First Amendment or RFRA. (See id. at 385 (“We will not draw the conclusion that, just because courts have recognized the free exercise rights of churches and other religious entities, it necessarily follows that for-profit, secular corporations can exercise religion:”).) That argument treats the line between profit-motivated and non-profit entities as much brighter than it actually is, since for-profit corporations pursue non-profit goals on a regular basis.
In Citizens United v. Federal Election Commission, for example, the Supreme Court said, “[b]y suppressing the speech of manifold corporations, both for-profit and nonprofit, the Government prevents their voices and viewpoints from reaching the public and advising voters on which persons or entities are hostile to their interests.”
The forceful dissent of Judge John T. Noonan, Jr., in EEOC v. Townley Eng’g & Mfg. Co.,
The First Amendment, guaranteeing the free exercise of religion to every person within the nation, is a guarantee that [for-profit corporations may] rightly invoke[]. Nothing in the broad sweep of the amendment puts corporations outside its scope. Repeatedly and successfully, corporations have appealed to the protection the Religious Clauses afford or authorize. Just as a corporation enjoys the right of free speech guaranteed by the First Amendment, so a corporation enjoys the right guaranteed by the First Amendment to exercise religion.
The First Amendment does not say that only one kind of corporation enjoysthis right. The First Amendment does not say that only religious corporations or only not-for-profit corporations are protected. The First Amendment does not authorize Congress to pick and choose the persons or the entities or the organizational forms that are free to exercise their religion. All persons — and under our Constitution all corporations are persons — are free. A statute cannot subtract from their freedom.
Id. at 623 (Noonan, J., dissenting) (internal citation omitted).
Oddly, the government’s opposing view, adopted by the Majority, appears to be itself a species of religion, based on the idea that seeking after filthy lucre is sin enough to deprive one of constitutional protection, and taking “[t]he theological position ... that human beings should worship God on Sundays or some other chosen day and go about their business without reference to God the rest of the time.” Id. at 625. There is certainly in the text of the Constitution no support for this peculiar doctrine, and what precedent there is on the role of religion in the world of commerce is to the contrary. See United States v. Lee,
I reject that power grab and would hold that Conestoga may invoke the right to religious liberty on its own behalf.
Turning to the merits of the Appellants’ RFRA claim, I am satisfied that both Conestoga and the Hahns have shown a likelihood of success. RFRA has been called the “most important congressional action with respect to religion since the First Congress proposed the First Amendment,” Douglas Laycock & Oliver S. Thomas, Interpreting the Religious Freedom Restoration Act, 73 Tex. L.Rev. 209, 243 (1994), and it exists specifically to provide heightened protection to the free exercise of religion. The statute was produced by an “extraordinary ecumenical coalition in the Congress of liberals and conservatives, Republicans and Democrats, Northerners and Southerners, and in the country as a whole, a very broad coalition of groups that have traditionally defended ... the various religious faiths ... as well as those who champion the cause of civil liberties.” Religious Freedom Restoration Act of 1990: Hearing Before the Subcomm. On Civil & Constitutional Rights of the H. Comm, on the Judiciary, 101st Cong. 13 (1991) (statement of Rep. Solarz, chief sponsor of H.R. 5377).
Those diverse voices came together in response to the Supreme Court’s decision in Employment Division, Department of Human Resources of Oregon v. Smith,
In short, RFRA restores the judicial standard of review known as “strict scrutiny,” which is “the most demanding test known to constitutional law.” City of Boerne v. Flores,
a. Substantial Burden
Under RFRA, “a rule imposes a substantial burden on the free exercise of religion if it prohibits a practice that is both sincerely held by and rooted in the religious beliefs of the party asserting the claim.” United States v. Ali,
force[d] her to choose between following the precepts of her religion and forfeiting benefits, on the one hand, and abandoning one of the precepts of her religion in order to accept work, on the other hand. Governmental imposition of such a choice puts the same kind of burden upon the free exercise of religion as would a fine imposed against appellant for her Saturday worship.
Sherbert,
The District Court here failed to appreciate the applicability of those precedents. It held, for two reasons, that the burden imposed by the Mandate on Conestoga and the Hahns was insubstantial. First, it said that Conestoga, as a for-profit corporation, lacks religious rights and so can suffer no burden on them, and, relatedly, that any harm to the Hahns’ religious liberty is “too attenuated to be substantial” because it is Conestoga, not they, that must face the Mandate. Conestoga Wood Specialties Corp.,
Relying on the recently reversed panel decision in Hobby Lobby, the District Court’s second line of argument was that “the Hahns have not demonstrated that [the Mandate] constitute^] a substantial burden upon their' religion,” Conestoga Wood Specialties Corp.,
Even if Conestoga’s and the Hahns’ only religious objection were the ultimate use of the offending contraceptives by Conestoga employees, however, the fact that the final decision on use involves a series of sub-decisions does not render the burden on their religious exercise insubstantial. Nothing in RFRA suggests that indirect pressure cannot violate the statute. See 42 U.S.C. § 2000bb-l(a) (prohibiting not “direct” burdens, but “substantial” ones). Indeed, even though a burden may be characterized as “indirect,” “the Supreme Court has indicated that indirectness is not a barrier to finding a substantial burden.” Tyndale,
Moreover, if the indirectness of the ultimate decision to use contraceptives truly rendered insubstantial the harm to an employer, then no exemptions to the Mandate would be necessary. The harm to the Catholic Church by one of its employees’ decision to use an abortifacient would be equally as indirect, and, by the District Court’s logic, would pose equally as insubstantial a burden on the Church’s free exercise rights. But the Mandate does provide an exemption for so-called “religious employers,” see supra note 16, and the regulation itself thus allows that an employee’s choice that only indirectly affects an employer can result in substantial harm to the employer.
It is true, as the Supreme Court cautioned in United States v. Lee, that “every pez’son cannot be shielded from all the burdens incident to exercising every aspect of the right to practice religious beliefs. When followers of a particular sect enter into commercial activity as a matter of choice, the limits they accept on their own conduct as a matter of conscience and faith are not to be superimposed on the statutory schemes which are binding on others in that activity.”
Thus, I would hold that the District Court ezred in concluding that the Man
b. Strict Scrutiny
If government action “substantially burdens” religious exercise, it will be upheld under RFRA only if it “is in furtherance of a compelling governmental interest,” and “is the least restrictive means” of accomplishing that interest. 42 U.S'.C. § 2000bb — 1. Neither the Majority nor the District Court addressed that strict scrutiny test, because they disposed of the case on other grounds. The Supreme Court has said that strict scrutiny must not be “ ‘strict in theory, but fatal in fact.’ ” Adarand Constructors, Inc. v. Pena,
i. Compelling Interest
Compelling interests are those “of the highest order,” Church of the Lukumi Babalu Aye, Inc. v. City of Hialeah,
Preserving public health and ending gender discrimination are indeed of tremendous societal significance. The government can certainly claim “a compelling interest in safeguarding the public health by regulating the health care and insurance markets.” Mead v. Holder,
Assuming for the sake of discussion that the Mandate may actually advance those interests, it must nevertheless be observed that the mere “invocation” of a “general interest in promoting public health and safety [or, for that matter, gender equality] ... is not enough” under RFRA. Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal,
The government’s arguments against accommodating the Hahns and Conestoga are “undermined by the existence of numerous exemptions [it has already made] to the ... mandate.” Newland v. Sebelius,
ii. Least Restrictive Means
Nor can the government affirmatively establish that the Mandate is the least restrictive means of advancing its interests in health and gender equality. Statutes fail the “least restrictive means” test when they are “overbroad” or “underinclusive.” Church of the Lukumi Babalu Aye,
The Hahns and Conestoga argue that the government could directly further its interest in providing greater access to contraception without violating their religious exercise by, for example,
(1) offering] tax deductions or credits for the purchase of contraceptive services; (2) expanding] eligibility for already existing federal programs that provide free contraception; (3) allowing] citizens who pay to use contraceptives to submit receipts to the government for reimbursement; or (4) providing] incentives for pharmaceutical companies that manufacture contraceptives to provide such products to pharmacies, doctor’s offices, and health clinics free of charge.
(Appellants’ Opening Br. at 51.) In response, the government argues that the Appellants misunderstand the least-restrictive-means test and that their proposed alternatives “would require federal taxpayers to pay the cost of contraceptive services for the employees of for-profit, secular companies.” (Appellees’ Br. at 40.)
It is the government that evidently misunderstands the test, for while the government need not address every conceivable alternative, it “must refute the alternative schemes offered by the challenger,” United States v. Wilgus,
Accordingly, the government has not met the burdens of strict scrutiny, and I would hold that Conestoga and the Hahns have established a likelihood of succeeding on the merits of their RFRA claim.
3. The Appellants’ First Amendment Claim
Conestoga and the Hahns also bring a separate claim under the First Amendment. As previously discussed, the Supreme Court in Smith held that the Free Exercise Clause is not implicated when the government burdens a person’s religious exercise through laws that are neutral and generally applicable.
In my view, the Mandate is not generally applicable, and it is not neutral. “A law fails the general applicability requirement if it burdens a category of religiously motivated conduct but exempts or does not reach a substantial category of conduct that is not religiously motivated and that undermines the purposes of the law to at least the same degree as the covered conduct that is religiously motivated.” Blackhawk v. Pennsylvania,
B. Irreparable Harm,
Focusing only on the question of likelihood of success on the merits, neither the District Court nor the Majority evaluated whether Conestoga and the Hahns have demonstrated irreparable harm. It is a painful topic to confront, as it brings to the fore the immediate and unconscionable consequences of the government’s overreaching.
“Irreparable harm is injury for which a monetary award cannot be adequate compensation.” Int’l Dairy Foods Ass’n v. Amestoy,
Because the government demanded that the Hahns and Conestoga capitulate before their appeal was even heard,
C. The Remaining Injunction Factors
Conestoga and the Hahns have also met the remaining preliminary injunction factors. A preliminary injunction would not result in greater harm to the government but would merely restore the status quo between the parties. “One of the goals of the preliminary injunction analysis is to maintain that status quo, defined as the last, peaceable, noncontested status of the parties.” Kos Pharm., Inc. v. Andrx Corp.,
In addition, a preliminary injunction would not harm the public interest. On the contrary, “[a]s a practical matter, if a plaintiff demonstrates both a likelihood of success on the merits and irreparable injury, it almost always will be the case that the public interest will favor the plaintiff.” Am. Tel. & Tel. Co. v. Winback & Conserve Program, Inc.,
IV. Conclusion
This is a controversial and, in some ways, complex case, but in the final analysis it should not be hard for us to join the many courts across the country that have looked at the Mandate and its implementation and concluded that the government should be enjoined from telling sincere believers in the sanctity of life to put then-consciences aside and support other people’s reproductive choices. The District Court’s ruling should be reversed and a preliminary injunction should issue.
. Their concern seems aimed particularly at contraceptives that work after conception (see Am. Compl. at 9 (noting concern over mandated "drugs or devices that may cause the demise of an already conceived but not yet attached human embryo, such as 'emergency contraception’ or ‘Plan B’ drugs (the so called ‘morning after' pill)”)), and the concern apparently increases the further along in the development of the fertilized egg that the contraceptive action of a drug or device takes place (see id. at 10 (discussing objections to "a drug called ‘ella’ (the so called ‘week after’ pill)), which studies show can function to kill embryos even after they have attached to the uterus, by a-mechanism similar to the abortion drug RU-486”). Being forced to assist in the acquisition and use of abortifacients is obviously of great concern to them. (See Appellants’ Opening Br. at 10-11 ("[T]he Hahns believe that it would be sinful and immoral for them to intentionally participate in, pay for, facilitate, or otherwise support any contraception with an abortifacient effect through health insurance coverage they offer at Conestoga.”).)
At oral argument, counsel for the government insisted that "abortifacient" is a "theological term,” and that, “for federal law purposes, a device that prevents a fertilized egg from implanting in the uterus,” like Plan B and Ella, "is not an abortifacient.” (Oral
. To attribute the rules to government personnel is unduly generous. As the Majority obliquely observes (see Maj. Op. at 381), the rules in question here are not the product of any legislative debate, with elected representatives considering the political sensitivities and constitutional ramifications of telling devout Mennonites to fund the destruction of what they believe to be human lives. They are not even the result of work within an administrative agency of the United States. They are instead the result of the ACA assigning regulatory authority to a subunit of the Department of Health and Human Services ("HHS”) known as the Health Resources and Services Administration, 42 U.S.C. § 300gg-13(a)(4), which in turn turned the drafting over to the Institute of Medicine. (See Maj. Op. at 381.) What the Majority does not do is identify what the Institute of Medicine is. It is not an agency of the United States government, or of any other public entity. It is a private organization that, according to its website, "works outside of government to provide unbiased and authoritative advice to
. There are plenty of other exceptions, however, as I will discuss later. See infra Part III.A.2.b.i.
. According to 26 U.S.C. § 4980D(a), ”[t]here is ... a tax on any failure of a group health plan to meet the requirements of chapter 100 (relating to group health plan requirements).” The $95,000 estimate of the penalty takes account only of Conestoga’s 950 employees. The actual penalty could amount to much more, given that the statute subjects noncom-pliant companies to a $100 per-day penalty for "any failure” to provide the mandated coverage "with respect to each individual to whom such failure relates.” Id. § 4980D(b)(/). Presumably, “ ‘individual’ means each individual insured” by the company, Hobby Lobby Stores, Inc. v. Sebelius,
In the alternative, Conestoga presumably could drop employee health insurance altogether, and it would then face a reduced fine of $2,000 per full-time employee per year (totaling $1.9 million). See 26 U.S.C. § 4980H. Neither party has briefed that option, and it is unclear what additional consequences might follow from such action, including upward pressure on wages, etc.
. See Korte v. Sebelius, No. 12-3841,
. At least six circuits have explicitly adopted a "sliding scale” approach for evaluating a motion for a preliminary injunction. See McCormack v. Hiedeman,
. As noted, see supra note 6, six circuits have used the label "sliding scale” to describe their approach to reviewing requests for preliminary injunctions. Almost all of the remaining circuits have, like us, adopted an approach that, if not in name, mirrors the so-called sliding scale approach. See Lankford v. Sherman,
Only one circuit appears to have rejected a balancing approach outright. The Eleventh Circuit “has not recognized” a sliding scale approach where there are “sufficiently serious questions going to the merits [that] make them a fair ground for litigation and [where there is] a balance of hardships tipping decidedly toward the party requesting preliminary relief.” Snook v. Trust Co. of Ga. Bank of Savannah, N.A.,
. I have discussed the correct standard of review at length only to emphasize that, in view of the particularly heavy and irreparable harm that the Hahns and Conestoga are now suffering and will continue to- suffer as a result of the Majority’s holding, see infra Part III.B, this case clearly meets the requirements for a preliminary injunction. But even under the stricter standard applied by the District Court, I would still hold, for the reasons I provide in the remainder of this dissent, that the Hahns and Conestoga have made the necessary showing. See Hobby Lobby,
. The government has not asserted that the Anti-Injunction Act, which precludes judicial consideration of suits seeking to ”restrain[] the assessment or collection of any [federal] tax,” 26 U.S.C. § 7421(a), applies to this case. As a result, that line of argument is waived. See Hobby Lobby, 111 F.3d at 1157,
. See Gilardi v. U.S. Dep’t of Health & Human Servs., No. 1:13-cv-00104-EGS, slip op. at 1 (D.C.Cir. Mar. 29, 2013) (granting on court’s own motion injunction pending appeal after first denying plaintiffs’ motion on March 21, 2013); Annex Med., Inc. v. Sebelius, No. 13-1118, slip op. at 6,
In addition to those cases, the Fourth Circuit recently declined to rule on a challenge to the contraception Mandate in a case remanded to it by the Supreme Court, because the plaintiffs "did not challenge these regulations, or make any argument related to contraception or abortifacients, in the district court, in their first appeal ..., or in their Supreme Court briefs.” Liberty Univ., Inc. v. Lew, No. 10-2347, slip op. at 58, - F.3d -(4th Cir. July 11, 2013).
The Sixth Circuit's order denying preliminary injunctive relief in Autocam is of little persuasive value. In its order, the court acknowledged “conflicting decisions,” but it denied injunctive relief because the district court in that case issued a "reasoned opinion” and because "the Supreme Court[ ] [had] recently] deni[ed] ... an injunction pending appeal in Hobby Lobby." Autocam, No. 12-2673, slip op. at 2 (citing Hobby Lobby Stores, Inc. v. Sebelius,-U.S.-,
. The Hobby Lobby court remanded the case for a determination regarding the remaining two preliminary injunction factors. Id. at 1146-47.
. Indeed, because the showing necessary for an injunction falls well below certainty, we have held that "this ‘probability’ ruling” is insufficient to establish that a party has "prevailed]” based solely on its being awarded a preliminary injunction. Milgram,
. As I am addressing the Majority’s reasoning, I begin with this point rather than the statutory question of whether Conestoga is a "person” under RFRA. As I explain below, see infra note 23, I believe that it is.
. The Majority thinks it important that corporations lack the anthropomorphic qualities of individual religious devotion — " '[t]hey do not pray, worship, observe sacraments or take other religiously — motivated actions separate and apart from the intention and direction of their individual actors.’ ” (Maj. Op. at 385 (quoting Hobby Lobby Stores, Inc. v. Sebelius,
. The press reports are not in the record, but one would have to have been cut off from all media to miss the uproar created by the Mandate. See, e.g., Ethan Bronner, A Flood of Suits Fights Coverage of Birth Control, New York Times, Jan. 26, 2013, at A1 (describing “a high-stakes clash between' religious freedom and health care access that appears headed to the Supreme Court”).
. Some wading into those waters has become inevitable. A handful of federal statutes create exemptions for “a religious corporation, association, educational institution, or society." 42 U.S.C. § 2000e-l(a) (Title VII); see abo id. § 12113(d)(1), (2) (similar language in the Americans with Disabilities Act). In LeBoon v. Lancaster Jewish Community Center Ass'n,
In contrast to that rather broad view of whether an organization qualifies for a religious exemption under Title VII, the definition of the term “religious employer” in the Mandate was notably cramped. See 45 C.F.R. § 147.130(a)(l)(iv)(B) (defining "religious employers” as "organizationfs] that meet[ ] all of the following criteria: (1) The inculcation of religious values is the purpose of the organization. (2) The organization primarily employs persons who share the religious tenets of the organization. (3) The organization serves primarily persons who share the reli
. We are dealing here with a closely held corporation, and we need not determine whether or how a publicly traded corporation, with widely distributed ownership, might endeavor to exercise religion. Those issues can be left for another day.
. It is commonplace for corporations to have mission statements and credos that go beyond profit maximization. When people speak of "good corporate citizens” they are typically referring to community support and involvement, among other things. Beyond that, recent developments in corporate law regarding "Benefit” or "B” corporations significantly undermine the narrow view that all for-profit corporations are concerned with profit maximization alone. As one academic has said, "[o]n a secular level, society appears to have already recognized this, giving form to the yearning of investors, customers, employees, and officers to combine and form businesses consistent with their particular values and convictions. This is evidenced by developments both in the marketplace and in state legislatures, such as the promulgation of ‘Benefit Corporation’ statutes and the 'B Corporation’ movement." Ronald J. Colombo,
. The government emphasizes that, in Amos, "the Supreme Court held that a gymnasium run by the Mormon Church was free to discharge a building engineer who failed to observe the Church's standards,” but that, in so doing, "the Court stressed that the Church did not operate the gym on a for-profit basis.” (Appellee’s Br. at 18.) During oral argument, counsel for the government relied on that characterization of Amos to imply for the first time that granting any free exercise rights to a for-profit corporation would inevitably trigger Establishment Clause problems, as any accommodation to the corporation would come at the expense of similarly situated corporations that had not received a religious exemption. As I have already noted, see supra Part III.A.l, Amos did not turn on a for-profit versus non-profit distinction, and, in fact, the Court left open any question regarding the Establishment Clause impact of granting a religious exemption to a for-profit corporation.
More fundamentally, the government mistakes the scope of the Establishment Clause. Under the so-called "endorsement” test for evaluating Establishment Clause challenges, courts look to "whether the challenged governmental practice either has the purpose or effect of 'endorsing' religion.” Cnty. of Allegheny v. ACLU,
Thus, it cannot be, as the government seems to suggest, that a decision to accommodate the Hahns' and Conestoga's constitutionally protected religious liberties would result in an impermissible endorsement of their religion. The Establishment Clause does not prohibit what the Free Exercise Clause demands. To be sure, the government may, under certain circumstances, "cross[ ] the line from permissible accommodation to unconstitutional establishment.” Id. at 629,
. Conestoga is silenced because it . is a for-profit corporation, and the Hahns must likewise sit down and be quiet because, by the government’s reasoning, the Mandate really does not affect them. (See Appellee’s Br. at 22 (arguing that "[t]he contraceptive-coverage requirement does not compel the [Hahns] as individuals to do anything,” but, rather, "[i]t is only the legally separate corporation that has any obligation under the mandate” (internal quotation marks omitted) (third alteration in original)).)
. Because of that conclusion, I need not consider at length the alternative argument that, even if Conestoga itself is without First Amendment protection, it may assert the free exercise claims of its owners, the Hahns. Suffice it to say that there is persuasive precedent for that approach in the context of close corporations. See Commack Self-Serv. Kosher Meats, Inc. v. Hooker,
The Majority forecloses that line of argument, insisting that, although ”[t]he corporate form offers several advantages 'not the least of which was limitation of liability,’ ... the shareholder must give up some prerogatives” in return (Maj. Op. at 388), including, apparently, his religious convictions. That conclusion rests on a mistaken idea that the business purposes for which corporate law has developed and that underpin the legal fiction of a corporation being separate from its owners must mean that the people behind the corporate veil are to be ignored for all purposes. That notion breezes past the very specific business objectives for which the corporate veil exists, namely, "to facilitate aggregations of capital,” Entel v. Guilden,
. Although the Supreme Court held RFRA unconstitutional as applied to state and local governments because it exceeded Congress’ power under § 5 of the Fourteenth Amend
. Having determined (erroneously) that corporations, even closely held ones, do not enjoy religious liberty, the Majority declined to "decide whether such a corporation is a 'person' under the RFRA.” (Maj. Op. at 388.) I believe that it is. Although the statute itself does not define "person,” the fallback definition section in the United States Code provides that "unless the context indicates otherwise ... the word[ ] 'person' ... includefs] corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals....” 1 U.S.C. § 1; see also Mohamad v. Palestinian Auth., - U.S. -,
. The same logic applies to the District Court’s statement that there is no difference to employers if, on one hand, their employees purchase contraceptives with salary or, on the other, they obtain them free of charge through company-provided health insurance. Conestoga Wood Specialties Corp.,
. The Supreme Court in Lee did not use the phrase "substantial burden,” but, since Lee, the Court has consistently described its holding in that case as establishing that the government may substantially burden religious exercise only if it can show that the regulation in question satisfies strict scrutiny — that is, that the regulation furthers a compelling governmental interest in the least restrictive means possible. In Hernandez v. Commissioner, 490 U.S. 680,
. The sheer number of employers exempted from the Mandate distinguishes this case from United States v. Lee. In that case, the Supreme Court held that, although the "compulsory participation in the social security system interfere[d] with [the plaintiff Amish employer’s] free exercise rights,”
By way of comparison, the Supreme Court held in O Centro that the government had failed to make a showing that a ban on the use of a hallucinogenic substance served a compelling interest as applied to a Native American tribe that used the substance as part of its religious services.
With respect to the Mandate, as a result of the multiple and wide-reaching exemptions, millions of individuals — perhaps upwards of 190 million, see Newland,
. As the Tenth Circuit said in Wilgus, the government need not "refute each and every conceivable alternative regulation scheme.” Wilgus,
. Because I have already discussed the "non-profit versus for-profit” distinction at
. Given the government’s recent decision to delay the implementation of other aspects of the ACA, see Zachary A. Goldfarb & Sandhya Somashekhar, White House Delays HealthCare Rule that Businesses Provide Insurance to Workers, Washington Post, July 2, 2013, available at http://www.washingtonpost.com/ politics/white-house-delays-health-care-rule-that-businesses-provide-insurance-to-workers/ 2013/07/02/f87e7892-e360-l 1 e2-aef3-33 9619 eab080_story.html, one wonders why it could not give religious believers some breathing room consideration of the Mandate.