Lead Opinion
Opinion for the Court filed by Circuit Judge BROWN, with whom Senior Circuit Judge EDWARDS joins except as to parts VI, VII, and VIII, and with whom Senior Circuit Judge RANDOLPH joins except as to parts III and IV.
Opinion concurring in part and concurring in the judgment filed by Senior Circuit Judge RANDOLPH.
Opinion concurring in part and dissenting in part filed by Senior Circuit Judge EDWARDS.
Two years after our decision Seven-Sky v. Holder,
I
Two brothers, Francis and Philip Gilardi, are equal owners of Freshway Foods and Freshway Logistics — both companies are closely-held corporations that have elected to be taxed under Subchapter S of the Internal Revenue Code. The two companies collectively employ about 400 employees and operate a self-insured health plan through a third-party administrator and stop-loss provider.
As adherents of the Catholic faith, the Gilardis oppose contraception, sterilization, and abortion. Accordingly, the two brothers' — exercising their powers as owners and company executives — excluded coverage of products and services falling under these categories.
But along came the Affordable Care Act. Part of the Act directs all group health plans and health insurance issuers to provide, without cost-sharing requirements, preventive care as determined by the Health Resources and Services Administration. 42 U.S.C. § 300gg-13(a)(4). In turn, the Administration issued guidelines requiring coverage for “all Food and Drug Administration-approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity,” as prescribed by a healthcare provider. Women’s Preventive Services Guidelines, Health Res. & Servs. Admin., http://www.hrsa.gov/womensguidelines/; see Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventive Services Under the Patient Protection Affordable Care Act, 77 Fed.Reg. 8725, 8725-26 (Feb. 15, 2012) (citing the online HRSA Guidelines); see also 29 C.F.R. § 2590.715-2713(a)(l)(iv); 45 C.F.R. 147.131(c).
Finding themselves on the horns of an impossible dilemma, the Gilardis and their companies filed suit in district court, alleging the contraceptive mandate violated their rights under the Religious Freedom Restoration Act (RFRA), 42 U.S.C. § 2000bb et seq., the Free Exercise Clause, the Free Speech Clause, and the Administrative Procedure Act. The plaintiffs moved for a preliminary injunction, but the district court denied their request. With respect to the Freshway companies, the court determined they could not “exer
The plaintiffs timely filed an interlocutory appeal and moved for an injunction pending appeal. After having initially denied their motion, we issued, sua sponte, an order giving them a temporary reprieve from the mandate.
II
Our standard of review for a denial of a preliminary injunction rests upon what aspect of the district court’s decision we are examining. Insofar as our review concerns the district court’s consideration of the preliminary-injunction factors and the ultimate decision to grant or deny the injunction, we review for an abuse of discretion. See In re Navy Chaplaincy,
“In ruling on a preliminary injunction a key issue — often the dispositive one — is whether the movant has shown a substantial likelihood of success on the merits.” Greater New Orleans Fair Hous. Action Ctr. v. U.S. Dep’t of Hous. & Urban Dev.,
III
We begin with the Freshway companies. Before addressing the merits of their RFRA claim, we must first ask whether they may bring the challenge at all. The statute allows “[a] person whose religious exercise has been burdened” to seek judicial relief, but leaves us bereft of guidance on who a “person” is. See 42 U.S.C. § 2000bb-l(c) (emphasis added).
For at least one of our sister circuits (as well as the Appellants), the Dictionary Act, 1 U.S.C. § 1, dispositively answers the question. See Hobby Lobby Stores, Inc. v. Sebelius,
But the focus on personhood is too narrow; instead, we must construe the term “person” together with the phrase “exercise of religion.” See Rasul v. Myers,
IV
The query is simple: do corporations enjoy the shelter of the Free Exercise Clause? Or is the free-exercise right a “purely personal” one, such that it is “unavailable to corporations and other organizations because the ‘historic function’ of the particular guarantee has been limited to the protection of individuals”? First Nat’l Bank of Bos. v. Bellotti,
At the time of the Framing, a great debate raged on the precise formulation of what we now know as the Free Exercise Clause. See Michael W. McConnell, The Origins and Historical Understanding of Free Exercise of Religion, 103 Harv. L.Rev. 1409, 1480-85 (1990). The earliest drafts from the House of Representatives focused on the protection of conscience, rather than the “exercise of religion.” See id. at 1482; see also 1 Annals of Congress 729 (1789) (noting a later amendment to change the Clause’s prototype to read: “no religion shall be established by law, nor shall the equal rights of conscience be infringed”). And as the debates went on, strong concerns arose that the rights of religious sects would not be “well secured under the ... Constitution.” 1 Annals of Congress 730 (remarks of Daniel Carroll, Aug. 15, 1789). To address these concerns and others, the House continued to tinker and toil; once the dust had settled, it eventually proposed a constitutional amendment barring Congress from “prevent[ing] the free exercise” of religion and “infring[ing] the rights of conscience.” 1 id. at 766. But the Senate had different ideas, and in the end, it was the free exercise of religion — standing alone — that was sent to the states for ratification. See McConnell, supra, at 1488; see also Louis Fisher, Religious Liberty in America: Political Safeguards 56 (2002).
This history reveals two things about the Clause’s purpose relevant to our inquiry today. First, the constitutional guarantee “extended the broader freedom of action to all believers,” allowing for the inclusion of “conduct as well as belief.” McConnell, supra, at 1490. Second, the adopted formulation encompassed both individual judgment, as well as “the corporate or institutional aspects of religious belief.” Id. Because the word religion “connotes a community of believers,” the prohibition against the impingement on religious free exercise must be understood to cover the activities of both individuals and religious bodies. See id.
And these two groups have been the beneficiaries of the Supreme Court’s free-exercise jurisprudence. To be sure, the right has largely been understood as a personal one. Before incorporation, the Court described the free-exercise right as an individual one — “the indefeasible right to worship God according to the dictates of conscience.” Cummings v. Missouri,
That is not to say the Court views organizations as constitutional outliers — indeed, its jurisprudence reflects the foundational principle that religious bodies— representing a communion of faith and a community of believers — are entitled to the shield of the Free Exercise Clause. The Court has heard free-exercise challenges from religious entities and religious organizations. See Jimmy Swaggart Ministries v. Bd. of Equalization of Cal.,
Beyond these cases involving religious organizations, however, we glean nothing from the Court’s jurisprudence that suggests other entities may raise a free-exercise challenge. But that the Court has never seriously considered such a claim by a secular corporation or other organizational entity is not to say it never will. For the nonce, only one aberrational case comes to mind. In Gallagher v. Crown Kosher Super Market of Massachusetts, Inc.,
Citing Citizens United v. FEC,
Perhaps Appellants’ constitutional arithmetic, Citizens United plus the Free Exercise Clause equals a corporate free-exercise right, will ultimately prevail. But we must be mindful that Citizens United represents the culmination of decades of Supreme Court jurisprudence recognizing that all corporations speak. See Conestoga Wood,
Consider Bellotti — the progenitor of Citizens United. When the Bellotti Court declared “political speech does not lose First Amendment protection ‘simply because its source is a corporation,’” Citizens United,
No such corpus juris exists to suggest a free-exercise right for secular corporations. Thus, we read the “nature, history, and purpose” of the Free Exercise Clause as militating against the discernment of such a right. When it comes to corporate entities, only religious organizations are accorded the protections of the Clause. And we decline to give credence to the notion that the for-profit/non-profit distinction is dispositive, as that, too, is absent from the Clause’s history. Fortunately, we need not opine here on what a “religious organization” is, as the Freshway companies have conceded they do not meet that criterion.
The Freshway companies alternatively assert they can vindicate the free-exercise rights of their owners. They reason that if “a company is owned and controlled by a few like-minded individuals who share the same religious values and run the company pursuant to those values,” the company may serve as the owners’ surrogate. Appellants’ Br. at 50. This pass-through theory of corporate standing is logically and structurally appealing in light of the government’s shell game. And EEOC v.
Admittedly, there is a certain theological congruence to Townley’s characterization. The Bible says “faith without works is dead.” James 2:26 (King James). As amici point out, not only are Catholic employers morally responsible for the management of their companies, “instructing or encouraging someone else to commit a wrongful act is itself a grave moral wrong — i.e., ‘scandal’ — under Catholic doctrine.” Br. of Catholic Theologians at 3. Thus, amici reason, “the Mandate thrusts Catholic employers into a ‘perfect storm’ of moral complicity in the forbidden actions.” Br. of Catholic Theologians at 5; see also Br. of the Archdiocese of Cincinnati at 16-17 nn. 6, 7. When even attenuated participation may be construed as a sin, see, e.g., United States v. Lee,
But dogma does not dictate justiciability. Though Townley’s conclusion is theologically defensible, its standing bona fides, supported only by a reference to a footnote in Tony & Susan Alamo Foundation v. Secretary of Labor,
Townley’s misconception of religious assoeiational standing has spread from one free-exercise case to another, even creeping its way into the current contraceptive mandate challenges. See Stormans, Inc. v. Selecky,
V
That leaves the Gilardis.
The shareholder-standing rule gives us little pause; we are satisfied that the Gilardis have been “injured in a way that is separate and distinct from an injury to the corporation.” See Crosby v. Beam,
VI
We now reach the heart of the Gilardis’ RFRA claim. The Act requires the Gilardis to “allege! ] a substantial burden on [their] religious exercise.” Kaemmerling v. Lappin,
We begin with the peculiar step of explaining what is not at issue. This case is not about the sincerity of the Gilardis’ religious beliefs, nor does it concern the theology behind Catholic precepts on contraception. The former is unchallenged, while the latter is unchallengeable. See id. at 716,
The only dispute touches on the characterization of the burden. The burden is too remote and too attenuated, the government says, as it arises only when an employee purchases a contraceptive or uses contraceptive services. We disagree with the government’s foundational premise. The burden on religious exercise does not occur at the point of contraceptive purchase; instead, it occurs when a company’s owners fill the basket of goods and services that constitute a healthcare plan. In other words, the Gilardis are burdened when they are pressured to choose between violating their religious beliefs in managing their selected plan or paying onerous penalties. See Thomas,
The Framers of the Constitution clearly embraced the philosophical insight that government coercion of moral agency is odious. Penalties are impertinent, according to Locke, if they are used to compel men “to quit the light of their own reason, and oppose the dictates of their own consciences.” John Locke, A Letter Concerning Toleration 13-14 (J. Brook ed., 1792) (1689). Madison described conscience as “the most sacred of all property,” James Madison, Property, Nat’l Gazette, Mar. 29, 1792, at 174, reprinted in James Madison’s “Advice to My Country” 25, 83-84 (David B. Mattern ed., 1997), and placed the freedom of conscience prior to and superior to all other natural rights. Religion, he wrote, is “the duty which we owe to our Creator ... being under the direction of reason and conviction only, not of violence or compulsion,” 1 Madison Papers 174 (1962), “precedent” to “the claims of Civil Society,” James Madison, Memorial and Remonstrance Against Religious Assessments (1785); see also United States v. Macintosh,
From thence sprang the idea that the right to free exercise necessarily prohibits the government from “compelling] a man to furnish contributions of money for the propagation of opinions which he disbelieves.” Thomas Jefferson, The Virginia Act for Establishing Religious Freedom (1786). And that prohibition has plainly manifested itself throughout the years as an integral component of the free-exercise guarantee. Justice Brennan, writing for the Court in Sherbert v. Verner,
The contraceptive mandate demands that owners like the Gilardis meaningfully approve and endorse the inclusion of contraceptive coverage in their companies’
In suggesting that no substantial burden lies with the Gilardis, the government invokes the principles undergirding the bargain for the corporate veil. True, it is an elementary principle of corporate law that “incorporation’s basic purpose is to create a distinct legal entity, with legal rights, obligations, powers, and privileges different from those of the natural individuals who created it, who own it, or whom it employs.” Cedric Kushner Promotions, Ltd. v. King,
Mindful of these principles, consider the ramifications of the government’s argument. It contends free exercise is an individual right. If the Gilardis had run their businesses as sole proprietorships, they would presumably have a viable RFRA claim under the government’s theory. Cf. Braunfeld,
This interpretation is perplexing and troubling. It is perplexing because we do not believe Congress intended important statutory rights to turn on the manner in which an individual operates his businesses. The government’s logic is also quite troubling because it would eventually reach First Amendment free-exercise cases. The same language, “exercise” “of religion,” appears both in the Constitution and RFRA. Compare U.S. Const. Amend. I (“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof....”), with 42 U.S.C. § 2000bb-1(a) (“Government shall not burden a person’s exercise of religion ____”). Thus, if the government is correct, the price of incorporation is not only
A parade of horribles will descend upon us, the government exclaims, if religious beliefs could serve as a private veto for the contraceptive mandate. Hyperbole aside, we note it was Congress, and not the courts, that allowed for an individual’s religious conscience to prevail over substantially burdensome federal regulation. In Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal,
The Government’s argument echoes the classic rejoinder of bureaucrats throughout history: If I make an exception for you, I’ll have to make one for everybody, so no exceptions. But RFRA operates by mandating consideration, under the compelling interest test, of exceptions to “rule[s] of general applicability.” 42 U.S.C. § 2000bb-l(a). Congress determined that the legislated test [of RFRA] “is a workable test for striking sensible balances between religious liberty and competing governmental interests.” § 2000bb(a)(5).
Id. at 436,
VII
As the Gilardis have demonstrated the substantial nature of their burden, we now turn to strict scrutiny, a “searching examination” where the onus is borne exclusively by the government. Fisher v. Univ. of Tex., — U.S. -,
A
It is difficult to divine precisely what makes an interest “compelling,” but a few reliable metrics exist. The interest cannot be “broadly formulated” — the test demands particularity. See O Centro,
For example, as a standalone principle, “safeguarding the public health” seems too broadly formulated to satisfy the compelling interest test. It has been used to justify all manner of government regulations in other contexts. See Roe v. Wade,
The nebulousness of the government’s interest, however, prevents us from engaging in the type of exacting scrutiny warranted here. What exactly is the government trying to ameliorate? Is it the integrity of “the health and insurance markets”? Surely, that cannot be the answer; the comprehensive sweep of the Affordable Care Act will remain intact with or without the mandate. Or is it a need to provide greater access to contraceptive care? If so, as we note below, the reasons underpinning that need are tenuous at best. If we are to assess whether an exemption for the Gilardis would pose an “impediment to [a governmental] objective[],” we must first be able to discern what that objective is. See id. at 221, 236,
The government’s invocation of a “woman’s compelling interest in autonomy” is even less robust. The wording is telling. It implies autonomy is not the state’s interest to assert. Nevertheless, the government, quoting Eisenstadt v. Baird,
Our difficulty in accepting the government’s rationale stems from looking at the Eisenstadt quote in its entirety: “If the right of privacy means anything, it is the right of the individual, married or single,
Equally unconvincing is the government’s assertion that the mandate averts “negative health consequences for both the woman and the developing fetus.” From the outset, we note the science is debatable and may actually undermine the government’s cause. For the potential mother, as one amicus notes, the World Health Organization classifies certain oral contraceptives as carcinogens, marked by an increased risk for breast, cervical, and liver cancers. Br. of the Breast Cancer Prevention Institute, at 8-9. On the other hand, the contraceptives at issue have been approved by the Food and Drug Administration, supported by research touting their benefits. See Op. of Edwards, J., at 1240. This tug-of-war gives us pause because the government has neither acknowledged nor resolved these contradictory claims.
Even giving the government the benefit of the doubt, the health concerns underpinning the mandate can be variously described as legitimate, substantial, perhaps even important, but it does not rank as compelling, and that makes all the difference. Cf. Hutchins v. District of Columbia,
Finally, we note “gender equality” is a bit of a misnomer; perhaps the government labeled it as such for the veneer of constitutional importance attached to the term. More accurately described, the interest at issue is resource parity — which, in the analogous abortion context, the Supreme Court has rejected as both a fundamental right and as an equal-protection issue. See Harris,
The government cites Roberts v. U.S. Jaycees,
B
Let us assume, however, the government has a compelling interest. Even then, we cannot see how the mandate is “the least restrictive means of furthering that ... interest.” See 42 U.S.C. § 2000bb-l. It suffers from two flaws that cannot be overcome. First, there are viable alternatives — presented by the Gilardis and others — that would achieve the substantive goals of the mandate while being sufficiently accommodative of religious exercise. See Appellants’ Br. at 61; see also Conestoga Wood,
Moreover, the mandate is self-defeating. When a government regulation “fail[s] to prohibit nonreligious conduct that endangers [its asserted] interests in a similar or greater degree” than the regulated conduct, it is underinclusive by design.
A word on Lee. We would be remiss if we omitted this observation by the Court:
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.
Lee was a rare case in which the government fended off a strict-scrutiny challenge by proving exemptions would “present an administrative problem of such magnitude ... that such a requirement would have rendered the entire statutory scheme unworkable.” Sherbert,
In contrast, the government has not proven — nay, even asserted — statutory unworkability here. Its “private veto” concern is somewhat on point, but without substance or substantiation, is nowhere near enough. If we found narrow tailoring satisfied by mere ipse dixit, the strict-scrutiny inquiry would become feeble indeed. And unlike Lee, where the government successfully asserted the Social Security system required every contribution that Congress did not otherwise exempt, there is nothing to suggest the preventive-
VIII
We conclude the district court erred in denying a preliminary injunction for the Gilardis on the grounds that their case was unlikely to succeed on the merits; therefore, we reverse the district court’s denial of a preliminary injunction for the individual owners. Because the court premised its decision entirely on a question of law, we must remand for consideration of the other preliminary-injunction factors. See Chaplaincy of Full Gospel Churches,
So ordered.
Notes
. For ease of reference, we will refer to this provision as “the contraceptive mandate.”
. The Gilardis could have dropped their healthcare coverage altogether, but they regard this option as morally unthinkable. See J.A. at 41 ¶ 10; J.A. at 52 ¶ 10.
. We agree with Judge Edwards that the Gilardis’ Article III standing is indisputable. See Op. of Edwards, J., at 1227-28.
. We assume, without deciding, that Congress did not intend to abrogate the prudential-standing requirement in enacting RFRA. We share Judge Edwards’ concerns about whether prudential-standing principles apply to RFRA challenges and whether the shareholder-standing rule is part of the prudential-standing equation. See Op. of Edwards, J., at 1229-31. But it would be imprudent to decide these questions without the benefit of full briefing on this issue, especially as the Gilardis can easily surmount the shareholder-standing hurdle.
. Our conclusion is buttressed by other considerations. First, Ohio caselaw does not treat the derivative-action rule as an unyielding one; to the contrary, some flexibility has been shown when it comes to close corporations such as the Freshway companies. See, e.g., Yackel v. Kay,
. Much ink has already been spilled on how the government's interests leave “appreciable damage” unprohibited. See Conestoga Wood,
. See A. Raymond Randolph, Before Roe v. Wade: Judge Friendly’s Draft Abortion Opinion, 29 Harv. J.L. & Pub. Pol’y 1035, 1048 (2006) (describing the transformation of the right described in Griswold and Roe).
. Underinclusiveness is generally a relevant consideration of the narrow-tailoring inquiry. See Lukumi,
. Lee also reinforces our doubts about whether the government’s asserted interests are sufficiently compelling. The proper functioning of the tax system was perceived as an interest of "a high order,” see
Concurrence Opinion
concurring in part and concurring in the judgment:
I do not join parts III and IV of Judge Brown’s opinion because I do not believe we need to reach the potentially far-reaching corporate free-exercise question. Other courts in contraceptive-mandate cases have “decline[d] to address the unresolved question of whether for-profit corporations can exercise religion.” Tyndale House Publishers, Inc. v. Sebelius,
We should be particularly hesitant to pass unnecessarily on such a complex issue. If secular for-profit corporations can never exercise religion, what of profitable activities of organized religions? See Hernandez v. Comm’r,
I also write separately to emphasize the importance of the Freshway Corporations’ election to be taxed under subchapter S of the Internal Revenue Code. I.R.C. §§ 1361-1379. As a result, the Freshway Corporations do not pay corporate income taxes. See I.R.C. § 1363(a). Instead, the income of the Freshway Corporations passes through, pro rata, to their shareholders, the Gilardis. See I.R.C. § 1366(a)(1). Subchapter S disregards the corporate form for purposes of the corporate income tax. We must ask why Congress would have disregarded the corporate form for subchapter S corporations but then wanted it imposed to prevent their owners from asserting free-exercise rights under RFRA. There is no good answer, or at least we have received none. It would be incongruous to emphasize the corporate veil in rigid form for RFRA purposes while disregarding it for tax purposes under subchapter S. This inference is particularly compelling because both subchapter S and the “tax” that enforces the contraceptive mandate are part of the Internal Revenue Code. I.R.C. § 4980D.
The pass-through provisions of subchapter S matter for an additional reason. If the Gilardis do not order the Freshway Corporations to comply with the mandate, then their individual tax returns will be directly affected. As shareholders of an S Corporation (technically, they are treated as one shareholder under I.R.C. § 1361(c)(l)(A)(ii)), they would “take[ ] into account” their “pro rata share of the corporation’s ... income” in determining their income tax liabilities. I.R.C. § 1366(a)(1). In other words, as a direct result of the mandate’s operation the Gilardis themselves will have less income in each taxable year. This underscores the “pressure on [the Gilardis] to modify [their] behavior and to violate [their] beliefs.” Thomas v. Review Bd. of Ind. Emp’t Sec. Div.,
Concurrence Opinion
concurring in part and dissenting in part:
Table of Contents
I. Standing
A. The Companies Have No Standing to Pursue a Cause of Action Under RFRA
B. The Owners of the Companies Have Standing in This Case to Pursue a Cause of Action Under RFRA
II. Free Exercise Jurisprudence
A. First Principles: The Limited Reach of the Free Exercise Clause
B. The Evolution of the Substantial Burden/Compelling Governmental Interest Test During the Twenty-seven Years from Sherbert to Smith
C. Congress’ Enactment of RFRA in Reaction to Smith: Restoration of the Substantial Burden/Compelling Governmental Interest Test
III. The Mandate Does Not Substantially Burden Appellants’ Religious Objections to the Use of Contraceptive Products
IV. Compelling Governmental Interests Justify the Mandate
However, I strongly disagree with the majority’s holding on the merits. Under the Patient Protection and Affordable Care Act of 2010 (“Affordable Care Act”), 42 U.S.C. § 300gg-13(a)(4), Freshway is required to include in its health care plan “[a]ll Food and Drug Administration approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity.” See Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventative Services Under the Patient Protection and Affordable Care Act, 77 Fed.Reg. 8725, 8725 (Feb. 15, 2012); see id. at 8725 n. 1 (providing hyperlink to the applicable Health Resources and Services Administration guidelines). The Gilardis contend that compliance with this directive — also known as “the Mandate” — will force them to violate “their Catholic religious beliefs” against contraception. Br. of Appellants at 14.
No one doubts the sincerity of the Gilardis’ religious beliefs against contraception. Their legal claim, however, is seriously wanting. The Gilardis complain that the Mandate imposes a “substantial burden” on their “exercise of religion” under RFRA, 42 U.S.C. § 2000bb-l(a), because their companies are required to provide health insurance that includes contraceptive services. This is a specious claim.
It has been well understood since the founding of our nation that legislative restrictions may trump religious exercise. Braunfeld v. Brown,
The First Amendment must apply to all citizens alike, and it can give to none of them a veto over public programs that do not prohibit the free exercise of religion. The Constitution does not, and courts cannot, offer to reconcile the various competing demands on government, many of them rooted in sincere religious belief, that inevitably arise in so diverse a society as ours. That task, to the extent that it is feasible, is for the legislatures and other institutions.
Id. at 452,
The Gilardis’ claim in this case finds no support in the law. They are not required to use or endorse contraception, and they remain free to openly oppose contraception. The Mandate requires nothing more than that the companies, not the Gilardis, offer medical insurance that includes coverage of contraceptive services for those employees who want it. The Supreme Court has never applied the Free Exercise Clause to find a substantial burden on a plaintiffs religious exercise where the plaintiff is not himself required to take or forgo action that violates his religious beliefs, but is merely required to take action that might enable other people to do things that are at odds with the plaintiffs religious beliefs. Therefore, the Gilardis cannot claim to be substantially burdened by the Affordable Care Act — a neutral
If I were to indulge the implausible suggestion that the Mandate imposes a substantial burden on Appellants’ exercise of religion, I would disagree with the majority’s conclusion that the Government has failed to establish that the Mandate is the least restrictive means of furthering a compelling interest. When the record in this case is viewed through the lens of well-established precedent, the Mandate easily satisfies the requirements of the compelling governmental interest test.
As the Supreme Court made clear in United States v. Lee,
Congress and the courts have been sensitive to the needs flowing from the Free Exercise Clause, but every person 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.
Id. at 261,
I. Standing
A. The Companies Have No Standing to Pursue a Cause of Action Under RFRA
Although the Supreme Court has long recognized Free Exercise protection for individuals and religious organizations, “the nature, history, and purpose” of the Clause counsel against extending the right to nonreligious corporate entities. See First Nat’l Bank of Boston v. Bellotti
The dispositive point here is that while general business corporations may engage in expression related to their business interests, independent of their owners’ interests, general business corporations “do not pray, worship, observe sacraments or take other religiously-motivated actions separate and apart from the intention and direction of their individual actors.” Grote,
Unlike Freshway, the Gilardis satisfy the requirements of Article III and are not barred for want of standing from pursuing a cause of action under RFRA.
The Government argues that
Plaintiffs cannot circumvent the distinction between religious organizations and secular companies by attempting to shift the focus of the RFRA inquiry from Freshway Foods to the Gilardis, who are the corporations’ controlling shareholders.... The[ ] obligations [of the Affordable Care Act] lie with the corporations themselves. The Gilardis cannot even establish standing to challenge the contraceptive-coverage requirement, much less demonstrate that the requirement may be regarded as a substantial burden on their personal exercise of religion.
Br. for the Appellees at 24 (emphasis added). It appears that the Government has conflated the requirements of Article III standing with the merits of the Gilardis’ claim under RFRA. Indeed, apart from the foregoing passing reference to “standing,” the Government never bothers to address the requirements of Article III. Rather, it rests principally on its claim that an action to redress injuries to a corporation cannot be maintained by a stockholder in his own name. Id. at 25.
To satisfy Article Ill’s standing requirements, a plaintiff must show that (1) he or she has suffered an “injury in fact” that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc.,
As the sole owners of the companies, the Gilardis are inextricably tied to Freshway. They therefore suffer injury in fact because they cannot operate their businesses according to their faith. Br. of Appellants at 16-17. Furthermore, the Gilardis injury is imminent and concrete, it is caused by the Mandate, and it will be redressed by a favorable judicial decision. Therefore, the Gilardis have Article III standing to pursue a cause of action under RFRA.
It is true that when a plaintiffs asserted injury is based on governmental regulation of a third party, proof of standing may be problematic. See, e.g., Allen v. Wright,
This case presents a situation in which a for-profit corporation is fully owned by two related shareholders. Freshway and the shareholder-owners are separate legal entities, but are otherwise inextricably connected. The Gilardis control the corporations and feel a concomitant responsibility to manage the companies’ business activi
Finally, because RFRA provides that “[standing to assert a claim or defense under [the Act] shall be governed by the general rules of standing under article III of the Constitution,” 42 U.S.C. § 2000bb-1(c), the Gilardis clearly have met the only requirements for standing that are set forth in RFRA.
The Government ignores the requirements of Article III standing and, instead, rests its argument on “the bedrock principle that a corporation is ‘a distinct legal entity, with legal rights, obligations, powers, and privileges different from those of the natural individuals who created it, who own it, or whom it employs.’ ” Br. for the Appellees at 26 (citing Cedric Kushner Promotions, Ltd. v. King,
First, contrary to the Government’s argument, the general rule relating to shareholder suits is not inviolate. As the Supreme Court noted in Franchise Tax Board of California v. Alcan Aluminium Limited, there is “an exception to this rule allowing a shareholder with a direct, personal interest in a cause of action to bring suit even if the corporation’s rights are also implicated.”
Second, although the Government does not explicitly assert that the shareholder standing rule is a prudential standing requirement, the Sixth Circuit reached this conclusion in Autocam Corporation v. Sebelius,
Autocam cites Franchise Tax in support of the proposition that the shareholder standing rule is a component of prudential standing doctrine. But Franchise Tax merely stated that “we think” the “shareholder standing” rule is “related to” the principle of prudential standing that requires a plaintiff to assert his own legal interests.
Autocam’s reliance on Bennett v. Spear also seems misplaced. In Bennett, the prudential standing doctrine to which the Court was referring was the “zone of interest” test, not the shareholder standing rule.
As already noted, the Autocam decision rests in part on the assumption that “Congress did not remove [the] prudential [shareholder] standing limitations when it enacted RFRA.”
Third, Bennett makes clear that prudential standing can be negated by Congress. If there were any prudential standing requirements applicable to Free Exercise claims before the enactment of RFRA, Congress eliminated them when RFRA was passed. In Bennett, the Court held that a statutory provision stating that “any person may commence a civil suit” was sufficient to make it clear that any party who satisfied the requirements of Article III could bring suit to challenge an agency action under the statute.
In sum, I agree with the majority that the Gilardis have standing to pursue a claim under RFRA. It is important to note, however, that the Gilardis’ standing rests on their inextricable ties to Freshway. The companies are operated as an extension of the two owners’ religious beliefs; there are no minority shareholders with different views. Thus, the cognizable constitutional injury — an alleged encroachment on personal religious exercise — only exists in this case because the Gilardis’ fully-owned companies are a vehicle by which they express their personal religious views, e.g., they direct delivery trucks to display bumper stickers conveying “their religious views regarding the sanctity of human life to the public.” Br. of Appellants at 11-12.
The Mandate applying to their companies touches the Gilardis’ religious exercise rights under RFRA. The touching is not substantial, but it is sufficient to satisfy the requirements of Article III. The merits of the Gilardis’ claim under RFRA is quite another matter, however.
II. Free Exercise Jurisprudence
A. First Principles: The Limited Reach of the Free Exercise Clause
Through the entire history of Free Exercise jurisprudence, the Supreme Court has remained true to the principle that the Free Exercise Clause does not ensure freedom from any regulation to which a party holds a religious objection. Indeed, the Court has consistently recognized that any such rule would be problematic because it “would place beyond the law any act done under claim of religious sanction.” Cleveland v. United States,
In early cases, the Supreme Court routinely held that religious activities must be subordinate to general public welfare legislation. Mormons were thus not exempt for the sake of religious exercise from laws criminalizing polygamy. Reynolds,
When one studies the history of Free Exercise jurisprudence in the United States, it is inescapable that the Free Exercise Clause of the First Amendment has been narrowly defined for good reasons.
However much we might wish that it were otherwise, government simply could not operate if it were required to satisfy every citizen’s religious needs and desires. A broad range of government activities — from social welfare programs to foreign aid to conservation projects — will always be considered essential to the spiritual well-being of some citizens, often on the basis of sincerely held religious beliefs. Others will find the very same activities deeply offensive, and perhaps incompatible with their own search for spiritual fulfillment and with the tenets of their religion. The First Amendment must apply to all citizens alike, and it can give to none of them a veto over public programs that do not prohibit the free exercise of religion. The Constitution does not, and courts cannot, offer to reconcile the various competing demands on government, many of them rooted in sincere religious belief, that inevitably arise in so diverse a society as ours. That task, to the extent that it is feasible, is for the legislatures and other institutions.
B. The Evolution of the Substantial Burden/Compelling Governmental Interest Test During the Twenty-seven Years from Sherbert to Smith
RFRA states in relevant part:
(a) In general
Government shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability, except as provided in subsection (b) of this section.
(b) Exception
Government may substantially burden a person’s exercise of religion only if it demonstrates that application of the burden to the person—
(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.
RFRA was enacted to overturn the Supreme Court’s decision in Employment Division, Department of Human Resources of Oregon v. Smith,
The compelling interest framework was first articulated in Sherbert, where the Court held that South Carolina violated the plaintiffs Free Exercise rights when it denied her unemployment benefits on the grounds that observing the Sabbath did not constitute “good cause” for declining work on Saturday.
In the majority of the Free Exercise cases decided during the twenty-seven years following Sherbert, the Court applied this compelling interest framework to hold either (a) that there was no substantial burden on religious exercise, or (b) that the burden was justified by the Government’s interest in administering a statutory scheme that, by its nature, required uniform enforcement in order to be administrable. The Court amplified these lines of analysis in Lee.
In Lee, the Court upheld the Government’s application of Social Security taxes to an Amish employer who held a religious objection to the Social Security system. Accepting the plaintiffs “contention that both payment and receipt of social security benefits is forbidden by the Amish faith,” the Court concluded that Social Security taxes imposed a substantial burden on Lee’s Free Exercise.
In at least six more Free Exercise cases decided during the twenty-seven years post-Sherbert, the Court applied the substantial burden/compelling governmental interest framework to hold that the disputed Government action or regulation imposed no substantial burden, or that the burden was justified under the reasoning in Lee and Braunfeld:
• Gillette v. United States,401 U.S. 437 , 461 [91 S.Ct. 828 ,28 L.Ed.2d 168 ] (1971) (the Military Selective Service Act, exempting persons who oppose participating in war generally, but not those who hold religious objections to a particular war, does not violate Free Exercise) (“Our cases do not at their farthest reach support the proposition that a stance of conscientious opposition relieves an objector from any colliding duty fixed by a democratic government.”).
• Bob Jones Univ. v. United States,461 U.S. 574 , 603-04 [103 S.Ct. 2017 ,76 L.Ed.2d 157 ] (1983) (denying tax-exempt status to a religious school that practiced racial discrimination as part of a religious belief against interracial dating and marriage did not violate Free Exercise) (“Th[e] governmental interest [in eradicating racial discrimination] substantially outweighs whatever burden denial of tax benefits places on petitioners’ exercise of their religious beliefs.” (citing Lee,455 U.S. at 259-60 [102 S.Ct. 1051 ]; Prince, 321U.S. at 170 [ 64 S.Ct. 438 ]; Gillette,401 U.S. 437 [91 S.Ct. 828 ]; and Reynolds,98 U.S. 145 )).
• Hernandez v. Comm’r,490 U.S. 680 , 698 [109 S.Ct. 2136 ,104 L.Ed.2d 766 ] (1989) (denying tax deductible status to fees paid for training sessions that were “the central practice of Scientology” did not violate Free Exercise); id. at 699-700 [109 S.Ct. 2136 ] (“Lee establishes that even a substantial burden would be justified by the ‘broad public interest in maintaining a sound tax system,’ free of ‘myriad exceptions flowing from a wide variety of religious beliefs.’ ” (quoting Lee,455 U.S. at 260 ,102 S.Ct. 1051 )).
• Tony & Susan Alamo Found. v. Sec’y of Labor,471 U.S. 290 , 303 [105 S.Ct. 1953 ,85 L.Ed.2d 278 ] (1985) (the Fair Labor Standards Act did not burden the religious exercise of a non-profit religious organization or its “associates,” who received food and shelter in exchange for work carrying out the organization’s commercial enterprises).
• Bowen,476 U.S. at 706-07 [106 S.Ct. 2147 ] (rejecting a claim that using a social security number to administer Government programs violated the Free Exercise of Native Americans who believed the number would impair their child’s spirit) (“[T]he nature of the burden is relevant to the standard the government must meet to justify the burden.... [Administration of complex [benefits] programs requires certain conditions and restrictions. Although in some situations, a mechanism for individual consideration will be created, a policy decision ... to treat all applicants alike and ... not ... to become involved in case-by-case inquiries into the genuineness of each religious objection ... is entitled to substantial deference.” (citing Thomas v. Review Bd. of Ind. Emp’t Sec. Div.,450 U.S. 707 , 717-18 [101 S.Ct. 1425 ,67 L.Ed.2d 624 ] (1989); Sherbert,374 U.S. at 404 [83 S.Ct. 1790 ])).
• Lyng,485 U.S. at 442 [108 S.Ct. 1319 ] (no substantial burden on religious exercise even though building a road across a stretch of national forest that would “cause serious and irreparable damage to the sacred areas which are an integral and necessary part of the belief systems and lifeway” of the Native American tribes); id. at 450-51 [108 S.Ct. 1319 ] (“[Sherbert] does not and cannot imply that incidental effects of government programs, which may make it more difficult to practice certain religions but which have no tendency to coerce individuals into acting contrary to their religious beliefs, require government to bring forward a compelling justification.... ”).
During this same twenty-seven year period, the Court found Free Exercise violations only when the disputed governmental policy allowed for individualized or discrete exemptions, and the state declined to grant exemptions or exceptions to accommodate religious beliefs. Three of the four successful Free Exercise cases, like Sherbert, presented a discretionary decision as to whether the plaintiff had “good cause” for refusing employment that conflicted with their religious practice. Thomas,
In sum, a careful reading of the Supreme Court’s Free Exercise decisions during the twenty-seven years post-£%erbert shows that Free Exercise challenges to generally applicable, neutral Government policies were rarely successful. See Michael W. McConnell, The Origins and Historical Understanding of Free Exercise of Religion, 103 Harv. L. Rev. 1409, 1417 (1990) (“Since 1972, the Court has rejected every claim for a free exercise exemption to come before it, outside the narrow context of unemployment benefits governed strictly by Sherbert.” (footnotes omitted)).
C. Congress’ Enactment of RFRA in Reaction to Smith: Restoration of the Substantial Burden/Compelling Governmental Interest Test
After twenty-seven years of consistently applying the substantial burden/compelling governmental interest framework to decide eases arising under the Free Exercise Clause, the Supreme Court inexplicably discarded this analytical framework in Smith,
In Smith, the Court held that criminalizing the use of peyote did not violate the free exercise of Native American sects that traditionally used the hallucinogen during religious ceremonies. The Court did not require the state to provide a compelling justification for denying an exemption, stating that the Sherbert compelling interest test was “inapplicable” to “an across-the-board criminal prohibition on a particular form of conduct.” Id. at 884-85,
In response to Smith, Congress enacted RFRA. The statute notes that “the Supreme Court virtually eliminated the requirement that the government justify burdens on religious exercise imposed by laws neutral toward religion.” 42 U.S.C. § 2000bb(a)(4). It then states that the purpose of RFRA is to “restore the compelling interest test as set forth” in Sherbert and Yoder and to “guarantee its application in all cases where free exercise of religion is substantially burdened.” Id. § 2000bb(b)(l).
Senator Hatch, a sponsor of RFRA, explained that the bill was amended to add the word “substantial” before “burden” so as to be “consistent with the case law developed by the Court prior to the Smith decision” that “does not require the Government to justify every action that has some effect on religious exercise.” 139 Cong. Rec. S26180 (daily ed. Oct. 26, 1993) (statement of Sen. Hatch).
Since the passage of RFRA, the Supreme Court has confirmed that, as Congress intended, RFRA reinstates the full body of pre-Smith jurisprudence. In Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal,
Applying these principles, the Court concluded that the Government failed to prove that the Controlled Substances Act required uniform application in order to be administrable. Critical to this conclusion was the fact that the Controlled Substances Act authorized the Attorney General to “‘waive the requirement for registration of certain manufacturers, distributors, or dispensers if he finds it consistent with the public health and safety.’ ” Id. at 432,
III. The Mandate Does Not Substantially Burden Appellants’ Religious Objections to the Use of Contraceptive Products
Requiring Freshway’s health plan to cover contraceptive products does not substantially burden the Gilardis’ personal objection to using contraception. The Gilardis have standing in this case only because of the alleged injuries that arise from the Mandate’s application to their companies, not to them. Their alleged injuries are sufficient to satisfy the requirements of Article III, but they have failed to show that the Mandate substantially burdens their personal religious activities.
There are three reasons why the Mandate does not substantially burden the Gilardis’ “exercise of religion.” First, the Mandate does not require the Gilardis to use or purchase contraception themselves. Second, the Mandate does not require the Gilardis to encourage Freshway’s employees to use contraceptives any more directly than they do by authorizing Freshway to pay wages. Finally, the Gilardis remain free to express publicly their disapproval of contraceptive products.
Because the Mandate does not require the Gilardis to personally engage in conduct prohibited by their religious beliefs, this case differs from every case in which the Court has found a substantial burden on religious exercise. In 0 Centro and Yoder, for instance, there was no dispute as to whether the regulations substantially burdened the plaintiffs’ religious exercise. The disputed Government policies in those cases very plainly prevented the plaintiffs, personally, from engaging in their religious practices (using hoasca and homeschooling one’s children), and the only question was whether the burdens were justified.
In contrast, the Gilardis cannot claim that they are being forced to use contraceptives, which would directly conflict with their religious beliefs. Rather, they complain that because their companies are required to purchase insurance that includes coverage for contraception, they as owners are enabling third parties to engage in conduct that they oppose. This is a specious claim. The Gilardis can find no support for their position in the controlling case precedents. No Free Exercise decision issued by the Supreme Court has recognized a substantial burden on a plaintiffs religious exercise where the plaintiff is not himself required to take or forgo action that violates his religious beliefs, but is merely required to take action that might enable other people to do things that are at odds with the plaintiffs religious beliefs.
Furthermore, the Mandate does not require the Gilardis to directly facilitate employees’ use of contraception. The Gilardis do not contend that their religious exercise is violated when Freshway pays wages that employees might use to purchase contraception, and the Mandate does not require the Gilardis to facilitate the use of contraception any more directly than they already do by authorizing Freshway to pay wages. Amici supporting the Gilardis’ position attempt in vain to distinguish between the Mandate and paying wages. First, they argue that the Mandate requires the Gilardis to become an “essential cause” of increasing the number of employees who use contraception. Br. of 28 Catholic Theologians and Ethicists at 22-23. But the Gilardis are no more of an “essential cause” of increasing the use of contraception when they authorize Freshway to pay for a benefits plan that employees might use to
Amici also attempt to distinguish between the Mandate and paying wages by arguing that covering contraceptive products is akin to the difference between giving an underage person a “gift certificate” to buy beer, and giving him money that he might spend on beer. Id. at 21-22. But this analogy fails. Health coverage under the Mandate is not like giving a gift certificate to buy beer specifically, but more like a gift certificate to a supermarket where the recipient may purchase whatever is available, including beer. Just as the Government does not directly encourage religion when it provides vouchers that recipients may choose to spend on religious schools, the Gilardis do not directly encourage the use of contraception when they provide insurance coverage that recipients may choose to spend on contraceptives. Zelman v. Simmons-Harris,
Amici also contend that the difference between the Mandate and paying wages is akin to the difference between a person who opposes the death penalty being required to pay taxes that fund executions, and being required to “purchase the drugs for a lethal injection and personally deliver them to the facility where the execution will take place.” Br. of 28 Catholic Theologians and Ethicists at 19. The problem with this rather extraordinary example is that the Mandate does not require the Gilardis to have nearly this degree of personal involvement in providing contraceptives. The Mandate does not require the Gilardis to transfer funds from Freshway’s accounts directly to the manufacturers or retailers of contraception. Nor are the companies required to deliver or distribute contraception to employees. Under the Employee Retirement Income Security Act, 29 U.S.C. § 1132(d)(1), Freshway is a distinct legal entity from its self-insured group health plan. The plan is operated by a third-party administrator, and, pursuant to health privacy regulations, the Gilardis are actually prohibited from being informed whether individual employees purchase contraceptive products, or about any other information regarding employees’ health care decisions. See Br. of Americans United for Separation of Church and State, et al., at 29-30 (citing 45 C.F.R. § 164.508; 45 C.F.R. § 164.510). Moreover, the Gilardis are free to procure Mandate-compliant coverage for their employees through an entirely independent, third-party insurance carrier, rather than administering their own group health plan. Id. This is a far cry from personally purchasing contraceptives and delivering them to employees.
Finally, the Gilardis suggest that because Freshway is required to offer health insurance that includes contraception, they as owners are being pressed to effectively endorse the use of contraception. This claim fails because the Supreme Court has held that a party’s First Amendment rights are not violated when he must comply with a Government policy that sends a message contrary to his beliefs. Hence, an institute of higher education may be required to host military recruiters on campus, even if it strongly opposes military policy. See Rumsfeld v. Forum for Academic & Institutional Rights, Inc.,
For the foregoing reasons, the Gilardis simply cannot establish that the Mandate substantially burdens their personal objection to contraception. The Mandate does not regulate the Gilardis; it regulates their companies. So the Mandate requires nothing of the Gilardis, save what is required of any managers of business operations subject to federal law. And we do not normally assume that managers of for-profit companies are personally affronted by the requirements of federal law.
More particularly, the Mandate does not require the Gilardis to use or purchase contraception themselves; it does not require them to facilitate Freshway’s employees’ use of contraceptives any more directly than they do by authorizing Freshway to pay wages; and they remain free to publicly express their disapproval of contraceptive products. Because the Gilardis cannot show a substantial burden on their personal religious exercise, they cannot prevail on the merits of their RFRA claim as a matter of law. I would therefore affirm the District Court’s denial of a preliminary injunction on this ground, without inquiring into whether the Mandate serves a compelling governmental interest.
IV. Compelling Governmental Interests Justify the Mandate
Even though I would deny the preliminary injunction on the ground that the Gilardis cannot show that the Mandate substantially burdens their exercise of religion, I will also address the Government’s compelling interests in order to respond to my colleagues’ opinion on this point.
In O Centro, the Court made clear that “the Government can demonstrate a compelling interest in uniform application of a particular program by offering evidence that granting the requested religious accommodations would seriously compromise its ability to administer the program.”
The Mandate obviously serves the compelling interests of promoting public health, welfare, and gender equality. Br. for the Appellees 38-40. See, e.g., Bd. of Dirs. of Rotary Int’l v. Rotary Club of Duarte,
Contraceptive products are used for health care purposes beyond preventing unwanted pregnancy. They are prescribed to prevent disease. Contraceptives reduce the risk of ovarian, endometrial, and gynecologic cancers. See Br. of the Ovarian Cancer Nat’l Alliance, et al. at 5-25 (describing how the Mandate is based, in part, on ensuring that women have access to cancer-preventative benefits unrelated to preventing pregnancy). Contraceptives and sterilization also preserve the health of adult women with diabetes, lupus, and heart conditions, who would be at physical risk if they became pregnant. See Br. of Nat’l Health Law Program, et al. at 7-13.
Coverage for contraceptive products eliminates gender discrimination because the cost of contraception falls disproportionately on women, and the costs of health care are generally much higher for women than men. Br. for the Appellees at 41 (“Congress found that ... ‘women of childbearing age spend 68 percent more in out-of-pocket health care costs than men.’ ” (quoting 155 Cong. Reo. S28843 (daily ed. Dec. 1, 2009) (statement of Sen. Gillibrand))). Gender inequality in the cost of health care is caused, in part, by the fact that many health services specific to women have historically been excluded from insurance coverage. See Br. for Nat’l Women’s Law Center, et al. at 7 (“Congress intended ... to help alleviate the ‘punitive practices of insurance companies that charge women more and give [them] less in benefits.’ ” (quoting 155 Cong. Rec. S28842 (Dec. 1, 2009) (statement of Sen. Mikulski))).
Furthermore, it is critical to the functioning of the Affordable Care Act’s statutory scheme that exemptions from the Mandate are, like exemptions from the Social Security tax, extremely limited. Allowing religious exemptions to for-profit, secular corporations would undermine the universal coverage scheme: If the Gilardis’ companies were exempted from covering contraception, another corporation’s owners might just as well seek a religious exemption from covering certain preventative vaccines. A Christian Scientist, whose religion has historically opposed conventional medical treatment, might claim that his corporation is entitled to a religious exemption from covering all medical care except healers who treat medical ailments with prayer. Paul Vitello, Christian Science Seeks Truce with Modem Medicine, N.Y. Times, Mar. 24, 2010, at A20, available at http://www.nytimes.com/2010/03/24/ nyregion/24heal.html?pagewanted=all&_ r=0 (last visited Oct. 13, 2013). Muslim or Jewish business owners might claim a religious exemption from covering any medication derived from pork products (for instance, the gelatin used to make capsules or coating of many pills). S. Pirzada Sattar & Debra A. Pinals, Letter to the Editor, When Taking Medications Is a Sin, 53 Psychiatric Services 213 (2002), available at http://journals.psychiatry online.org/article.aspx?Volume=53& page=213&journalID=18 (last visited Oct. 13, 2013). Just as in Lee and Braunfeld, “[t]he whole point of ... a ‘uniform’ [policy] would ... be[ ] defeated by exceptions.” O Centro,
The existing exemptions to the Mandate do not establish that the Government lacks
In fact, the Gilardis voluntarily relinquished Freshway’s grandfathered status by increasing the employees’ co-payments for doctor visits. Br. for the Appellees at 43; Joint Appendix at 25. That the Gilardis voluntarily relinquished grandfathered status despite their opposition to the Mandate supports the Department’s prediction that most other employers are likely to do so in the short term, as they will inevitably modify their coverage plans to accommodate changes in the cost of health care.
Furthermore, contrary to the Gilardis’ suggestion, employers with fewer than fifty employees are not specifically exempted from the Mandate. Rather they are exempt altogether from being required to provide health coverage under the Affordable Care Act. 26 U.S.C. § 4980H(e)(2)(A). Small businesses that do elect to provide health coverage — as many do in order to offer more competitive benefits to employees and to receive tax benefits — must provide coverage that complies with the Mandate. Br. for the Appellees at 42. In other words, the Mandate would apply to the Gilardis even if they had fewer than fifty employees, so long as they chose to provide health coverage, as they contend they are committed to doing. Br. of Appellants at 13-14.
The only permanent, specific exemption from the Mandate is for religious, nonprofit employers. 45 C.F.R. § 147.130(a)(l)(iv)(B) (current rules defining religious nonprofits in terms of Internal Revenue Code status); Coverage of Certain Preventative Services Under the Affordable Care Act, 78 Fed.Reg. 8456, 8462 (Feb. 6, 2013) (proposed rules exempting any non-profit organization that holds itself out as a religious organization). This exemption for religious nonprofits surely does not undermine the Government’s position that uniform enforcement is essential to the scheme, in the way that the exemption for Native American tribes using peyote was fatal to such a claim in O Centro. In O Centro, the existing exemption for the religious use of peyote by Native American tribes was much larger than the exemption sought by the 130 members of the Christian Spiritist sect. If the Controlled Substances Act was administrable with a much larger exemption for all Native Americans, why would a smaller exemption for 130 hoasca users defeat the scheme? Furthermore, the nature of the exemption sought in O Centro — the Christian Seperatist sect’s sacramental use of hoasca — was essentially indistinguishable from the nature of the exemption that had already been granted for the Native American tribes’ sacramental use of peyote.
This case is a far cry from the situation seen in O Centro. The exemption sought by the Gilardis for secular, for-profit corporations is potentially much larger than the exemption for non-profit religious entities that exists under .the Mandate. In addition, the exemption sought in this case is fundamentally different from the exemption that has already been granted. The Court has long recognized that federal
If an exemption for religious non-profits were taken as proof that the Government lacks a compelling interest in enforcing regulations against secular, for-profit corporations, this would suggest that secular corporations should likewise be entitled to religious exemptions from Title VII', the National Labor Relations Act, and the Americans with Disabilities Act. Furthermore, the Mandate’s exception for religious non-profits is nothing like the exceptions in Church of the Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520,
It is very important to recall that the Court in Lee rejected the argument that limited exemptions from the Social Security tax proved the Government lacked a compelling interest in uniform enforcement all for-profit employers. The Court explained that Congress was justified in “dr[awing] a line ... exempting the self-employed Amish but not all persons working for an Amish employer.”
Freshway, the employer in Lee, and other for-profit corporations are different from religious non-profits in that they use labor to make a profit, rather than to perpetuate a religious values-based mission. In choosing to use labor for financial gain, the corporation and its owners sub
Because the Gilardis have voluntarily chosen to capitalize on labor, they have agreed to accept certain limitations on their conduct that arise from the Government’s compelling interest in securing the safety and welfare of their employees. For this reason, even if the Mandate were a substantial burden on the Gilardis’ religious exercise — which it is not — this record supports the conclusion that the burden is justified by the Government’s compelling interest in enforcing a public-welfare statutory scheme that, like the Social Security tax, simply “could not function” if for-profit employers of various “denominations were allowed to challenge the ... system because ... payments were spent in a manner that violates their religious belief.” O Centro,
The judgment of the District Court should be affirmed.