WASHINGTON, D.C. A court setback to a Pennsylvania family business that objects to the Obama administration's abortion/contraceptive mandate heightens the likelihood the Supreme Court will soon decide whether for-profit companies have religious free exercise rights, says a legal expert.
A divided, three-judge panel of the U.S. Third Circuit Court of Appeals in Philadelphia denied a preliminary injunction requested by the Conestoga Wood Specialties Corp., saying "for-profit, secular organizations cannot engage in religious exercise."
Had it been granted, an injunction would have blocked enforcement of a controversial rule from the Department of Health and Human Services that requires employers to pay for coverage of contraceptives, including ones that can cause abortions.
The Third Circuit opinion, issued July 26, clashed with one issued only a month earlier by the full 10th Circuit Court of Appeals. The 10th Circuit rejected the Obama administration's argument that protections under the 1993 Religious Freedom Restoration Act (RFRA) do not extend to for-profit companies. That court in Denver ruled corporations such as Hobby Lobby and its sister corporation, Mardel, "can be 'persons' exercising religion for purposes" of RFRA.
"That split is likely to deepen as other courts of appeals weigh in. It seems to us that the Supreme Court needs to resolve the issue," said Kyle Duncan, general counsel of the Becket Fund for Religious Liberty. "The split's only going to get deeper."
The Sixth and Seventh Circuit Courts have heard arguments in similar cases but have yet to issue rulings, Duncan said.
The Supreme Court may have the opportunity shortly to decide if it is ready to settle the difference. He expects the Department of Justice to ask soon for a high court review, Duncan said.
He is "not surprised that there's a difference in opinion on these legal issues," Duncan said. He said, however, he is "disappointed" the Third Circuit "did not grapple" with the 10th Circuit's reasoning.
The Department of Health and Human Services issued the abortion/contraception mandate as a regulation to implement the 2010 health care law.
The Hahns, a Mennonite family that owns Conestoga, object to the controversial mandate because they believe life begins at conception. The mandate went into effect for Conestoga when its group health plan was renewed in January, and the company is abiding by the requirement.
The Greens, an evangelical Christian family that owns Hobby Lobby and Mardel, also oppose the rule because of their pro-life beliefs. Protected for now by a preliminary injunction, they have said they will not comply with the mandate even though it could cost them $1.3 million a day in penalties.
The Ethics & Religious Liberty Commission has signed onto friend-of-the-court briefs defending the businesses' religious liberty in both cases. The Christian Legal Society wrote both briefs.
The Becket Fund, which represents Hobby Lobby and Mardel, thinks it has "very strong arguments" that RFRA applies to for-profit companies, not just individuals and nonprofits, Duncan said. In the federal code, it is "black-letter law" that a person includes corporations, he said.
The Obama administration is saying "only nonprofit corporations can exercise religion," Duncan explained. The Becket Fund hopes the Supreme Court will rule federal law does not exclude for-profits from religious freedom, he said.
Drugs considered contraceptives under the mandate include Plan B and other "morning-after" pills, which can prevent implantation of tiny embryos. That secondary, post-fertilization mechanism of the pill causes an abortion. The mandate also covers "ella," which in a fashion similar to the abortion drug RU 486 can even act after implantation to end the life of the child.
More than 60 federal lawsuits have been filed against the abortion/contraception mandate. Courts have granted injunctions to 23 for-profit corporations and refused to issue injunctions or restraining orders for seven companies, according to the Becket Fund. No action has been taken in five lawsuits by for-profit companies.
The ERLC and the U.S. Conference of Catholic Bishops lead a coalition of diverse religious organizations that have urged the Obama administration to protect freedom of conscience under the mandate.
The Obama administration's final rule on the mandate, however, does not provide a religious liberty accommodation to for-profit companies such as Conestoga Wood and Hobby Lobby. Religious liberty advocates say it also fails to remedy the conscience problems for nonprofit organizations that object.
The Third Circuit case is Conestoga Wood v. Secretary of HHS. The 10th Circuit case is Hobby Lobby v. Sebelius. Kathleen Sebelius is secretary of HHS.