Court Grants Temporary Injunction Against ACA Contraception Requirement

Judge Reggie Walton (D.D.C.) on Friday granted plaintiffs a temporary injunction in Tyndale House Publishers, Inc. v. Sebelius stopping the Secretary from enforcing HHS regs under the Affordable Care Act that require health insurance plans to provide contraception coverage against a self-insured Christian publishing house.  Judge Walton wrote that the plaintiffs were likely to succeed on their Religious Freedom Restoration Act claim and that they met other requirements for a temporary injunction.  The ruling, should it stand, paves the way for self-insured plaintiff-corporations to challenge the contraception requirement under the RFRA.

Tyndale House Publishers is a small Christian publishing house that operates under a Christian "statement of belief and policy" outlining its religious beliefs.  It doesn't offer its employees an outside health insurance plan; instead, it's self-insured and thus pays directly for its employees' health benefits.  Mark Taylor, the other named plaintiff, is Tyndale's president and CEO.

The plaintiffs balked at HHS regs, enacted under the ACA, that, with certain exemptions for religious organizations, require employers to provide contraception as part of their employee health insurance plans.  Importantly, they complained only about "drugs (e.g., Plan B, ella) or devices (e.g., intrauterine devices) that can cause the demise of an already conceived/fertilized human embryo."  They filed suit, arguing that the regs violated the RFRA; the Free Exercise, Establishment, and Free Speech Clauses of the First Amendment; the Fifth Amendment Due Process Clause; and the Administrative Procedures Act. 

The RFRA forbids the government from "substantially burden[ing] a person's exercise of religion even if the burden results from a rule of general applicability" unless the government can "demonstrate[] that application of the burden to the person (1) is in furtherance of a compelling government interest; and (2) is the least restrictive means of furthering that compelling government interest."  42 U.S.C. Sec. 2000bb-1(a), (b).

Judge Walton first concluded that the plaintiffs had standing.  He wrote that Tyndale had standing under EEOC v. Townley Eng'g & Mfg. Co., 859 F.2d 610 (9th Cir. 1988), which held that a corporation has standing to assert the free exercise rights of its owners.  Alternatively, Tyndale had third-party standing to assert its primary owner's free exercise rights.

As to the substance, Judge Walton wrote that Tyndale showed a "substantial burden," because

the contraceptive coverage mandate similarly places the plaintiffs in the untenable position of choosing either to violate their religious beliefs by providing coverage of the contraceptives at issue or to subject their business to the continual risk of the imposition of enormous penalties for its noncompliance.

Op. at 22.  Judge Walton distinguished O'Brien v. HHS (E.D. Mo. 2012) (holding that the plaintiff did not suffer a substantial burden, because it provided employee health insurance through a group plan), because here the self-insured plaintiff, Tyndale, would pay directly for its employees' contraception (and not indirectly, through a group plan).  Judge Walton explained:

The court dismissed the plaintiffs' RFRA claim [in O'Brien], holding that the plaintiffs had failed to show that the contraceptive coverage mandate substantially burdened their religious exercise.  Describing the burden at issue as the "funds, which plaintiffs will contribute to a group health plan, [that] might, after a series of independent decisions by health care providers and patients covered by [the company's] plan, subsidize someone else's participation in an activity that is condemned by plaintiffs' religion," the court reasoned that the burden on the plaintiffs' religious exercise was simply too attenuated to qualify as "substantial." . . . 

Here, the plaintiffs provide direct coverage to Tyndale employees through a self-insured plan in which "Tyndale acts as its own insurer."  This difference in the manner in which coverage is provided is significant because while the company in O'Brien contributes to a health insurance plan which ultimately pays for the services used by the plan participants, Tyndale itself directly pays for the health care services used by its plan participants, thereby removing one of the "degrees" of separation that the court deemed relevant in O'Brien.

Op. at 23-24.

Judge Walton also concluded that the government's compelling interests in promoting public health and providing employed women with access to health care on par with employed men wouldn't be undermined by exempting Tyndale (and therefore weren't necessary here), because the government already exempts a number of other employers.  He noted that Tyndale objected only to certain kinds of contraception--Plan B, ella, and intrauterine devices--and provided some other contraceptive coverage through its health plan, and that requiring Tyndale to provide the full range of contraceptives wasn't necessary to achieve public health and equality between female and male employees.

SDS