Hopeful Signs in the Lawsuits Against the Obamacare HHS Mandate

National   |   Nadja Wolfe   |   Jul 12, 2013   |   9:26AM   |   Washington, DC

Last month, courts reviewed two requests for preliminary injunctions against the contraception mandate of the Affordable Care Act (ACA).

That is, two businesses which do not fit the exemption rules but whose owners object to the mandate for moral and religious reasons will not have to pay the fines they would otherwise be responsible for while the case is being heard in full. Under the ACA, the fine for having a non-compliant group health care package is $100 per day per employee.[1]

In order to obtain a preliminary injunction, the moving party must meet a four-part test. First, the party must be likely to win its case at trial. [2] Second, there must be “a likely threat of irreparable harm” if the injunction is not granted.[3] Third, that harm must be greater than any harm the other side would suffer if the injunction is granted.[4] And lastly, the injunction must be “in the public interest.”[5] Additionally, both cases examined whether corporations were able to sue to enforce rights under both the Free Exercise clause in the Constitution and the Religious Freedom and Restoration Act (RFRA). RFRA claims require the plaintiff to show that on its face the law is “(1) a substantial burden imposed by the federal government on a (2) sincere (3) exercise of religion.”[6]

Hobby Lobby, as its name suggests, is a chain of craft stores, and it has a sister-chain of Christian bookstores.[7] They are family-owned and their foundational documents and mission statements name in particular their Christian beliefs as the principles for running the business.[8] As they are not small businesses and operate for profit,[9] they do not qualify for any exemption under the ACA’s implementing regulations.[10] Both businesses may have been able to “grandfather” in their health plans, but did not do so by the required date, at which time the contraception mandate had not been imposed.[11]

The district court refused to grant a preliminary injunction on the grounds that free exercise extends to individuals and religious organizations only,[12] that RFRA applies mainly to religious organizations,[13] and that the Green family is not “substantially burdened” by the ACA penalty and so cannot make their own RFRA claim.[14] The court concluded that the claim was likely to fail on the merits, and did not examine the other parts of the test fully.[15] This was upheld by the Tenth Circuit Court of Appeals.[16] Hobby Lobby’s emergency writ to the U.S. Supreme Court was denied.[17] However, the Tenth Circuit did grant a special appeal and put the case before a larger en banc panel composed of eight judges who reviewed the first panel’s decision.

On June 28 the en banc panel from the Tenth Circuit reversed the district court’s exclusion of corporations from RFRA protections. It found that corporations are “persons” protected under RFRA, and that Hobby Lobby had demonstrated the likelihood of success on the merits.[18] The panel did not grant the injunction, however, as a majority did not agree that the harm-balance and public interest requirements were met, although four judges would find that Hobby Lobby had met those tests, and would have granted the injunction.[19] Based on this, the district court will now conduct its own examination of whether the prongs were met and whether to grant the injunction. For those who opposed the contraceptive mandate, this is a qualified victory.

Not so with the second case handed down, Beckwith Electric Co., Inc. v. Sebelius. The district court granted the injunction,[20] and although Beckwith Electric will have to put up a $75,000 bond pending the outcome, it will not have to pay the fine unless or until a decision is entered against it.[21] Similarly to Hobby Lobby, Beckwith Electric’s owner, Thomas Beckwith, is a person of religious faith who has been inspired by those beliefs in how he operates his business. He brings chaplains in to assist employees on a weekly basis and his business has donated to numerous charities, both religious and secular.[22] Like Hobby Lobby, his business meets no exemption under the ACA and his health plan is not in compliance with it.[23] Therefore, Beckwith would also be subject to the fine.

The district court in Beckwith went far beyond the appellate court in Hobby Lobby. It not only found that corporations can bring RFRA claims,[24] but also that “[c]losely-held corporations” can assert the rights of their owners,[25] that individuals do not lose this right by engaging in secular enterprises,[26] and that Beckwith is likely to prevail on the merits, having made an argument that on its face meets the elements of both the RFRA test and the requirements for an injunction.[27] Now, the trial will proceed.

Although the Beckwith result is good and Hobby Lobby helpful, there is still work to do. In both of these cases, as well as some other notable decisions in the contraceptive mandate suits, the owners have incorporated their religious beliefs quite strongly into their business practices. Secular businesses with secular owners who share the same beliefs on other grounds may not be able to benefit from this. If a strong showing of religious practice in business is needed, owners who are religious but do not bring chaplains in or buy religiously themed newspaper ads may have insufficient grounds to assert protection of their conscience as well.



As the contraception mandate stands, it is not, as the Beckwith court noted, a question of denying access to certain medical devices and pills that prevent implantation of the embryo. No employer has moved to suppress anyone’s ability to purchase these things;[28] rather, what they have objected to is material participation in something they believe ends human life. It should not be a controversial proposition that engaging in public life should not require one to leave his or her conscience at home or at church. One can only hope that these decisions signal that rights of conscience and religious exercise will carry the day.

LifeNews: Nadja Wolfe is a student at William and Mary School of Law and a CLI Contributor. She writes for the Charlotte Lozier Institute.

[1] Affordable Care Act, 26 U.S.C. § 4980D(a)-(b) (2012).

[2] Hobby Lobby Stores, Inc. v. Sebelius, No. 12-6294, slip op. 24 (10th Cir. filed June 27, 2013) (reversing denial of preliminary injunction and remanding to lower court for further findings on whether to grant).

[3] Id.

[4] Id.

[5] Id.

[6] Hobby Lobby Stores, Inc. v. Sebelius, 870 F. Supp 2d 1278, 1292 (W.D. Okla. 2012) (quoting Kikumura v. Hurley, 242 F.3d 950, 960 (10th Cir. 2001).

[7] Hobby Lobby v. Sebelius, No. 12-6294, slip op. 10.

[8] Id. at 10-11. The store also carries out other religious activities mentioned in the opinion, such as purchasing newspaper ads promoting conversion.

[9] Id. at 14-15.

[10] Id. at 16.

[11] Id.

[12] Hobby Lobby Stores, Inc. v. Sebelius, 870 F. Supp 2d at 1287.

[13] Id. at 1291.

[14] Id. at 1293.

[15] Id. at 1296.

[16] Hobby Lobby Stores, Inc. v. Sebelius, 2012 WL 6930302 (10th Cir. 2012) (denying injunction pending appeal).

[17] Id.

[18] Hobby Lobby Stores, Inc. v. Sebelius, No. 12-6294, slip op. 25.

[19] Id. at 9.

[20] Beckwith Electric Co., Inc. v. Sebelius, No. 8:13-cv-0648-T-17MAP, slip op. 1-2 (M.D. Fla. filed June 25, 2013).

[21] Id. at 36.

[22] Id. at 3.

[23] Id.

[24] Id. at 12

[25] Id. at 16.

[26] Id. at 21.

[27] Id. at 26-36.

[28] This is true regardless of representations in the media and popular internet campaign slogans charging religious employers with misogyny, extreme religious fundamentalism, and inequitable treatment of women.