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Religious-affiliated employers faced with what they say is a morally untenable choice of either offering prescription coverage for contraceptives, which they oppose on theological grounds, or denying their employees what they view as a basic right lost a major establishment clause battle Thursday when a narrowly divided appellate panel upheld the state’s Women’s Health and Wellness Act. By a 3-2 margin, the Appellate Division, 3rd Department, rejected myriad constitutional challenges by Catholic and Baptist organizations, and upheld the law requiring employers that provide prescription insurance coverage to their workers to cover contraceptives. The church groups argued that the statute impeded their state and federal constitutional rights by providing an exemption only for religious employers focusing on ecclesiastical rather than secular activities. Under the law, a religious employer whose main purpose is to promote its theological values is entitled to an exemption, while one that runs hospitals or offers social services as part of its ministry cannot qualify for the exemption. The panel recognized the “Hobson’s choice” the law imposes on religious employers. But a majority led by Justice Thomas E. Mercure, while acknowledging that “mandated coverage for prescription contraceptives burdens [the churches'] free exercise rights,” nonetheless found no fatal constitutional flaw. A two-judge dissent written by Presiding Justice Anthony V. Cardona would have stricken the law as violative of several provisions of the state and federal constitutions. Catholic Charities of the Diocese of Albany v. Serio has its genesis in a 2002 law that was passed after years of previously successful lobbying by Catholic groups. The law, which was drafted as a women’s health and gender equity measure, exempts qualified religious employers, but only to the extent that the inculcation of religious values is their main mission and that they primarily employ and serve members of the same faith. The exemptions were copied verbatim from a California law that has been upheld by that state’s high court in a case the U.S. Supreme Court declined to review. A far broader “conscience clause” that would have permitted religious employers much more leeway was specifically rejected by the New York Legislature in a bill that underwent many revisions and was enacted as an election-year compromise. Roman Catholic and evangelical Baptists challenged the law, claiming it placed them in an impossible position of either implicitly endorsing something contrary to their deeply held beliefs – namely, contraception – or denying their employees benefits to which the churches argue all workers are morally entitled. But Albany Supreme Court Justice Dan Lamont rejected their arguments in a decision more than two years ago, and Thursday the 3rd Department narrowly affirmed. Mercure, joined by Justices Karen K. Peters and Anthony J. Carpinello, scrutinized the “facially neutral” Women’s Health and Wellness Act under both state and federal constitutional precepts before deciding that it violates neither. The majority noted that the plaintiffs employ many people who do not share their faith, and suggested that permitting the religious groups to by-pass the contraception provision would subordinate the beliefs of the employees to that of the employer. They also rejected the argument that forcing the church-affiliated groups to pay for contraceptive insurance would create a perception that those groups were endorsing contraception. “Given plaintiffs’ well-known religious beliefs regarding contraception, we cannot conclude that there is a ‘great likelihood’ that plaintiffs provision of contraceptive coverage to its employees would be perceived as anything more than compliance under protest with a statutory mandate that is generally applicable to all employers offering group health insurance coverage,” Mercure wrote. HIGH COURT TEST The majority found no inconsistency between the law at issue and the seminal U.S. Supreme Court test for establishment clause claims, Lemon v. Kurtzman. Under Lemon, to survive an establishment clause attack a statute must have a secular purpose; its primary effect must be one that neither hinders nor advances religion, and it must not foster an “excessive government entanglement” with religion. “Plaintiffs generally contend – and the dissent agrees – that the exemption favors religious worship over religious-based ministry, and that it discriminates between religious institutions that are devoted solely to ecclesiastical purposes and religious institutions whose ministries are part of the institution,” Mercure wrote. “While plaintiffs’ objection is understandable, they do not explain how this distinction advances or inhibits religion within the meaning of Lemon’s second prong.” The majority similarly dismissed claims that the statute discriminates between religious denominations and that it violates the church autonomy doctrine, which generally holds that civil authorities must defer to ecclesiastical leaders on issues such as the governance of their church. However, the majority warned that the state could find itself on thin constitutional ice if it attempted to differentiate between what exactly constitutes an inculcation of religious values, and therefore qualifies for the exemption, and what does not. But that was not the case here, the majority said. DISSENTERS’ POSITION Presiding Cardona and Justice Edward O. Spain disagreed. They said the state has already made an inappropriate and unconstitutional determination that some religious-sponsored activities, such as running hospitals, are secular. “We fail to see where the record establishes that an organization is automatically secular and not religious in nature if it employs or serves persons of different faiths or engages in the provision of charitable or social services,” Cardona wrote. “Nor do we see that making such assumptions and engaging in the formulation of ‘religious tests’ is an appropriate area of inquiry for the Legislature or the courts.” The dissenters would have shot down the law under the state Constitution’s free exercise clause and the state and federal free speech provisions. “Simply stated, we have great difficulty with a statutory scheme which explicitly dissects the laudable activities of a given religious organization into two unequal parts, for example secular and ecclesiastical, and affords only the ecclesiastical portion an exemption from mandated conduct which the entire organization deems objectionable,” Cardona wrote. Further, Cardona and Spain sympathized with the plaintiffs’ argument that financial support for contraception, as mandated by the law, could be viewed publicly as an endorsement of a practice to which it is opposed. “It is the fact that their opposition is so public and widespread which makes the Catholic plaintiffs, in particular, more susceptible to charges of hypocrisy, especially since, as has been emphasized, these plaintiffs could avoid supporting contraceptive use by choosing not to provide any prescription coverage to their employees,” Cardona wrote. APPEAL PLANNED In a statement, the New York State Catholic Conference made clear that it would appeal. “[O]ur religious beliefs prevent us from paying for something we teach is sinful,” Richard E. Barnes, executive director of the conference, said in a statement. “We believe that advocates of this legislation have their sights set on mandating coverage for abortion, in an attempt to destroy the church’s network of social services, hospitals, nursing homes and schools.” JoAnn M. Smith, president and chief executive officer of Family Planning Advocates, said the case has nothing to do with abortion, noting that contraception helps prevent unwanted pregnancies and therefore abortions. “This bill was about contraceptive coverage from the beginning, middle and end,” Smith said. “It was about making sure that the discrimination women faced in receiving basic health care was ended in New York state. . . . The fact that the court recognized as important the state interest in gender equality and access to health care is tremendously important, and I was thrilled to see that.” The appeal was argued by Michael L. Costello of Tobin & Dempf in Albany, N.Y., for the plaintiffs and Assistant Attorney General Shaifali Puri in defense of the statute. Appearing amici curiae were the U.S. Conference of Catholic Bishops, the American College of Obstetricians and Gynecologists, the American Civil Liberties Union, Planned Parenthood Federation of America, the American Jewish Congress, Agudath Israel of America and other organizations. This article originally appeared in the New York Law Journal , a publication of ALM.

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