Religion-based challenges to the new health care law likely will bring the controversial reforms back to the nation's high court before the end of the coming term.
Although a recent split among the circuits increased that likelihood substantially, lawyers in one of the two divided circuits chose on Wednesday to seek en banc review in the U.S. Court of Appeals for the Third Circuit instead of a swifter trip from the panel decision to the U.S. Supreme Court.
However, other splits may develop as cases in the Sixth and Seventh circuits are expected to be decided soon, said S. Kyle Duncan, general counsel of The Becket Fund for Religious Liberty.
"Those panels seemed to be leaning heavily in one direction or another," Duncan said. "We may see decisions by the end of August deepening the split."
Duncan won a ruling in late June from the en banc 10th Circuit in Hobby Lobby v. Sebelius. The owners of Hobby Lobby, a craft store chain, and Mardel, a Christian bookstore chain, challenged regulations implementing the Patient Protection and Affordable Care Act that require them to provide certain contraceptive coverage in their employer-sponsored health care plans. They contend the coverage includes drugs and devices that they believe are abortifacients, the use of which is contrary to their faith.
The en banc court on June 27 held that the two for-profit companies are entitled to bring their claims under the Religious Freedom Restoration Act and the First Amendment free exercise clause. It said the companies had established a likelihood of success that their rights under the statute were substantially burdened by the contraceptive-coverage requirement, and had established an irreparable harm. The court sent the case back to the district court to determine whether two of the remaining factors for granting a preliminary injunction had been met.
The district court held a hearing and entered an injunction. At that point, the government asked for a stay of the proceedings, which was granted until October 1 in order for the government to consider a petition to the Supreme Court.
Shortly afterwards, a panel of the Third Circuit took the opposite position in Conestoga Wood Specialties Corp. v. Sebelius.
Conestoga Wood is owned by the Hahn family, who hold 100 percent of the voting shares. It is a Pennsylvania for-profit corporation that manufactures wood cabinets and has 950 employees. The Hahns practice the Mennonite religion and claimed that the contraceptive coverage requirement violated the Religious Freedom Restoration Act and the free exercise clause. They objected specifically to the emergency contraception drug known as Plan B and the week-after pill known as Ella.
The panel, voting 2-1, held that a for-profit, secular corporation cannot exercise religion either directly, as the Hahns argued, under the Supreme Court decision in Citizens United v. FEC; or under a so-called pass-through method, by which the corporation can assert the free exercise claims of its owners.
"Even if we were to disregard the lack of historical recognition of the right, we simply cannot understand how a for-profit, secular corporation—apart from its owners—can exercise religion," said the majority.
Conestoga Wood's en banc petition argues, "The panel majority invented a rule that makes religious families incapable of exercising religion in a business corporation. The decision does not merely prevent the Hahns’ claim from succeeding; it blocks a family business company from being able to exercise religion at all. This eviscerates the rights of devout business owners of all kinds, from religious families running companies like Conestoga, to kosher butchers and Bible publishers. The panel judicially amends the Constitution by adding a novel exception to the Free Exercise Clause."
Conestoga Wood is represented by Charles Proctor of Proctor, Lindsay & Dixon, in Chadds Ford, Pa. "When the Hahns filed incorporation papers, Obamacare was nowhere on the horizon. The government says they are separate from the corporation but any profits and losses pass through right to the Hahns."
Proctor noted that in two Supreme Court cases the justices upheld the right of two religious corporations to practice animal sacrifices and to use hallucinogenic tea. "Those corporations could exercise their religious rights in odd ways and the Supreme Court upheld it, no problem at all," he said. "Here, we're talking about something not as extreme, but simply because they manufacture a secular product they're denied that relief."
Another case, Liberty University v. Lew, is definitely headed to the Supreme Court after a remand by the justices in June 2012.
A panel of the Fourth Circuit recently rejected the university's broad-based attack on the law's requirement that employers with 50 or more full-time employees offer health insurance. Liberty also claimed the law and implementing regulations violated its rights under the First and Fifth Amendments and the Religious Freedom Restoration Act. The panel rejected the constitutional and statutory attacks on the law and declined to rule on the claims against the regulations.
"This court of appeals has now decided that Congress can force employers to buy an unwanted product," said Mathew Staver, chairman of Liberty Counsel, representing the university. "As Congress cannot force individuals to buy an unwanted product, neither can it force employers to do so. I look forward to having this matter before the Supreme Court."
There are approximately 64 challenges to the contraceptive coverage requirement pending. Of those, 36 were filed by for-profit companies. The remaining number have been brought by religiously affiliated nonprofit organizations.
The Becket Fund's Duncan is handling eight cases, only one of which is for a for-profit corporation: Hobby Lobby. The challenges by nonprofit organizations generally have been stayed or dismissed without prejudice while the courts awaited the Obama administration's final rule on accommodations for nonprofit entities with religious objections.
That rule came out at the end of June, noted Duncan who added, "We should expect activity in the nonprofit cases fairly soon.”
Contact Marcia Coyle at firstname.lastname@example.org.