Demonstrators at a Stand Up for Religious Freedom rally
Demonstrators at a Stand Up for Religious Freedom rally (Photo: Timothy A. Clary / AFP / Getty Images)

A federal appellate ruling barring enforcement of the Affordable Care Act’s law’s mandate that employer-provided health insurance cover contraception and related services has deepened the appellate split over that issue.

A divided panel of the U.S. Court of Appeals for the Seventh Circuit ruled on Nov. 8 that Religious Freedom Restoration Act of 1993 claims against the mandate were “very likely to succeed.” The ruling in combined appeals reversed two December 2012 trial court decisions and ordered the lower courts to block the mandate.

The plaintiffs were two closely held companies and the Roman Catholic family members who own them. Korte v. U.S. Department of Health and Human Services had been heard at the trial level by Southern District of Illinois Judge Michael Reagan and Grote v. Sebelius by Southern District of Indiana Judge Sarah Evans Barker.

The Seventh Circuit was the first appeals court to order trial judges to issue preliminary injunctions, according to Edward White, senior counsel with the American Center for Law and Justice, who argued for the Korte plaintiffs. It also was “the only one that has ruled in favor of the owners of the company and the company itself with regard to the exercise of religion.”

Writing for the court, Judge Diane Sykes wrote that “the contraception mandate substantially burdens the religious-exercise rights of all of the plaintiffs; and the government has not carried its burden under strict scrutiny.” Judge Joel Flaum joined her opinion.

In her dissent, Judge Ilana Diamond Rovner argued that it’s not the families but rather the corporations, as employers, that would comply with the mandate. “I believe the court’s holding and rationale represent an unprecedented and unwarranted re-conception of both what the free exercise of religion entails and what constitutes a substantial burden on that exercise,” Rovner wrote.

Matt Bowman, a senior legal counsel at Alliance Defending Freedom who represented the Grote plaintiffs, welcomed the outcome. “The Seventh Circuit recognized that ObamaCare is an example of the pervasive modern regulatory state that reaches into the daily lives of Americans in unprecedented ways,” he said.

Last week’s ruling put the appellate tally at 3-2 in favor of plaintiffs opposed to the mandate. The Tenth Circuit held that a company could be a “person” exercising religion in this context and the D.C. Circuit similarly sided with owners of a company.

On the other side, the Third and Sixth circuits held that companies are not people capable of religious exercise.

The Eight Circuit has yet to rule on two similar cases following oral argument last month: Annex Medical Inc. v. Sebelius and O’Brien Jr. v. U.S. Department of Health and Human Services. Meanwhile, dozens of cases are still piling up on dockets in federal trial courts as the U.S. Supreme Court mulls several petitions for certiorari.

The Justice Department, which represented the government, did not immediately respond to a request for comment. Alisa Klein in the civil division’s appellate staff argued for the government.

Sheri Qualters can be contacted at squalters@alm.com.