Business Owners Duck Obamacare Mandate

(CN) - The D.C. Circuit granted the Catholic owners of Freshway Foods an injunction against the contraception mandate of health care reform, intensifying a circuit split.

Francis and Philip Gilardi, owners of Freshway Foods and practicing Catholics, challenged the Patient Protection and Affordable Care Act's mandate that group health plans provide coverage for contraceptive services.

Freshway Foods does not fall under the act's exception for religious organizations or small businesses, leaving the Gilardis "with two choices: adjust their companies' plans to provide the mandated contraceptive services in contravention of their religious beliefs, or pay a penalty amounting to over $14 million per year," according to the 32-page judgment.

A divided thee-judge panel of the D.C. Circuit granted the brothers a preliminary injunction last week, finding that the mandate forces individual owners of a corporation to violate their religious beliefs.

"The contraceptive mandate demands that owners like the Gilardis meaningfully approve and endorse the inclusion of contraceptive coverage in their companies' employer-provided plans, over whatever objections they may have," Judge Janice Brown wrote for the majority. "Such an endorsement - procured exclusively by regulatory ukase - is a 'compel[led] affirmation of a repugnant belief.' That, standing alone, is a cognizable burden on free exercise."

Contrary to the government's argument, the Gilardis did not lose their right to freely exercise their religion by incorporating, the opinion states.

"We do not believe Congress intended important statutory rights to turn on the manner in which an individual operates his businesses," Brown wrote.

The government also failed to convince the court that it has a compelling interest in protecting women's autonomy, averting alleged negative health consequences, or preserving gender equality.

"'Gender equality' is a bit of a misnomer; perhaps the government labeled it as such for the veneer of constitutional importance attached to the term," Brown wrote. "More accurately described, the interest at issue is resource parity - which, in the analogous abortion context, the Supreme Court has rejected as both a fundamental right and as an equal protection issue."

Judge Harry Edwards wrote in dissent that the mandate does not substantially burden the Gialardis' religious obligations.

"The Gilardis cannot claim that they are being forced to use contraceptives, which would directly conflict with their religious beliefs," Edwards wrote. "Rather, they complain that because their companies are required to purchase insurance that includes coverage for contraception, they as owners are enabling third parties to engage in conduct that they oppose. This is a specious claim." (Emphasis in original.)

He noted that the Gilardis remain free to voice their opposition to the use of contraception, so there can be no chance that their employees will understand the government-mandated coverage as an endorsement of contraception.

"The Gilardis simply cannot establish that the mandate substantially burdens their personal objection to contraception," he wrote (emphasis in original). "The mandate does not regulate the Gilardis; it regulates their companies. So the mandate requires nothing of the Gilardis, save what is required of any managers of business operations subject to federal law. And we do not normally assume that managers of for-profit companies are personally affronted by the requirements of federal law."

The ruling intensifies a circuit split on Obamacare's contraception mandate. This decision conflicts with the 3rd Circuit's ruling in Conestoga Wood Specialties Corp., and the 6th Circuit's ruling in Autocam Corp. and Eden Foods , but agrees with the 10th Circuit's decision in Hobby Lobby Stores.

In a statement , plaintiffs' attorney Francis Manion with the American Center of Law and Justice said, "a majority of the court agreed with our argument that the HHS Mandate places a substantial burden on the free exercise of religion of the Gilardis in trying to run their business in accordance with their religious beliefs. But the Court declined to go further and also hold that the Gilardis' companies, as such, also have free exercise claims that they can assert in court."

While pleased with the court's decision, "at the same time, we believe we need to ask the Supreme Court to decide the question left unanswered so that there will be no ambiguity about the protection afforded by this decision. Therefore, we intend to file a petition for certiorari with the Supreme Court next week," Manion said.

Manion recently argued a similar care brought by business owner Frank O'Brien before the 8th Circuit.

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