CHICAGO (CN) - Reinforcing earlier injunctions, the 7th Circuit found that two businesses owned by Catholic families should not have to cover the contraceptive needs of their employees, as required in the new health care reform law.
Compelling the businesses "to cover these services substantially burdens their religious-exercise rights," Judge Diane Sykes wrote for a divided appellate panel.
Both companies had actually gone before the same panel separately earlier this year after federal judges found them unlikely to succeed with their challenges under the Religious Freedom Restoration Act (RFRA).
The same divided panel awarded an emergency injunction in January to the Illinois construction firm Korte & Luitjohan Contractors, and in February to the Indiana manufacturing company Grote Industries.
All parties then fully briefed the court and convened for a consolidated hearing in May, leading the court to reverse and issue preliminary injunctions against the mandate on Friday.
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, and the D.C. Circuit's ruling in Freshway Foods.
The majority ruled that "nothing in the Supreme Court's free-exercise jurisprudence categorically forecloses RFRA claims by profit-seeking entities."
"If the government's view is correct, commonplace religious practices normally thought protected would fall outside the scope of the free-exercise right," Sykes wrote. "The Jewish deli is the usual example. On the government's understanding of religious liberty, a Jewish restaurant operating for profit could be denied the right to observe Kosher dietary restrictions. That cannot be right. There is nothing inherently incompatible between religious exercise and profit-seeking."
Sykes, a President George W. Bush appointee, was joined in her opinion by Judge Joel Flaum, appointed by President Ronald Reagan. Judge Ilana Diamond Rover, also a Bush appointee, dissented.
Rover accused the majority of rewriting the terms of the Religious Freedom Restoration Act and free-exercise jurisprudence to reach its conclusion that corporations may have religious rights.
"The court extends a highly personal right to a secular corporation, a man-made legal fiction that has no conscience enabling belief or worship," Rover wrote. "It then deems a corporation's duty to cover contraceptive care as an impermissible burden on the religious rights of both the corporation and its owners. It does so without considering the directness and degree of the burden on the plaintiffs' right to the free exercise of their religion, in contravention of the plain terms of RFRA, which proscribes only substantial burdens on that right. And it permits the plaintiffs to invoke their free exercise rights offensively rather than defensively, in a way that circumscribes the rights Congress has given to employees, by permitting the corporate employers to rewrite the terms of the statutorily-mandated health plans they provide to their employees."
As a result, the court's ruling allows corporations to avoid giving their employees the insurance coverage Congress intended for them to have, Rover concluded.
Read the Top 8
Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.