Court Nixes Challenge to Contraceptive Mandate

(CN) - A manufacturing company owned by a Roman Catholic family lost its bid for an order blocking Obamacare's mandate that employers cover contraception for employees.

The 6th Circuit on Tuesday refused to issue an injunction sought by Autocam Corporation and Autocam Medical, automotive and medical-supply manufacturers owned by the Kennedy family, who are practicing Roman Catholics.

The Kennedys and their businesses challenged the 2010 Patient Protection and Affordable Care Act's mandate requiring companies' health plans to cover contraceptives and sterilization procedures, claiming the directive forces them to violate the teachings of their religion or face significant fines.

It is their belief that they become morally responsible for others' use of contraceptives when they "directly pay for the purchase of drugs and services ... in violation of [their] beliefs," according to the lawsuit.

If corporations do not comply with the new health care law, however, they will be fined an estimated $19 million per year.

A federal judge denied Autocam's request for a preliminary injunction, and the 6th Circuit upheld that decision Tuesday.

"Looking to RFRA's [Religious Freedom Restoration Act] relevant context, we find strong indications that Congress did not intend to include corporations primarily organized for secular, profit-seeking purposes as 'persons' under RFRA. ... Congress did not intend to expand the scope of the Free Exercise Clause," Judge Julia Gibbons wrote for the three-judge panel.

Although many religious organizations have been granted RFRA protections, "we need not 'draw the conclusion that, just because courts have recognized the free exercise rights of churches and other religious entities, it necessarily follows that for-profit, secular corporations can exercise religion,'" Gibbons wrote, quoting 3rd Circuit precedent.

The Cincinnati-based court also dismissed the Kennedys' individual claims for lack of jurisdiction, saying a shareholder may not bring claims on behalf of the company, even if they're majority owners.

"We are without authority to ignore the choice the Kennedys made to create a separate legal entity to operate their business," Gibbons explained.

"The decision to comply with the mandate falls on Autocam, not the Kennedys," she added. "For this reason, the Kennedys cannot bring claims in their individual capacities under RFRA, nor can Autocam assert the Kennedys' claims on their behalf."

The panel rejected the plaintiffs' claim that the Supreme Court's decision to extend free-speech rights to corporations in Citizens United meant that secular, for-profit companies can exercise religion freely.

"The court's recognition of rights for corporations like Autocam under the free speech clause nearly 20 years after RFRA's enactment does not require the conclusion that Autocam is a 'person' that can exercise religion for purposes of RFRA," Gibbons wrote.

Tuesday's ruling deepens the circuit split on whether for-profit corporations may be exempt from compliance under the RFRA, indicating the matter is ripe for Supreme Court review. This decision agrees with the 3rd Circuit's ruling in Conestoga Wood Specialties Corp., but conflicts with the 10th Circuit's decision in Hobby Lobby Stores.

Though the Supreme Court refused to issue an injunction pending appeal in the latter case, Justice Sonia Sotomayor noted that the high court has yet to address a similar case despite conflicting lower-court rulings.

Brigitte Amiri, an attorney for the American Civil Liberties Union, which filed an amicus brief in the case, said in a statement: "Companies cannot break the law by withholding coverage for health services just because they have a religious objection. Nearly every woman uses contraception at some point in her life. This law ensures that employers do not discriminate against their workers by making it difficult for them to obtain the care they need."

Tom Brejcha, president and chief counsel of the Thomas More Society, the law firm representing the plaintiffs along with CatholicVote Legal Defense Fund, vowed to take the case directly to the Supreme Court, "as the U.S. Courts of Appeal are now sharply divided on these critical issues.

"The Religious Freedom Restoration Act was enacted in order to protect people of faith against government mandates that impose a substantial burden on believers' efforts to freely exercise their religious convictions, unless the government has really compelling reasons for doing so, and even then only if the means used are the least restrictive and burdensome among possible alternatives," Brejcha said in a written statement. "We hope the Supreme Court will agree to hear this case so that the Kennedys and other business owners who practice as well as profess their religious faith can keep on doing so without having to 'bet the company' and thereby risk their employees' jobs as well as their own livelihood."

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