OAKLAND, Calif. (CN) - A federal judge in Oakland signaled Friday he will likely block controversial new rules issued by the Trump administration letting employers opt out of covering birth control on moral and religious grounds.
U.S. District Judge Haywood Gilliam Jr. appeared to reject each of the administration's arguments challenging a motion by more than a dozen states for a nationwide preliminary injunction of the final rules. Set to take effect Jan. 14, the rules would for the first time extend court-ordered coverage exemptions for religious employers to employers objecting based on moral beliefs.
Gilliam in particular bristled at the administration's assertion that he must decide the motion based on the Supreme Court's landmark 2014 ruling in Burwell v. Hobby Lobby Stores, Inc. - which extended an existing religious exemption for houses of worship to certain for-profit corporations -rather than on rulings issued after Burwell by eight federal appellate courts.
"Are you arguing that the court, rather than under the reasoning of eight of the nine courts of appeals that looked at it, that assessed it objectively, are you saying that Hobby Lobby requires that courts defer entirely to the adherence portion of what is 'substantial burden?'" Gilliam asked a U.S. Justice Department attorney in the downtown Oakland hearing.
Enacted in 2010, the Affordable Care Act (ACA) requires employers to cover contraception under their health plans with no co-payment. Religious institutions are exempt from the mandate, and nonprofits were allowed to opt out via an accommodation by which an employer certifies its objection to the mandate to the federal government. The government is consequently tasked with confirming insurers provide separate coverage.
But the Trump administration issued new interim exemption rules in October 2017 allowing any employer or health insurer with religious or moral objections to providing birth control to opt out of the requirement. Under these rules, exempted entities no longer need to certify their objection or otherwise notify the federal government of their decision to stop providing coverage, a provision California and its co-plaintiffs contend will create disastrous interruptions in coverage for affected women.
Gilliam ordered a nationwide injunction of the rules in December 2017, reasoning the states were likely to succeed on claims that the U.S. Department of Health and Human Services violated administrative procedures for revising contraception-coverage policy, and that they would suffer "imminent" financial harm absent an injunction in the form of additional birth-control coverage and health care costs associated with a rise in unintended pregnancies.
The Ninth Circuit upheld the injunction last month, but limited it to just the five states prosecuting the case at the time. In response, the plaintiffs added eight more states and the District of Columbia to the lawsuit and moved for a second nationwide injunction.
On Friday, Gilliam made clear he will decide which case law to apply to the motion, including whether to apply Hobby Lobby's "substantial burden" finding advocated by the government. The finding states that the ACA's contraception mandate imposes a "substantial burden" on the exercise of religion in violation of the Religious Freedom Restoration Act (RFRA).
He noted eight federal appellate courts have issued competing decisions regarding substantial burden since Hobby Lobby, indicating he will decide the motion based on them.
Hobby Lobby, Gilliam added, instructs lower courts to assess certain factors set forth in RFRA when reviewing decisions by federal agencies like Health and Human Services, so the Hobby Lobby "is not determinative."
"It's not exactly the agency's call. The court will decide whether [the rules] comply with RFRA," he told U.S. Justice Department attorney Justin Sandberg.
"I don't know whether saying that 'we wanted to settle the case and did that by abandoning half the interests at stake in the case'" is legally sound, Gilliam added. "Ultimately, the court has to decide what is permissible and what is required."
Sandberg countered that RFRA grants federal agencies "leeway" in crafting contraception-coverage policy, requiring deference by the courts.
"The [Supreme] Court said in Hobby Lobby that it isn't the court's job to determine the line between what is innocent action and what someone can say are actions complicit with moral behavior," he said.
Becket Fund attorney Mark Rienzi's argument that Health and Human Services "absolutely has discretion" in creating coverage exemptions drew a similar rebuke from Gilliam.
"I'm not bound by agency action. Ultimately, I and the other courts assessing this issue will decide, Gilliam said, adding that the rules amount to a "massive policy shift for the women not covered under them."
The statement mirrors the states' key argument for nationwide relief, suggesting any potential injunction will be issued for all 50 states.
Rienzi represents the Little Sisters of the Poor, a religious nonprofit operated by an order of Roman Catholic nuns and an intervenor in the case.
On rebuttal, California Justice Department attorney Karli Eisenberg assailed the administration's contention that few women will be affected by President Trump's rules.
"If it's not a significant number of women [that will be affected], then it's not a significant number of employers that require these rules," she said, contending that millions of out-of-state employees and students residing in plaintiff states will lose birth-control coverage under them.
"This is not a numbers game," Eisenberg said. Women are entitled to their statutory benefits."
Gilliam is expected to issue a written decision over the weekend.
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