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Michigan Catholic Conference v. Burwell

United States Court of Appeals, Sixth Circuit

June 11, 2014

MICHIGAN CATHOLIC CONFERENCE and CATHOLIC FAMILY SERVICES D/B/A CATHOLIC CHARITIES DIOCESE OF KALAMAZOO (13-2723); THE CATHOLIC DIOCESE OF NASHVILLE, CATHOLIC CHARITIES OF TENNESSEE, INC., CAMP MARYMOUNT, INC., MARY, QUEEN OF ANGELS, INC., ST. MARY VILLA, INC., DOMINICAN SISTERS OF ST. CECILIA CONGREGATION, and AQUINAS COLLEGE (13-6640), Plaintiffs-Appellants,
v.
SYLVIA MATTHEWS BURWELL, Secretary of the United States Department of Health and Human Services; THOMAS E. PEREZ, Secretary of the United States Department of Labor; JACOB J. LEW, Secretary of the United States Department of Treasury; UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES; UNITED STATES DEPARTMENT OF LABOR; and UNITED STATES DEPARTMENT OF THE TREASURY, Defendants-Appellees

Argued May 8, 2014

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Appeal from the United States District Court for the Western District of Michigan at Grand Rapids; No. 1:13-cv-01247--Gordon J. Quist, District Judge.

Appeal from the United States District Court for the Middle District of Tennessee at Nashville; No. 3:13-cv-01303--Todd J. Campbell, District Judge.

ARGUED:

Matthew A. Kairis, JONES DAY, Columbus, Ohio, for Appellants.

Adam C. Jed, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellees.

ON BRIEF:

Matthew A. Kairis, Melissa Dunlap Palmisciano, Neil Vakharia, JONES DAY, Columbus, Ohio, for Appellants.

Adam C. Jed, Mark B. Stern, Alisa B. Klein, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellees.

Charles E. Davidow, PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP, Washington, D.C., Daniel Mach, Brigitte Amiri, AMERICAN CIVIL LIBERTIES UNION FOUNDATION, Washington, D.C., Ayesha N. Khan, AMERICANS UNITED FOR SEPARATION OF CHURCH AND STATE, Washington, D.C., B. Eric Restuccia, OFFICE OF THE MICHIGAN ATTORNEY GENERAL, Lansing, Michigan, for Amici Curiae.

Before: MOORE and ROGERS, Circuit Judges; NIXON, District Judge[*]

OPINION

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KAREN NELSON MOORE, Circuit Judge.

The plaintiffs-appellants in this consolidated appeal are non-profit entities affiliated with the Catholic Church who have religious objections to certain preventive care standards under the Patient Protection and Affordable Care Act. Specifically, the appellants object to the requirement that their employer-based health insurance plans cover all Food and Drug Administration-approved contraception, sterilization methods, and counseling. All of the appellants are eligible for either an exemption from the requirement or an accommodation to the requirement, through which the entities will not pay for the contraceptive products and services and the coverage will be independently administered by an insurance issuer or third-party administrator. Nonetheless, in their complaints filed in the District Courts for the Middle District of Tennessee and Western District of Michigan, the appellants alleged that the contraceptive-coverage requirement violated the Religious Freedom Restoration Act; the Free Speech, Free Exercise, and Establishment Clauses of the First Amendment; and the Administrative Procedure Act. Both district courts denied the appellants' motions for a preliminary injunction. We AFFIRM the denials of preliminary injunctions to all appellants on all claims.

I. BACKGROUND

A. Factual Background

The appellants allege that they are Catholic entities that provide " spiritual, educational, social, and financial services to members of their communities, Catholic and non-Catholic alike." MCC R. 1 (MCC Compl. at ¶ 1) (Page ID #2); CDN R. 1 (CDN Compl. at ¶ 2) (Page ID #2).[1]

All appellants currently provide health plans to their employees. Michigan Catholic Conference (" MCC" ) offers a self-insured group health plan that is " administered by separate third party administrators,[2] Blue Cross Blue Shield of Michigan and Express Scripts." MCC R. 1 (Compl. at ¶ 41) (Page ID #13). Catholic Charities of Kalamazoo is a " Covered Unit[]" whose employees may participate

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in the plan that MCC offers its employees. MCC R. 1 (Compl. at ¶ ¶ 41, 50-51) (Page ID #13, 15). The remaining appellants--the Catholic Diocese of Nashville (" CDN" ); [3] Catholic Charities of Tennessee, Inc. (" Catholic Charities of Tennessee" ); Camp Marymount, Inc. (" Camp Marymount" ); Mary, Queen of Angels, Inc. (" MQA" ); St. Mary Villa, Inc. (" St. Mary Villa" ); Aquinas College; and Dominican Sisters of St. Cecilia Congregation (" St. Cecilia Congregation" )--offer fully-insured group health plans.[4] CDN R. 1 (Compl. at ¶ ¶ 43, 61, 71, 79, 80, 107, 129) (Page ID #13, 17, 19, 20, 25, 30). MCC, CDN, and St. Cecilia Congregation allege that they are eligible for the total exemption from the contraceptive-coverage requirement for " religious employers," meaning that their health plans need not provide contraceptive coverage. MCC R. 1 (Compl. at ¶ 9) (Page ID #4); CDN R. 1 (Compl. at ¶ 14) (Page ID #7). The remaining appellants allege that they are eligible for the accommodation for certain religiously affiliated non-profits. MCC R. 1 (Compl. at ¶ 11) (Page ID #5); CDN R. 1 (Compl. at ¶ 10) (Page ID #5).

Regulatory Background

The enactment of the Patient Protection and Affordable Care Act (" ACA" ) in 2010 established new minimum standards requiring employer-based group health plans and health insurance issuers to cover certain services without cost-sharing through a deductible or other payment by the plan participant or beneficiary. 42 U.S.C. § 300gg-13. The term " group health plan" is broadly defined to include both insured group health plans and self-insured group health plans: " [t]he term 'group health plan' means an employee welfare benefit plan . . . to the extent that the plan provides medical care (as defined in paragraph (2)) and including items and services paid for as medical care) to employees or their dependents (as defined under the terms of the plan) directly or through insurance, reimbursement, or otherwise." 42 U.S.C. § 300gg-91(a)(1). Congressional hearings emphasized the importance of coverage without cost-sharing for women's specific healthcare needs because " women have different health needs than men, and these needs often generate additional costs." 155 Cong. Rec. 29049, 29070 (Dec. 2, 2009) (statement of Sen. Feinstein). " Women of childbearing age spent 68 percent more in out-ofpocket health care costs than men." Id. Additionally, the legislative debates recognized that medical costs disproportionately discourage women from seeking treatment: " [w]omen are more likely than men to neglect care or treatment because of cost." 155 Cong. Rec. S11985, S11987 (daily ed. Nov. 30. 2009) (statement of Sen. Mikulski). The enacted law thus required coverage for, " with respect to women, such additional preventive care and screenings . . . as provided for in comprehensive guidelines supported by the Health Resources and Services Administration." 42 U.S.C. § 300gg-13(a)(4); see also Group Health Plans and Health Insurance Issuers Relating

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to Coverage of Preventive Services under the Patient Protection and Affordable Care Act, 77 Fed. Reg. 8725-01, 8725 (Feb. 15, 2012) (to be codified at 29 C.F.R. pt. 2590; 45 C.F.R. pt. 147).

For assistance in developing the guidelines for covered " preventive care and screenings," id., the Health Resources and Services Administration (" HRSA" ) asked the Institute of Medicine (" IOM" ) to bring together a committee to " conduct a review of effective preventive services to ensure women's health and well-being." IOM, Clinical Preventive Services for Women: Closing the Gaps (" Closing the Gaps " ) (2011), 1.[5] " The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public." Id. at iv. The members of the Committee on Preventive Services for Women (" Committee" ) included " specialists in disease prevention, women's health issues, adolescent health issues, and evidence-based guidelines." Id. at 2. The Committee recommended preventive measures that " met the following criteria:

o The condition to be prevented affects a broad population;
o The condition to be prevented has a large potential impact on health and well-being; and
o The quality and strength of the evidence is supportive.

Id. at 8. The Committee made eight recommendations[6] for preventive services for women, including coverage for " the full range of Food and Drug Administration-approved contraceptive methods, sterilization procedures, and patient education and counseling for women with reproductive capacity." Id. at 10; see also 77 Fed. Reg. at 8725. This recommendation was based on the Committee's concern about the high rate of unintended pregnancy in the United States; forty-nine percent of pregnancies in 2001 " were unintended--defined as unwanted or mistimed at the time of conception," a rate much higher than comparable developed countries. Closing the Gaps at 102. The rate of unintended pregnancy " is more likely among women who are aged 18 to 24 years and unmarried, who have a low income, who are not high school graduates, and who are members of a racial or ethnic minority group." Id. The Committee concluded that contraceptive coverage would greatly decrease the risk of unwanted pregnancies, adverse pregnancy outcomes, and other negative health consequences, and significantly reduce women's medical costs. Id. at 102-07. The regulations promulgated by the agencies implementing the ACA required group health plans and insurance issuers offering group or individual health insurance coverage to provide coverage without cost-sharing for preventive care and screenings provided for in guidelines supported by the HRSA. See 26 C.F.R. § 54.9815-2713A (Tax); 29 C.F.R. § 2590.715-2713A (Labor); 45 C.F.R. § 147.131 (Health and Human Services).[7]

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The regulations provide for a religious-employer exemption from the contraceptive-coverage requirement and an accommodation for certain non-profits that do not qualify for the exemption but that object to contraceptive coverage on religious grounds. The government first developed the religious-employer exemption, under which HRSA is authorized to " establish an exemption . . . with respect to a group health plan established or maintained by a religious employer (and health insurance coverage provided in connection with a group health plan established or maintained by a religious employer) with respect to any requirement to cover contraceptive services under such guidelines." 45 C.F.R. § 147.131(a). A " religious employer" is defined as " an organization that is organized and operates as a nonprofit entity and is referred to in section 6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code of 1986, as amended." 45 C.F.R. § 147.131(a); see 26 U.S.C. § § 6033(a)(3)(A)(i), (iii) (referring to " churches, their integrated auxiliaries, and conventions or associations of churches" and " the exclusively religious activities of any religious order." ).

Based on objections that the religious-employer exemption as borrowed from the Tax Code was drawn too narrowly, the government developed a special accommodation for certain non-profits. The accommodation was intended to " meet two goals--providing contraceptive coverage without cost-sharing to individuals who want it and accommodating non-exempted, non-profit organizations' religious objections to covering contraceptive services." 77 Fed. Reg. at 8727. The final regulations permitted " eligible organization[s]" to obtain the accommodation if the organization " satisfies all of the following requirements:

(1) The organization opposes providing coverage for some or all of any contraceptive services required to be covered under § 147.130(a)(1)(iv) on account of religious objections.
(2) The organization is organized and operates as a nonprofit entity.
(3) The organization holds itself out as a religious organization.
(4) The organization self-certifies, in a form and manner specified by the Secretary, that it satisfies the criteria in paragraphs (b)(1) through (3) of this section, and makes such self-certification available for examination upon request[.]

45 C.F.R. § 147.131(b).

The process by which an organization obtains the exemption and the accommodation will be discussed as ...


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