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Wednesday, January 02, 2013

Ind. Decisions - More on "Contraception Mandate Faces Justice Sotomayor and Seventh Circuit"

Updating this ILB entry from Dec. 29, 2012, re the Dec. 27th decision in Grote Industries v. Sebelius by Indiana district court Judge Sarah Evans Barker, and the Dec. 28th 2-1 ruling by a 7th Circuit panel in the case of Korte v. Sebelius, both involving the issue of whether "the new federal health care law’s requirement that companies with more than 50 employees provide free health insurance coverage for birth control drugs and methods for their female workers" -- In Grote, Judge Barker denied an injunction; in Korte, the 7th Circuit granted an injunction. And in Hobby Lobby, where the Tenth Circuit denied Hobby Lobby’s motion for an injunction pending appeal, Justice Sotomeyer on Dec. 26th denied an emergency application for a stay. Here is some additional commentary.

Andrea Neal, of The Indiana Policy Institute, has this commentary in the Indianapolis Star, headed "Business' beliefs held hostage: To avoid huge fines, Grote Industries gives in." Some quotes:

When the officers of Grote Industries sat down to discuss a possible legal challenge to the contraceptive mandate in the national health-care law, the vote was immediate and unanimous.

"We decided that it was definitely against our beliefs," says chairman and CEO William Grote III.

The company filed a complaint in U.S. District Court in Southern Indiana seeking to block implementation of that provision in the Patient Protection and Affordable Care Act of 2010. * * *

As of Jan. 1, the company had no choice in the matter. It either covers such services or faces steep daily fines imposed by the federal government.

"The penalty is absolutely onerous," Grote says. "It would easily destroy the company should we not do it."

The Affordable Care Act has generated many lawsuits since its passage, but few of its provisions have been as controversial as the one forcing employers to subsidize medical services to which they object on moral grounds.

The law guarantees most workers free access to preventive health care. Federal rules say this includes "contraceptive methods and sterilization methods" approved by the Food and Drug Administration, such as Plan B and "ella," known as the "morning after" and "week after" pills because they can prevent fertilized eggs from attaching to the uterus. Related counseling and education are also covered.

Employers who fail to finance these things can be fined $100 per employee per day. With 1,150 employees worldwide, Grote Industries could be looking at $4 million a year.

The Grote complaint is one of more than 40 lawsuits filed around the country by Catholic and evangelical plaintiffs including hospitals, universities and for-profit businesses.

Religious nonprofits are exempt from the mandate until Aug. 1 while the Obama administration considers changes to address their objections. For-profit businesses like Grote were required to comply by August 2012, or whenever their updated health plans took effect, in most cases Jan. 1.

The underlying issue -- whether the mandate violates religious freedom and free speech concerns of private employers -- has yet to be addressed by the Supreme Court. Efforts to block the law's enforcement pending resolution of the legal challenges have been mostly unsuccessful.

On Dec. 26, Supreme Court Justice Sonia Sotomayor refused to stop the Department of Health and Human Services from enforcing the mandate against Hobby Lobby, an arts and crafts chain with 13,000 employees. The next day, U.S. District Judge Sarah Evans Barker denied a similar motion from Grote Industries, finding that "the burden the mandate imposes on plaintiffs here is likely too remote and attenuated to be considered substantial." Hobby Lobby has announced it will defy the law while Grote intends to comply.

Lyle Denniston writes today in Constitution Daily in an article headed "Do profit-making corporations have religious rights?" Some quotes:
One of the big issues not settled by the 2012 presidential campaign is whether “corporations are people” and, like people, have constitutional rights. The issue continues in a new form: does the First Amendment’s right to the free exercise of religion protect profit-making corporations? The courts are just beginning to provide answers, and the answers so far are mixed.

Last week, using different legal analyses, a Supreme Court justice on one day made it clear that the question remained open and unsettled, while a federal appeals court panel’s majority two days later gave at least a temporary answer: Yes. Those were the most significant statements so far as federal courts work their work through more than 40 lawsuits challenging the new Affordable Care Act’s requirement for free birth-control services for millions of working women. * * *

The key dispute in this context thus appears to turn on whether the faith preferences of the owners of a profit-making corporation can be transferred to the business entity so that it is not an independent entity but rather, for constitutional purposes, is an alter ego. The Kortes argue that, since the couple owns 88 percent of the construction company, they do treat it as an alter ego to express their faith. And it appears that, at least for the time being, that claim has prevailed in the courts in their case.

However, other judges on other federal courts have disagreed, and have concluded flatly that a secular corporation cannot exercise religion, and have warned that the contrary conclusion could raise the prospect of scuttling many laws that protect employees’ workplace rights.

Justice Sotomayor herself noted the conflicting results that have been emerging in the contraceptives mandate cases. And she also commented that the challengers, once they have had their day in the lower courts, will be free to bring the issue back to the Supreme Court. Given the intensity of the courthouse controversy over the mandate, such an appeal is all but certain, thus posing at some point a profound new twist on whether “corporations are people.”

Posted by Marcia Oddi on January 2, 2013 09:00 AM
Posted to Ind Fed D.Ct. Decisions | Ind. (7th Cir.) Decisions