Foundation v. Sebelius

Decision Date13 January 2014
Docket NumberCase No. 13–cv–15198.
Citation991 F.Supp.2d 957
PartiesThe AVE MARIA FOUNDATION, et al., Plaintiffs, v. Kathleen SEBELIUS, et al., Defendants.
CourtU.S. District Court — Eastern District of Michigan
Validity Called into Doubt

42 U.S.C.A. § 300gg–13(a)(4); 45 C.F.R. § 147.131(a, c)Erin E. Mersino, Ann Arbor, MI, for Plaintiffs.


STEPHEN J. MURPHY, III, District Judge.

Plaintiffs are five nonprofit organizations seeking to invalidate federal regulations that require employer-sponsored health insurance plans to include coverage for contraceptives, abortifacients, and sterilization at no cost to the plan beneficiaries. All five organizations object to the challenged regulations for religious reasons, and none of the organizations qualify for a “straight-up” exemption. Although Plaintiffs could avoid the requirement through an accommodation for religious objectors, to qualify, Plaintiffs must execute a self-certification that obliges their insurer to provide the objectionable services at no cost to the plan beneficiaries. Plaintiffs say that providing even indirect support for contraception, abortion, and sterilization would also violate their religious convictions.

Because failure to cover the required services or execute a self-certification by January 1, 2014 could have subjected Plaintiffs to financial penalties or other harms, Plaintiffs moved for a temporary restraining order. The Court granted the motion on the briefs and scheduled a hearing to determine if a preliminary injunction should issue. The Court canceled the hearing after the parties jointly moved for a ruling based on the submissions in their briefs. Having considered the parties' submissions, the Court will issue a preliminary injunction.

I. Statutory and Regulatory Framework

The Affordable Care Act (“ACA”) requires employers with fifty or more employees to offer health insurance plans meeting certain coverage requirements. See26 U.S.C. § 4980H. Failure to comply exposes an employer to substantial fines. See26 U.S.C. §§ 4980D(a), 4980H(a). Although smaller employers need not sponsor a health plan, if they elect to do so, the government asserts that their health plans must also meet the minimum coverage requirements.1 Def.'s Resp. 5, ECF No. 9.

One such requirement is that health plans cover “preventative care and screening” for women “as provided for in comprehensive guidelines supported by the Health Resources and Services Administration [‘HRSA’].” 42 U.S.C. § 300gg–13(a)(4). The HRSA adopted guidelines (“HRSA Mandate”), in turn, require coverage of “all Food and Drug Administration approved contraceptive methods, sterilization procedures, and patient education and counseling for women with reproductive capacity.” HRSA, Women's Preventative Services: Required Health Plan Coverage Guidelines, available at http:// www. hrsa. gov/ womens guidelines/ (last visited Jan. 13, 2014); see also Eden Foods, Inc. v. Sebelius, 733 F.3d 626, 628 (6th Cir.2013).

The ACA and implementing regulations initially varied this requirement for grandfathered health plans and health plans sponsored by religious employers. See42 U.S.C. § 18011(a)(2); 45 C.F.R. §§ 147.140, 147.131(a). A health plan is grandfathered if at least one person has been continuously enrolled in the plan since March 23, 2010, and if the terms of the plan have remained unchanged. See45 C.F.R. § 147.140; see also26 C.F.R. § 54.9815–1251T; 29 C.F.R. § 2590.715–1251. A “religious employer” (1) has the “inculcation of religious values as its purpose,” (2) “primarily employs persons who share its religious tenets,” (3) “primarily serves persons who share its religious tenets,” and (4) is a non-profit organization under Sections 6033(a)(1) and 6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code. 45 C.F.R. § 147.131(a).

After receiving objections from organizations that did not qualify as religious employers, the government temporarily exempted nonprofit religious organizations from the HRSA Mandate. See Korte, 735 F.3d at 661–62. The government also proposed and adopted an “accommodation” that allows “eligible organizations” to avoid the HRSA Mandate through a self-certification process. Coverage of Certain Preventative Services under the Affordable Care Act, 78 Fed.Reg. 39,873–74 (July 2, 2013). An eligible organization is one that (1) “opposes providing coverage for some or all ... contraceptive services ... on account of religious objections”; (2) “is organized and operates as a nonprofit entity”; (3) “holds itself out as a religious organization”; and (4) self-certifies that it satisfies the foregoing criteria. See45 C.F.R. § 147.131(a).

Although an eligible organization is not required to file anything with the government,the organization must provide a copy of the self-certification to its health insurance provider. See45 C.F.R. § 147.131(c)(1). The eligible organization is then relieved of any obligation to “contract, arrange, pay, or refer for contraceptive coverage,” 78 Fed.Reg. at 39,874, and the organization's insurer must exclude contraceptive coverage from the organization's health plan, see45 C.F.R. § 147.131(c). But receipt of the self-certification obliges the insurer to [p]rovide separate payments for any contraceptive services required to be covered” at no cost to the plan beneficiaries and to notify them of the available coverage. 45 C.F.R. § 147.131(c)(2)(i)-(d).

The final rules governing the accommodation for eligible organizations became effective January 1, 2014, at which point the temporary safe harbor also expired. See78 Fed.Reg. at 39,872.

II. The Plaintiff Organizations

Plaintiffs are five nonprofit organizations “founded, organized, and ... maintained in conformity with and/or for furtherance of the teachings of the Catholic Church.” Monaghan Decl. ¶ 28, ECF No. 3–2. The Ave Maria Foundation was founded “to promote and spread Catholic education, Catholic media, community projects, and other Catholic charities.” Monaghan Decl. ¶ 7. It supports a variety of organizations, including three of its co-plaintiffs, that “teach the principles of the Catholic tradition,” support the Catholic Church's “moral and social teachings,” and educate the public about the Catholic Church. Monaghan Decl. ¶¶ 11, 18, 21, 23. The Ave Maria Foundation subscribes to the authoritative doctrine of the Catholic Church, including its teachings against contraception, abortion, sterilization, and abortifacients. Monaghan Decl. ¶¶ 9, 12, 17.

The Rhondora J. Donahue Academy, Inc., is a religious primary school “grounded in the traditions of the Roman Catholic Church.” Monaghan Decl. ¶ 18–20. It “actively professes belief” in the authoritative teachings of the Catholic Church, including those related to sexual activity. Gurnsey Decl. ¶ 8, ECF No. 3–6. Ave Maria Communications produces Catholic radio programming and promotes Catholic teaching through a variety of media sources. Monaghan Decl. ¶¶ 21–22; Kresta Decl. ¶ 5, ECF No. 3–5. It too “actively professes belief” in the authoritative teachings of the Catholic Church, including those related to sexual activity. Kresta Decl. ¶ 7. The Thomas More Law Center is a “public interest law firm dedicated to education and litigation on issues of human life, religious freedom, and traditional family values.” Monaghan Decl. ¶ 25. And Domino's Farms Petting Farm is a nonprofit that promotes understanding of “an agriculture lifestyle” and “operate[s] an animal petting farm” for educational purposes. Monaghan Decl. ¶ 27.

All five organizations maintain a group health insurance plan through Blue Cross/Blue Shield of Michigan. Zumda Decl. ¶¶ 5, ECF No. 3–4. Plaintiffs believe that providing health insurance is necessary to remain competitive employers and fulfills their “religious duty to provide for the health and well-being of [their] employees and their families.” Monaghan Decl. ¶¶ 49, 52; see also Zumda Decl. ¶ 18; Kresta Decl. ¶ 20; Guernsey Decl. ¶ 21. But for religious reasons, Plaintiffs' health plan exclude coverage for abortion, abortifacients, sterilization, and artificial contraception. Monaghan Decl. ¶¶ 31–33; Zumda Decl. ¶¶ 12–13.

Notwithstanding the HRSA Mandate, Plaintiffs desire to continue providing health plans insurance coverage that excludes payments for abortions, sterilizations,and abortifacient and contraceptive drugs. Zumda, Decl. ¶ 17. But Plaintiffs' existing health plan is ineligible for grandfathered status due to changes in cost-sharing. Zumda Decl. ¶¶ 8–9. None of the plaintiff organizations qualify as religious employers. And Plaintiffs object to self-certifying as eligible organizations, because, they submit, doing so will indirectly support contraception, sterilization, and abortion. Monaghan Decl. ¶¶ 33, 41–48.


A court may issue a preliminary injunction after weighing (1) whether the movant has a strong likelihood of success on the merits; (2) whether the movant would suffer irreparable injury without the injunction; (3) whether issuance of the injunction would cause substantial harm to others; and (4) whether the public interest would be served by the issuance of the injunction.’ Hunter v. Hamilton Cnty. Bd. of Elections, 635 F.3d 219, 233 (6th Cir.2011) (quoting Certified Restoration Dry Cleaning Network, L.L.C. v. Tenke Corp., 511 F.3d 535, 542 (6th Cir.2007)).

I. Likelihood of Success on the Merits

Plaintiffs seek injunctive relief under the Religious Freedom Restoration Act (RFRA), 42 U.S.C. §§ 2000bb et seq. RFRA affords a cause of action to any person whose religious exercise is substantially burdened by government action even if the burden results from a rule of general applicability. See42 U.S.C. § 2000bb–1.

A RFRA claim proceeds in two steps. “First, the plaintiff must make out a prima facie case by establishing Article III standing and showing that the law in question ‘would (1) substantially burden (2) a...

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