Roman Catholic Archdiocese of N.Y. v. Sebelius

• Decision Date: 04 December 2012
• Docket Number: No. 12 Civ. 2542(BMC).,12 Civ. 2542(BMC).
• Citation: 907 F.Supp.2d 310
• Parties: The ROMAN CATHOLIC ARCHDIOCESE OF NEW YORK, et al., Plaintiffs, v. Kathleen SEBELIUS, in her official capacity as Secretary, United States Department of Health and Human Services, et al., Defendants.
• Court: U.S. District Court — Eastern District of New York

907 F.Supp.2d 310

The ROMAN CATHOLIC ARCHDIOCESE OF NEW YORK, et al., Plaintiffs,

v.Kathleen SEBELIUS, in her official capacity as Secretary, United States Department of Health and Human Services, et al., Defendants.

No. 12 Civ. 2542(BMC).

United States District Court, E.D. New York.

Dec. 4, 2012.

Jones & Day, New York, NY, for Plaintiffs.

Benjamin Berwick, U.S. Department of Justice, Civil Division, Federal Programs, Neil Matthew Merkl, Kelley, Drye & Warren, LLP, Cecilia D. Noland–Heil, American Center for Law and Justice, for Defendants.

MEMORANDUM DECISION AND ORDER

COGAN, District Judge.

The Patient Protection and Affordable Care Act (the “ACA”), Pub.L. No. 111–148, 124 Stat. 119 (2010), requires that group health insurance plans cover certain preventative medical services without cost-sharing, such as a copayment or a deductible. Pursuant to regulations subsequently issued, the preventative services that must be covered include contraception, sterilization, and related counseling (the “Coverage Mandate”), although certain religious employers are exempt from this requirement.

Plaintiffs are five New York-area Roman Catholic entities. Catholic doctrine teaches that contraception and sterilization, along with other forms of artificial interference with the creation of human life, are immoral and Catholic organizations may not condone or facilitate these practices. Plaintiffs allege that the Coverage Mandate violates their rights to religious liberty because it requires them to pay for contraceptive coverage despite their sincerely-held religious beliefs. They assert claims under the Establishment, Free Exercise, and Free Speech clauses of the First Amendment, as well as the Religious Freedom Restoration Act and the Administrative Procedures Act. Plaintiffs ask the Court to invalidate and the enjoin enforcement of the Coverage Mandate against them.

Defendants have moved to dismiss plaintiffs' complaint for lack of subject-matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, arguing that plaintiffs lack standing to challenge the Coverage Mandate and, alternatively, that the case is not ripe for judicial review. ¹ For the reasons set forth below, defendants' motion is granted in part and denied in part.

BACKGROUND

I. The Relevant Statutes and Regulations

The Coverage Mandate is the result of a complex history of Congressional legislation and agency rulemaking involving the Department of Labor (“DoL”), the Department of the Treasury (“DoT”), and the Department of Health and Human Services (“HHS”) (collectively, the “Departments”).

In March 2010, Congress enacted the ACA as well as the Health Care and Education Reconciliation Act. These acts established a number of requirements relating to “group health plans,” a term which encompasses employer plans that provide health care coverage to employees, regardless of whether the plans are insured or self-insured. See42 U.S.C. § 300gg–91(a)(1); Interim Final Rules for Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventative Services Under the Patient Protection and Affordable Care Act, 75 Fed.Reg. 41,726, 41,727 (July 19, 2010) (“Interim Final Rules”). As is relevant here, the ACA requires that group health plans provide coverage for a number of preventative medical services at no charge to the patient. § 300gg–13. Specially, the ACA provides that a group health plan must “at a minimum provide coverage for and shall not impose any cost sharing requirements for [,]” among other things, women's “preventative care and screenings ... as provided for in comprehensive guidelines supported by the Health Resources and Services Administration[.]” § 300gg–13(a)(4).²

The ACA's preventative services coverage requirement does not, however, apply to group health plans that are grandfathered. See42 U.S.C. § 18011(a)(2). A group health plan is grandfathered when at least one person was enrolled in the plan on March 23, 2010 and the plan has continually covered at least one individual since that date. See26 C.F.R. § 54.9815–1251T(a)(1)(i)(DoT); 29 C.F.R. § 2590.715–1251(a)(1)(i)(DoL); 45 C.F.R. § 147.140(a)(1)(i)(HHS). A plan may lose its grandfathered status, however, if, when compared to the terms of the plan as of March 23, 2010, it eliminates benefits, increases a percentage cost-sharing requirement, significantly increases a fixed-amount cost-sharing requirement, significantly decreases an employer's contribution rate, or imposes or lowers an annual limit on the dollar value of benefits. See26 C.F.R. § 54.9815–1251T(g)(1)(DoT); 29 C.F.R. § 2590.715–1251(g)(1)(DoL); 45 C.F.R. § 147.140(g)(1)(HHS).

The Departments began issuing regulations implementing the ACA in phases. On July 19, 2010, they announced that HHS was developing the HRSA guidelines and expected to issue them by August 1, 2011. SeeInterim Final Rules, 75 Fed.Reg. at 41,728. Since there were no existing HRSA guidelines concerning preventative care and screenings for women at the time of the Interim Final Rules, HHS commissioned the Institute of Medicine (“IOM”), a Congressionally-funded body, with “review[ing] what preventative services are necessary for women's health and well-being” and recommending comprehensive guidelines, as called for by the ACA. On July 19, 2011, IOM published a report recommending the inclusion of certain preventative medical services in HRSA's guidelines. Among other things, IOM recommended that group health plans be required to cover “the full range of Food and Drug Administration [“FDA”]-approved contraceptive methods, sterilization procedures, and patient education and counseling for women with reproductive capacity.” FDA-approved contraceptive methods encompass oral conceptive pills, diaphragms, intrauterine devices, and emergency contraceptives, which, according to plaintiffs, can cause abortions.

HRSA adopted IOM's recommendations on August 1, 2011. Two days later, the Interim Final Rules were amended to “provide HRSA additional discretion to exempt certain religious employers from the [HRSA] Guidelines where contraceptive services are concerned.” 76 Fed.Reg. 46,263 (Aug. 3, 2011). See also45 C.F.R. § 147.130(a)(1)(iv)(A). In order to qualify for the religious employer exemption, an organization must meet all of the following criteria:

(1) The inculcation of religious values is the purpose of the organization.

(2) The organization primarily employs persons who share the religious tents of the organization.

(3) The organization serves primarily persons who share the religious tenets of the organization.

(4) The organization is a nonprofit organization as described in section 6033(a)(1) and section 6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code of 1986, as amended.³

45 C.F.R. § 147.130(a)(1)(iv)(B)(HHS). See also29 C.F.R. § 2590.715–2713(a)(1)(iv)(DoL). HRSA exercised its discretion under the amended Interim Final Rules and exempted the religious employers who satisfy these criteria from the requirement of covering contraceptive services. See Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventative Services Under the Patient Protection and Affordable Care Act, 77 Fed.Reg. 8,725, 8,726 (Feb. 15, 2012).

The Departments received over 200,000 responses to their request for comments on the amended Interim Final Rules. Many of the comments were submitted by religiously-affiliated institutions and asserted that the religious employer exemption was too narrow and that the limited scope of the exemption raised religious liberty concerns. Id. at 8,727. On February 15, 2012, the Departments finalized the amended Interim Final Rules without making any changes to the criteria used to determine whether an organization qualified for the religious employer exemption. Id. These finalized amended rules are the operative regulations at issue in this suit and, together with the HRSA guidelines, constitute the Coverage Mandate. See29 C.F.R. § 2590.715–2713(a)(1)(iv)(DoL); 45 C.F.R. § 147.130(a)(1)(iv)(HHS).

At the same time that they finalized the Interim Final Rules, however, the Departments announced a “temporary enforcement safe harbor” period during which they planned “to develop and propose changes to these final regulations that would 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 8,727. Without the safe harbor, non-grandfathered plans would be required to comply with the Coverage Mandate for plan years beginning on or after August 1, 2012. The safe harbor extended this date, by a year, to plan years beginning on or after August 1, 2013, during which time the Departments agreed not to take any enforcement action against an employer or group health plan that complies with the conditions of the safe harbor. See HHS, Guidance on Temporary Enforcement Safe Harbor, at 3 (Aug. 15, 2012), available at http:// cciio. cms. gov/ resources/ files/ prev– services– guidance– 08152012. pdf (last visited Dec. 3, 2012). In order to comply with the terms of the safe harbor, the organization must (1) be organized and operate as a non-profit entity, (2) have “consistently not provided all or the same subset of contraceptive coverage otherwise required at any point” from February 10, 2012 onward because of the organization's religious beliefs, (3) provide notice to participants that some or all contraceptive services will not be covered for the first plan year beginning on or after August 1, 2012, and (4) provide a certification that it satisfies these criteria.

Consistent with their announced plan “to develop and propose changes” to the Interim Final Rules, on March 21, 2012, the Departments filed an advance notice of proposed rulemaking (“ANPRM”) in the Federal Register concerning possible means of accommodating religious...