Tyndale House Publishers, Inc. v. Sebelius

• Decision Date: 16 November 2012
• Docket Number: Civil Action No. 12–1635(RBW).
• Citation: 904 F.Supp.2d 106
• Parties: TYNDALE HOUSE PUBLISHERS, INC., et al., Plaintiffs, v. Kathleen SEBELIUS, Secretary of the United States Department of Health and Human Services, et al., Defendants.
• Court: U.S. District Court — District of Columbia

904 F.Supp.2d 106

TYNDALE HOUSE PUBLISHERS, INC., et al., Plaintiffs,

v.Kathleen SEBELIUS, Secretary of the United States Department of Health and Human Services, et al., Defendants.

Civil Action No. 12–1635(RBW).

United States District Court, District of Columbia.

Nov. 16, 2012.

David A. Cortman, Alliance Defending Freedom, Lawrenceville, GA, Erik W. Stanley, Alliance Defending Freedom, Leawood, KS, Steven Henry Aden, Alliance Defense Fund, Matthew S. Bowman, Alliance Defending Freedom, Washington, DC, for Plaintiffs.

Benjamin Leon Berwick, U.S. Department of Justice, Washington, DC, for Defendants.

MEMORANDUM OPINION

REGGIE B. WALTON, District Judge.

The plaintiffs, Tyndale House Publishers, Inc. and its president and CEO, Mark D. Taylor, challenge the application of the regulations and penalties relating to an employer's obligation to cover contraceptives under an employer health plan pursuant to the Patient Protection and Affordable Care Act (the “ACA”), Pub.L. No. 111–148, 124 Stat. 119 (2010),¹ as violating the Religious Freedom Restoration Act (“RFRA”), 42 U.S.C. § 2000bb–1 (2006), the Free Exercise, Establishment, and Free Speech Clauses of the First Amendment, U.S. Const. amend. I, the Due Process Clause of the Fifth Amendment, U.S. Const. amend. V, and the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 553(b)- (c), 706(2)(A), 706(2)(D) (2006). See generally Verified Complaint (“Compl.”). Currently before the Court is the plaintiffs' Motion for Preliminary Injunction (“Pls.' Mot.”). For the reasons explained below, the plaintiffs' motion will be granted.²

I. BACKGROUND

A. The Affordable Care Act

Enacted in March 2010, the ACA requires group health plans to provide women with “preventive care and screenings” without imposing any cost-sharing requirements on the plan beneficiaries. See42 U.S.C. § 300gg–13(a)(4) (Supp.2010). Specifically, the ACA requires that non-grandfathered ³ group or individual health plans and health insurance issuers cover without “impos[ing] any cost sharing requirements ... such additional preventive care and screenings [for women] ... as provided for in comprehensive guidelines supported by the Health Resources and Services Administration [ (“HRSA”) ].” Id.

The Department of Health and Human Services (“HHS”) tasked the Institute of Medicine (“Institute”) with developing recommendations to implement the requirement to provide preventive services for women. Institute of Medicine, Clinical Preventive Services for Women: Closing the Gaps 2 (2011) (“Institute Report”). The HRSA adopted the Institute's recommendations on August 1, 2011, which included a provision requiring “the full range of [FDA]-approved contraceptive methods, sterilization procedures, and patient education and counseling for women with reproductive capacity.” Id. at 20–22, 109–10. HHS subsequently promulgated regulations implementing the Institute's recommendations, under which all health insurance plans and policies (except those grandfathered or otherwise exempt) are required to comply with the contraceptive coverage mandate starting with the plan years beginning on or after August 1, 2012. 76 Fed.Reg. 46621–01 (Aug. 3, 2011).

Among other exemptions, the regulations exempt from the contraceptive coverage mandate certain “religious employers,” defined as employers having each of the following characteristics:

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

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

45 C.F.R. § 147.130(a)(1)(iv)(B). In response to concerns from various organizations with religious objections to the contraceptivecoverage mandate but which did not fit the definition of religious employer, “the Departments of Health and Human Services, Labor, and the Treasury [ ] propose [d] amendments to regulations regarding” the contraceptive coverage mandate in an Advance Notice of Proposed Rulemaking (“Advance Notice”). 77 Fed.Reg. 16501–01 (Mar. 21, 2012). The agencies stated in the Advance Notice that the religious employer exemption would be broadened. Id. In addition to the Advance Notice, HHS also issued guidance outlining a safe harbor for certain non-profit employers with religious objections to the contraceptive coverage mandate. See Ctr. for Consumer Info. & Ins. Oversight and Ctrs. for Medicare & Medicaid Servs., Guidance on the Temporary Enforcement Safe Harbor for Certain Employers (February 10, 2012), available at http:// cciio. cms. gov/ resources/ files/ Files 2/ 02102012/ 20120210– Preventive Services– Bulletin. pdf, and (August 15, 2012), available at http:// cciio. cms. gov/ resources/ files/ prev– services– guidance– 08152012. pdf. The guidance grants certain non-profit employers with religious objections to the contraceptive coverage mandate an exemption from application of the mandate until August 1, 2013, by which time HHS expects to have finalized new rules and regulations broadening the definition of religious employer. 77 Fed.Reg. 16501–01.

Employers subject to the contraceptive coverage mandate face fines, penalties, and enforcement actions for non-compliance. See29 U.S.C. § 1132(a) (civil enforcement actions by the Department of Labor and insurance plan participants); 26 U.S.C. § 4980D(a), (b) (penalty of $100 per day per employee for noncompliance with coverage provisions of the ACA); 26 U.S.C. § 4980H (annual tax assessment for noncompliance with requirement to provide health insurance).

B. The Plaintiffs' Factual Allegations

The first named plaintiff, Tyndale House Publishers, Inc. (“Tyndale”), is a Christian publishing company founded in 1962 by Dr. Kenneth Taylor and his wife, Margaret Taylor. Compl. ¶ 21. Initially founded to publish “Kenneth Taylor's modern paraphrase of portions of the New Testament” of the Bible, the company today “publishes a wide array of Christian books ranging from Bible commentaries to books about family issues to Christian fiction.” Id. ¶ 24. The publishing company employs 260 full-time employees, and provides them with health insurance through a self-insured health plan. Id. ¶¶ 71–73.

Tyndale is 96.5% owned by the Tyndale House Foundation (the “Foundation”), a non-profit religious entity. Id. ¶¶ 41–42, 45. Of the shares owned by the Foundation, “just over 8.4%” are voting shares. Id. ¶ 45. “The Foundation receives 96.5% of all of Tyndale's distributed profits,” amounting to $38.8 million of the $40.2 million in profits since 2001. Id. ¶ 47. The Foundation directs much of its proceeds “to various charitable causes.” Id. ¶ 50. In particular, “[t]he Foundation has used proceeds from Tyndale to benefit such ministries as: a Christian community center in the Chicago area ...; [the] Cabrini Green Legal Aid Clinic ...; and evangelistic work worldwide.” Pls.' Mem., Exhibit (“Ex.”) 1 (Oct. 8, 2012 Affidavit of Mark D. Taylor) ¶ 3.

In addition to the shares owned by the Foundation, “a small percentage is owned by [the] Tyndale Trust.” Compl. ¶ 52. Because the Tyndale Trust holds “84% of the voting shares,” Tyndale is “primarily directed” by the Tyndale Trust. Id. ¶¶ 2, 52. The same group of individuals serves both as the trustees of the Tyndale Trust and as the board of directors of Tyndale House Publishers, and each individual is “required to sign a Statement of Faith each year to show that they hold certain religious beliefs, which are typically described as evangelical Christian beliefs.” Id. ¶¶ 55–56.

Two additional Illinois trusts established to “benefit Dr. Kenneth Taylor's widow and children,” own “just over 3.4%” of the publishing company's remaining shares. Id. ¶ 60. The two trusts “share the beliefs of Tyndale House Publishers, [the] Tyndale House Foundation, and [the] Tyndale Trust.” Id. ¶ 61.

Tyndale, the Foundation, and the three trusts ⁴ have each adopted almost identical “statement[s] of belief and policy” outlining their religious beliefs, which include “respect for the inviolable sanctity of the life of every human being as created in the image and likeness of God from the moment of conception/fertilization” such that each “supports Tyndale House Publishers, Inc.'s omission from its employee health plan of any coverage of abortions and of drugs (e.g., Plan B, ella ⁵) or devices (e.g., intrauterine devices [“IUDs”] ) that can cause the demise of an already conceived/fertilized human embryo.” Id. ¶¶ 39, 51, 59, 62.

The second named plaintiff, Mark D. Taylor, is the son of Tyndale's founder, Kenneth Taylor. Id. ¶ 2. Mark Taylor is the president and CEO of Tyndale and the Foundation, and a trustee of both the Tyndale Trust and the Kenneth N. Taylor Trust. Id. ¶ 63. In his capacity as president and CEO of the publishing company and the Foundation, Mark Taylor “is responsible for their overall operations, including the provision of Tyndale's health insurance plan.” Id. ¶ 65. He shares the same beliefs as the entities described above. Id. ¶ 67.

The contraceptive coverage mandate requires the plaintiffs “to provide and pay for drugs and devices ... [that] violate [their] religious beliefs, and [ ] subjects [the plaintiffs] to heavy fines and penalties if [they] choose [ ] not to violate those beliefs.” Id. ¶¶ 3, 5. In particular, the plaintiffs are required to pay for “drugs (e.g., Plan B, ella) or devices (e.g., intrauterine devices) that can cause the demise of an already conceived/fertilized human embryo.” Id. ¶¶ 39, 81–82.

The plaintiffs instituted this action on October 2, 2012. By requiring the plaintiffs to provide for certain contraceptive care, the plaintiffs allege that the defendants have violated their rights under the RFRA, and the First and Fifth Amendments to the...