Univ. of Notre Dame v. Sebelius

• Decision Date: 20 December 2013
• Docket Number: No. 3:13–cv–01276–PPS.,3:13–cv–01276–PPS.
• Citation: 988 F.Supp.2d 912
• Parties: UNIVERSITY OF NOTRE DAME, Plaintiff, 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 — Northern District of Indiana

988 F.Supp.2d 912

UNIVERSITY OF NOTRE DAME, Plaintiff,

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

No. 3:13–cv–01276–PPS.

United States District Court,

N.D. Indiana,

South Bend Division.

Dec. 20, 2013.

Matthew A. Kairis, Jones Day, Columbus, OH, for Plaintiff.

OPINION AND ORDER DENYING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

PHILIP P. SIMON, Chief Judge.

Notre Dame seeks a preliminary injunction against enforcement of the part of the Affordable Care Act that requires employers to provide employees with health insurance that covers contraceptive services. Notre Dame objects to providing contraceptive care on religious grounds, and that of course is its prerogative. But the law provides religious employers like Notre Dame an out by allowing it to file a certification saying it refuses to provide such services. If Notre Dame takes that tack, someone else provides the coverage, and not on Notre Dame's dime. Notre Dame nonetheless claims that by formally opting out, it would trigger, or authorize, a third party's provision of contraception, and it objects to that.

Notre Dame wants to eat its cake, and have it still, at the expense of Congress, administrative agencies, and the employees who will be affected. Notre Dame is free to opt out of providing the coverage itself, but it can't stop anyone else from providing it. But that is essentially what Notre Dame is requesting. Notre Dame is not being asked to do or say anything it doesn't already do, and wouldn't do regardless of the outcome of this case; the only thing that changes under the healthcare law is the actions of third parties. Notre Dame can't claim to be “pressured” to do something it has done, will do, and would do regardless of the contraception requirement. If Notre Dame opts out of providing contraceptive coverage, as it always has and likely would going forward, it is the government who will authorize the third party to pay for contraception. The government isn't violating Notre Dame's right to free exercise of religion by letting it opt out, or by arranging for third party contraception coverage.

For these reasons and as outlined more fully below, because I find that Notre Dame is not likely to succeed on the merits, a preliminary injunction is not warranted.

FACTUAL and LEGAL BACKGROUND

Notre Dame is a nonprofit Catholic university, and the largest employer in St. Joseph County, Indiana. Compl. ¶¶ 9, 21, 24. Notre Dame views its Catholic faith as integral to its educational mission. Id. ¶¶ 27–29. It adheres to the Catholic Church's document governing Catholic universities, known as Ex Corde Ecclesiae. Affidavit of John Affleck–Graves ¶ 12. It subscribes to the Catholic beliefs “that life begins at conception and that artificial interference with life and conception is immoral.” And so it opposes any artificial impediment to conception. Memo. ISO Motion for Preliminary Injunction at 1; Compl. ¶¶ 32–33. Notre Dame is therefore opposed to “pay [ing] for, [facilitate[ing] access to, and/or becom[ing] entangled in the provision of products, services, practices and speech” that propound contraception. Memo. ISO Motion for Preliminary Injunction at 1. It also believes that it must avoid giving anyone the impression that it condones the use of contraception, which would constitute “scandal,” defined as “encouraging by words or example other persons to engage in wrongdoing.” Compl. ¶ 34.

Notre Dame's employee healthcare is self-insured, meaning that Notre Dame underwrites its employees' medical expenses itself. Although Notre Dame is financially responsible, it contracts with a third party administrator (a “TPA”) to administer the health plan. Id. ¶¶ 36–37. Notre Dame offers its students the option of purchasing health insurance through Aetna. Id. ¶ 39. Neither plan covers contraceptive services due to Notre Dame's religious objections. Id. ¶ 41.

1. Background on the Affordable Care Act

Congress enacted the Patient Protection and Affordable Care Act, Pub. L. 111–148, 124 Stat. 119 (2010) (the “ACA”) in 2010, substantially overhauling the nation's healthcare legal and regulatory framework. The ACA requires health insurance to cover certain preventive services without cost to the insured. 42 U.S.C. § 300gg–13. Insurance plans that don't include the required coverage face stiff penalties: $100 per affected individual per day of noncompliance, 26 U.S.C. § 4980D(a), (b), or $2,000 per year per employee if an employer who is required to provide insurance decides not to, 26 U.S.C. § 4980H(a), (c)(1). But certain healthcare plans are grandfathered, which essentially means that if they remain as they were before the ACA was enacted, they don't have to comply with the preventive services requirements. See42 U.S.C. § 18011(a)(2). It is undisputed that Notre Dame's plan isn't grandfathered. Compl. ¶ 42.

Initially, the preventive care coverage requirements did not include various services specific to women's needs. See 155 Cong. Rec. S11985, S11986 (daily ed. Nov. 30, 2009) (statement of Sen. Mikulski). But the ACA was later amended to add preventive care specific to women. § 2713(a)(4), 124 Stat. at 131 (codified at 42 U.S.C. § 300gg–13(a)(4)). The law doesn't list the specifics, instead leaving that to “comprehensive guidelines supported by the Health Resources and Services Administration.” Id.

The problem was that there weren't guidelines for preventive care and screening for women, so the Department of Health and Human Services asked the Institute of Medicine (“IOM”) to make recommendations. Inst. of Med., Committee on Preventive Services for Women, Clinical Preventive Services For Women: Closing The Gaps, 2 (2011), available at http:// www. nap. edu/ catalog. php? record_ id= 13181. The IOM convened a committee of specialists that recommended that the guidelines include support and counseling addressing a battery of issues including, of primary relevance here, “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. (This is the requirement Notre Dame opposes, and for the sake of convenience I will refer to the requirement using the shorthand “contraception” or “contraceptive.”) These approved methods include options that are prescription-only (oral contraceptives and intrauterine devices) and non-prescription (condoms, spermicides and emergency contraceptives). Id. at 105. The government adopted guidelines consistent with the IOM's recommendations on an interim basis in 2011, albeit subject to an exemption for religious employers. See76 Fed.Reg. 46,621 (Dep'ts of Treas., Labor, Health & Human Svcs. Aug. 3, 2011).

2. Rulemaking Under the ACA

The adoption of guidelines with a narrow religious exemption was perhaps the moment that the contours of this controversy began to take shape. An organization qualified for exemption from the contraception requirement as a religious employer if: (1) its purpose was the inculcation of religious values; (2) it primarily employed people who shared its religious tenets; (3) it primarily served people who shares its religious tenets; and (4) it was a nonprofit under sections 6033(a)(1) and 6033(a)(3)(A)(I) or (iii) of the Internal Revenue Code of 1986. 76 Fed.Reg. 46,621, 46,626. But the final (and current) regulations reduced the definition to just number (4) above; the first three requirements were discarded. See45 C.F.R. § 147.131(a). What that means is that the exemption applies to “churches, their integrated auxiliaries, and conventions or associations of churches” and “the exclusively religious activities of any religious order.” 26 U.S.C. § 6033(a)(3)(A)(i) and (iii). The upshot of all this was that, as originally drafted, employees covered under exempt organizations' health insurance as defined in the tax code— i.e. church employees—could not receive cost-free contraceptive services. But the “religious employer” exemption didn't apply to religious based non-profits like Notre Dame. That was the balance originally struck by the drafters of the regulations.

A tremendous outcry over this perceived disparity in the regulations ensued. Why would churches be exempt but not church affiliated entities? So in 2012 the government said that it would forego enforcement against non-profits with religious objections to contraception, like Notre Dame, for a year while it considered developing an accommodation that would apply to those entities. See77 Fed.Reg. 8725, 8728–29 (Feb. 15, 2012).

At this point, in mid–2012, Notre Dame filed a case on similar grounds to its current one. But that case was dismissed without prejudice because Notre Dame lacked standing then, and the case wasn't yet ripe. See Univ. of Notre Dame v. Sebelius, 2012 WL 6756332, 2012 U.S. Dist. LEXIS 183267 (N.D.Ind. Dec. 31, 2012).

In July 2013 the government published the final regulations, which now include accommodation for an “eligible organization,” meaning an organization that “(1) [o]pposes 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 first three criteria.” 78 Fed.Reg. 39,870, 39,874 (Jul. 2, 2013); see also26 C.F.R. § 54.9815–2713A(a). When I refer to “the accommodation” in this Opinion, this is what I'm referring to. There is no dispute that this accommodation applies to Notre Dame. To take advantage of the accommodation, an organization need only complete an opt-out form (available at http:// www. dol. gov/ ebsa/ pdf/ preventive services eligible organization certification form. pdf) with the name of the organization and certifying individual and contact information, then sign and date it. The form need only be...