Appeals courts mull ‘Obamacare’ contraception mandate

Business owners who object to the contraception mandate in President Obama’s health care law are pleading their cases in appeals courts across the country, a curtain raiser before a potential showdown in the Supreme Court.

So far, federal circuit courts across the country have diverged on whether religiously devout owners should be exempt from a requirement in the Affordable Care Act that requires them to cover a spectrum of FDA-approved contraceptives as part of their health insurance plans. Lawyers involved in the cases agree the split is a significant development that could send the case to Washington.

“I feel quite confident that one of these will be heard by the Supreme Court,” said Louise Melling, deputy legal director for the American Civil Liberties Union, which has filed briefs in support of the mandate.

The requirement has been a political flash point in Washington for more than year and resulted in about 60 lawsuits from corporate owners and religious nonprofits, such as hospitals and universities.

President Obama tried to mollify the latter group’s concerns by offering an accommodation that would let the nonprofits defer the costs and responsibility of contraception coverage to an insurer or third-party administrator who could offer the drugs’ through a separate plan. But the nation’s Catholic bishops and religious groups have largely rejected the compromise, leaving the situation in limbo.

So it is the corporate cases that are heating up in a series of appellate court showdowns this month and next.

The 7th Circuit Court of Appeals heard oral arguments in Chicago on Wednesday from attorneys for two Midwest companies owned by devout Catholics — the Grote family, which manufactures vehicle safety systems, and Cyril and Jane Korte, who manage about 90 full-time employees at their construction firm, K&L Contractors.

Hobby Lobby, the Oklahoma-based craft-store corporation and most well known of the corporate plaintiffs, made its case before the entire 10th Circuit Court of Appeals the next day, and the 3rd and 6th circuit courts are scheduled to hear arguments from two more plaintiffs Thursday and June 11.

Adele Keim, a lawyer at the Becket Fund for Religious Liberty, attended the Denver arguments while her colleague, Kyle Duncan, delivered arguments on behalf of the Green family, which owns Hobby Lobby. She said it was clear that the eight judges — it was an “en banc” hearing, so all of the circuit judges attended instead of only three — were taking the matter seriously.

“The court was very engaged,” she said. “And it was intense for both sides.”

The plaintiffs say the mandate is forcing them to choose between their beliefs and providing health insurance for their employees because flouting the mandate would result in crippling fines. They are objecting the loudest to emergency contraception that is taken after sex, which they equate with abortion.

More than 30 for-profit entities have filed suit, and 26 of them have obtained rulings that address their merits, at least in part, according to the fund, which keeps track of the cases. Nineteen of the for-profit plaintiffs have secured temporary relief from the mandate, before its merits are vetted by the courts.

The courts are exploring whether the owners have standing to bring the suit or will be harmed by the mandate.

For the ACLU, Ms. Melling said owners who complain that the requirement will place a substantial burden on them are relying on “too attenuated a link” between themselves and their functions as employers.

Supporters of the mandate say employers should insure contraceptives because it is not much different than paying salaries, which could be used to purchase the drugs or devices. They also say the owners would be loath to associate themselves with their corporations if they had to defend themselves, for instance, against a tort claim.

In Chicago, judges pressed the plaintiff’s counsel on how whether corporations are a distinct entity from their owners.

“For some purposes, but not for moral purposes,” replied Matthew S. Bowman, a lawyer with Alliance Defending Freedom. “Just because a corporation has some limited legal liability doesn’t mean that it limits moral liability.”