UPDATED Wednesday 6:19 p.m.  The family-owned business involved in the Third Circuit case, Conestoga Wood Specialties Corp., has filed a petition seeking en banc review of its challenge to the contraception mandate. The petition can be read here.

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Final update Friday 2:19 p.m., with additional discussion of the basis of the Third Circuit’s decision.

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Creating a direct split among federal appeals courts and thus enhancing chances that the Supreme Court will take on the issue, the Third Circuit Court ruled on Friday that a family-owned, profit-making business cannot challenge on religious grounds the new federal health care law’s mandate of birth control health insurance for its workers.   The two-to-one decision by the Philadelphia-based court conflicts with a recent ruling by the Denver-based Tenth Circuit Court.

Ruling in the case of Conestoga Wood Specialties Corp. v. Health and Human Services Department (Circuit docket 13-1144), the Third Circuit panel declared that “for-profit, secular corporations cannot engage in religious exercise” even though they are operated by religiously devout owners.   It thus turned aside the business firm’s claim that the contraception mandate violates the firm’s rights under the First Amendment and the federal Religious Freedom Restoration Act.

The decision was written by Circuit Judge Robert E. Cowen and joined by Circuit Judge Thomas I. Vanaskie.  Circuit Judge Kent A. Jordan dissented.

The case involves a Pennsylvania company that makes wooden cabinets.  All of its stock is owned by members of the Hahn family, who practice the Mennonite faith.  Their company has 950 employees, and it is company policy not to support “anything that terminates a fertilized embryo.”  The objection is aimed at two drugs that must be provided in health coverage for employees under the contraception mandate — the so-called “morning-after pill,” such as Plan B, and the so-called “week-after pill,” known by the name ella.

Under the 2010 Affordable Care Act, private employers with more than fifty employees must provide health insurance that covers a range of birth control and reproductive health screening.  Failure to do so can lead to financial penalties of up to one hundred dollars a day for each employee who is not provided with such coverage.  Some sixty lawsuits are pending around the country, by profit-making businesses and various non-profit institutions, challenging this mandate on religious grounds.

The Third Circuit majority concluded that the First Amendment right to exercise a religious belief — under the Free Exercise Clause — is a “personal right” that exists for the benefit of human beings, not artificial “persons” like corporations.   Religious belief, it said, develops in the “minds and hearts of individuals.”  In drawing this conclusion, he noted the contrary view announced by the Tenth Circuit Court, and said that “we respectfully disagree.”

The majority remarked: “We do not see how a for-profit, ‘artificial being, invisible, intangible, and existing only in contemplation of law,’ that was created to make money could exercise such an inherently ‘human’ right.”   The opinion said that the judges could not find a single court opinion, before the lawsuits against the contraception mandate began, that had found that a profit-making corporation doing ordinary business had its own right of “free exercise” of religion.

It is one thing for a religious organization to be able to exercise the tenets of its faith, the court said, and another thing for a purely secular corporation to make the same claim.

Besides ruling that such a secular firm cannot exercise religious beliefs all on its own, the Circuit Court majority decided that it cannot do so by a “pass-through” to the corporation of its owners’ personal religious beliefs.   The basic nature of a corporation, the majority said, is to have its own independent identity, rights, powers and obligations.   Pennsylvania law on the organization of corporations reinforces that separate identity, the opinion said.

The birth control mandate, according to the court, does not require the Hahn family to do anything; the obligations of the mandate fall only on the corporation.

The decision then moved on to reject the claim that the Pennsylvania firm was protected as a “person” under the federal Religious Freedom Restoration Act.  “Since Conestoga cannot exercise religion, it cannot assert a RFRA claim,” the court concluded, saying that it thus was unnecessary to decide whether a corporation could be a “person” under that Act.

Judge Jordan, in a dissenting opinion that ran to more than twice the length of the majority opinion (sixty-six pages, compared to thirty), said the majority’s conclusions rested on “a cramped and confused understanding of the religious rights preserved by congressional action and the Constitution.”

The decision denied Conestoga’s request for a preliminary injunction to block enforcement against it of the contraception mandate.  Because the Circuit Court had earlier refused a temporary postponement of enforcement, Conestoga has been obeying the mandate, the court noted.

Posted in Cases in the Pipeline, Featured, Health Care

Recommended Citation: Lyle Denniston, Courts split on contraception law (FURTHER UPDATE), SCOTUSblog (Jul. 26, 2013, 12:28 PM), http://www.scotusblog.com/2013/07/courts-split-on-contraception-law/