Business owners rights of conscience defeat ACA birth control mandate says D.C. Circuit Court

The Vatican

One of the manifestations of the anarchism of the right is that despite the "don't tread on me" constitutionalism worn on their sleeves their rhetoric drips with contempt for the actual government and minimizes or rejects the power to regulate commerce among the states and to protect the public health and welfare.  The latest is the D.C Circuit Court of Appeals rejection on free exercise grounds of the Affordable Care Act's mandate that employer health plans provide contraception benefits.
Judge Janice Brown's majority opinion sets the stage this way:

Two brothers, Francis and Philip Gilardi, are equal owners of Freshway Foods and Freshway Logistics—both companies are closely-held corporations that have elected to  be taxed under Subchapter S of the Internal Revenue Code. The two companies collectively employ about 400 employees and operate a self-insured health plan through a third-party administrator and stop-loss provider. As adherents of the Catholic faith, the Gilardis oppose contraception, sterilization, and abortion. Accordingly, the two brothers—exercising their powers as owners and company executives—excluded coverage of products and services falling under these categories. But along came the Affordable Care Act. Part of the Act directs all group health plans and health insurance issuers to  provide, without cost-sharing requirements, preventive care as determined by the Health Resources and Services Administration. 42 U.S.C. § 300gg-13(a)(4).

 The ACA compels no one to use contraception.  But the panel finds that paying for the exercise of that right by an employee is a violation of the boss's freedom of conscience.  Since the Department of Health and Human Services has accommodated religious organizations, the conservative thrust is now to extend that principle to non-religious organization owned by religious people.

In Gilardi v. United States Department of Health and Human Services the court skips over the idea that corporations have rights of religious freedom.  Instead the panel erases the shareholder standing rule and the distinction between the owners of a closely held corporation and the legal entities they create.  The brothers are not distinct from the company they own.  Through a third-party adminsitrator the Gilardi brothers write the checks (though large claims are covered by re-insurance).  They pay for the benefit (not the workers whose produce the revenue). The court declares "The shareholder-standing rule gives us little pause; we are satisfied that the Gilardis have been “injured in a way that is separate and distinct from an injury to the corporation.”

Having jumped that hurdle it is easy to conclude as the panel does, that the burden on free exercise is substantial:

The burden on religious exercise does not occur at the point of contraceptive purchase; instead, it occurs when a company’s owners fill the basket of goods and services that constitute a healthcare plan. In other words, the Gilardis are burdened when they are pressured to choose between violating their religious beliefs in managing their selected plan or paying onerous penalties.

Judge Brown flirts with the idea that corporations - which have rights of free speech - also have religious "free exercise" rights.  Corporations have no souls, therefore they have no faith.  They are neither believers, agnostics, nor atheists.  But Citizens United tells you that they have rights of speech and that money talks.  One would think that like the constitutional attack on the "individual mandate" this is an off the wall idea that will certainly fail.  But four justices embraced it in the big ACA case Arizona v. Sebelius.  So I hope that our constitutional lawyers in the the office of the Solicitor General are working hard to blunt this embrace on the right of the misguided Humanae Vitae encyclical in which the then Pope Paul VI denounced artificial birth control in the same terms as he condemned sterilization and abortion.

The Catholic faithful have largely ignored this command. But conservatives like Judge Brown celebrate as an act of faith employers' rejection of the government's public health mandate that health insurance plans provide contraception as a benefit.   One would think that the AIDS epidemic alone would impress a court that prevention of sexually transmitted disease is a compelling public interest.  But Brown dismisses public health concerns as"nebulous" and "capacious".

Religious employers have been accommodated by the DHHS but the Gilardi court extends that to closely held for-profit companies.  The Gilardi case was carefully selected and it drew a raft of amicus briefs.  Key to its appeal is that the company self-insures so the benefits are not shifted to an insurer but instead must be paid directly by the shareholders - here the two brothers.  Since Circuits have split the issue will presumably be decided by the four conservative Catholics on the Supreme Court.  Justice Anthony Kennedy has parted ways with the bishops on same-sex marriage, but his vote is far less predictable here.