Mealey's-Affordable-Care-Act-report-sample-issue

MEALEY’STMTM
Affordable Care Act
Report March 2014 Volume 1, Issue #1
High Court Hears Arguments In Birth Control Mandate Cases
WASHINGTON, D.C. — The U.S. Supreme Court on March 25 heard arguments in two cases that will decide
whether for-profit, secular businesses have to provide contraceptive services as part of their health insurance packages
to employees even if they oppose such measures on religious grounds. SEE PAGE 4.
Plaintiffs Urge High Court To Affirm Injunctions In Birth Control Cases
WASHINGTON, D.C. — Secular, for-profit companies and their owners filed separate briefs on Feb. 27, urging the
U.S. Supreme Court to affirm an appeals court decision reversing the denial of a preliminary injunction in their cases
challenging the birth control mandate contained in the Patient Protection and Affordable Care Act (ACA). SEE PAGE 6.
Government Asks Florida Federal Court To Nix Contraceptive Mandate Challenge
MIAMI — The Patient Protection and Affordable Care Act (ACA) provides a simple opt-out procedure for
employers with religious objections to the contraceptive mandate, and those with such objections should not be
permitted to bar insurers from complying with the law, the government told a Florida federal judge in a March 10
motion to dismiss. SEE PAGE 8.
8th Circuit Urged To Affirm Denial Of Injunction In Birth Control Case
ST. LOUIS — The federal government on Feb. 27 filed a brief with the Eighth Circuit U.S. Court of Appeals, urging
the court to affirm the denial of a preliminary injunction in a case brought by a Missouri family challenging the
birth control mandate contained in the Patient Protection and Affordable Care Act (PPACA). SEE PAGE 13.
Order Of Catholic Nuns Asks 10th Circuit To Overturn Denial Of Injunction
DENVER — An order of Catholic nuns protesting the denial of a preliminary injunction in their challenge to the
birth control mandate contained in the Patient Protection and Affordable Care Act (PPACA) filed a brief Feb. 24
with the 10th Circuit U.S. Court of Appeals, asking the court to overturn the decision. SEE PAGE 14.
6th Circuit Asked To Affirm Denials Of Injunctions In Birth Control Cases
GRAND RAPIDS, Mich. — The federal government on Feb. 20 urged the Sixth Circuit U.S. Court of Appeals
to affirm the denials of preliminary injunctions sought by two groups of Catholic organizations in their challenges
to the birth control mandate contained in the Patient Protection and Affordable Care Act (PPACA). SEE PAGE 16.
Split 7th Circuit Affirms Denial Of Injunction In Birth Control Case
CHICAGO — A divided Seventh Circuit U.S. Court of Appeals panel on Feb. 21 affirmed a decision denying the
University of Notre Dame’s motion for a preliminary injunction in its case challenging the birth control mandate
contained in the Patient Protection and Affordable Care Act. SEE PAGE 17.
Judge: Cash-Only Physicians’ Alleged Injury Too Remote From ACA Mandate
MILWAUKEE — The alleged reduction in clients physicians who accept only cash might face from the delayed
implementation of the Patient Protection and Affordable Care Act (ACA)’s employer mandate is too attenuated to
provide standing to sue the Internal Revenue Service, a Wisconsin federal judge held March 18. SEE PAGE 19.
District Of Columbia Appeals Panel Affirms Dismissal Of ACA Suit
WASHINGTON, D.C. — Plaintiffs cannot squeeze the individual insurance mandate in the Patient Protection
and Affordable Care Act (ACA) into an ‘‘arbitrary as-applied’’ exemption to Congress’ taxing power, a panel of the
District of Columbia Circuit U.S. Court of Appeals affirmed March 7. SEE PAGE 20.

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MEALEY’STMTM
Affordable Care Act
Report
March 2014 Volume 1, Issue #1
Cases in this Issue Page
Kathleen Sebelius, et al. v. Hobby Lobby Stores Inc., et al., No. 13-354,
U.S. Sup.; Conestoga Woods Specialties Corp., et al. v. Kathleen
Sebelius, et al., No. 13-356, U.S. Sup. .......................................................... 4
Kathleen Sebelius, et al. v. Cyril B. Korte, et al., Kathleen Sebelius, et al. v.
William D. Grote III, et al., No. 13-937, U.S. Sup........................................... 6
Ave Maria School of Law v. Kathleen Sebelius, et al., No. 13-795, M.D. Fla. ......... 8
Kathleen Sebelius, et al. v. William Newland, et al., No. 13-919, U.S. Sup............. 9
Reaching Souls International Inc., et al. v. Kathleen Sebelius, et al.,
No. 13-1092, W.D. Okla. .................................................................................. 10
Priests for Life, et al. v. U.S. Department of Health and Human Services, et al.,
No. 113-5368 D.C. App.; Roman Catholic Archbishop of Washington,
et al. v. Kathleen Sebelius, et al., No. 13-5371, D.C. App................................. 11
Paul Wieland, et al. v. U.S. Department of Health and Human Services,
No. 13-3528, 8th Cir.......................................................................................... 13
Little Sisters of the Poor Home for the Aged, et al. v. Kathleen Sebelius, et al.,
No. 13-1540, 10th Cir........................................................................................ 14
Michigan Catholic Conference, et al. v. Kathleen Sebelius, et al., No. 13-2723,
6th Cir.; The Catholic Diocese of Nashville, et al. v. Kathleen Sebelius,
et al., No. 13-6640, 6th Cir................................................................................ 16
University of Notre Dame v. Kathleen Sebelius, et al., No. 13-3853, 7th Cir.......... 17
Association of American Physicians & Surgeons Inc., and Robert T.
McQueeney v. John Koskinen, commissioner of the Internal Revenue
Service, in his official capacity, No. 13-1214, E.D. Wis..................................... 19
Association of American Physicians & Surgeons Inc., et al. v. Kathleen G.
Sebelius, et al., No. 13-5003, D.C. Cir. ........................................................ 20
Jacqueline Halbig, et al. v. Kathleen Sebelius, et al., No. 14-5018, D.C. Cir. .......... 21
David King, et al. v. Kathleen Sebelius, et al., No. 14-1158, 4th Cir. ...................... 23
State of Oklahoma, ex rel. Scott Pruitt v. Kathleen Sebelius, et al., No. 11-30,
E.D. Okla............................................................................................................ 24
Jacqueline Halbig, et al. v. Kathleen Sebelius, et al., No. 14-5018, D.C. Cir. .......... 26
St. Louis Effort for Aids, et al. v. John Huff, director of the Missouri
Department of Insurance, Financial Institutions and Professional
Registration, No. 13-4246, W.D. Mo. ............................................................... 28
David King, et al. v. Kathleen Sebelius, et al., No. 14-1158, 4th Cir. ...................... 30
John East, et al. v. Blue Cross and Blue Shield of Louisiana, et al., No. 14-115,
M.D. La............................................................................................................... 32
Senator Ron Johnson, et al. v. U.S. Office of Personnel Management, et al.,
No. 14-09, E.D. Wis........................................................................................... 32
Edward Gaines, Gaines Insurance Agency Inc., et al. v. Peter Lee, in his
official capacity as Executive Director of the California Health Benefit
Exchange, et al., No. BS147414, Calif. Super., Los Angeles Co........................ 34
Thomas and Wanda Carruth v. The Outsource Group, et al., No. 14-33, S.D. Miss..... 34
The Catholic Benefits Association LCA, et al. v. Kathleen Sebelius, et al.,
No. 14-240, W.D. Okla. .................................................................................... 36
Published document is available at the end of the report. For other available
documents from cases reported on in this issue, visit www.mealeysonline.com or call
1-800-MEALEYS.

In this Issue
Contraceptive Mandate
High Court Hears Arguments In
Birth Control Mandate Cases............................ page 4
Plaintiffs Urge High Court To Affirm
Injunctions In Birth Control Cases................... page 6
Government Asks Florida Federal Court
To Nix Contraceptive Mandate
Challenge .......................................................... page 8
Federal Government Files Petition With
High Court In Birth Control Case.................... page 9
Judge: Likelihood Of Success Demonstrated
In Contraceptive Mandate Case.......................... page 10
Catholic Groups Urge Appeals Court To
Reverse Dismissal Of Birth Control
Cases............................................................... page 11
8th Circuit Urged To Affirm Denial Of
Injunction In Birth Control Case.................... page 13
Order Of Catholic Nuns Asks 10th Circuit
To Overturn Denial Of Injunction................. page 14
6th Circuit Asked To Affirm Denials Of
Injunctions In Birth Control Cases................. page 16
Split 7th Circuit Affirms Denial Of
Injunction In Birth Control Case.................... page 17
Individual/Employer Mandate
Judge: Cash-Only Physicians’ Alleged Injury
Too Remote From ACA Mandate...................... page 19
District Of Columbia Appeals Panel
Affirms Dismissal Of ACA Suit....................... page 20
Premium Credits
Government Asks Appeals Court To Affirm
Judgment In Birth Control Suit ......................... page 21
4th Circuit Briefed On ACA Exchange
Credit Challenge ............................................. page 23
Oklahoma, HHS Seek Summary Judgment
On ACA Premium Credits Issue..................... page 24
Health Care Exchanges
Government: Bulletin Clarifies Enrollment
In Exchange May Be Retroactive .................... page 26
Mo. Federal Judge Grants Injunction,
Halts Law Regulating Insurance
Exchanges........................................................ page 28
4th Circuit Briefed On ACA Exchange
Credit Challenge ............................................. page 30
Coverage
Judge Enjoins Insurers From Rejecting
Funds From HIV Program.............................. page 32
ACA Regulations Covering Senators Don’t
Provide Injury, Government Argues................ page 32
New Complaints
Calif. Senator Sues State, Claiming
Improper Cancellation Of
Insurance Policies............................................ page 34
Couple Sues In Mississippi Federal Court,
Says Coverage Wrongfully Canceled ............... page 34
Oklahoma City Archdiocese Sues HHS
Over Contraceptive Mandate .......................... page 36
Regulations
HHS: ACA Plans Must Accept Specialty
Support Programs............................................ page 37
HHS Issues Guidelines For Basic
Health Programs, Same-Sex
Households ..................................................... page 37
HHS Issues Proposed Rule On Product
Modifications, Risk Corridors, Civil
Penalties.......................................................... page 37
HHS Sets Parameters For Reinsurance,
Coinsurance, Exchange User Fees ................... page 38
ACA Insurance Plans To Offer Same-Sex
Coverage In 2015, HHS Says ......................... page 38
Legislation
U.S. House Passes ACA Individual,
Employer Mandate
Exemption Bills............................................... page 38
U.S. House Passes Bill Delaying ACA
Mandate Penalties ........................................... page 39
MEALEY’S Affordable Care Act Report Vol. 1, #1 March 2014
Cite as Mealey’s Affordable Care Act Report, Vol. 1, Iss. 1 (3/14) at p.___, sec.___. 3

News
High Court Hears
Arguments In Birth
Control Mandate Cases
WASHINGTON, D.C. — The U.S. Supreme Court
on March 25 heard arguments in two cases that will
decide whether for-profit, secular businesses have to
provide contraceptive services as part of their health
insurance packages to employees even if they oppose
such measures on religious grounds (Kathleen Sebelius,
et al. v. Hobby Lobby Stores Inc., et al., No. 13-354,
U.S. Sup.; Conestoga Woods Specialties Corp., et al. v.
Kathleen Sebelius, et al., No. 13-356, U.S. Sup.).
(Transcript in Section B. Document #31-140402-
011T.)
Justices heard 90 minutes of arguments in Hobby
Lobby Stores Inc., et al. v. Kathleen Sebelius, et al.
and Conestoga Woods Specialties Corp., et al. v. Kath-
leen Sebelius, et al. In both cases, the plaintiffs allege
that the birth control mandate contained in the Patient
Protection and Affordable Care Act (ACA) violates
their rights to freedom of religion, speech and asso-
ciation as secured by the First and Fifth Amendments
to the U.S. Constitution and the Religious Freedom
Restoration Act (RFRA).
Under the ACA, all group health plans and health
insurance issuers that offer nongrandfathered group
or individual health coverage are required to provide
coverage for certain preventive services without cost-
sharing, including for the full range of U.S. Food and
Drug Administration-approved contraceptive methods,
sterilization procedures and patient education and
counseling for women with reproductive capacity.
Companies that don’t provide coverage face fines.
The justices are considering ‘‘whether RFRA allows a
for-profit corporation to deny its employees the health
coverage of contraceptives to which the employees are
otherwise entitled by federal law, based on the religious
objections of the corporation’s owners’’ and ‘‘[w]hether
the religious owners of a family business, or their
closely-held, for-profit corporation, have free exercise
rights that are violated by the application of the con-
traceptive-coverage Mandate of the ACA.’’
Cases
In Hobby Lobby, Hobby Lobby Inc., Mardel Inc. and
the companies’ owners David Green, Barbara Green,
Steve Green, Mart Green and Darsee Lett sued the
government in the U.S. District Court for the Western
District of Oklahoma. In July, the District Court
reversed a previous decision and granted summary
judgment in favor of the plaintiffs.
The plaintiffs had appealed the District Court’s initial
decision denying preliminary injunction, and in June,
a majority of the 10th Circuit U.S. Court of Appeals
held that Hobby Lobby and Mardel have standing to
sue and that the Anti-Injunction Act (AIA) does not
apply to the case. As to the merits, the majority held
that the District Court erred in concluding that
Hobby Lobby and Mardel had not demonstrated a
likelihood of success of their RFRA claim, while three
other judges would have affirmed the District Court
on the issue. The majority also held that Hobby
Lobby and Mardel satisfied the irreparable harm
prong for the preliminary injunction standard. The
District Court, however, did not consider all the fac-
tors required for a preliminary injunction. The court
remanded the case with instructions for the District
Court to address all required factors. Upon remand,
the District Court granted the injunction.
In Conestoga Wood, Norman Hahn, Elizabeth Hahn,
Norman Lemar Hahn, Anthony H. Hahn and Kevin
Hahn and Conestoga Wood Specialties Corp. sued the
government in the U.S. District Court for the Eastern
District of Pennsylvania. In January 2013, the District
Court denied the plaintiffs’ request for a preliminary
Vol. 1, #1 March 2014 MEALEY’S Affordable Care Act Report
4

injunction, and the Third Circuit U.S. Court of
Appeals affirmed.
Corporations Arguments
Attorney Paul D. Clement argued for Hobby Lobby
and Conestoga Wood, but before he could get through
two sentences of his opening arguments, Justice Sonia
Sotomayor jumped in, asking whether the claim was
limited to materials such as contraceptives or whether
it would include items such as vaccinations or blood
transfusions. Many people have religious objections
to vaccinations and various other medical treatments,
Justice Elena Kagen noted.
Clement responded that the first step would be to ask
whether there was a substantial burden on religious
exercise. This case is ‘‘one where it’s so religiously sen-
sitive, so fraught with religious controversy, that the
agency itself provides a certain number of exemptions
and accommodations.’’ Once past the substantial bur-
den step of the analysis, the next step would be the
compelling interest and least restrictive alternatives ana-
lysis and every case would have to be analyzed on its
own, Clement said.
Justice Sotomayor later asked how courts were sup-
posed to know whether a corporation holds a particular
religious belief. She also asked what would happen to
minority members or shareholders of a corporation
who did not share the majority’s religious beliefs and
how much of a business has to be dedicated to religion.
Clement responded, ‘‘I think the way to approach those
cases would be the same basic way you approach other
questions of corporate intent or corporate motivation.
You look to the governance doctrines, if any of this is
put at issue.’’ It’s a critical question that goes the level of
sincerity, Clement said. Justice Sotomayor interrupted
him to say that that question was the ‘‘most dangerous
piece’’ and one that courts have ‘‘resisted in all our
exercise jurisprudence, to measure the depth of some-
one’s religious beliefs.’’
Justices Sotomayor and Kagan also noted that com-
panies objecting to the contraception requirement
could avoid the issue by deciding not to offer health
care coverage and choosing to pay the penalty. Because
there’s a choice, Justice Kagan said the question is ‘‘why
is there a substantial burden at all.’’ Clement responded
that Hobby Lobby would be hurt if it didn’t provide
health insurance to its employees and that in order to
compensate for that, it would have to increase wages.
In response to questioning from Chief Justice John G.
Roberts Jr., Clement also agreed that providing health
insurance to its employees was part of the religious
commitment of the owners.
Justice Anthony M. Kennedy asked Clement how the
court should take into account the religious rights of
employees who may have different religious views
than their employer. The employee may not agree
with the religious beliefs of the employer, so Justice
Kennedy asked whether religious beliefs of the em-
ployer just trump those of the employees. Clement
responded this is not about access to contraception,
but about who will pay for the government’s preferred
subsidy.
Government Arguments
Solicitor General Donald B. Verrilli Jr. argued for
the government in both cases, quoting from Prince v.
Massachusetts in saying, ‘‘Limitations which of neces-
sity bound religious freedom begin to operate when-
ever activities begin to affect or collide with the liberties
of others or of the public. Adherence to that principle
is what makes possible the harmonious functioning
of a society like ours, in which people of every faith
live and work side by side.’’
Chief Justice Roberts interrupted to say that in en-
acting the RFRA, Congress wanted to provide excep-
tions for the religious views of a particular group.
Verrilli responded that the court must take into ac-
count the way in which the requested accommodation
will affect the rights and interests of third parties.
Justices Samuel A. Alito Jr. and Antonin Scalia directed
questions as to why the government believed that for-
profits corporations could not raise free-exercise of
religion claims and whether there was something
about the corporate form that was inconsistent with
the free exercise claim. Verrilli responded that churches
can bring claims, but engaging in a for-profit activity
is inconsistent with free exercise claims.
Justice Kennedy pointed out that the government
already has exempted many employers from the act’s
5

requirement for no co-pay preventative services. He
asked ‘‘what kind of constitutional structure do we
have if the Congress can give an agency the power to
grant or not grant a religious exemption based on what
the agency determined.’’ Verrilli countered that it was
appropriate for the agency to take into account the
‘‘special solicitude’’ that churches receive, but all the
government has done is say that churches, because of
that special solicitude, get an exemptions. Nonprofit
religious organizations don’t get an exemption, but
they do get an accommodation, Verrilli said. Also,
there are no exemptions for small employers and should
those companies choose to offer insurance to their em-
ployees, they must provide the minimum coverage spe-
cified by the regulations, including contraceptives, he
added.
Justice Kennedy said that under the government’s legal
theory, a for-profit corporation could be forced to pay
for abortions. Verrilli said there is no such law on the
books, but Justice Roberts said that Hobby Lobby and
Conestoga Wood believe that emergency contraception
is a form of abortion. Emergency contraception is one
of the required products under the mandate.
Mark L. Rienzi and S. Kyle Duncan of The Beckett
Fund for Religious Liberty in Washington and Clem-
ent of Bancroft in Washington represented the plain-
tiffs in Hobby Lobby. David A. Cortman of Alliance
Defending Freedom in Lawrenceville, Ga., and Clem-
ent represent Conestoga Wood. Verrilli represented the
government in both cases.
(Additional documents available: Government’s peti-
tion in Hobby Lobby. Document. #31-131002-028B.
Respondents’ brief in Hobby Lobby. Document #31-
131106-013B. Government’s brief in Hobby Lobby.
Document #31-140205-034B. Conestoga Woods’
opening brief. Document #31-140205-035B. Gov-
ernment’s reply brief. Document #93-140326-031B.
Appeals court decision in Hobby Lobby. Document
#31-130703-017Z. District Court’s decision in
Hobby Lobby. Document #31-130807-006Z. Appeals
court decision in Conestoga Wood. Document #31-
130807-015Z. Conestoga Wood petition for writ
of certiorari. Document #31-131120-031B. Govern-
ment’s respondents’ brief in Conestoga Wood. Docu-
ment #31-131106-034B. District Court opinion in
Conestoga Wood. Document #31-130123-011Z.) I
Plaintiffs Urge High Court
To Affirm Injunctions In
Birth Control Cases
WASHINGTON, D.C. — Secular, for-profit com-
panies and their owners filed separate briefs on
Feb. 27, urging the U.S. Supreme Court to affirm an
appeals court decision reversing the denial of a preli-
minary injunction in their cases challenging the birth
control mandate contained in the Patient Protection
and Affordable Care Act (ACA) (Kathleen Sebelius,
et al. v. Cyril B. Korte, et al., Kathleen Sebelius, et al.
v. William D. Grote III, et al., No. 13-937, U.S. Sup.).
(Kortes’ respondent brief available. Document #93-
140326-036B.)
Denials Reversed
The PPACA and the Health Care and Education Re-
conciliation Act (collectively, PPACA) contain a man-
date that requires most health care plans to provide
free ‘‘preventative’’ services. Those services include vac-
cines and routine screenings such as cholesterol check-
ups and mammograms, as well as contraception and
sterilization procedures.
In separate cases, Cyril and Jane Korte, owners of
Korte & Luitjohan Contractors Inc.; William D.
Grote III, William Dominic Grote IV, Walter F.
Grote Jr., Michael R Grote, W. Frederick Grote III
and John R. Grote (collectively, the Grotes); and
Grote Industries LLC and Grote Industries Inc. (col-
lectively, Grote Industries) sued Kathleen Sebelius,
secretary of Health and Human Services (HHS); the
Department of Health and Human Services; Hilda
Solis, secretary of Labor; the U.S. Department of
Labor; Timothy Geithner, secretary of Treasury; and
the Department of Treasury in the U.S. District Court
for the Southern District of Illinois, alleging that the
mandate violates their rights to freedom of religion,
speech and association as secured by the First and
Fifth Amendments to the U.S Constitution, the Reli-
gious Freedom Restoration Act (RFRA) and the Ad-
ministrative Procedure Act (APA). The plaintiffs seek
a preliminary injunction to prohibit the defendants
from enforcing the mandate against them when it
goes into effect.
The plaintiffs in each suit are Catholic families and their
closely held corporations. The businesses are secular
6

and for profit, but the plaintiffs say they operate the
businesses in conformity with their faith commitments.
The plaintiffs object for religious reasons to providing
the mandated coverage.
The District Court denied motions by the plaintiffs in
each case for preliminary injunction. The cases were
consolidated for appeal in the Seventh Circuit U.S.
Court of Appeals.
In November, a divided Seventh Circuit reversed the
denial of the preliminary injunctions, with the majority
saying ‘‘[t]he federal government has placed enormous
pressure on the plaintiffs to violate their religious beliefs
and conform to its regulatory mandate. Refusing to
comply means ruinous fines, essentially forcing the
Kortes and Grotes to choose between saving their com-
panies and following the moral teachings of their faith.’’
Petition Filed
On Feb. 21, the federal government filed a petition
for a writ of certiorari with the U.S. Supreme Court,
challenging a Seventh Circuit decision reversing the
denial of preliminary injunction in the two cases. In
its petition, the government says the question presented
is ‘‘whether RFRA allows a for-profit corporation to
deny its employees the health coverage of contracep-
tives to which the employees are otherwise entitled by
federal law, based on the religious objections of the
corporation’s owners.’’
The Seventh Circuit’s decision that the RFRA allows a
for-profit corporation to deny its employees the health
coverage of contraceptives to which they are otherwise
entitled by federal law, based on the religious objec-
tions of the corporation’s owners, is incorrect, the gov-
ernment says.
The same question is pending before the court in
Hobby Lobby v. Sebelius, et al. (Sup., No. 13-354)
and Conestoga Woods Specialties Corp. v. Kathleen
Sebelius, et al. (Sup., No. 13-356), with oral arguments
held March 25. The government asked the court to
hold the instant petition for a writ of certiorari pending
the court’s decision in Hobby Lobby and Conestoga
Wood and then to dispose of the petition as appropriate
in light of the court’s decision in those cases.
Question Presented
The plaintiffs in the Korte case agree with the govern-
ment that the court should hold the petition pending
disposition of Hobby Lobby and Conestoga Wood
and then dispose of the petition in light of the deci-
sions in those cases.
The Korte plaintiffs, however, say the government’s
characterization of the question presented is ‘‘seriously
distorted.’’ Their counterstatement of the question
presented is ‘‘[w]hether the HHS regulation that
compels the individual owners of a closely held cor-
poration to direct their corporation to offer insurance
coverage of abortion-inducing drugs and devices, other
birth control drugs and devices, and sterilization, con-
trary to the owners’ religious beliefs, violates the Reli-
gious Freedom Restoration Act as applied to them.’’
Mandate Not Required
The Korte plaintiffs also say ‘‘that the government com-
pulsion here might pass strict scrutiny under RFRA
is fanciful.’’ Under RFRA strict scrutiny, the govern-
ment bears the burden of demonstrating a compelling
interest to support its restrictions on religious exercise,
but it cannot do so, the plaintiffs say.
The ACA ‘‘does not even require the challenged
HHS mandate,’’ the plaintiffs say.
Rather, Congress required coverage of preventive
care ‘‘‘as provided for in comprehensive guidelines
supported by the Health Resources and Services
Administration’ (HRSA), which is a component of
the Department of Health and Human Services
(HHS),’’ the plaintiffs say. The HRSA did not have
comprehensive guidelines for preventive services for
women, including the objectionable drugs, devices
and services at issue here, they added. The Institute
of Medicine formulated ‘‘recommendations’’ that in-
cluded the objectionable drugs and devices, and
HRSA adopted those recommendations and then
three federal agencies adopted regulations requiring
the ‘‘recommended services,’’ the plaintiffs say.
‘‘It strains credulity to say that the government has a
compelling interest in forcing coverage of something
that it did not even identify as essential but merely left
to various agencies to recommend,’’ the plaintiffs say.
Multiple Exceptions
Further, ‘‘the regulatory scheme does not reflect a
view that employer coverage of the required drugs,
devices, and services are essential to the degree of being
7

‘compelling’ for purposes of strict scrutiny’’ because the
‘‘‘requirement’ does not apply at all to grandfathered
plans, to small employers, to exempt religious em-
ployers, or to large employers that decline to provide
insurance,’’ the plaintiffs say. Multiple exceptions have
been made, which profoundly undercuts the govern-
ment’s claim that its interest is compelling, the plain-
tiffs added.
The government’s ‘‘general interest in promoting
public health and safety’’ does not translate ‘‘into a
compelling interest in coercing unwilling employers
to violate their religious beliefs in order to provide
an agency’s ‘recommended’ services,’’ the plaintiffs say.
Edward Lawrence White of American Center for Law &
Justice in Ann Arbor, Mich., represents the Korte plain-
tiffs. Michael A. Wilkins of Broyles Kight & Ricafort in
Indianapolis represents the Grote plaintiffs. Solicitor
General Donald B. Verrilli Jr., Assistant Attorney
General Stuart F. Delery, Deputy Solicitors General
Ian Heath Gershengorn and Edwin S. Kneedler, Assis-
tant to the Solicitor General Joseph R. Palmore and
Attorneys Mark B. Stern and Alisa B. Klein, all of the
Department of Justice in Washington, represent the
government.
(Additional document available. Petition. Document
#31-140305-024B.) I
Government Asks Florida
Federal Court To Nix
Contraceptive Mandate Challenge
MIAMI — The Patient Protection and Affordable
Care Act (ACA) provides a simple opt-out procedure
for employers with religious objections to the con-
traceptive mandate, and those with such objections
should not be permitted to bar insurers from complying
with the law, the government told a Florida federal
judge in a March 10 motion to dismiss (Ave Maria
School of Law v. Kathleen Sebelius, et al., No. 13-
795, M.D. Fla.).
(Memosupportingmotiontodismissavailable.Docu-
ment #93-140326-011B. Proposed amicus brief by
the American Civil Liberties Union available. Docu-
ment #93-140326-012B.)
Ave Maria School of Law sued U.S. Department
of Health and Human Services Secretary Kathleen
Sebelius and others in the U.S. District Court for the
Middle District of Florida in November, challenging
the contraceptive coverage mandate in the ACA.
Ave Maria conceded that it could opt out of the man-
date by informing its insurer of eligibility for religious
exemption. However, Ave Maria claimed that opting
out merely shifted the mandate to a third party and,
thus, violated its Religious Freedom Restoration Act
(RFRA) rights.
Opt Out
In moving for dismissal or summary judgment, the
defendants argue that the ‘‘plaintiff cannot transform
its right, as an eligible organization, not to provide
contraceptive coverage into a substantial burden by
characterizing its decision to opt out as ‘a trigger’ for
a third party to provide such coverage.’’
If Ave Maria opts out, a third-party insurance issuer
will provide coverage, the defendants argue. While
the ACA’s mandate that insurers must cover contra-
ceptive coverage for employers who opt out may offend
Ave Maria, it does not burden Ave Maria’s beliefs, the
defendants argue.
In short, Ave Maria is not obligated to undertake actions
it ﬁnds offensive, but the fact that it ﬁnds them offen-
sive does not prevent the government or a third-party
insurer from engaging in them, the defendants argue.
No Substantial Burden
‘‘The contraceptive coverage requirements, and in par-
ticular the accommodations for eligible organizations
like plaintiff, do not impose a substantial burden on
plaintiff’s religious exercise. And even if they did, the
regulations would not violate RFRA because they are
narrowly tailored to serve compelling governmental
interests in public health and gender equality,’’ the
defendants argue.
The defendants also urged the court to reject Ave
Maria’s free speech, Fifth Amendment due process
and equal protection claims.
ACLU
In a March 10 proposed amicus brief, the American
Civil Liberties Union and the American Civil Liberties
Union of Florida argue that the RFRA claims fail.
8

To receive an exemption under the mandate, a qualified
entity need only file a two-page form with its insurer,
which must then bear the burden of fulfilling the man-
date, the ACLUs argue. Ave Maria likely already filed
such a form with its insurer, the ACLUs argue.
Secondly, the right to religious liberty does not give
those entities the ability to infringe on the rights of,
or impose their beliefs on, others, the ACLUs argue.
‘‘This Court should reject Plaintiff’s attempt to do the
same here. The contraception rule is a significant
advancement in women’s equality,’’ the ACLUs argue.
Assistant Attorney General Stuart F. Delery, U.S.
Attorney A. Lee Bentley III, Department of Justice
Director Jennifer Ricketts and Deputy Director Shiela
M. Lieber and Trial Attorney Adam Grogg in
Washington, D.C., represent the defendants. David
Andrew Cortman of Alliance Defense Fund in Law-
renceville, Ga.; Gregory S. Baylor and Matthew S.
Bowman of Alliance Defending Freedom in Washing-
ton, Jeremy D. Tedesco of its Scottsdale, Ariz., office,
and Kevin Hayden Theriot of its Leawood, Kan., office;
and Roger K. Gannam of Lindell & Farson in Jack-
sonville, Fla., represent Ave Maria. Daniel Tilley of the
American Civil Liberties Union Foundation of Florida
in Miami, Jennifer Lee and Brigitte Amiri of the Amer-
ican Civil Liberties Union Foundation in New York
and Daniel Mach of its Washington office represent
the ACLUs. I
Federal Government Files
Petition With High Court
In Birth Control Case
WASHINGTON, D.C. — The federal government
on Jan. 31 filed a petition for writ of certiorari with
the U.S. Supreme Court, seeking to have overturned
the granting of a preliminary injunction in a case chal-
lenging the birth control mandate contained in the
Patient Protection and Affordable Care Act (PPACA)
(Kathleen Sebelius, et al. v. William Newland, et al.,
No. 13-919, U.S. Sup.).
(Petition available. Document #31-140219-017B.)
The government, however, has asked the Supreme
Court to hold the petition pending the court’s decision
in two cases raising similar issues that are already sched-
uled for oral argument.
Religious Violations
Hercules Industries Inc. manufactures and distri-
butes heating, ventilation and air conditioning products
and equipment. The company is owned by siblings
William Newland, Paul Newland, James Newland
and Christine Ketterhagen. William Newland serves
as president, and his son, Andrew Newland, serves
as vice president. Although the company is a for-profit
secular employer, the Newlands say they adhere to
the Catholic denomination of the Christian faith, and
‘‘they seek to run Hercules in a manner that reflects
their sincerely held religious beliefs.’’ The company
maintains a self-insured group plan for its employees,
but because the Catholic Church condemns the use
of contraception, the self-insured plan does not include
abortifacient drugs, contraception or sterilization.
As part of the PPACA signed into law in March 2010,
the act requires group health plans to provide no-cost
coverage for preventive care and screening for women,
including services for birth control and sterilization.
The Hercules plan is not ‘‘grandfathered’’ under the
PPACA, and because it is a secular, for-profit cor-
poration, Hercules does not qualify as a ‘‘religious
employer’’ within the meaning of the preventive care
regulations. The company’s owners say the company
also cannot seek refuge in the enforcement ‘‘safe har-
bor,’’ so the company will be required to include no-
cost coverage for contraception in its group health plan
or face monetary penalties.
In April 2012, Hercules and the Newlands sued
Kathleen Sebelius in her official capacity as secretary
of Health and Human Services, Hilda Solis in her
official capacity as secretary of Labor, Timothy Geith-
ner in his official capacity as secretary of the Treasury,
and the Department of Health and Human Services
(DHHS), Department of Labor (DOL) and Depart-
ment of the Treasury (DOT) in the U.S. District Court
for the District of Denver for violations of the Religious
Freedom Restoration Act (RFRA), the free exercise
clause, the establishment clause and the free speech
clause contained in the First Amendment, the due pro-
cess clause contained in the Fifth Amendment and the
Administrative Procedure Act.
Injunction Orders
In July 2013, the District Court granted the plain-
tiffs’ motion for preliminary injunction, and the federal
9

government appealed. The case was stayed in the 10th
Circuit U.S. Court of Appeals pending the appeals
court resolution of Hobby Lobby Stores Inc., et al. v.
Kathleen Sebelius, et al. In Hobby Lobby, the appeals
court reversed an Oklahoma district court’s denial of
Hobby Lobby’s request for a preliminary injunction,
holding that the corporations were ‘‘persons’’ within
the meaning of RFRA, that compliance with the reg-
ulation would substantially burden the corporations’
religious exercise and that the regulation was not nar-
rowly tailored to achieve a compelling interest.
The appeals court determined in Hobby Lobby that
the plaintiffs had satisfied two of the four preliminary
injunction facts and remanded for the District Court
to consider whether the likely harm to plaintiffs with-
out the preliminary injunction outweighed any likely
harm to DHHS as a result of the injunction and whether
the injunction was adverse to the public interest.
On remand, the District Court reversed its previous
decision and granted a preliminary injunction in favor
of Hobby Lobby. DHHS filed a petition for certiorari
with the U.S. Supreme Court (No. 13-354), which is
scheduled for oral argument March 25 along with
Conestoga Wood Specialties Corp. v. Kathleen Sebe-
lius. (No. 13-356). In Conestoga Wood, Norman
Hahn, Elizabeth Hahn, Norman Lemar Hahn,
Anthony H. Hahn and Kevin Hahn and Conestoga
Wood Specialties Corp. sued the government in the
U.S. District Court for the Eastern District of Pennsyl-
vania. In January 2013, the District Court denied the
plaintiffs’ request for a preliminary injunction, and the
Third Circuit U.S. Court of Appeals affirmed.
In their petition for writ of certiorari, the plaintiffs
in Conestoga Wood ask the court ‘‘[w]hether the reli-
gious owners of a family business, or their closely-held,
for-profit corporation, have free exercise rights that
are violated by the application of the contraceptive-
coverage Mandate of the [PP]ACA.’’ The plaintiffs con-
tend that their rights have been violated.
Petition Held
In the instant petition, the government says the ques-
tion to be presented is ‘‘whether RFRA allows a for-
profit corporation to deny its employees the health
coverage of contraceptives to which the employees are
otherwise entitled by federal law, based on the religious
objections of the corporation’s owners.’’
The 10th Circuit’s decision holding that RFRA allows
a for-profit corporation to deny its employees the health
coverage of contraceptives to which they are otherwise
entitled by federal law based on the religious objec-
tions of the corporation’s owners is incorrect, as is the
appellate court decision in Hobby Lobby, the govern-
ment says.
The question asked in the instant case is the same
question pending before the court in Hobby Lobby
and Conestoga Wood, and the government says the
petition in this case should be held pending decisions
in those cases. The petition in this case can then be
disposed of as appropriate in light of the court’s decision
in Hobby Lobby and Conestoga Wood, the govern-
ment says.
David Andrew Cortman of Alliance Defending
Freedom-Lawrenceville in Lawrenceville, Ga.; Erik
William Stanley and Kevin H. Theriot of Alliance
Defending Freedom-Leawood in Leawood, Kan.; Gre-
gory S. Baylor, Matthew Scott Bowman and Steven
H. Aden of Alliance Defending Freedom-DC in
Washington; and Michael Jeffrey Norton of Alliance
Defending Freedom-Greenwood Village in Green-
wood Village, Colo., represent the plaintiffs. Solicitor
General Donald B. Verrilli Jr., Assistant Attorney
General Stuart F. Delery, Deputy Solicitors General
Ian Heath Gershengorn and Edwin S. Kneedler, Assis-
tant to the Solicitor General Joseph R. Palmore and
Attorneys Mark B. Stern and Alisa B. Klein, all of the
U.S. Department of Justice in Washington, represent
the defendants. I
Judge: Likelihood Of Success
Demonstrated In
Contraceptive Mandate Case
OKLAHOMA CITY — Religious groups demon-
strate a substantial likelihood of success in their Reli-
gious Freedom Restoration Act of 1993 (RFRA)
challenge to the Patient Protection and Affordable
Care Act (ACA)’s contraceptive mandate, an Oklahoma
federal judge held March 10 (Reaching Souls Inter-
national Inc., et al. v. Kathleen Sebelius, et al., No.
13-1092, W.D. Okla.; 2014 U.S. Dist. LEXIS 30497).
(Opinion available. Document #93-140326-007Z.)
10

Nonprofits Reaching Souls International Inc. and
Truett-McConnell and self-insured church plan Guide-
Stone Financial Resources of the Southern Baptist
Convention filed a class action suit in the U.S. District
Court for the Western District of Oklahoma, seeking
an injunction against Patient Protection and Affordable
Care Act (ACA) regulations requiring coverage for birth
control.
Jurisdiction
The government moved for dismissal for lack of juris-
diction and summary judgment, arguing that organiza-
tions could avoid the regulations by certifying that it
meets eligibility requirements, at which time its issuer
or third-party administrator assumes responsibility for
providing the services. The plaintiffs opposed the
motion and filed a separate motion seeking to defer a
ruling pending further discovery.
In December 2013, Judge Timothy D. DeGiusti
denied the motion to dismiss for lack of jurisdiction
and granted plaintiffs a preliminary injunction, con-
cluding that they demonstrated a substantial likelihood
of succeeding on their RFRA as amended, 42, U.S.
Code Section 2000bb et. seq. (RFRA) claim. The defen-
dants filed an interlocutory appeal.
RFRA
In denying summary judgment, Judge DeGiusti said
his previous finding that plaintiffs had shown a sub-
stantial likelihood of success on their RFRA claim also
dooms the defendants’ argument that the plaintiffs
failed to state a claim on which relief could be granted.
Judge DeGiusti gave the parties 14 days to file briefs
on whether the case should be stayed.
Benjamin L. Berwick of the U.S. Attorney’s Office in
Washington represents defendants Department of the
Treasury, Department of Health and Human Services,
Department of Labor, Jacob J. Lew, Kathleen Sebelius
and Thomas E. Perez. Daniel H. Blomberg of The
Becket Fund for Religious Liberty in Washington,
D.C., represents the plaintiffs.
(Additionaldocumentsavailable: Openingbrief.Docu-
ment #93-140326-008B. Response. Document #93-
140326-009B. Order on injunction. Document #93-
140326-010Z.) I
Catholic Groups Urge Appeals
Court To Reverse Dismissal
Of Birth Control Cases
WASHINGTON, D.C. — Two groups of religious
institutions on Feb. 28 filed a joint principle brief
with the District of Columbia Circuit U.S. Court of
Appeals, urging the court to reverse the dismissal of
their suits challenging the birth control mandate con-
tained in the Patient Protection and Affordable Care
Act (ACA) (Priests for Life, et al. v. U.S. Department
of Health and Human Services, et al., No. 113-5368
D.C. App.; Roman Catholic Archbishop of Washing-
ton, et al. v. Kathleen Sebelius, et al., No. 13-5371,
D.C. App.).
(Joint brief available. Document #93-140326-021B.)
The PPACA requires all group health plans and
health insurance issuers that offer non-grandfathered
group or individual health coverage to provide coverage
for certain preventive services without cost sharing,
including, ‘‘all Food and Drug Administration
approved contraceptive methods, sterilization proce-
dures, and patient education and counseling for
women with reproductive capacity.’’
Certain exemptions exist for religious employers.
Nonprofit religious organizations that do not qualify
for the exemption may qualify for an accommodation.
Under the accommodation, a nonprofit religious orga-
nization can self-certify to its health insurance issuer
that it has a religious objection to providing coverage
for contraceptive services as part of its health insurance
plan. Once the issuer receives the self-certification, the
nonprofit organization is exempt from the mandate.
The organization’s employees will receive coverage for
contraceptive services, but that coverage will be pro-
vided directly through the issuer. The coverage is
excluded from the employer’s plan of benefits, and
the issuer assumes the full costs of coverage and is pro-
hibited from charging any co-payments, deductibles,
fees, premium hikes or other costs to the organization
for its employees.
Dismissals Challenged
In separate cases, the Priests for Life, a nonprofit
religious organization, and three of its employees and
the Roman Catholic Archbishop of Washington, the
Consortium of Catholic Academies of the Archdiocese
11

of Washington Inc., Archbishop Carroll High School
Inc., Don Bosco Cristo Rey High School of the Arch-
diocese of Washington Inc., Mary of Nazareth Roman
Catholic Elementary School Inc., Catholic Charities
of the Archdiocese of Washington Inc., Victory Hous-
ing Inc., the Catholic Information Center Inc., Catho-
lic University of America and Thomas Aquinas College
sued the federal government in the U.S. District Court
for the District of Columbia.
Both cases allege that the contraceptive mandate vio-
lates the RFRA, the free exercise clause, the free speech
clause, the establishment clause and the Administrative
Procedure Act (APA).
On Dec. 19, the District Court dismissed Priests for
Life’s challenge to the mandate, saying that accom-
modations made to the mandate for religious employers
do not violate their religious rights.
On Dec. 20, the District Court partially granted
summary judgment motions ﬁled by both parties in
the Roman Catholic Archbishop’s case. The District
Court granted the defendants’ motion with respect to
Catholic University’s RFRA claim and all of the plain-
tiffs’ free exercise claims, compelled speech claims,
denominational preference claims, internal church
governance claims and APA claims. The court also dis-
missed the RFRA claims advanced by plaintiffs covered
under the Archdiocese’s health care plan and all of the
plaintiffs’ establishment clause challenges to Internal
Revenue Service regulations and APA erroneous inter-
pretation claims for lack of jurisdiction. The court
granted Thomas Aquinas College’s cross-motion for
summary judgment on its RFRA claim and all of the
plaintiffs’ cross-motions for summary judgment on their
free speech claims. The court went on to ﬁnd that the
rest of the plaintiffs lacked standing to raise a RFRA
claim.
Plaintiffs in both suits appealed to the District of
Columbia Circuit U.S. Court of Appeals, and the
cases were consolidated for purposes of appeal.
Substantial Burden
In their joint brief, the plaintiffs say that the resolution
of the cases turns on the answer to the question of
whether ‘‘absent interests of the highest order, may
the Government force Plaintiffs to take actions that
violate their religious beliefs.’’ Under the RFRA the
answer is ‘‘no,’’ the plaintiffs say.
In Gilardi v. U.S. Department of Health and Human
Services (733 F.3d 1208 [D.C. Cir. 2013]), the appeals
court held that the mandate imposes a substantial
burden on religious exercise by placing ‘‘substantial
pressure on [plaintiffs] to modify [their] behavior and
to violate [their] beliefs,’’ the plaintiffs say. As in Gilardi,
the mandate forces them to choose between ‘‘violating
their religious beliefs’’ or ‘‘paying onerous penalties,’’ the
plaintiffs say.
‘‘This is, therefore, a textbook case of a ‘substantial
burden’ that may be imposed only in accordance with
strict scrutiny,’’ the plaintiffs say. ‘‘Because the Govern-
ment concedes that Gilardi forecloses its strict scrutiny
argument, the Mandate must be enjoined.’’
The plaintiffs say that the only relevant question is
whether they are being substantially pressured to take
the actions required by the mandate. The District
Court held, however, that the plaintiffs do not really
object to the actions required by the mandate, but
rather to the actions the mandate requires of third
parties. The District Court’s ‘‘forays into ‘the theology
behind Catholic precepts on contraception’ were mani-
festly improper (and incorrect),’’ the plaintiffs say.
‘‘As the Supreme Court has repeatedly admonished,
‘[i]t is not within the judicial function’ to determine
whether a plaintiff ‘has the proper interpretation of [his]
faith,’’ the plaintiffs say. As such, it is clear the mandate
imposes a substantial burden on their religious beliefs,
and the dismissals of their cases must be reversed, they
added.
Eric S. Dreiband and Noel John Francisco of Jones
Day represent the plaintiffs in Roman Catholic Arch-
bishop of Washington. Jacek Pruski of the U.S. Depart-
ment of Justice represents the federal government in
Roman Catholic Archbishop of Washington. All
are in Washington. David Eliezer Yerushalmi of the
American Freedom Law Center in Washington and
Robert J. Muise of the American Freedom Law
Center in Ann Arbor, Mich., represent the plaintiffs
in Priests for Life. Benjamin Leon Berwick of the
U.S. Department of Justice in Washington represent
the defendants in Priests for Life.
(Additional document available. Amicus curiae brief
of Association of Gospel Rescue Mission. Document
#93-140326-022B.) I
12

8th Circuit Urged To Affirm
Denial Of Injunction
ST. LOUIS — The federal government on Feb. 27
filed a brief with the Eighth Circuit U.S. Court of
Appeals, urging the court to affirm the denial of a pre-
liminary injunction in a case brought by a Missouri
family challenging the birth control mandate contained
in the Patient Protection and Affordable Care Act
(PPACA) (Paul Wieland, et al. v. U.S. Department of
Health and Human Services, No. 13-3528, 8th Cir.;
See 2/5/14, Page 11).
(Appellee brief available. Document #31-140305-
031B.)
Birth Control Opposition
As a benefit of his employment with the State of
Missouri as a member of the House of Representatives,
Paul Joseph Wieland has health insurance provided
through the Missouri Consolidated Health Care Plan
(MCHCP) for himself and his wife and daughters.
Before Aug. 1, 2013, Wieland’s coverage under the
plan did not cover contraception, sterilization or abor-
tifacients. However, in July 2013, MCHCP notified
Wieland that because of the implementation of the
PPACA, it must provide contraception and sterilization
coverage in all of its medical plans and that, effective
Aug. 1, 2013, he would be placed in the ‘‘corresponding
medical plan that includes contraception and steriliza-
tion coverage in accordance with federal law.’’ As a result
of the additional coverage, the premiums increased.
Wieland contends that because of his family’s religious
principles and beliefs, they oppose the use, funding, pro-
vision or support of contraceptives, sterilization and
abortifacients. Wieland alleges that the federal govern-
ment issued a mandate pursuant to the PPACA requir-
ing group health plans to cover, without cost sharing,
‘‘all Food and Drug Administration-approved contra-
ceptive methods, sterilization procedures, and patient
education and counseling for women with reproductive
capacity.’’ Wieland contends that this forces his family
to ‘‘treat contraceptives, sterilization, abortifacients, and
related education and counseling as health care and
‘subverts’ [their] religious beliefs.’’
Further, the mandate forces his family to violate their
sincerely held religious beliefs under threat of having to
forfeit the job benefit of employer-sponsored health
insurance coverage for the family, Wieland says. Also,
the mandate forces the family to fund government-
dictated speech and religious beliefs and practices
and unconstitutionally interferes with his and his
wife’s parental rights and fundamental right to family
integrity, Wieland says.
Case Dismissed
Wieland and his wife sued the federal government
in the U.S. District Court for the Eastern District of
Missouri, alleging that the defendants’ conduct violates
the Religious Freedom Restoration Act (RFRA), the
free exercise clause of the U.S. Constitution, their
parental rights/family integrity rights under the Fifth
Amendment to the Constitution and the Adminis-
trative Procedure Act. The family seeks declarative
and injunctive relief. The plaintiffs also moved for a
temporary restraining order, enjoining the defendants
from enforcing the mandate.
On Oct. 16, the District Court granted the govern-
ment’s motion to dismiss the case, saying the plaintiffs
lacked standing.
The Wielands appealed to the Eighth Circuit, arguing
that several federal circuit courts, including the Eighth
Circuit, have ruled that employers are entitled to pre-
liminary injunctive relief against enforcement of the
mandate. The Wielands say they have the same claim
as the employers, ‘‘except that it is more obvious and
direct than the claims made by the employers.’’
The mandate requires them to provide religiously
abhorrent contraceptive coverage not for employees
but for their own daughters, the Wielands say. By
exempting churches and religious orders and providing
an accommodation for religious nonprofit organi-
zations, the government has acknowledged that the
mandate burdens the religious freedom of the Catholic
Church and other churches, but it has denied that
the mandate burdens individual Catholics, the Wie-
lands say.
Claims Fail
The federal government responds that the District
Court’s decision should be affirmed, saying the District
Court correctly held that the plaintiffs failed to meet
their burden to establish standing, the government says.
Even if the plaintiffs have standing, their claims
are meritless. The Wielands have relied on decisions
13

upholding the RFRA claims by employers that sought
to exclude contraceptives from their plans on a plan-
wide basis, but no court has allowed an individual to
demand that the group health plan through which he
receives coverage be tailored to reflect his religious
beliefs, the government says.
‘‘No one is required to use his health coverage for ser-
vices that he does not want, and it is not a burden on a
person’s religion to have a plan that includes coverage
of services that he or his family members will not use,’’
the government says.
The Wielands’ RFRA claim would fail even if strict
scrutiny were applicable because insurance markets
could not function if employers had to tailor their
group health plans to specific needs and desires of
each individual plan participant and beneficiary, the
government says. ‘‘The scheme that plaintiffs envision
would all but lead to the end of group health coverage,
which relies on common coverage for a set of insured
individuals.’’
Likewise, the Wielands’ constitutional claims are with-
out merit, the government says. The free exercise claim
fails because the contraceptive-coverage provision is a
neutral law of general applicability that does not target
religious exercise for disfavored treatment, and the sub-
stantive due process claim fails because having a health
insurance plan that includes coverage of contraceptives
does not implicate their right ‘‘to direct the upbringing
and education of children under their control,’’ the
government says.
Peter C. Breen and Thomas L. Brejcha of Thomas
More Society in Chicago and Timothy Belz of Ottsen
and Leggat in St. Louis represent the Wielands.
Michelle R. Bennett of the U.S. Department of Justice
in Washington, D.C., represents the government.
(Additional document available. Appellants’ brief.
Document #31-140205-033B.) I
Order Of Catholic Nuns
Asks 10th Circuit To
Overturn Denial Of Injunction
DENVER — An order of Catholic nuns protesting
the denial of a preliminary injunction in their challenge
to the birth control mandate contained in the Patient
Protection and Affordable Care Act (PPACA) filed a
brief Feb. 24 with the 10th Circuit U.S. Court of
Appeals, asking the court to overturn the decision (Lit-
tle Sisters of the Poor Home for the Aged, et al. v.
Kathleen Sebelius, et al., No. 13-1540, 10th Cir.).
(Appellant brief available. Document #31-140305-
023B.)
Little Sisters of the Poor is a group of Denver nuns
that runs nursing homes for the poor. Little Sisters
sued the federal government in the U.S. District
Court for the District of Colorado, challenging the
birth control mandate, which requires all group health
plans and health insurance issuers that offer non-
grandfathered group or individual health coverage to
provide coverage for certain preventive services with-
out cost sharing, including ‘‘all Food and Drug Admin-
istration approved contraceptive methods, sterilization
procedures, and patient education and counseling for
women with reproductive capacity.’’
Exemptions
Certain exemptions exist for religious employers.
Nonprofit religious organizations that do not qualify
for the exemption may qualify for an accommodation.
Under the accommodation, a nonprofit religious orga-
nization can self-certify to its health insurance issuer
that it has a religious objection to providing coverage
for contraceptive services as part of its health insurance
plan. Once the issuer receives the self-certification, the
nonprofit organization is exempt from the mandate.
The organization’s employees will receive coverage
for contraceptive services, but that coverage will be
provided directly through the issuer. The coverage is
excluded from the employer’s plan of benefits, and
the issuer assumes the full costs of coverage and is pro-
hibited from charging any co-payments, deductibles,
fees, premium hikes or other costs to the organization
for its employees.
Under the regulations, the nuns are eligible for an
accommodation but contend that signing a form stat-
ing their objections and providing it to their third-party
health insurance administrator makes them complicit
in providing contraceptive coverage and violates their
religious beliefs.
On Dec. 27, the plaintiffs were denied a prelimi-
nary injunction. On Dec. 31, they asked Justice Sonia
14

Sotomayor for an injunction pending appellate review
by the 10th Circuit. The federal government opposed
the emergency injunction pending the appellate review.
In a two-sentence order issued Dec. 31, Justice Soto-
mayor temporarily enjoined the federal government
from enforcing the mandate and related regulations
against the plaintiffs. The ruling applied to Little Sisters
and more than 200 other faith-based groups that
use insurance offered by Christian Brothers Employee
Benefit Trust.
On Jan. 24, the full court enjoined the federal govern-
ment from enforcing the birth control mandate against
Little Sisters pending final disposition of an appeal by
the 10th Circuit U.S. Court of Appeals.
Questions Presented
Little Sisters have asked the 10th Circuit to consider
the following questions:
Whether the District Court correctly concluded that
the mandate does not ‘‘substantially burden’’ their
‘‘religious exercise of refusing to provide the coverage
or sign the form.’’
Whether the mandate impermissibly discriminates
‘‘among religious organizations by making eligibility
for the ‘religious employer’ exemption dependent on
the structure of the religious organization and the
government’s assumptions about the organization’s
religious beliefs.’’
Whether the mandate’s ‘‘requirements that Appel-
lants (a) must sign and deliver the form, and (b)
‘must not, directly or indirectly, seek to influence
the third party administrator’s decision’ to provide
the coverage at issue, violate the First Amendment.’’
Whether the District Court correctly denied Little
Sisters’ motion for preliminary injunction.
Religious Belief
In their brief, Little Sisters say that as a matter of reli-
gious exercise, they cannot either provide the required
coverage in their health plans or sign the accommoda-
tion, meaning they will be subject to severe penalties.
The government claims that it has not burdened Little
Sisters because the government cannot use the Em-
ployee Retirement Income Security Act to force third
parties — the administrators of the church plan
through which Little Sisters provide benefits — to act
on Little Sisters’ accommodation form. As the govern-
ment sees it, this absence of ERISA enforcement au-
thority against others should fully resolve Little Sisters’
religious concerns, but Little Sisters say it does not.
The District Court essentially agreed with the govern-
ment that Little Sisters should not object to the form
in absence of ERISA enforcement authority, but such
an approach was error because it overstates the impor-
tance of ERISA and because it essentially rewrites the
Little Sisters’ religious beliefs for them, Little Sisters say.
‘‘Standard moral reasoning underpins the Little Sisters’
refusal to designate, authorize, incentivize, and obligate
a third party to do that which the Little Sisters may not
do directly,’’ Little Sisters say. ‘‘And regardless of what
the trial court and the government think the Little
Sisters should believe, the undisputed fact is that they
do believe their religion forbids them from signing
EBSA Form 700 [the accommodation form].’’
Substantial Burden
Little Sisters say that under Religious Freedom Restora-
tion Act (RFRA) precedent, their mandate’s require-
ments easily qualify as a ‘‘substantial burden’’ on
them. The required analysis is straightforward — ‘‘to
determine whether the claimant’s belief is sincere,
and if so, whether the government has applied sub-
stantial pressure on the claimant to violate that belief,’’
Little Sisters say.
‘‘Here, the mandate’s severe financial penalties impose
enormous pressure on the Little Sisters to give up their
religious exercise and sign and send,’’ Little Sisters say.
Little Sisters says the government also has violated
their rights under the religion clauses and free speech
clauses of the First Amendment because the govern-
ment is unconstitutionally discriminating among reli-
gious organizations and unconstitutionally compelling
the Little Sisters to say things that they do not want to
say and not to say things that they want to say.
Mark Rienzi, Daniel Blomberg and Adele Keim of
The Becket Fund for Religious Liberty in Washington,
Carl C. Scherz and Seth Roberts of Locke Lord
in Dallas and Kevin C. Walsh of University of Rich-
mond School of Law in Richmond, Va., represent the
15

plaintiffs. Assistant Attorney General Stuart F. Delery,
U.S. Attorney General John F. Walsh, Director Jenni-
fer Ricketts, Deputy Director Sheila M. Lieber and
Michelle R. Bennett, all of the U.S. Justice Department
in Washington, represent the government. I
6th Circuit Asked To
Affirm Denials Of Injunctions
In Birth Control Cases
GRAND RAPIDS, Mich. — The federal government
on Feb. 20 urged the Sixth Circuit U.S. Court of
Appeals to affirm the denials of preliminary injunctions
sought by two groups of Catholic organizations in
their challenges to the birth control mandate contained
in the Patient Protection and Affordable Care Act
(PPACA) (Michigan Catholic Conference, et al. v.
Kathleen Sebelius, et al., No. 13-2723, 6th Cir.; The
Catholic Diocese of Nashville, et al. v. Kathleen Sebe-
lius, et al., No. 13-6640, 6th Cir.).
030B.)
In separate cases, the Michigan Catholic Conference
and Catholic Family Services d/b/a Catholic Charities
Diocese of Kalamazoo and the Catholic Diocese
of Nashville, Catholic Charities of Tennessee, Camp
Marymount, Mary, Queen of Angels, St. Mary Villa,
Dominican Sisters of St. Cecilia Congregation and
Aquinas College Kalamazoo sued the federal govern-
ment in the U.S. District Court for the Western Dis-
trict of Michigan, seeking to enjoin the defendants
from enforcing provisions of the PPACA related to
contraceptive coverage.
The plaintiffs in both cases allege that they are Catholic
religious entities that uphold and follow the teachings
of the Catholic Church and that their sincerely held
religious beliefs make it unacceptable to provide, pay
for and/or facilitate access to abortion, sterilization or
the use of contraception. The plaintiffs contend that
the mandate and the PPACA force them to violate the
church’s teachings. They assert violations of the Reli-
gious Freedom Restoration Act (RFRA), the First
Amendment free exercise clause, free speech clause,
establishment clause, religion clause and the Adminis-
trative Procedure Act (APA).
The District Court denied motions for preliminary
injunctions filed by both groups of plaintiffs. Both
groups of plaintiffs appealed to the Sixth Circuit, and
the cases were consolidated for purposes of appeal.
In its brief, the government says that the plaintiffs
acknowledge that either they are automatically exempt
from the mandate’s requirement because they are
houses of worship or that they may opt out of the
coverage requirement by informing their insurance
issuer or third-party administrator that they are eligible
for a religious accommodation and, therefore, are not
required ‘‘to contract, arrange, pay, or refer for con-
traceptive coverage.’’
The plaintiffs have said that they do not object to
informing insurance issuers or third-party administra-
tors of their decision not to provide contraceptive cov-
erage but instead object to requirements imposed on
the insurance issuers and third-party administrators,
the government says. When an eligible organization
elects not to provide coverage for religious reasons,
the insurance company that issues policies for that
organization’s employees is required to provide or
arrange separate payments for contraceptive services
for the employees, the government says. In the case
of a self-insured plan, these requirements generally
must be met by the third-party administrator that
operates the plan, the government says. In all cases,
the organization eligible for a religious accommoda-
tion does not administer this coverage and does not
bear any direct or indirect costs of this coverage, the
government says.
‘‘[T]he plaintiffs cannot transform their right, as
eligible organizations, not to provide coverage into a
substantial burden by characterizing their decision to
opt out as ‘a permission slip’ for third parties to pro-
vide the contraceptive coverage,’’ the government says.
‘‘These third parties provide coverage as a result of legal
obligations imposed on themselves, not on the
plaintiffs.’’
As the District Court held in Michigan Catholic Con-
ference, et al. v. Kathleen Sebelius, et al., ‘‘[t]he fact that
the scheme will continue to operate without them may
offend Plaintiffs’ religious beliefs, but it does not sub-
stantially burden the exercise of those beliefs,’’ the gov-
ernment says.
16

No Merit
The government also says that the requirement that
non-grandfathered plans cover recommended preven-
tive health services without cost sharing does not target
religious practices in contravention of the free exercise
clause.
Further, the plaintiffs’ assertion that the regulations
unconstitutionally compel speech fails for the same
reasons their RFRA claims fail, the government says.
Even if they could not opt out of providing contra-
ceptive coverage, ‘‘covering medical services that involve
speech does not entangle plaintiffs with such speech or
endorse any medical advice that is given,’’ the govern-
ment says.
The regulations also do not favor some churches or
denominations over others in violation of the establish-
ment clause, the government says.
Alison Kilmartin of Jones Day in Pittsburgh; Jennifer
Brinkman Flannery and Paula Batt Wilson of Jones
Day in Cleveland; Rebecca D’Arcy O’Reilly of Bodman
in Detroit; Thomas Van Dusen of Bodman in Troy,
Mich.; and Matthew Anthony Kairis of Jones Day in
Columbus, Ohio, represent the plaintiffs in Michigan
Catholic. Matthew A. Kairis, Brandy H. Ranjan and
Melissa D. Palmisciano of Jones Day in Columbus, L.
Gino Marchetti Jr., Matthew C. Pietsch and Antonio
J. Aguilar of Taylor, Pigue, Marchetti in Nashville,
Tenn., and Robb S. Harvey and Lauran Sturm of
Waller Lansden Dortch Davis in Nashville represent
the plaintiffs in Catholic Diocese of Nashville. Assistant
Attorney General Stuart F. Delery, U.S. Attorneys
Patrick A. Miles Jr. and David Rivera, Deputy Assistant
Attorney General Beth S. Brinkmann and Attorneys
Mark B. Stern, Alisa B. Klein and Adam C. Jed, all
of the Department of Justice in Washington, D.C.,
represents the defendants. I
Split 7th Circuit Affirms
Denial Of Injunction
CHICAGO — A divided Seventh Circuit U.S. Court
of Appeals panel on Feb. 21 affirmed a decision deny-
ing the University of Notre Dame’s motion for a pre-
liminary injunction in its case challenging the birth
control mandate contained in the Patient Protection
and Affordable Care Act (University of Notre Dame v.
Kathleen Sebelius, et al., No. 13-3853, 7th Cir.; 2014
U.S. App. LEXIS 3326.).
On Dec. 3, University of Notre Dame, a Catholic
university, sued the federal government in the U.S.
District Court for the Northern District of Indiana,
saying a mandate contained in the PPACA requiring
employers to provide employees with health insurance
that covers contraceptive care violates its religious
beliefs. A previous challenge by the university to the
mandate was dismissed.
In the new complaint, filed after the government
issued final regulations concerning the mandate, the
university says that ‘‘instead of recognizing the in-
alienable rights of religious organizations, the Govern-
ment has instead acknowledged and exempted only a
small class of religious entities, and required the rest —
like Notre Dame — to ‘certify’ its beliefs in a way never
before required, and nonetheless to participate and be-
come entangled in a program antithetical to its faith.’’
Under the accommodation, institutions such as Notre
Dame can sign a certificate indicating that they oppose
providing coverage for some or all contraceptive services
based on religious objections.
On Dec. 20, the District Court denied Notre Dame’s
request for a preliminary injunction.
Notre Dame appealed to the Seventh Circuit, arguing
that the District Court’s decision cannot be reconciled
with the Religious Freedom Restoration Act (RFRA) as
interpreted by the Seventh Circuit in Cyril B. Korte,
et al. v. Kathleen Sebelius, et al. (735 F.3d 654 [2003];
2013 U.S. App. LEXIS 22748). The RFRA prohibits
the government from imposing a ‘‘substantial burden’’
on ‘‘any exercise of religion unless the burden is the least
restrictive means of advancing a compelling govern-
ment interest,’’ and in Korte, the Seventh Circuit
held that the mandate as applied to for-profit corpora-
tions violated RFRA, Notre Dame says.
Form Signed
On Dec. 31, the last day before it would be penalized
for violating the regulation, Notre Dame signed ‘‘EBSA
Form 700,’’ thereby opting out of paying contraceptive
17

coverage for its employees. Notre Dame provided the
form to Meritain Health Inc., its third-party adminis-
trator, and Aetna Inc., its insurer. Following its filing of
the appeal, six students moved to intervene, which the
court granted. Notre Dame then moved to dismiss the
appeal so it could conduct additional discovery related
to the intervenors in the District Court.
Before rendering its decision, the appeal court noted that
it wasn’t sure what Notre Dame wanted enjoined at this
stage given that it has gone ahead and signed the accom-
modation and sent copies to its health insurer and third-
party administrator. As such, Notre Dame has complied
with the statute, the court said.
‘‘We imagine that what the university wants is an order
forbidding Aetna and Meritain to provide any contra-
ceptive coverage to Notre Dame staff or students pend-
ing final judgment in the district court,’’ the court said.
‘‘But we can’t issue such an order; neither Aetna nor
Meritain is a defendant (the university’s failure to join
them as defendants puzzles us), so unless and until they
are joined as defendants they can’t be ordered by the
district court or by this court to do anything.’’
The question before the court remains whether Notre
Dame is entitled to a preliminary injunction, and it is
not, the majority said.
Notre Dame has not shown yet that it faces a sub-
stantial burden in complying with the mandate, the
court said. The form is two pages long and the only
passage of consequence is 95 words, the court said. The
only colorable burden is that by filling out the form and
sending it to Aetna and Meritain it ‘‘triggers’’ the cover-
age of the contraception costs of the university’s female
employees and students, making Notre Dame an
accomplice in the provision of contraception in viola-
tion of Catholic doctrine, the majority said.
However, it is federal law and not Notre Dame’s signing
and mailing of a form that requires health care insurers
and third-party administrators of self-insured health
plans to cover contraceptive services, the majority said.
By refusing to fill out the form, Notre Dame would
subject itself to penalties, but Aetna and Meritain
would still be required by federal law to provide the
services, the majority added.
‘‘If the government is entitled to require that female
contraceptives be provided to women free of charge,
we have trouble understanding how signing the form
that declares Notre Dame’s authorized refusal to pay
for contraceptives for its students or staff, which
under federal law are obligated to pick up the tab,
could be thought to ‘trigger’ the provision of female
contraceptives,’’ the majority said. ‘‘The process of
claiming one’s exemption from the duty to provide
contraceptive coverage is the opposite of cumbersome.
It amounts to signing one’s name and mailing the
signed form to two addresses.’’
No Violations
Notre Dame also argued that the mandate violates the
establishment clause because it favors certain types of
religious organizations over others because the religious
employer doesn’t have to sign or mail a certification to
claim its exemption. The establishment clause, how-
ever, does not require the government to equalize the
burdens that laws of general applicability impose on
religious institutions, and an unequal effect does not
condemn the law, the majority said.
Further, the mandate does not violate the free-speech
clause, the majority said.
The majority also denied the motion to dismiss the
appeal, saying it was apparent that the appeal would
be refiled after discovery relating to the intervenors or
resumed if a limited remand was ordered in lieu of
dismissal, meaning that dismissal or remand would
be a source of delay harmful to both parties.
Judge Richard A. Posner wrote the opinion for the
majority in which Judge David F. Hamilton concurred.
Dissent
Judge Joel M. Flaum said he would have granted the
motion to dismiss the appeal, saying dismissal would
not prejudice the government or the intervenors. It also
would not inhibit the court’s review of the ultimate
issues at a later stage, the judge said.
As to the merits, Judge Flaum said Notre Dame has
made a credible claim under the RFRA and he would
grant the university a preliminary injunction for-
bidding the government from penalizing Notre
Dame for refusing to comply with the self-certification
requirement.
18

Matthew A. Kairis and Melissa D. Palmisciano of Jones
Day in Columbus, Ohio; Carol A. Hogan and Brian J.
Murry of Jones Day in Chicago; Leon F. DeJulius Jr.
and Alison M. Kilmartin of Jones Day in Pittsburgh;
and Marianne Corr of the University of Notre Dame in
Notre Dame, Ind., represent Notre Dame. Assistant
Attorney General Stuart F. Delery, Deputy Assistant
Attorney General Beth S. Brinkmann and attorneys
Mark B. Stern, Alisa B. Klein and Adam C. Jed, all
of the U.S. Department of Justice in Washington,
D.C., represent the federal government. I
Judge: Cash-Only Physicians’
Alleged Injury Too Remote
From ACA Mandate
MILWAUKEE — The alleged reduction in clients
physicians who accept only cash might face from the
delayed implementation of the Patient Protection and
Affordable Care Act (ACA)’s employer mandate is too
attenuated to provide standing to sue the Internal Rev-
enue Service, a Wisconsin federal judge held March 18
(Association of American Physicians Surgeons Inc.,
and Robert T. McQueeney v. John Koskinen, commis-
sioner of the Internal Revenue Service, in his official
capacity, No. 13-1214, E.D. Wis.; 2014 U.S. Dist.
LEXIS 34980).
‘‘[E]ach link of this lengthy causal chain is speculative
and fails to support plaintiffs’ standing argument,’’ U.S.
Judge William C. Greisbach of the Eastern District of
Washington said.
The Association of American Physicians Surgeons
Inc. (AAPS) and Robert T. McQueeney, M.D., filed
suit in the U.S. District Court for the Eastern District
of Wisconsin against Internal Revenue Service Com-
missioner John Koskinen. Many of the physicians who
belong to AAPS operate cash practices and do not take
health insurance. McQueeney, an AAPS member,
operates a part-time psychiatry practice in Wisconsin.
Tax Argument
The plaintiffs claimed that implementing the ACA’s
individual mandate in 2014 while delaying the em-
ployer mandate violated the separation of powers and
the 10th Amendment to the U.S. Constitution and
sought declaratory and injunctive relief.
The IRS moved to dismiss for lack of subject matter
jurisdiction.
Judge Greisbach rejected the plaintiffs’ contention
that the Supreme Court did not find that the ACA’s
penalty provisions are a tax for all purposes.
‘‘Plaintiffs’ argument misses the main point of third-
party standing cases. The critical issue is not whether
the employer mandate is characterized as a tax, a pen-
alty, or simply a mandate, but rather, whether the gov-
ernment action prescribed by the ACA directly affects
(and injures) plaintiffs,’’ Judge Greisbach said.
Here, the plaintiffs claim that the IRS’s failure to
enforce the employer mandate will cause employers
not to offer ACA-compliant plans for 2014, causing
employees to pay out-of-pocket for plans plaintiffs do
not accept, that this will leave employees with less
income and thus cause those employees to purchase
fewer cash services from cash-only business like those
operated by McQueeney and other AAPS members,
Judge Greisbach said.
Many Factors
An employer’s decision not to offer insurance depends
on many factors, including costs, industry standards
and employee preference, Judge Greisbach said. Any
argument that a substantial number of employers will
choose not to offer insurance is speculative at best,
Judge Greisbach said. Any employee who does not
obtain insurance through work will also have the option
of obtaining coverage through the exchanges, Judge
Greisbach said.
Judge Greisbach noted that because the IRS cannot
enforce the penalty for failing to comply with the
individual mandate with criminal prosecutions and
because of the meager penalties assessed for failing
to comply, many individuals may not obtain insurance
through the exchanges. Should this occur, McQueeney
and AAPS members may actually see an increase in
business as a result of the individual mandate, Judge
Greisbach said.
Evidence Of Injury
Nor can the plaintiffs show that any injury is im-
minent or traceable to the IRS, Judge Greisbach said.
19

Any change in tax laws is likely to create incentives or
disincentives and have an impact on the income of
some industry, trade or profession, Judge Greisbach
said. If courts found that such an impact imparted
standing, then every tax code change would warrant
litigation, Judge Greisbach said.
Finally, Judge Greisbach said the plaintiffs’ complaint
does not identify any AAPS member whose health
insurance premiums increased. Although AAPS be-
latedly offered Lawrence Huntoon to satisfy this role,
the causal connection between any difference in man-
date enforcement and Huntoon’s alleged injury is too
remote to support standing, Judge Greisbach said.
Jonathan Gordon Cooper of the U.S. Department of
Justice in Washington, D.C., represents Koskinen.
Andrew L. Shlafly of Andrew L. Schlafly, attorney at
law, in Far Hills, N.J., represents the plaintiffs. I
District Of Columbia
Appeals Panel Affirms
Dismissal Of ACA Suit
WASHINGTON, D.C. — Plaintiffs cannot squeeze
the individual insurance mandate in the Patient Protec-
tion and Affordable Care Act (ACA) into an ‘‘arbitrary
as-applied’’ exemption to Congress’ taxing power, a
panel of the District of Columbia Circuit U.S. Court
of Appeals affirmed March 7 (Association of American
Physicians Surgeons Inc., et al. v. Kathleen G. Sebe-
lius, et al., No. 13-5003, D.C. Cir.).
(Opinion in Section A. Document #31-140319-
001Z.)
The panel rejected the plaintiffs’ Fifth Amendment
challenges to the individual insurance mandate in 26
U.S. Code Section 5000A.
The plaintiffs attempt to squeeze their claim into a
narrow exception to Congress’ taxing power in Brush-
aber v. Union Pac. Railroad Co. (240 U.S. 1, 24-25
[1916]), in which the court rejected the power where it
was so arbitrary as to constitute a confiscation of prop-
erty rather than a tax, the panel said. The panel rejected
the argument that Kelo v. City of New London, Conn.
(545 U.S. 469 [2005]) stood for the proposition that
a sovereign may not take the property of one private
party solely for the purpose of transferring it to a second
private party, even when it compensates the first party.
‘‘But it is impossible to read that sentence in Kelo (even
if we were to treat it as a holding, which it isn’t) as
suggesting that any redistributive purpose sweeps an
otherwise valid tax into the narrow group of measures
condemned by Brushaber,’’ the panel said.
Standing
The American Association of Physicians and Sur-
geons Inc. (AAPS) and Alliance For Natural Health
USA sued Kathleen G. Sebelius, secretary of Health
and Human Services (HHS), and Michael J. Astrue,
commissioner of the Social Security Administration, in
the U.S. District Court for the District of Columbia
pursuant to the Medicare Act, the Social Security Act
and the Administrative Procedure Act (APA), seeking
to enjoin the defendants from compelling AAPS mem-
bers to participate in Medicare Part A as a condition
of receiving Social Security benefits and to purchase
health insurance approved by HHS. The plaintiffs also
challenged the ACA’s individual insurance mandate.
The District Court dismissed the case, saying that the
plaintiffs lacked standing or failed to state claims for
which relief could be granted.
The plaintiffs appealed to the D.C. Circuit.
‘As-Applied’
In its ruling, the panel said the plaintiffs give no reason
why viewing the mandate ‘‘as-applied’’ rather than
facially would yield a different result.
Nor did National Federation of Independent Business v.
Sebelius (132 S. Ct. 2566 [2012]) (NFIB) do anything
to change the outcome of the plaintiffs’ challenges to
the ACA’s origination, the panel said. The District
Court asked for supplemental briefing regarding
NFIB but limited it to whether NFIB required dismissal
of any portion of the instant case, the panel said.
The briefing was not, as portrayed by the plaintiffs, a
request to examine the impact of NFIB, the panel said.
The panel then rejected statutory challenges to Social
Security Administration provisions automatically enti-
tling eligible individuals for enrollment in Medicare
Part A. Precedent clearly forecloses on the plaintiffs’
20

challenge, the panel said. As written, Medicare Part A
‘‘precludes any option not to be entitled to its benefits,’’
the panel said. The panel also rejected the plain-
tiffs’ claim that such a change required a notice-and-
comment period, saying the lack of any possible remedy
from such a process makes it unnecessary.
Fiduciary Duties
Nor did Astrue or Sebelius violate their fiduciary
and equitable duties by failing to provide a honest ac-
counting of Social Security and Medicare, the panel
said. On this issue, the plaintiffs provide no legal argu-
ment and cite no statute or other basis for this argument
and ‘‘do not even sketch a penumbra possibly emanat-
ing from any part of the laws or Constitution of the
United States,’’ the panel said.
Judge Stephen F. Williams wrote for the court, joined
by Judges Judith W. Rogers and David B. Sentelle.
Lawrence J. Joseph represents the plaintiffs. Acting
Assistant Attorney General Stuart F. Delery, U.S.
Attorney Ronald C. Machen Jr. and trial attorneys
Mark B. Stern and Dana Kaersvang, all of the U.S.
Justice Department, represent the defendants. All are
in Washington. I
Government Asks Appeals
Court To Affirm Judgment
In Birth Control Suit
WASHINGTON, D.C. — The federal government
on Feb. 12 filed a brief with the District of Columbia
Circuit U.S. Court of Appeals urging the court to
affirm a decision granting summary judgment in its
favor in a suit challenging an Internal Revenue Service
regulation imposed under the Patient Protection and
Affordable Care Act (ACA) that extends eligibility for
premium assistance subsidies to people who purchase
health insurance through exchanges established by
the ACA (Jacqueline Halbig, et al. v. Kathleen Sebelius,
et al., No. 14-5018, D.C. Cir.).
002B.)
Insurance Exchanges
The ACA includes provisions for the creation of state
health insurance exchanges, which are mechanisms ‘‘for
organizing the health insurance marketplace to help
consumers and small businesses shop for coverage in
a way that permits easy comparison of available plan
options based on price, benefits and services, and qual-
ity.’’ The ACA requires each state to establish an
exchange by Jan. 1, 2014, but also provides that if a
state opts out of the exchange, the federal government
will establish and operate an exchange within the state.
The ACA encourages states to establish exchanges
with a variety of incentives, chiefly the premiums-
assistance subsidy for state residents purchasing in-
dividual health insurance through state-established
exchanges. However, no premium assistance subsidy
will be provided unless the citizen pays for the insurance
through a state-established exchange.
Thirty-four states declined to establish exchanges,
making the federal government responsible for estab-
lishing exchanges in those states. Under the ACA, the
consequence of the states’ decisions not to create their
own exchanges is that people who buy insurance
through the federal exchanges in those states are not
eligible for premium assistance subsidies.
If people in those 34 states were ineligible for subsidies,
many would be unable to afford the comprehensive
coverage the ACA’s individual mandate requires them
to purchase, and they would therefore be entitled to
an exemption for the mandate’s penalty. If employees
in the states were ineligible for subsidies, their em-
ployers also would be exempt from the ACA’s em-
ployer mandate to sponsor certain health coverage for
their employees.
Subsidies Expanded
To address this issue, the IRS promulgated regulations
expanding the availability of subsidies. The IRS rule
states that subsidies shall be available to anyone
‘‘enrolled in one or more qualified health plans through
an Exchange’’ and defines ‘‘exchange’’ to mean ‘‘a State
Exchange, a regional Exchange, subsidiary Exchange,
and Federally-facilitated Exchange.’’ The rule means
that premium assistance subsidies are available in all
states, including those states that declined to establish
their own exchange.
Virginia resident Jacqueline Halbig, West Virginia
resident David Klemencic, Tennessee resident Carrie
Lowery and Texas resident Sarah Rump contend that
21

because the subsidy expansion rule makes them eligible
for a premium assistance subsidy, they will be disqua-
lified from the exemption to the individual mandate
and be subject to its penalties for failure to obtain in-
surance. Small businesses Innovare Health Advocates,
GC Restaurants, Olde England’s Lion Rose, Olde
England’s Lion Rose at Castle Hills, Olde England’s
Lion Rose Forum, Olde England’s Lion Rose
at Sonterra, Olde England’s Lion Rose at Westlake
and Community National Bank all have headquarters
in states that chose not to establish their own insurance
exchange. The businesses contend that absent the IRS
rule, they would not be subject to assessable payments
under the employer mandate contained in the ACA.
Innovare says that if it were not subject to the pay-
ments, it was preparing to expand its health insurance
plan to cover all full-time employees in a manner that
would likely not comply with the ACA. The Olde
England companies say they do not offer health in-
surance to many full-time employees and do not
want to offer it to them but that choice will expose
them to the assessable payments under the employer
mandate. Community National Bank says its directors
object to certain provisions of the ACA, such as its
definition of contraceptive and abortifacient drugs as
‘‘preventative services,’’ and would rather drop the
health insurance it offers to full-time employees than
comply with the provision. However, the bank says
such an action would expose it to assessable payments
under the employer mandate.
The individuals and small businesses sued Kathleen
Sebelius, secretary of Health and Human Services
(HHS); Jacob Lew, secretary of the Treasury; Steven
Miller, acting commissioner of the IRS; the depart-
ments and the IRS in the U.S. District Court for the
District of Columbia, seeking a declaration that the
IRS regulations are unlawful. They have asserted a
claim for rulemaking in violation of the Administrative
Procedure Act (APA) and are seeking a judgment
declaring that the IRS rule violates the APA and a pre-
liminary and permanent injunction.
The parties cross-moved for summary judgment. The
District Court granted the federal government’s motion.
Statutory Language
The plaintiffs appealed, arguing that ‘‘[n]o legitimate
method of statutory construction would interpret the
phrase ‘Exchange established by the State under section
1311’ in the ACA’s subsidy provision to mean ‘Ex-
change established by the State under section 1311
or, if the state fails to establish one, by HHS under sec-
tion 1321.’ ’’
The act expressly contemplates state-established ex-
changes and HHS-established exchanges, and where
an act specifically refers to one type or the other, courts
must give effect to that language, the plaintiffs say.
Congress’ Intent
In its brief, the government says the plaintiffs pre-
mise their argument on one phrase in Section 36B
of the act, read in isolation from the rest of the section
and divorced from the statutory provisions it cross-
references, the structure of the statute and the purpose
of the ACA.
The U.S. ‘‘Supreme Court, however, has repeatedly
emphasized that ‘statutory construction is a holistic
endeavor’’’ and that a ‘‘statutory phrase cannot be ‘con-
sidered in isolation, and without reference to the struc-
ture and purpose’ of the statute,’’ the government says.
‘‘Moreover, in the context of federal taxing statutes,
the Supreme Court has held that ‘revenue laws are to
be construed in the light of their general purpose to
establish a nationwide scheme of taxation uniform in
its application,’ ’’ the government says. ‘‘State law may
control only when the federal taxing act, by express
language or necessary implication, makes its own opera-
tion dependent upon state law.’’
Should the court reach the merits notwithstanding
these threshold issues, the government said, the judg-
ment of the District Court should be affirmed. The
District Court correctly held that ‘‘while there is more
than one plausible reading of the challenged phrase
in Section 36B when viewed in isolation, the cross-
referenced sections, the surrounding provisions, and
the ACA’s structure and purpose all evince Congress’s
intent to make premium tax credits available on both
state-run and federally-facilitated exchanges.’’
Michael A. Carvin, Jacob M. Roth and Jonathan Berry
of Jones Day in Washington represent the plaintiffs.
Acting Assistant Attorney General Stuart F. Delery,
Deputy Assistant Attorney General Ian Heath Gershen-
gorn, U.S. Attorney Ronald C. Machen Jr., Deputy
22

Branch Director Sheila Lieber and Senior Trial
Counsel Joel McElvain, all of the U.S. Department of
Justice in Washington, represent the government.
(Additional document available. Reply brief. Docu-
ment #31-140305-022B.) I
4th Circuit Briefed
On ACA Exchange
Credit Challenge
RICHMOND, Va. — The U.S. Department of
Health and Human Services on March 18 responded
to arguments that the Patient Protection and Affordable
Care Act (ACA) allowed for premium support only for
those enrolled through exchanges created by the states,
saying such reading does not comport with the lan-
guage of the statute (David King, et al. v. Kathleen
Sebelius, et al., No. 14-1158, 4th Cir.).
(Opening brief available. Document #93-140326-
034B. Response available. Document #93-140326-
035B.)
Virginia residents David King, Douglas Hurst, Brenda
Levy and Rose Luck sued Kathleen Sebelius, secretary
of the U.S. Department of Health and Human Service
(DHHS); the DHHS; Jacob Lew, secretary of the
U.S. Department of Treasury; the Department of
Treasury; Daniel Werfrel, acting commissioner of the
IRS; and the IRS in the U.S. District Court for the
Eastern District of Virginia, saying the IRS rule squarely
contravenes the express intent of the PPACA, ignoring
the clear limitations that Congress imposed on the
availability of the federal subsidies. Further, the IRS
promulgated the regulation without any reasoned
effort to reconcile it with the contrary provisions of
the statute, the plaintiffs say.
The plaintiffs seek a declaratory judgment ruling that
the IRSrule is illegal under the Administrative Procedure
Act (APA) and injunctive relief barring its enforcement.
Exchanges
The plaintiffs allege that the ACA includes provisions
for the creation of state health insurance exchanges,
which are mechanisms ‘‘for organizing the health in-
surance marketplace to help consumers and small
businesses shop for coverage in a way that permits
easy comparison of available plan options based on
price, benefits and services, and quality.’’ The ACA
required each state to establish an exchange by Jan. 1,
2014, but also provided that if a state opts out of the
exchange, the federal government would establish and
operate an exchange within the state.
The ACA encourages states to establish exchanges with
a variety of incentives, chiefly the premium-assistance
subsidy for state residents purchasing individual health
insurance through state-established exchanges. Thirty-
four states declined to establish exchanges, making the
federal government responsible for establishing ex-
changes in those states.
To address this issue, the IRS promulgated regulations
expanding the availability of subsidies. The IRS rule
states that subsidies shall be available to anyone
‘‘enrolled in one or more qualified health plans through
an Exchange’’ and defines ‘‘exchange’’ to mean ‘‘a State
Exchange, a regional Exchange, subsidiary Exchange,
and Federally-facilitated Exchange.’’ The rule means
that premium-assistance subsidies are available in all
states, including those states that declined to establish
their own exchanges.
Mandates
The plaintiffs allege that Virginia opted not to establish
its own insurance exchange. The individuals are not
eligible for employer- or government-sponsored health
coverage that satisfies the individual mandate. Absent
the IRS ruling, the individuals would be entitled to a
certificate of exemption from the individual mandate
penalty for 2014 because the cheapest bronze plan
approved for sale to them on the federal exchange in
Virginia would cost more than 8 percent of their in-
dividual household incomes. But because the IRS rule
makes them eligible for a subsidy that would reduce
their out-of-pocket cost to below that figure, they
will be disqualified from that otherwise-applicable
exemption and subject to the individual mandate
penalty. As a result, they say, they will be forced to
pay a penalty or purchase more insurance than they
want. The individuals say they are injured by the IRS
rule because it has the effect of subjecting them to
monetary sanctions or requiring them to alter their
behavior to avoid those sanctions. Either way, the indi-
viduals say, their financial strength and fiscal planning
are immediately and directly affected by the exposure
and/or liabilities.
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