In the most significant ruling yet on the many lawsuits against the Obama administration’s HHS mandate, the 7th Circuit Court of Appeals in Chicago ruled to stop the HHS from enforcing the mandate against a privately-owned business. This is the first time an appeals court has ruled in favor of a privately-owned business–the first time that an appeals court has determined that a private individual in secular business has freedom of religion.
Madison county, Illinois business owners Cyril and Jane Korte, owners of Korte & Luitjohan Contractors, are Catholics and say that providing contraceptives, sterilization, and abortion-inducing drugs is against their faith. They filed for an emergency injunction on Dec 18th. They employ about 90 people. Most of their employees are unionized and the union provides their health plans. Interestingly, the Kortes discovered in August that their current health plans for the remaining employees provides contraception, and the Kortes want to stop that by implementing a new plan on January 1st.
In the court’s two-to-one ruling, the court wrote:
We conclude that the Kortes have established both a reasonable likelihood of success on the merits and irreparable harm, and that the balance of harms tips in their favor.
The court also made an interesting reference to Citizens United, in addressing the government’s argument that the business has no rights under RFRA. Citizens United found that corporations do have free speech rights (the case dealt with campaign financing); this court seems to imply that corporations/businesses also have freedom of religion.
In response, the government’s primary argument is that because K & L Contractors is a secular, for‐profit enterprise, no rights under RFRA are implicated at all. This ignores that Cyril and Jane Korte are also plaintiffs. Together they own nearly 88% of K & L Contractors. It is a family‐run business, and they manage the company in accordance with their religious beliefs. This includes the health plan that the company sponsors and funds for the benefit of its nonunion workforce. That the Kortes operate their business in the corporate form is not dispositive of their claim. See generally Citizens United v. Fed. Election Comm’n, 130 S. Ct. 876 (2010).
About the fact that the Kortes were already providing contraception, the court wrote:
Finally, the government emphasizes the fact that K & L Contractors’ current employee health plan covers contraception. But it is well‐established that a religious believer does not, by inadvertent nonobservance, forfeit or diminish his free‐exercise rights.
The court noted, in conclusion:
In short, the Kortes have established a reasonable likelihood of success on their claim that the contraception mandate imposes a substantial burden on their religious exercise. As such, the burden will be on the government to demonstrate that the contraception mandate is the least restrictive means of furthering a compelling governmental interest….given this high bar, we think the Kortes have established a reasonable likelihood of success on their RFRA claim…. They have also established irreparable harm. Without an injunction pending appeal, the Kortes will be forced to choose between violating their religious beliefs by maintaining insurance coverage for contraception and sterilization services contrary to the teachings of their faith and subjecting their company to substantial financial penalties.