• Blocking the Trump administration’s contraception rules (again).

    Yesterday evening, a California federal judge enjoined the Trump administration from enforcing two rules that would greatly expand the exemptions to the Affordable Care Act’s contraception mandate. The injunction applies only in the plaintiff states, which include California, New York, Virginia, and ten others, as well as Washington, D.C.

    I’ve written extensively about these rules, one of which offers an exemption for employers with religious objections to offering contraception coverage, and the other of which extends to those with moral objections.

    * * *

    The crux of the fight over the religious-exemption rule is whether a federal agency can invoke the Religious Freedom Restoration Act to craft exemptions from statutes that, in the agency’s judgment, burden religious exercise. (Judge Gilliam rejected, for the same reasons I gave here, an unrelated—and completely bogus—statutory argument for the exemption.)

    RFRA says that any statutes that Congress adopts are “subject” to RFRA “unless such law explicitly excludes such application.” So maybe Obamacare should be understood to contain within it a silent proviso: agencies must faithfully implement the law as written, except to the extent that doing so would conflict with RFRA. That’s what the Little Sisters of the Poor has argued: that Congress “delegated authority to the agencies to create exemptions to protect religious exercise,” such that RFRA “operates as a floor on religious accommodation, not a ceiling.”

    The view has some force. Agencies will usually have a better sense than courts of whether and how their own rules will burden religious exercise. They’re also more politically accountable than courts, which may equip them to weigh an incidental burden on religion against the substantiality of Congress’s interest in adopting the law. And they’ve got the wherewithal to create context-sensitive rules that offer the regulated community clarity about RFRA accommodations, without the need to resort to costly litigation.

    The trouble with that argument, however, is that RFRA contemplates that courts will grant relief for any violation, not agencies. Congress hasn’t explicitly delegated to agencies the power to craft exemptions from generally applicable laws, and the courts probably shouldn’t presume agencies can wield that open-ended power without some clearer indication from Congress. An agency’s views about RFRA’s application are entitled to respectful attention—but the courts still make the final call.

    That’s Judge Gilliam’s view, anyhow. As he sees it, after several rounds of litigation, the federal courts have almost uniformly coalesced around the view that a set of Obama-era exemptions are sufficient to comply with RFRA. He doesn’t think the Trump administration has the authority to go further: “the courts, not the agencies, are the arbiters of what the law and the Constitution require.” He explains:

    The Court questions the Little Sisters’ contention that RFRA effected a wholesale delegation to executive agencies of the power to create exemptions to laws of general applicability in the first instance, based entirely on their own view of what the law requires. As this case definitively demonstrates, such views can change dramatically based on little more than a change in administration. In any event, there is no dispute that both the prior and current Administrations have contended that they have administered the ACA in a manner consistent with RFRA. But the courts are not concerned, at all, with the Federal Defendants’ desire to “avoid litigation,” especially where that avoidance means depriving a large number of women of their statutory rights under the ACA.

    * * *

    The religious-exemption rule presents some thorny legal questions. The rule governing moral exemptions, which was crafted to benefit just two non-religious anti-abortion groups, does not. It’s flat-out illegal, and obviously so. Here’s my take from back in October 2017:

    In a truly baffling legal argument, HHS identifies a long string of statutes that ostensibly “show Congress’ consistent protection of moral convictions alongside religious beliefs in the Federal regulation of health care.” … [But n]one of th[ose] statutes purport to give HHS the authority to craft a freestanding “moral exemption” from the obligation to cover preventive services for women. To the contrary, the statutes demonstrate that, when Congress wants to add a moral exemption to a statute, it knows how to do so. Far from supporting HHS’s action, all of these statutes undermine it.

    In his opinion yesterday, Judge Gilliam came to the same conclusion:

    Congress mandated the coverage that is the subject matter of this dispute, and rejected a “conscience amendment” that would exempt entities like March for Life from this generally-applicable statutory requirement. The Final Rules note that “[o]ver many decades, Congress has protected conscientious objections including based on moral convictions in the context of health care and human services, and including health coverage, even as it has sought to promote access to health services.” But that highlights the problem: here, it was the agencies, not Congress, that implemented the Moral Exemption, and it is inconsistent with the language and purpose of the statute it purports to interpret.

    * * *

    I’d expect the Trump administration to appeal the decision, and fast. (Or as fast as possible, under the circumstances. The Justice Department has been asking courts to pause most of its cases during the shutdown.) Either the Ninth Circuit or the Supreme Court could vacate the injunction while the appeal proceeds. If they don’t, however, the injunction could remain in place through the 2020 election.

    There’s a decent chance, then, that these contraception rules will never take effect in the 13 states that brought this lawsuit.

    @nicholas_bagley

     
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  • Does the Supreme Court get science and economics?

    Yesterday, Austin pointed to two New York Times articles, one by Aaron and the other by Uwe Reinhardt, to suggest that the Supreme Court understands neither science nor economics. I’m sympathetic to the claim. There’s an air of unreality about a court decision that allows companies to claim a religious exemption to paying for “abortifacients,” when employees actually pay for that contraception (as Uwe notes) and the challenged forms of contraception don’t appear to cause abortions (as Aaron explains).

    Still, I’m not sure the Court’s decision demonstrates its ignorance. I offer the following not in defense of Hobby Lobby, but by way of explanation. The Court had some lawyerly reasons to downplay both science and economics. You might not agree with those reasons, but they’re not insubstantial.

    Science. The extent to which the contraception mandate infringes on Hobby Lobby’s religious liberty turns on a mixed question of science and religion. Scientists can demonstrate that the challenged forms of birth control almost never prevent implantation of a fertilized egg. But it’s very hard for scientists to prove that it can never happen.

    That’s where religion comes in. Does facilitating the use of contraception that might conceivably prevent implantation, even if that risk is very low, contravene some religious precept? Science can’t answer that question. A religious person might think that it’s wrong—sinful—to commit an act that presents a risk, however remote, of something very bad. Should the courts be in the business of second-guessing those kinds of religious claims? Among other things, doing so raises the possibility that the courts would uphold mainstream religious values while dismissing religious views they thought were kooky.

    It’s also relevant that the government didn’t dispute the sincerity of Hobby Lobby’s belief. To the contrary, it acknowledged that FDA’s own labels for the challenged forms of contraception said they might interfere with implantation. In our adversary system, the courts generally won’t adopt an argument that neither side actually makes.

    Economics. The Court’s decision might reflect ignorance of the fact that employees ultimately bear the cost of their health benefits. But it might not. Whatever the underlying economic realities, Hobby Lobby is still cutting checks for health care. Plus, Hobby Lobby as an entity has to work with its third-party administrator to guarantee coverage for these forms of birth control. These are both affirmative acts, and Hobby Lobby objected to them both.

    Are those acts too attenuated from the eventual decision to use one of the challenged forms of contraception to amount to a “significant burden” on Hobby Lobby’s exercise of religion? Justice Ginsburg thought so, and that strikes me as a reasonable view. (It seems relevant, too, that Hobby Lobby actually did cover the contraception in question to the ACA. It just wasn’t aware of it!)

    But the Court said that it would defer to Hobby Lobby’s “honest conviction” that its participation—however attenuated—was “immoral.” Why? Because that conviction “implicates a difficult and important question of religion and moral philosophy, namely, the circumstances under which it is wrong for a person to perform an act that is innocent in itself but that has the effect of enabling or facilitating the commission of an immoral act by another.” The Court didn’t get the economics wrong. It just didn’t want to disparage Hobby Lobby’s view about the wrongness of its modest participation.

    On both points, the Supreme Court’s decision reflects a willingness to take very seriously Hobby Lobby’s asserted religious beliefs, even to the point of minimizing good science and sound economics. If you think that’s deplorable, I get it. But notice that the flip side is also true. Taking the science and economics seriously would have meant upholding the contraception mandate—which would have been seen, with some justice, as minimizing Hobby Lobby’s religious beliefs.

    @nicholas_bagley

     
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  • Sex discrimination and Hobby Lobby

    Here’s a question I’ve been puzzling over after Hobby Lobby. Why does the ACA require employers to cover birth control for women in the first place?

    After all, the ACA imposes very few requirements on employer-sponsored coverage. Annual and lifetime caps are verboten; there are some cost-sharing limits; and employers can be hit with a penalty if they don’t offer coverage. But there’s not much else.

    Why such a light touch? Because Congress trusted that, in general, the labor market will push employers to do right by their employees. In principle, that should include women employees. Women who want contraception coverage can bargain for it, much as they bargain for other fringe benefits. Employers with religious objections may have to pay women slightly more to make up for the absence of coverage or watch them walk out the door.

    The contraception mandate reflects an implicit judgment that the market doesn’t work well when it comes to birth control. Why? In the congressional debates, the suggestion was that women are still subject to various forms of conscious and (more often) unconscious discrimination. Employers may be systematically insensitive to women’s concerns in a way that the market can’t easily correct.

    Because contraception coverage for men isn’t a big concern, this sort of sex discrimination is easy to overlook. But the ACA arguably reflects Congress’s judgment that, if men needed birth control as urgently as women do, their employers would cover it without cost-sharing. On this view, the contraception mandate prohibits a form of sex discrimination by requiring employers to treat women the same as those hypothetical men.

    Which brings me back to Hobby Lobby. In her dissent, Justice Ginsburg warned that employers might invoke the decision to claim a religious objection to laws prohibiting racial discrimination. The Supreme Court brushed the concern aside: “Our decision today provides no such shield. The Government has a compelling interest in providing an equal opportunity to participate in the workforce without regard to race, and prohibitions on racial discrimination are precisely tailored to achieve that critical goal.”

    But the Court’s distinction doesn’t look like much of a distinction at all. Substitute the word “sex” for “race” and it would serve equally well as a justification for the contraception mandate. After all, the contraception mandate is “precisely tailored” to end a particular type of sex discrimination. Or so Congress might reasonably conclude.

    To be sure, there are plenty of other ways of understanding what the contraception mandate aims to accomplish. Maybe it’s less an antidiscrimination rule than a public health measure. Plus, given Congress’s effort to protect religious objectors in the Religious Freedom Restoration Act, it’s not crazy to ask the government to extend to the company an accommodation that it has already extended to non-profit religious organizations. (See Austin’s take on that here.)

    What I don’t get, though, is the Supreme Court’s blasé assumption that this case has nothing to do with discrimination. It seems to me that it does.

    @nicholas_bagley

     
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  • Obamacare heading back to the Supreme Court

    In 2014, SCOTUS may hear the federally facilitated exchanges (FFE) tax credit cases, in addition to the contraception mandate cases (Hobby Lobby and many others; BNA has a nice gated summary; Sotomayor just granted a delay for the plaintiffs pending full review).

    The contraception mandate, while high profile, will not threaten the ACA. It is not actually a constitutional challenge, but a statutory issue under the Religious Freedom Restoration Act. No matter how the Supreme Court rules, the ruling will not gut the rest of the law.  (Back in the NFIB ruling in June 2012, four justices said the ACA was not “severable” from the Medicaid expansion; that threat isn’t present in the contraception mandate cases). So – an interesting question of religious freedom for privately held corporations, but no fundamental upheaval of the ACA.

    The same cannot be said for the FFE tax credit cases, which were designed by the Cato Institute to wreck havoc. The most prominent federal district court cases are Halbig v. Sebelius in Washington, D.C. and King v. Sebelius in Virginia. The conventional wisdom is that SCOTUS won’t take the bait and the law is safe (see the McDermott Will & Emery briefing here). That was my prediction back in July 2012.

    (Disclosure:  MWE is one of the nation’s premier tax and health care law firms, with many clients in the industry; I was an income partner there many years ago)

    @koutterson

     
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  • The contraception mandate decision

    The Gilardi v. HHS decision is out today (on scribd), blocking the PPACA contraception mandate for the plaintiffs. Two brothers own Freshway Foods and a related company that offer a self-insured health plan to their 400 employees. For non-grandfathered plans with an annual enrollment period starting on or after September 23, 2010, PPACA required zero deductibles and cost sharing for a package of preventative services. One component of that package includes FDA-approved contraception. The Gilardi brothers claimed this requirement violates the Religious Freedom Restoration Act (RFFA). A majority of the Court agreed, sending the case back to the District Court for a reconsideration of the injunction.

    This case raises an interesting point about pluralism in our society. When do we get to abstain from generally-applicable laws that violate our moral beliefs? Even more attenuated, when do we get to opt out because other people’s actions violate our beliefs? Can the Freshway companies decide to drop hospice care for their employees as violating Catholic beliefs? Could a Muslim employer prevent employees from bringing home the bacon with their paychecks? Could a Baptist employer fire employees for watching porn at home on HBO?

    Judge Brown wrote for a 3-judge panel on the DC Court of Appeals. It is a complex 71-page split decision, with the justices disagreeing on several issues. On one level, it is not entirely surprising, as the Court had previously granted a temporary injunction for the Gilardi brothers.

    The brothers, as Catholics, do not want to cover contraception, sterilization or abortion. The first question is whether the Freshway companies have free exercise rights. The majority looked to cases where religious corporations pursued free exercise rights as a community, and noted that Citizens United recognized corporate free speech, “separated only by a semicolon” from the religious clauses. But mere proximity was not enough to find that corporations can worship God:

    When it comes to the free exercise of religion, however, the Court has only indicated that people and churches worship. As for secular corporations, the Court has been all but silent.

    Nor did the Court permit the Freshway companies to exercise the religious rights of their owners, despite the moral implications of complicity.

    To this point, the US Government is winning this case handily (or 2-1, as Randolph would leave the corporate worship issue undecided at this point). Their luck turns in the next section, where the majority grants standing to the Gilardi brothers themselves, suing in a derivative capacity. I must confess that this is the portion of the opinion that I understand the least, even though I teach derivative actions. This is not the sort of “direct” injury that is commonly recognized as the counterpart to derivative actions. The dissenting opinion by Judge Edwards agrees in this particular result, but with substantially clearer analysis based on Article III. They would grant contraception mandate standing to any closely-held company with religious owners. On this result, all 3 Judges agree.

    According to the majority, the injury is owning a company that is forced to “fill the basket of goods and services that constitute a healthcare plan” with contraception and sterilization. The majority analogizes this to compulsory church taxes and forcing the Amish to send their children to secular schools.

    Given this framework, the majority then finds that the contraception mandate fails the strict scrutiny standard under RFRA. The employees don’t have a compelling interest in contraception (so says the majority) and the mandate is not the “least restrictive” means to achieve that objective. The various compromises by the Administration (grandfathered plans, small employers, religious employers) were cited as evidence that the government lacked a consistent approach to contraception. There is a lesson here.

    One bright point for the Administration:  the Court assumes that the contraception provisions are severable when it notes that “the comprehensive sweep of the Affordable Care Act will remain intact with or without the mandate.’

    The dissent by Judge Edwards is longer than the main opinion. Judge Edwards agrees that the Freshway companies lack standing and that the Gilardi brothers have standing under RFFA. Edwards allows their claim to be heard, but finds it “specious.”

    The Supreme Court has never applied the Free Exercise Clause to find a substantial burden on a plaintiff’s religious exercise where the plaintiff is not himself required to take or forgo action that violates his religious beliefs, but is merely required to take action that might enable other people to do things that are at odds with the plaintiff’s religious beliefs.

    Edward’s dissent focuses on the Supreme Court decisions that were not overthrown by RFFA, finding a more nuanced application of free exercise than the majority. The dissent also found that the contraception mandate did not substantially burden the brothers – they are not required to use contraception themselves, but only to provide insurance that might be used by others (employees and their dependents) for contraception. The government isn’t forcing the Amish to go to school. See my discussion on pluralism above.

    The case attracted an unusual number of amicus briefs: 9 groups opposed the ACA contraception rule and 7 supported it. As a side note, this is the court where Majority Leader Reed is threatening the nuclear option if Republicans continue to block the President’s nominations from proceeding to the floor.

    @koutterson

    UPDATE:  correcting my Catholic mistake (see the comments)

     
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  • NEJM Health Law Roundup

    States that forgo Medicaid expansion will lose billions in federal subsidies, money that would have flowed through insurance plans to hospitals, doctors and other providers in the state. Since hospitals are the largest employer in many US counties, I predict significant political pressure for governors to not take the Red State Option. But in addition to the loss of insurance funds, states will lose billions of DSH funding over the next decade. Loss of some DSH was a tolerable bargain when hospitals were promised near-universal enrollment in insurance. But in states opting out of the Medicaid expansion, they will lose significant DSH funding even if Medicaid isn’t expanded and the number of uninsured remains high. In this week’s NEJM, John Graves crunches the numbers and quantifies how much the Red State Option will hurt DSH. More grist for the local political battles already underway.

    In a separate NEJM Perspective, Tim Jost catalogs all of the religious freedom cases attacking the inclusion of contraception as a mandatory preventative care benefit for non-grandfathered plans under the ACA. I’ve written about some of these cases previously (Corporations are Catholic too? and More Religious Objections to Contraception Coverage), but Tim covers the cases more comprehensively. Note that in the secular employer cases, the courts aren’t committed (yet) to allowing the corporations to assert 1A rights directly, but rely mainly on the corporation’s purported standing to assert 1A rights on behalf of their majority owners. This issue seems likely to come before the Court in due time.

    @koutterson

     
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  • More religious objections to contraception coverage

    I wrote last week that corporations might have First Amendment or RFRA religious rights to object to contraception coverage. Now we have a second federal judge agreeing, this time on behalf of Tyndale Bible Publishers (complaint here; preliminary injunction here). The short answer:

    The plaintiffs have therefore shown that the contraceptive coverage mandate substantially burdens their religious exercise.

    The Tyndale opinion again focuses on the rights of the owners of the company (here, a family foundation) rather than the company itself:

    This Court, like others before it, declines to address the unresolved question of whether for-profit corporations can exercise religion within the meaning of the RFRA and the Free Exercise Clause. See, e.g., First Nat’l Bank v. Bellotti, 435 U.S. 765, 777–78 n.14 (1978) (recognizing that corporations have First Amendment speech rights, but declining to “address the abstract question whether corporations have the full measure of rights that individuals enjoy under the First Amendment”); Stormans, Inc. v. Selecky, 586 F.3d 1109, 1119 (9th Cir.2009) (“We decline to decide whether a for-profit corporation can assert its own rights under the Free Exercise Clause …”); Church of Scientology of Cal. v. Cazares, 638 F.2d 1272, 1280 n.7 (5th Cir.1981) (same). Instead, the Court will assess whether Tyndale has standing to assert the free exercise rights of its owners…

    Viewing the rights of Tyndale’s owners (in particular, those of the Foundation) as the basis for its RFRA claim, the Court finds that Tyndale has made a satisfactory showing of Article III standing.

    The court also found “third party standing”

    It bears emphasizing that if the Court accepted the defendants’ position, no Tyndale entity would have standing to challenge the contraceptive coverage mandate—not even the Foundation. This is because, in the defendants’ view, Tyndale—though directly injured by the regulation—cannot exercise religion, and the Foundation—though capable of exercising religion—is not directly injured by the regulation. The third-party standing doctrine serves to avoid such conundrums.

    These cases are serious, but the threat is to mandatory contraception coverage, not the entire ACA.

    @koutterson

     

     
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