U.S. District Court Enjoins Contraceptive Coverage Mandate Applied To For-Profit Religious Publishing Company

Nathan A. Adams, IV is a Partner in our Tallahassee office

On November 16, 2102, in Tyndale House Publishers, Inc. v. Sebelius, No. 12-1635 (D. D.C. Nov. 16, 2012), the U.S. District Court for the District of Columbia granted a preliminary injunction to a closely held, for-profit religious publishing company and its president and CEO against enforcement of Department of Health and Human Services regulations interpreting the Affordable Care Act (ACA) to require all health insurance plans and policies, unless grandfathered or otherwise exempt, to comply with the contraceptive coverage mandate starting with the plan years beginning on or after August 1, 2012. 76 Fed. Reg. 46621-01 (Aug. 3, 2011).

Background

Tyndale House Publishers, Inc. is a for-profit Christian publishing company with 260 full-time employees. It provides them with health insurance through a self-insured health plan that omits coverage of abortions and of drugs (e.g., Plan B or ella) or devices (e.g.,intrauterine devices) that can cause the demise of an already conceived or fertilized human embryo. Tyndale is 96.5 percent owned by the Tyndale House Foundation: a nonprofit religious entity that distributes profits to various charities; the Tyndale Trust, which holds 84 percent of the voting shares; and two trusts benefiting the founder's widow and children. All adopted identical statements of faith and agreed to the same health plan limitations. The Tyndale plaintiffs alleged that the contraceptive coverage mandate violated their beliefs and rights under the Religious Freedom Restoration Act (RFRA) and First and Fifth Amendments of the U.S. Constitution.

Standing Established Tyndale's first challenge was to establish standing. Without deciding whether for-profit corporations can exercise religion within the meaning of RFRA and the Free Exercise Clause, the court determined that, because Tyndale as a closely-held corporation that "'does not present any free exercise rights of its own different from or greater than its owner's rights,'" it has "'standing to assert the free exercise rights of its owners'" including a nonprofit religious entity. Accord Legatus v. Sebelius, 2012 WL 5359630 (E.D. Mich. 2012). In addition, the court determined that Tyndale has standing to assert its owners' free exercise rights under third-party standing doctrine.

Religious Exercise Rights Substantially Burdened

Next, the court ruled that the plaintiffs demonstrated that the regulations substantially...