Government: Little Sisters Have No Case

In the latest development in the Little Sisters of the Poor’s lawsuit challenging, under the Religious Freedom Restoration Act, the contraception benefit coverage under the Affordable Care Act, the government today filed its brief in the Supreme Court.

To recap briefly: in a flurry of activity at the end of the year, just before the regulations went into effect January 1, a district court in Colorado denied the Little Sisters’ motion for a preliminary injunction; the Court of Appeals for the Tenth Circuit affirmed that decision; and Justice Sonia Sotomayor granted Little Sisters’ emergency application for a stay of that decision, ordering the Department of Justice to file a brief in response.

The Little Sisters case is one of a handful of cases decided in the closing weeks of 2013, in which a new legal argument was raised: that health insurance plans like the one that insures the Little Sisters and hundreds of other religious organizations, the Christian Brothers Trust, is a “church plan” under the Employee Retirement Income Security Act, meaning that it is exempt from regulation by the government. As a result, because the government’s enforcement mechanism for the contraception coverage is a tax levied on employers who provide insurance to their employees but refuse to provide the contraception coverage, the government lacks any enforcement authority over these exempt “church plans.”

Given that, it seems like end of story on the Little Sisters case and others like it: since Little Sisters doesn’t qualify for the exemption from the contraception coverage like a house of worship does under Department of Health and Human Services regulations, it must seek relief under the accommodation, which requires eligible employers (which Little Sisters is) to file a “self-certification” form with the third-party administrator of its plan (Christian Brothers Services). Because the Christian Brothers entities are exempt owing to the ERISA exemption, filing this form will in no way implicate Little Sisters in obtaining the coverage for its employees (even if its insurer wasn’t exempt, there are questions about this claim as well).

In its brief, the government argues the plaintiffs “have no legal basis to challenge the self-certification requirement or to complain that it involves them in the process of providing contraceptive coverage.” Both the insurer and the third-party administrator are exempt, the government argues, and even if they were to suddenly decide that they would provide the coverage, Little Sisters’ employees would receive the coverage despite Little Sisters’ objections, not because of them. But because the Christian Brothers entities have said they will under no circumstances provide the coverage, the Little Sisters, the government argues, don’t have an argument that they are “authorizing others” to provide the coverage by filling out the self-certification form.

Under RFRA, the plaintiff must show a substantial burden on her religious exercise, which the government argues Little Sisters has failed to do:

In this case, applicants’ religious exercise is not substantially burdened by the requirement that they sign the certification form expressing their religious objection to the contraceptive coverage in order to exempt themselves from the contraceptive-coverage provision. 

The government’s brief sums up the salient points on the purpose and operation of religious exemptions, and the operation of RFRA (emphasis added):

When extending religious accommodations, the government must be allowed to provide for the regularized, orderly means of permitting eligible entities or individuals to declare that they intend to take advantage of them. That is what the self-certification under the regulations accomplishes, and it does so by requiring only that employer-applicants say something that they have repeatedly said in this litigation, namely, that they object on religious grounds to providing contraceptive coverage to their employees. To interpret RFRA to negate even such a certification requirement would be extraordinary. 

As the government points out, no court of appeals has decided this question on the merits, although there were a spate of cases in the last two weeks of December in which this issue was raised, apparently for the first time. I’ve yet to read all the court papers, but looking at the Roman Catholic Archdiocese of New York case I discussed yesterday, in which the district court judge granted an injunction to employers insured by an ERISA-exempt “church plan,” it seems that although the plaintiffs there did not argue the insurer and third-party administrator were exempt under ERISA in their complaint, in their motion for summary judgment, they stated, as a matter of fact, that the insurance was provided by an exempt “church plan.”

It was in its response to that motion that the government first acknowledged that it lacked the authority to levy a tax on the exempt plans for failing to provide the contraceptive coverage. And it was at that point that the plaintiffs’ argument about the self-certification form — that it would authorize and direct the third-party administrator and insurer to provide the coverage — turned into an argument about a form that would do nothing more than state an objection, and have no impact on the third-party administrator and insurer at all.

In its brief, the government argues that in neither case would the plaintiff-employers have a RFRA claim. But given that Little Sisters argues that hundreds of employers (whom it seeks to bring into the litigation through a class action mechanism) are insured by the Church Brothers plan, and other exempt church plans are out there, it appears that there could be many employees that HHS thought would be able to access coverage and will not.

This morning’s press release from Little Sisters’ counsel at the Becket Fund reads, “DOJ to SCOTUS: Nuns Must Violate Faith or Pay Fines.” But as Marty Lederman points out in his post this morning, the government has invoked an argument Lederman made last month (see the post on the legal theory that could make Hobby Lobby’s case disappear): that the government’s enforcement authority is not a “penalty” or “fine” as the plaintiffs characterize it, but rather a tax. In other words, employers aren’t required to provide insurance coverage, but if they don’t, they have to pay a tax instead.

Stay tuned.

Sarah Posner, author of God’s Profits: Faith, Fraud, and the Republican Crusade for Values Voters, covers politics and religion. Her work has appeared in The Washington Post, The Guardian, The Atlantic, The American ProspectThe NationSalon, and other publications. Follow her on TwitterRSS feed Email

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