The Ohio HHS Appeal

The American Center for Law and Justice (ACLJ) will appeal a Sidney, OH, religious liberty case to the Supreme shutterstock_104711780Court.

The US Court of Appeals for the District of Columbia ruled Friday that devout Catholic business owners Francis and Philip Gilardi could continue their suit against the HHS mandate to provide employee insurance covering contraception, sterilization, and abortion-inducing drugs. However, the court did not rule that the companies they own, Freshway Foods and Fresh Unlimited, could sue.

This ambiguous decision — clear on the rights of the Gilardi family but unresolved on the religious rights of corporate persons — is so vital to religious freedom that the ACLJ says it will file a petition to the Supreme Court this week.

The Original Case

The original case, filed in January 2013, was on behalf of both the Gilardi brothers and their two companies. The US District Court for the District of Columbia ruled against them, but the the Appeals Court held that the mandate places a substantial burden on the Gilardis by requiring them to violate their religious beliefs. However, the Appeals Court also said that case law has not established whether or not companies can have or exercise religious freedom.

Long before the Affordable Care Act (“Obamacare”) was written, the two Freshway companies had comprehensive employee insurance plans that, in accordance with the Gilardi family’s religious believes, did not include elective birth control or sterilization, or “morning after pills” that can induce abortions.

The Gilardi and Freshway suit argued that the companies should receive an injunction against having to comply with the law because it violated the religious freedom rights of the owners and, as extensions of the owners, the two companies.

 Basis for Denial

The District Court ruled that the Gilardi family’s religious freedom rights had not been violated for two related reasons: 1) because the HHS mandate applied to the companies, not to individuals, and (it ruled) companies did not have religious freedom rights, and 2) because the mandate imposed an “indirect” burden on the Gilardi family’s religious freedom, not a “substantial” one.

Calling this a “classic example of ‘heads I win, tails you lose,’” the ACLJ appealed the decision. Such an understanding of the law, the ACLJ said, denies reality by refusing to acknowledge that the check paying for the disputed drugs and services is written by the owner — a person with religious beliefs and rights.

Basis for New Decision

At the September appeal, attorney Francis Manion argued that the Court had to find in favor of the Gilards because, having provided other exceptions to the mandate for both religious and non-religious reasons, “once the government makes massive exceptions to a rule or law, it has to show that it has a ‘compelling interest’ in not granting an exception for religious believers who also seek exemptions.”

The Court agreed. Writing for the justices who heard the case, Judge Janice Rogers Brown said “. . . the burden becomes substantial because the government commands compliance by giving the Gilardis a Hobson’s choice. They can either abide by the sacred tenets of their faith, pay a penalty of over $14 million, and cripple the companies they have spent a lifetime building, or they become complicit in a grave moral wrong. If that is not ‘substantial pressure on an adherent to modify his behavior and to violate his beliefs,’ we fail to see how the standard could be met.”

The Court said that the original finding that the burden on the Gilardi family’s religious freedom exercise was only “remote and… attenuated” was wrong. To find this, Brown wrote, the District Court accepted the government’s argument that the religious freedom burden came at the point when an employee decided to procure a service or drug that the owners objected to. Instead, the Appeals Court ruled that the burden came when the owners “fill the basket of goods and services that constitute the healthcare plan” to begin with, whether or not employees ever use them. In other words, the Appeals Court found that the federal government’s requiring company owners to contract for these drugs and procedures was in itself an “odious” coercive action.

Turning to the question of whether or not the federal government had a “compelling” reason that would justify this odious action, the Appeals Court found that the government’s claims were “nebulous” and “tenuous at best.”

“What exactly is the government trying to ameliorate?” the ruling asked. Finding only vague answers, the Court went on to negate the federal government’s claims that the right of privacy required the mandate (the Supreme Court’s ruling on abortion said that women had to be “free from unwarranted governmental intrusion into… the decision to bear or beget a child,” the Appeals Court said, and the mandate amounts to unwarranted governmental intrusion into that decision) and that it would prevent poor health outcomes for mothers and children (‘the science is debatable and may actually undermine the government’s cause” the Appeals Court said, because medically verifiable findings suggest that that hormonal contraceptives can increase cancer risks in women and thus make healthy women sick).

Even if the government’s claims were all true, the Court ruled, “the health concerns underpinning the mandate can be variously described as legitimate, substantial, perhaps even important, but it [sic] does not rank as compelling, and that makes all the difference.”

Finally, the Appeals Court ruled that the federal government’s claim that women need contraceptives, elective sterilization, and drugs to induce early abortions to have “gender equity” is false. “Perhaps the government labeled it as [“gender equity] for the veneer of constitutional importance attached to the term,” Brown wrote. “More accurately described, the interest at issue is resource parity — which, in the analogous abortion context, the Supreme Court has rejected as both a fundamental right and as an equal-protection issue.”

Having found that the federal government did not have a compelling reason to require business owners to provide the disputed drugs and services in their employee insurance plan, the Court went even further, ruling that even if there had been a compelling interest, the insurance mandate would not be the least restrictive means of providing it and thus could not be a justifiable excuse to violate a business owner’s religious freedom.

Moreover, the Court said, the federal government had already granted so many exceptions to the mandate — and  designated so many employers as not having to follow the mandate or the entire Affordable Care Act to begin with — that it was never possible for the mandate to bring about its supposedly compelling goal. In other words, the mandate was “unquestionably underinclusive” by design.

For all these reasons, the Court of Appeals found in favor of the Gilardi family.

Corporate Persons

While this is a resounding affirmation of the religious freedom rights of private business owners, the Court of Appeals leaves open the issue of whether or not “corporate persons” that are not churches or religious bodies can be said to have religious freedom rights.

Noting that the Religious Freedom Restoration Act clearly defines a “person” as extending to “corporations, companies, associations, firms, partnerships, societies, and joint stock companies,” Justice Brown wrote that it is nevertheless unclear whether the Free Exercise Clause can apply to a corporate “person” that is not also a purely religious one (such as a church). Finding no clear case law on the subject, the Appeals Court declined to rule on it.

Supreme Court Appeal

While this is a victory for the Gilardis and business owners, the ACLJ says it leaves a key part of the case — the part applying to freedom of religion and businesses — troublingly unresolved.

“We are obviously pleased with the Court’s recognition that the Mandate burdens the Gilardis’ beliefs,” reads an ACLJ statement released Friday. “At the same time, we believe we need to ask the Supreme Court to decide the question left unanswered so that there will be no ambiguity about the protection afforded by this decision.

“Therefore, we intend to file a petition for certiorari with the Supreme Court next week.”

Other HHS Cases

Currently, 75 cases have been filed against the HHS mandate by more than 200 religious and private organizations. About 40 of those cases involve private businesses. The Freshway case is the third to be appealed to the Supreme Court. All three involve private businesses.

The first was filed on Oct. 17th by the Thomas More Society for Michigan-based Autocam Corp., Autocam Medical, and its Catholic owners, the Kennedy family. The second was filed Oct. 21st by the Becket Fund for Religious Liberty on behalf of Hobby Lobby and the Mardel bookstore chain and their owners, the Evangelical Green family.

New cases continue to be filed against the mandate. The most recent came last week, filed by the Becket Fund on behalf of the EWTN Global Television Network and the State of Alabama. The first class action suit was filed on Sept. 24th by the Becket Fund on behalf of the Little Sisters of the Poor, Christian Brothers Services, and “all others similarly situated.”

image: Richard Thornton /

Avatar photo


Gail D. Finke is an author and mother living in Cincinnati, where she writes for The Catholic Beat at Sacred Heart Radio.

Subscribe to CE
(It's free)

Go to Catholic Exchange homepage