UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
FRANCIS A. GILARDI, JR., et al. )
)
Plaintiffs, )
) Civil Action No. 13-104(EGS)
v. )
)
KATHLEEN SEBELIUS, et al. )
)
Defendants. )
)
MEMORANDUM OPINION
Plaintiffs Francis A. Gilardi, Jr., Philip M. Gilardi,
Fresh Unlimited, Inc., d/b/a Freshway Foods, and Freshway
Logistics, Inc. filed a complaint on January 24, 2013 seeking
declaratory and injunctive relief against defendants United
States Department of Health and Human Services, Kathleen
Sebelius, United States Department of the Treasury, Timothy F.
Geithner, United States Department of Labor, Hilda L. Solis, and
their successors in office. Plaintiffs allege several causes of
action. Count I alleges a violation of the Religious Freedom
Restoration Act, 42 U.S.C. §§ 2000bb, et seq. Count II alleges
a violation of the First Amendment’s free exercise clause.
Count III alleges a violation of the First Amendment’s free
speech clause. Finally, Count IV alleges a violation of the
Administrative Procedure Act.
Pending before the Court is plaintiffs’ motion for a
preliminary injunction. Plaintiffs seek injunctive relief as to
Count I and allege that certain federal regulations promulgated
under the Patent Protection and Affordable Care Act (“Affordable
Care Act” or “ACA”), Pub. L. No. 111-148, 124 Stat. 119 (2010),
violate plaintiffs statutory rights under the Religious Freedom
Restoration Act (“RFRA”), Pub. L. No. 103-141, 107 Stat. 1488
(1993) (codified at 42 U.S.C. §§ 2000bb-1). Upon consideration
of the motion, the opposition and reply thereto, the Amicus
Curiae Brief of the State of Ohio, the entire record, and for
the reasons explained below, plaintiffs’ motion is DENIED.
I. BACKGROUND
Francis A. Gilardi, Jr. and Philip M. Gilardi (collectively
the “Gilardis”), are Ohio residents and “adherents of the
Catholic faith” who “hold to the Catholic Church’s teachings
regarding the immorality of artificial contraceptives,
sterilization, and abortion.” Compl. ¶ 3. The Gilardis are the
sole owners of plaintiffs Fresh Unlimited, Inc., d/b/a Freshway
Foods (“Freshway Foods”) and Freshway Logistics, Inc. (“Freshway
Logistics”) (collectively the “Freshway Corporations”), both of
which are Subchapter S corporations and are incorporated under
the laws of the State of Ohio. The Freshway Corporations are
engaged in the processing, packing, and shipping of produce and
other refrigerated products, Compl. ¶¶ 16-18, and have a total
2
of about 400 employees between the companies, id. ¶¶ 17-18.
The Gilardis each own a 50% share in the Freshway Corporations.
They state that “[a]s the two owners with controlling interests
in the two corporations, they conduct their businesses in a
manner that does not violate their sincerely-held religious
beliefs or moral values, and they wish to continue to do so.”
Compl. ¶ 3. The Freshway Corporations provide their full-time
employees with a self-insured employee health benefits plan that
provides employees with health insurance and prescription drug
coverage through a third-party administrator and stop-loss
provider. Compl. ¶ 29. The plan is to be renewed on April 1,
2013. Id.
Plaintiffs’ claims arise out of certain regulations
promulgated in connection with the Affordable Care Act. The
Affordable Care Act requires that all group health plans and
health insurance issuers that offer non-grandfathered group or
individual health coverage to provide coverage for certain
preventive services without cost-sharing, including, for “women,
such additional preventive care and screenings . . . as provided
for in comprehensive guidelines supported by the Health
Resources and Services Administration [(“HSRA”)].” 42 U.S.C. §
300gg-13(a)(4). The HSRA, an agency within the Department of
Health and Human Services (“HHS”), commissioned the Institute of
Medicine (“IOM”) to conduct a study on preventive services
3
necessary to women’s health. On August 1, 2011, HSRA adopted
IOM’s recommendation to include “the full range of Food and Drug
Administration approved contraceptive methods, sterilization
procedures, and patient education and counseling for women with
reproductive capacity.” See HRSA, Women’s Preventive Services:
Required Health Plan Coverage Guidelines (“HRSA Guidelines”),
available at http://www.hrsa.gov/womensguidelines/ (last visited
Mar. 2, 2013).
Several exemptions and safe-harbor provisions excuse
certain employers from providing group health plans that cover
women’s preventive services as defined by HHS regulations.
First, the mandate does not apply to certain “grandfathered”
health plans in which individuals were enrolled on March 23,
2010, the date the ACA was enacted. 75 Fed. Reg. 34538-01 (June
17, 2010). Second, certain “religious employers” are excluded
from the mandate. 76 Fed. Reg. 46,621 (Aug. 3, 2011); 45 C.F.R.
§ 147.130(a)(1)(iv)(A); see 78 Fed. Reg. 8456, 8459 (Feb. 6,
2013) (proposing to broaden the August 2011 definition of
religious employer to ensure that “an otherwise exempt employer
plan is not disqualified because the employer’s purposes extend
beyond the inculcation of religious values or because the
employer serves or hires people of different religious faiths”).
Third, a temporary enforcement safe-harbor provision applies to
4
certain non-profit organizations not qualifying for any other
exemption. 77 Fed. Reg. 8725, 8726-77 (Feb. 15, 2012).
The parties agree that the Freshway Corporations do not
qualify for any of these exemptions. As secular, for-profit
employers, Freshway Foods and Freshway Logistics do not satisfy
the definition of “religious employer” and are not eligible for
the protection of the safe-harbor. The grandfathered plans
provision also does not protect the corporations because the
current health insurance plan has undergone material changes
since 2010, including an increase in the cost of doctor visit
co-pays. See Decl. of Francis A. Gilardi, Jr., ECF No. 21-2, at
¶ 13.
The Gilardis state that they “have concluded that complying
with the Mandate would require them to violate their religious
beliefs and moral values because the Mandate requires them
and/or the corporations they own and control to arrange for, pay
for, provide, and facilitate contraception methods,
sterilization procedures, and abortion because certain drugs and
devices such as the ‘morning-after pill,’ ‘Plan B,’ and ‘Ella’
come within the Mandate’s . . . definition of ‘Food and Drug
Administration-approved contraceptive methods’ despite their
known abortifacient 1 mechanisms of action.” Compl. ¶ 5.
1
Plaintiffs use the word “abortifacient” to refer to drugs such
as Plan B and Ella that they allege cause abortions. See, e.g.,
5
On February 8, 2013, plaintiffs moved for a preliminary
injunction as to Count I, which alleges a violation of the
Religious Freedom Restoration Act (“RFRA”). Plaintiffs argue
that they satisfy the standard for a preliminary injunction
because they are likely to succeed on the merits because the
RFRA “substantially burdens” plaintiffs’ free exercise of
religion and defendants cannot establish that the regulations
survive strict scrutiny. Furthermore, plaintiffs argue, they
will suffer irreparable harm absent a preliminary injunction,
the balance of equities tips in plaintiffs’ favor, and the
public interest favors a preliminary injunction.
II. STANDARD OF REVIEW
A plaintiff seeking a preliminary injunction must establish
(1) a substantial likelihood of success on the merits; (2) that
it is likely to suffer irreparable harm in the absence of
preliminary relief; (3) that the balance of equities tips in its
favor; and (4) that an injunction is in the public interest.
Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290, 297
(D.C. Cir. 2006). The purpose of a preliminary injunction “is
merely to preserve the relative positions of the parties until a
trial on the merits can be held.” Univ. of Tex. v. Camenish,
451 U.S. 390, 395 (1981). It is “an extraordinary and drastic
Compl. ¶ 5. Plaintiffs do not allege that the regulations will
require them to provide insurance coverage for the medical
procedure of abortion.
6
remedy” and “should not be granted unless the movant, by a clear
showing, carries the burden of persuasion.” Mazurek v.
Armstrong, 520 U.S. 968, 972 (1997). In this Circuit, these
four factors have typically been evaluated on a “sliding scale,”
such that if “the movant makes an unusually strong showing on
one of the factors, then it does not necessarily have to make as
strong a showing on another factor.” Davis v. Pension Benefit
Guar. Corp., 571 F.3d 1288, 1291-92 (D.C. Cir. 2009). The
Circuit has recently stated, without holding, that existing
Supreme Court precedent suggests “that a likelihood of success
is an independent, free-standing requirement for a preliminary
injunction.” Sherley v. Sebelius, 644 F.3d 388, 393 (D.C. Cir.
2011) (citing Winter but finding that preliminary injunction was
not appropriate even under less stringent sliding-scale
analysis). Because this Court finds that plaintiffs have failed
to establish a likelihood of success, a preliminary injunction
is not appropriate under either standard, and the Court need not
reach the issue raised in Sherley. See, e.g., In re Akers, ---
B.R. ----, 2012 WL 5419318, at *4 (D.D.C. 2012) (stating that,
“[w]hichever way Winter is read, it is clear that a failure to
show a likelihood of success on the merits alone is sufficient
to defeat a preliminary injunction motion”); Arkansas Dairy Co-
op Ass’n, Inc. v. U.S. Dep’t of Agr., 573 F.3d 815, 832 (D.C.
Cir. 2009) (declining to proceed to review remaining preliminary
7
injunction factors when plaintiff had shown no likelihood of
success on the merits); see Apotex, Inc. v. FDA, 449 F.3d 1249,
1253 (D.C. Cir. 2006) (determining movant was not likely to
succeed on the merits and declining to address the other
factors).
III. DISCUSSION
A. Likelihood of Success on the Merits
The Religious Freedom Restoration Act, 42 U.S.C. §§ 2000bb-
1, provides that “[g]overnment shall not substantially burden a
person’s exercise of religion even if the burden results from a
rule of general applicability, except as provided in subsection
(b) of this section.” Subsection (b) provides that
“[g]overnment may substantially burden a person’s exercise of
religion only if it demonstrates that application of the burden
to the person is (1) in furtherance of a compelling governmental
interest; and (2) is the least restrictive means of furthering
that compelling governmental interest.”
Congress enacted the RFRA in response to the Supreme
Court’s decision in Employment Division, Department of Human
Services of Oregon v. Smith, 494 U.S. 872 (1990), in which the
Court held that the right to free exercise of religion under the
First Amendment does not exempt an individual from a law that is
neutral and of general applicability, and explicitly disavowed
the test used in earlier decisions, which prohibited the
8
government from substantially burdening a plaintiff’s religious
exercise unless the government could show that its action served
a compelling interest and was the least restrictive means to
achieve that interest. 42 U.S.C. § 2000bb. The purpose of the
RFRA was to “restore the compelling interest test” as set forth
in Sherbert v. Verner, 374 U.S. 398 (1963) and Wisconsin v.
Yoder, 406 U.S. 205 (1972). Id.
The RFRA does not define “substantial burden” but because
the RFRA intends to restore Sherbert v. Verner and Wisconsin v.
Yoder, those cases are instructive in determining the meaning of
“substantial burden.” In Sherbert, plaintiff’s exercise of her
religion was impermissibly burdened when plaintiff was forced to
choose between following the precepts of her religion” resting
and not working on the Sabbath and forfeiting certain
unemployment benefits as a result, or “abandoning one of the
precepts of her religion in order to accept work.” 374 U.S. at
404. In Yoder, the “impact of the compulsory [school]
attendance law on respondents’ practice of the Amish religion
[was found to be] not only severe, but inescapable, for the
Wisconsin law affirmatively compels them, under threat of
criminal sanction, to perform acts undeniably at odds with
9
fundamental tenets of their religious beliefs.” 406 U.S. at
218. 2
Plaintiffs argue that their exercise of religion is
substantially burdened because “they must facilitate, subsidize,
and encourage the use of goods and services that they sincerely
believe are immoral or suffer severe penalties.” Pls.’ Mot. for
Prelim. Injunction (“Pls.’ Br.”) at 13. Plaintiffs argue that
the substantial burden imposed on the Freshway Corporations is
the same as that imposed upon the Gilardis because the “beliefs
of the Gilardis extend to, and are reflected in, the actions of
the two corporations.” Id. at 14.
As an initial matter, the Court is troubled by plaintiffs’
apparent disregard of the corporate form in this case.
Plaintiffs argue that “requiring the two corporations to provide
group health coverage that the Gilardis consider immoral is the
same as requiring the Gilardis themselves to provide such
immoral coverage.” Id. at 14. The Court strongly disagrees.
The Gilardis have chosen to conduct their business through
corporations, with their accompanying rights and benefits and
limited liability. They cannot simply disregard that same
2
In a recent case, the government conceded that the Controlled
Substances Act placed a “substantial burden” on the “sincere
exercise of religion” by a religious sect that would be
prohibited from engaging in their traditional communion in which
they used a hallucinogenic tea. Gonzales v. O Centro Espirita
Beneficiente Uniao do Vegetal, 546 U.S. 418, 426 (2006).
10
corporate status when it is advantageous to do so. In a recent
case dealing with similar issues, Autocam Corp. v. Sebelius, the
court noted that
[a]s corporate owners, [plaintiffs] quite properly
enjoy the protections and benefits of the corporate
form. But the legal separation of the owners from the
corporate enterprise itself also has implcations at
the enterprise level. A corporate form brings
obligations as well as benefits. “When followers of a
particular sect enter into commercial activities as a
matter of choice, the limits they accept on their own
conduct as a matter of conscience and faith are not to
be superimposed on the statutory schemes which are
binding on others in that activity.” United States v.
lee, 455 U.S. 252, 263, n.3 (1982). Whatever the
ultimate limits of this principle may be, at a minimum
it means the corporation is not the alter ego of its
owners for purposes of religious belief and exercise.
No. 12-1096, 2012 WL 6845677, at *7 (W.D. Mich. Dec. 24, 2012)
(denying motion for preliminary injunction on similar facts),
injunction pending appeal denied, No. 12-2673 (6th Cir. Dec. 28,
2013). Similarly, the court in Conestoga Wood Specialties, Inc.
v. Sebelius stated that
‘[I]ncorporation’s basic purpose is to create a
distinct legal entity, with legal rights, obligations,
powers, and privileges different from those of the
natural individuals who created it, who own it, or
whom it employs.’ Cedric Kushner Promotions, Ltd. v.
King, 533 U.S. 158, 163 (2001). . . . It would be
entirely inconsistent to allow [individual plaintiffs]
to enjoy the benefits of incorporation, while
simultaneously piercing the corporate veil for the
limited purpose to challenge these regulations. We
agree with the Autocam court, which stated that this
separation between a corporation and its owners “at a
minimum [ ] means the corporation is not the alter ego
of its owners for the purposes of religious belief and
exercise.”
11
No. 12-6744, 2013 WL 140110, at *8 (E.D. Pa. Jan. 11, 2013),
injunction pending appeal denied, No. 13-1144 (3d Cir. Jan. 29,
2013).
The Court agrees with the Autocam and Conestoga courts and
finds that the Gilardis cannot simply impute their views onto
the corporation such that requiring the corporation to provide
preventive services coverage is the same as requiring the
Gilardis personally to provide preventive services coverage.
The Freshway Corporations are legally separate from the
Gilardis. As such, their religious views, legal and statutory
obligations, and benefits cannot be imputed to each other.
Accordingly, they must be evaluated separately for purposes of
the RFRA.
1. The Freshway Corporations’ RFRA Claim
Plaintiffs argue that the substantial burden imposed on the
Freshway Corporations is the same as that imposed upon the
Gilardis because the “beliefs of the Gilardis extend to, and are
reflected in, the actions of the two corporations.” Pls.’ Br.
at 14. Plaintiffs contend that “requiring the two corporations
to provide group health coverage that the Gilardis consider
immoral is the same as requiring the Gilardis themselves to
provide such immoral coverage.” Pls.’ Br. at 13. Defendants
respond that the coverage regulations do not substantially
burden any exercise of religion because secular, for-profit
12
corporations do not exercise religion. Defs.’ Opp. to Pls.’
Mot. for Prelim. Injunction (“Defs.’ Br.”) at 11-12.
As explained above, the Court declines to disregard the
corporate form by imputing the religious beliefs of the Gilardis
to the corporations they own. Accordingly, the Court must
evaluate whether providing preventive services coverage will
cause a substantial burden on the religious exercise of the
Freshway Corporations.
(a) Substantial Burden
The RFRA states that “[g]overnment shall not substantially
burden a person’s exercise of religion . . . .” 42 U.S.C. §§
2000bb-1(a). Accordingly, a threshold issue is whether the
Freshway Corporations “exercise” religion. For the reasons
explained below, the Court finds that they do not. 3
The Freshway Corporations are secular, for-profit
corporations that are engaged in the processing, packing, and
shipping of produce and other refrigerated products, Compl. ¶¶
16-18, and have a total of about 400 employees between the
companies, id. ¶¶ 17-18. The complaint states the following
allegations regarding the religious activities of the Freshway
Corporations: Freshway Foods makes annual monetary and/or in-
kind donations, primarily food, to many community non-profit
3
Because the Court finds that the Freshway Corporations do not
exercise religion, the Court does not reach the question of
whether they are “persons” within the scope of the RFRA.
13
charitable organizations, including the YMCA, Habitat for
Humanity, the American Legion, and Holy Angel’s Soup Kitchen.
Compl. ¶ 28(d). Freshway Logistics donates a trailer for use by
the local Catholic parish for its annual picnic and uses its
trucks to deliver food donated by Freshway Foods to food banks.
Compl. ¶ 28(e). During monthly employee appreciation lunches,
the Freshway Corporations provide alternative foods for their
employees to accommodate restrictions posed by their various
religions. Compl. ¶ 28(f). They also provide their Muslim
employees with space to pray during breaks, and during Ramadan,
employees are permitted to adjust break periods in order to eat
after sundown in accordance with their religion. Compl. ¶ 28(g).
Several allegations in the complaint allege the Gilardis’
religious activities taken in connection with the company. The
complaint states that, for the last ten years “Francis and
Philip Gilardi have affixed to the back of the trucks they own
through a separate company, but which bear the name of Freshway
Foods, a sign stating ‘It’s not a choice, it’s a child,’ as a
way to promote their pro-life views to the public.” Compl. ¶
28(a). The Gilardis also drafted a values statement listing
values by which the Freshway Companies would be run. The
statement lists “Ethics: Honest, Trustworthy and Responsible to:
14
-Each Other; -Our Customers; -Our Vendors. Non-negotiable –
Supersedes everything.” Compl. ¶ 28(c). 4
The Court is not persuaded that it must consider the
Gilardis’ actions in drafting values statements and in affixing
a slogan to their delivery trucks. Even considering these
actions, however, the court finds that they are insufficient to
establish religious activity taken by the Freshway Corporations.
The statement of values drafted by the Gilardis does not mention
religion at all, and the affixing of a slogan to the back of a
delivery truck is incidental, at most, to the activities of the
corporations.
That leaves the Court with the stated activities of the
Freshway Corporations. The corporations’ charitable activities
and accommodations of their employees who practice other
religions, while commendable, do not establish that the Freshway
Corporations themselves “exercise religion.” Rather, the Court
finds that the Freshway Corporations are engaged in purely
commercial conduct and do not exercise religion under the RFRA.
The cases cited by plaintiffs do not compel a different
result. For example, in Tyndale House Publishers, Inc. v.
Sebelius, the court noted the “unique” structure of the
4
The complaint also alleges that the Gilardis “strongly support
financially and otherwise their Catholic parish, schools, and
seminary.” Compl. ¶ 28(b). The complaint does not allege any
connection between this activity and the Freshway Corporations.
15
plaintiff corporation, which was formed to publish religious
books and Bibles and was owned in large part by a non-profit
religious entity. No. 12-1635, 2012 U.S. Dist. LEXIS 163965, at
*24 n.10. In deciding whether Tyndale’s owners had standing to
assert a free exercise claim on Tyndale’s behalf—a different
issue than the issue currently before this Court—the court held
that “when the beliefs of a closely-held corporation and its
owners are inseparable, the corporation should be deemed the
alter ego of its owners for religious purposes.” Id. at *25.
In this case, two large produce distribution companies are owned
by two people who are members of the Catholic faith. The
religious beliefs of the Gildardis cannot fairly be said to be
“inseparable” from the religious beliefs of the Freshway
Corporations. Indeed, on the record before the Court, there is
nothing to suggest that the corporations have any religious
beliefs. Accordingly, the Court finds Tyndale to be
distinguishable from this case.
Plaintiffs also argue that the religious beliefs of the
Gilardis should be taken into account because “corporations do
not run themselves or comply with legal mandates except through
human agency.” Pls.’ Reply in Supp. of Mot. for Prelim.
Injunction (“Pls.’ Reply”) at 11. They further contend, citing
the recent decision of Korte v. United States Department of
Health and Human Services, that the Gilardis would have to
16
operate the companies in a manner that they believe to be
immoral in order to comply with the preventive services
requirement. Id. at 11 (citing No. 12-3841, 2012 U.S. App.
LEXIS 26734, at *9 (7th Cir. Dec. 28, 2012)). In Korte, the
district court denied injunctive relief on an RFRA claim to a
secular, for-profit construction company that challenged the
preventive services coverage requirement. No. 12-1072, 2012 WL
6553996 (S.D. Ill. Dec. 14, 2012). In that case, the district
court found that any burden on the individual owners’ religious
beliefs caused by the corporation’s coverage of contraceptive
services was “too distant to constitute a substantial burden.”
Id. at *10. The Seventh Circuit granted an injunction pending
appeal. 2012 U.S. App. LEXIS 26734, at *9. The Seventh Circuit
held that the corporate form was not dispositive of the
individual plaintiffs’ claim because in order for the company to
comply with the mandate, the individual plaintiffs would be
required to violate their religious beliefs. Id. For the
reasons stated above, the Court finds that the corporate form is
dispositive in this case and should not be disregarded. In this
respect, the court relies on several recent decisions. See
Hobby Lobby Stores, Inc. v. Sebelius, 870 F. Supp. 2d 1278, 1291
(W.D. Okla. 2012) (distinguishing between the “purely personal”
matter of religious exercise by a corporation’s owners and the
actions of a corporation), injunction pending appeal denied, No.
17
12-6294, 2012 WL 6930302 (10th Cir. Dec. 20, 2012); Conestoga,
No. 12-6744, 2013 WL 140110, at *10 (E.D. Pa. Jan. 11, 2013)
(treating corporation and its owners separate for purposes of
RFRA and finding that the secular, for-profit corporation did
not exercise religion); see also Conestoga, No. 13-1144, slip.
op. at 3 (3d. Cir. Jan. 29, 2013) (adopting district court’s
reasoning that plaintiff corporation did not exercise religion
under RFRA). To the extent that Korte suggests a different
result, the Court declines to follow it.
The Court declines to reach the question of whether any
secular, for-profit corporation can exercise religion. Cf.
Hobby Lobby Stores, 870 F. Supp. 2d at 1291 (holding that
plaintiff corporations lacked standing to pursue an RFRA claim
and stating that “[g]eneral business corporations do not,
separate and apart from the actions or belief systems of their
individual owners or employees, exercise religion. They do not
pray, worship, observe sacraments or take other religiously-
motivated actions separate and apart from the intention and
direction of their individual actors.”); Briscoe v. Sebelius,
No. 13-285, 2013 U.S. Dist. LEXIS 26911, at *15 (D. Colo. Feb.
27, 2013) (“Secular, for-profit corporations neither exercise
nor practice religion.”). Rather, under the facts of this case,
the Freshway Corporations do not exercise religion and therefore
18
cannot succeed on the merits of a claim that the regulations
substantially burden their exercise of religion.
2. The Gilardis’ RFRA Claim
The Gilardis allege that the regulations create a
substantial burden on the Gilardis’ exercise of religion because
the regulations require them to “facilitate, subsidize, and
encourage the use of goods and services that they sincerely
believe are immoral or suffer severe penalties. It is this
forced subsidization, and not the manner in which the employee
may spend their own money or conduct their personal lives, to
which plaintiffs object.” Pls.’ Br. at 13.
With respect to the Gilardis, defendants argue that the
regulations do not create a substantial burden because they only
apply to the corporations, not their owners. Defs.’ Br. at 18.
Defendants also argue that even if the regulations did create a
burden on the Gilardis’ exercise of their religion, that burden
is too attenuated and indirect to be substantial. Id. at 23.
(a) Substantial Burden
As an initial matter, the Court declines to follow several
recent cases suggesting that a plaintiff can meet his burden of
establishing that a law creates a “substantial burden” upon his
exercise of religion simply because he claims it to be so. See
Monaghan v. Sebelius, No. 12-15488, 2012 U.S. Dist. LEXIS
182857, at *10-11 (E.D. Mich. Dec. 30, 2012) (stating that
19
because Monaghan claimed that “taking steps to have [the
company] provide contraception coverage violates his beliefs as
a Catholic,” the court “will assume that abiding by the mandate
would substantially burden Monaghan’s adherence to the Catholic
Church’s teachings); Legatus v. Sebelius, No. 12-12061, 2012
U.S. Dist. LEXIS 156144, at *20 (E.D. Mich. Oct. 31, 2012)
(stating that plaintiff shows a substantial burden simply by
saying so). The Court agrees with the reasoning of the court in
Conestoga, in stating that “[w]hile we wholeheartedly agree that
‘courts are not arbiters of scriptural interpretation,’” the
RFRA still imposes the requirement on courts to determine
“whether the burden a law imposes on a plaintiff’s stated
religious belief is ‘substantial.’” Conestoga, 2013 WL 140110,
at *12 (quoting Thomas v. Review Bd. of Ind. Emp’t Sec. Div.,
450 U.S. 707, 718 (1981)). Determining whether the impact of
the regulation on plaintiffs’ religious exercise is
“substantial” thus necessarily requires an understanding of the
nature of the religious exercise. Otherwise, as the Conestoga
court noted, “[i]f every plaintiff were permitted to
unilaterally determine that a law burdened their religious
beliefs, and courts were required to assume that such burden was
substantial, simply because the plaintiff claimed it was the
case, then the standard expressed by Congress under the RFRA
would convert to an ‘any burden’ standard.” Id. at *13 (citing
20
Washington v. Klem, 497 F.3d 272, 279-81 (3d Cir. 2007)); see
Autocam, 2012 WL 6845677, at *7 (stating that if a court cannot
look beyond plaintiffs’ assertion of religious belief, every
governmental regulation would be subject to a “private veto”).
Accordingly, the Court finds that it is necessary to determine
the nature of plaintiffs’ religious exercise in order to
determine whether it has been “substantially burdened.”
Here, plaintiffs have made several arguments regarding the
nature of their religious exercise. The Gilardis “hold to the
teachings of the Catholic Church regarding the sanctity of human
life from conception to natural death. They sincerely believe
that actions intended to terminate an innocent human life by
abortion are gravely sinful.” Compl. ¶ 25. The Gilardis “also
sincerely believe in the Catholic Church’s teaching regarding
the immorality of artificial means of contraception and
sterilization.” Id. ¶ 26. The Gilardis state that they “have
concluded that complying with the Mandate would require them to
violate their religious beliefs and moral values because the
Mandate requires them and/or the corporations they own and
control to arrange for, pay for, provide, and facilitate
contraception methods, sterilization procedures, and abortion
because certain drugs and devices [come within the scope of the
HRSA guidelines] despite their known abortifacient mechanisms of
action.” Id. ¶ 5. “Plaintiffs cannot arrange for, pay for,
21
provide, or facilitate employee health plan coverage for
contraceptives, sterilization, abortion, or related education
and counseling without violating their sincerely-held religious
beliefs and moral values.” Id. ¶ 32.
Having set forth the nature of the Gilardis’ religious
exercise, the Court must next determine whether the requirement
that the Freshway Corporations comply with the regulations
constitutes a “substantial burden” on the Gilardis’ exercise of
religion. The Court finds that it does not.
The regulations do not compel the Gilardis to personally
“arrange for, pay for, provide or facilitate” health coverage.
See Hobby Lobby, 870 F. Supp. 2d at 1294 (“The mandate in
question applies only to Hobby Lobby and Marden, not to its
officers or owners.”). The regulations do not require the
Gilardis to “personally support, endorse, or engage in pro-
abortion or pro-contraception activity.” Briscoe, 2013 U.S.
Dist. LEXIS 26911, at *16. Rather, the regulations are imposed
on the Freshway Corporations. For the reasons explained above,
the Court declines to disregard the corporate form.
Specifically, the Court finds that the Freshway Corporations are
not the alter egos of the Gilardis for the limited purpose of
asserting the Gilardis’ religious beliefs. 5 The Gilardis remain
5
Plaintiffs have not requested, nor does the Court understand
their argument to be, that the Court find that the Freshway
22
free to personally oppose contraception and, indeed, even the
regulations that are the subject of this lawsuit. Accordingly,
the Court finds that the regulations do not impose a substantial
burden on the Gilardis’ exercise of religion.
The plaintiffs argue that “indirectness” is not a barrier
to finding a substantial burden. Pls.’ Br. at 13 (citing
Thomas, 450 U.S. at 718). Plaintiffs argue that Thomas
established that the impact of a “substantial burden” need not
be direct. Pls.’ Reply at 11. Plaintiffs misread Thomas. In
that case, the Supreme Court held that Indiana’s denial of
unemployment compensation benefits to claimant, who quit his job
because his religious beliefs forbade participation in the
production of armaments, violated his First Amendment right to
free exercise of religion. In that case, however, the burden of
the denial of benefits rested with the person exercising his
religion, not a separate person or corporate entity, as is the
case here. The compulsion was indirect, rather than the burden,
as in this case. See Conestoga, 2013 WL 140110, at *14 n.15
(distinguishing Thomas). The Court therefore finds Thomas to be
distinguishable.
The Court also does not find the fact that the health
insurance provided by the Freshway Corporations is through a
Corporations are the alter egos of the Gilardis for all
purposes.
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“self-insurance” mechanism compels a different result. Compare
Tyndale, 2012 U.S. Dist. LEXIS 163965, at *42-43 (finding that a
self-insured plan differed materially from a group policy
because in a self-insurance scheme the plaintiff “directly pays
for the services used by its plan participants, thereby removing
one of the ‘degrees’ of separation that the court deemed
relevant in O’Brien”) with Briscoe, 2013 U.S. Dist. LEXIS 26911,
at *15 (denying injunctive relief under RFRA for plaintiff
corporation that provided self-insured plan) and Grote
Industries, LLC v. Sebelius, No. 12-134, 2012 WL 6725905, at *7
(S.D. Ind. Dec. 27, 2012) (same), injunction granted pending
appeal, No. 13-1077, 2013 WL 362725 (7th Cir. Jan. 30, 2013).
The Court finds that self-insurance, as is the case here, is not
dispositive. The Freshway Corporations are providing the
insurance, not the Gilardis. Accordingly, the Court finds that
the Gilardis have failed to demonstrate a likelihood of success
in establishing a “substantial burden” on their exercise of
religion.
IV. CONCLUSION
For all of the foregoing reasons, the Court finds that
plaintiffs have failed to demonstrate a likelihood of success on
the merits, and plaintiffs’ motion for a preliminary injunction
is DENIED. Because the Court has decided the motion on the
papers pursuant to Local Civil Rule 65.1(d), the motions hearing
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currently scheduled for March 6, 2013 is hereby CANCELED. An
appropriate Order accompanies this Memorandum Opinion.
Signed: Emmet G. Sullivan
United States District Judge
March 3, 2013
25