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Corp. Can't Assert Free Exercise in Mandate Claim, But People Can: D.C. Cir.

By Brett Snider, Esq. on November 07, 2013 3:10 PM

Moving into the birth control mandate discussion on Friday, the D.C. Circuit ruled on a religious challenge to the ACA's contraceptive in a split decision with some definite quirks.

In Gilardi v. U.S. Dept. of Health and Human Services, the D.C. Circuit was split on whether the Gilardi family, who are staunch Catholics and oppose contraception, were denied free exercise by having to choose between their businesses offering health care coverage and their religious beliefs.

Where does D.C. fall in the spectrum of its Sister Circuits on the question of corporations exerting free exercise claims?

Can Corporations Make RFRA Claims?

The Gilardis' companies -- Freshway Foods and Freshway Logistics -- argue that after SCOTUS declared that the imprimatur of corporate personhood included the personal right of free speech, why wouldn't it then include all "personal" rights like free exercise?

It's not a terrible argument. After all, the Tenth Circuit ruled using just the same reasoning in granting Hobby Lobby's right to refuse the contraception mandate.

The D.C. Circuit, however, was a bit more cautious. After a quick examination of the long legal history of the free exercise right, the Gilardi court -- though split 2-1 on this issue -- does not believe the "constitutional arithmetic" of Citizens United + free exercise = corporate free exercise. At least not until SCOTUS rules otherwise.

The Gilardi Court also declined to give credence to the "pass-through" theory that closely-held corporations can vindicate the beliefs of their owners -- a theory currently popular in the Ninth Circuit.

As the D.C. Circuit unanimously agreed, with companies where the owners are two people, like the Gilardis and Freshway, each individual can assert their own RFRA claim, as natural people certainly have free exercise rights.

Individual Claims Against Mandate

With the Gilardis well within their rights to sue Health and Human Services -- its been a rough legal year for Sec. Kathleen Sebelius -- the question for the Gilardi court was whether the Gilardis were likely enough to succeed on the merits of their claim to grant injunctive relief from the contraceptive mandate.

To succeed under RFRA, the Gilardis and others like them have to allege "a substantial burden" on the claimant(s)' free exercise. The Gilardi court saw the Gilardis as stuck with two choices:

  1. Pay up to $14 million to avoid providing healthcare
  2. "Become complicit in a grave moral wrong."

Having satisfied the threshold inquiry on burdens, the Gilardi Court is skeptical that the mandate could hold up to strict scrutiny as applied, and granted a preliminary injunction for the Gilardis not to comply with the mandate.

Bottom Line

With the D.C. Circuit giving a win to individuals for RFRA mandate claims but denying Hobby Lobby-style corporate free exercise, SCOTUS will have yet another tack to consider when they finally take on this issue.

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