News Law and Policy

Hobby Lobby Wins Preliminary Injunction Against Contraception Benefit

Jessica Mason Pieklo

On Friday, a federal judge reluctantly ruled the corporate arts and crafts store would not have to comply with the contraception benefit in the Affordable Care Act.

After hearing arguments Friday, U.S. District Judge Joe Heaton issued an order temporarily exempting Hobby Lobby from complying with the contraception benefit in the Affordable Care Act, which requires it to offer insurance coverage for the morning-after pill and similar birth control or face steep fines. The ruling moves the national fight over the constitutionality of the contraception benefit a significant step closer to the Supreme Court, but also shows a deep divide within the federal judiciary over whether or not corporations have constitutional religious rights.

The terse, four-page order is the first to flatly bar the federal government from enforcing any part of the contraceptive benefit in the federal health-care law. Judge Heaton, who earlier had turned down an identical request by Hobby Lobby to delay enforcement (his request was overturned by the U.S. Tenth Circuit Court of Appeals), took the opportunity to jab back at the court of appeals, holding that Hobby Lobby had “newly recognized religious rights” that drove much of the conclusion to block enforcement, despite his earlier order refusing to do so. These “newly recognized religious rights,” Heaton’s order makes clear, stem from the Tenth Circuit’s ruling that business firms can take on the religious views of their owners and then exercise those rights on their own in the way they conduct their business operations.

Judge Heaton made clear that, thanks to the Tenth Circuit’s ruling, he had very little choice other than to grant Hobby Lobby’s request to block the benefit. He cited the fact that Hobby Lobby faced financial penalties that “could conceivably amount to $1.3 million” a day for violating the mandate, but also made a finding that the government had a “not insignificant interest” in providing the two companies’ employees with access to all federally approved contraceptive methods through a health insurance plan. However, even with the government’s significant interest in making contraception widely available and affordable, Judge Heaton held that the threat of financial penalties and the potential violation of religious rights outweighed the government’s “potential harm” should access be unavailable.

In addition to issuing the preliminary injection, the judge also stayed the case until October 1 to give the federal government time to consider an appeal. That means the government now has the option of appealing the order to the Tenth Circuit. But that court already has suggested it would block enforcement in an earlier ruling and had scheduled a hearing in another case challenging the benefit for October as well, meaning that even if the Obama administration doesn’t appeal this specific order, the Tenth Circuit will weigh in on the constitutionality of the benefit regardless.

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Besides the Tenth Circuit, four other federal appeals courts have held hearings on the mandate, with another hearing in September. The clear fault line emerging in these legal challenges is this idea, fully embraced by the Tenth Circuit, that businesses have the ability to take on the religious beliefs of their owners. It’s a radical re-imagining of First Amendment religious rights made possible thanks to the Citizens United decision, which held corporations have certain First Amendment speech rights, including the right to spend money in elections. And as soon as next year, we could learn whether or not the Roberts Court, and Justice Anthony Kennedy in particular, is willing to extend those rights even further.

Analysis Law and Policy

Federal Court Says Trans Worker Can Be Fired Based on Owner’s Religious Beliefs

Jessica Mason Pieklo

“Plain and simple, this is just discrimination against a person because of who she is,” said John Knight, the director of the LGBT and HIV Project of the American Civil Liberties Union of Illinois, in an interview with Rewire.

When the U.S. Supreme Court ruled in 2014 in Burwell v. Hobby Lobby that the owners of secular for-profit businesses could challenge laws they believed infringed on their religious liberties, civil rights advocates warned that the decision was just the start of a new wave of litigation. On Thursday, those predictions came true: A federal district judge in Michigan ruled that a funeral home owner could fire a transgender worker simply for being transgender.

The language of the opinion is sweeping, even if the immediate effect of the decision is limited to the worker, Aimee Stephens, and her boss. And that has some court-watchers concerned.

“Plain and simple, this is just discrimination against a person because of who she is,” said John Knight, the director of the LGBT and HIV Project of the American Civil Liberties Union of Illinois, in an interview with Rewire.

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According to court documents, Stephens, an employee at Detroit’s R.G. & G.R. Funeral Homes, gave her boss—the business’ owner—a letter in 2013 explaining she was undergoing a gender transition. As part of her transition, she told her employer that she would soon start to present as a woman, including dressing in appropriate business attire at work that was consistent both with her identity and the company’s sex-segregated dress code policy.

Two weeks later, Stephens was fired after being told by her boss that what she was “proposing to do” was unacceptable and offensive to his religious beliefs.

In September 2014, the Equal Employment Opportunity Commission (EEOC) filed a lawsuit on behalf of Stephens, arguing the funeral home had violated Title VII of the federal Civil Rights Act, which prohibits employment discrimination. According to the EEOC, Stephens was unlawfully fired in violation of Title VII “because she is transgender, because she was transitioning from male to female, and/or because she did not conform to the employer’s gender-based expectations, preferences, or stereotypes.”

Title VII of the Civil Rights Act allows those employees who have been discriminated against in the workplace to collect money, known as civil damages. Those damages usually come in the form of lost wages, back pay, and funds to make up for—to some degree—the abuse the employee faced on the job. They are also designed to make employers more vigilant about their workplace culture. Losing an employment discrimination case for an employer can be expensive.

But attorneys representing Stephens’ employer argued that the Religious Freedom Restoration Act (RFRA) protected their client from legal liability for firing Stephens. On Thursday, a federal court agreed. It said that paying such damages for unlawfully discriminating against an employee could amount to a substantial burden on an employer’s religious beliefs. 

According to the court, despite the fact that Stephens’ boss admitted he fired her for transitioning, and despite the fact that the court found this admission to be direct evidence of employment discrimination, RFRA can be a defense against that direct discrimination. To use that defense, the court concluded, all the funeral home owner had to do was assert that his religious beliefs embraced LGBTQ discrimination. The funeral home had “met its initial burden of showing that enforcement of Title VII, and the body of sex-stereotyping case law that has developed under it, would impose a substantial burden on its ability to conduct business in accordance with its sincerely-held religious beliefs,” the court wrote.

In other words, Hobby Lobby provides employers a defense to discriminating against LGBTQ people on the basis of religious beliefs.

“The RFRA analysis is extremely troubling, and the implications of it [are] as well,” said Knight. “I believe this is the first case applying RFRA to a Title VII claim with respect to nonministerial employees.”

If the scope of the opinion were broader, Knight continued, “this would allow [employers in general] to evade and refuse to comply with uniform nondiscrimination law because of their religious views.”

This, Knight said, is what advocates were afraid of in the wake of Hobby Lobby: “It is the concern raised by all of the liberal justices in the dissent in Hobby Lobby, and it is what the majority in Hobby Lobby said the decision did not mean. [That majority] said it did not mean the end of enforcement of nondiscrimination laws.”

And yet that is exactly what we are seeing in this decision, Knight said.

According to court documents, Stephens’ boss has been a Christian for more than 65 years and testified that he believes “the Bible teaches that God creates people male or female,” that “the Bible teaches that a person’s sex is an immutable God-given gift, and that people should not deny or attempt to change their sex.” For Stephens’ former boss, Stephens’ transition to a woman was “denying” her sex. Stephens had to be fired, her boss testified, so that he would not be directly complicit in supporting the idea that “sex is a changeable social construct rather than an immutable God-given gift.”

If the “complicit in denying God’s will” sounds familiar, it should. It has been the exact argument used by businesses challenging the birth control benefit of the Affordable Care Act. Those business owners believe contraception is contrary to God’s will and that complying with federal law, which says birth control should be treated in insurance policies as any other preventive service, makes them complicit in sin. Thursday’s decision cites Hobby Lobby directly to support the court’s conclusion that complying with federal nondiscrimination law can be avoided by asserting a religious objection.

Think of the implications, should other courts follow this lead. Conservatives have, in the past, launched religious objections to child labor laws, the minimum wage, interracial marriage, and renting housing to single parents—to name a few. Those early legal challenges were unsuccessful, in part because they were based on constitutional claims. Hobby Lobby changed all that, opening the door for religious conservatives to launch all kinds of protests against laws they disagree with.

And though the complaint may be framed as religious objections to birth control, to LGBTQ people generally, and whatever other social issue that rankles conservatives, these cases are so much more than that. They are about corporate interests trying to evade regulations that both advance social equity and punish financially those businesses that refuse to follow the law. Thursday’s opinion represents the next, troubling evolution of that litigation.

CORRECTION: This article has been updated to clarify John Knight’s position with the American Civil Liberties Union of Illinois.

News Abortion

Abortion Providers Could Recoup Millions From Wisconsin After Fighting Unconstitutional Anti-Choice Law

Michelle D. Anderson

The providers seeking money include Planned Parenthood of Wisconsin, Inc., Planned Parenthood Federation of America, and Milwaukee Women's Medical Services, which conducts business as Affiliated Medical Services.

Abortion providers serving Wisconsin residents could recoup nearly $1.8 million in legal fees they amassed while fighting an anti-choice law that was first blocked in 2013. However, spokespeople for the State of Wisconsin have raised the possibility of an undisclosed settlement.

In a U.S. District Court filing dated July 28, the providers requested an award of “attorneys’ fees, costs and expenses” that could be recouped under the Civil Rights Attorneys’ Fee Awards Act of 1976. On Wednesday in response, Wisconsin Attorney General Brad Schimel asked the court to extend the due date for the state to respond from August 18 to September 1. The request was granted, according to court documents.

“The parties are currently discussing settlement of the plaintiffs’ motion. An extension of the briefing schedule would allow the parties the opportunity to explore the possibility of a settlement of this issue,” Schimel said in the court filing.

The providers seeking money include Planned Parenthood of Wisconsin, Inc., Planned Parenthood Federation of America, and Milwaukee Women’s Medical Services, which conducts business as Affiliated Medical Services. The sum requested includes $1.7 million in attorneys’ fees, $44,253 in billable costs and $22,545 in out-of-pocket expenses, according to the court filing.

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The providers amassed the fees fighting Wisconsin Act 37 of 2013, a Republican-initiated law that required doctors to have hospital admitting privileges within 30 miles of the location where an abortion was to be performed.

U.S. District Judge William Conley of the Western District of Wisconsin blocked the law’s enforcement soon after Republican Gov. Scott Walker signed it in 2013.

The state attorney general twice appealed to the Seventh Circuit U.S. Court of Appeals, which affirmed the lower court’s decision both times; the U.S. Supreme Court also declined to take the case a day after overturning a similar provision in Whole Woman’s Health v. Hellerstedt.

In a Court of Appeals opinion issued in November 2015, the court said there was no evidence that “transfer agreements provide inferior protection to the health of women undergoing abortion compared to admitting privileges.” The opinion concluded by saying the unconstitutional statute was burdensome and curtailed citizens’ constitutional right to an abortion.

“The statute may not be irrational, yet may still impose an undue burden—a burden excessive in relation to the aims of the statute and the benefits likely to be conferred by it— and if so it is unconstitutional,” the court said.

If not blocked, the law would have forced pregnant people in various parts of the state to travel at least an extra 200 miles round trip to access legal abortion, according to a previous Rewire report.

Johnny Koremenos, a spokesperson for Schimel, had indicated in statements to the Journal Sentinel and the Wisconsin State Journal earlier this month that the state would fight the charges for legal fees. He said Schimel would challenge the providers’ request “to ensure that the state is not paying more than it should be for those fees,” according to local news reports.

Koremenos did not respond to Rewire’s request for comment.

Walker also supported fighting the fees, his spokesperson told the Journal Sentinel.

Ismael Ozanne, the district attorney for Dane County, was also named as a defendant in the providers’ lawsuit, along with several state medical examining board members.

Planned Parenthood of Wisconsin spokeswoman Iris Riis told Rewire the money Planned Parenthood is seeking in this case is only a recoup of the legal fees already spent fighting the unconstitutional admitting privileges law.

“There would not be any leftover money to allocate to services or any fund. It would just cover what was already spent. Governor Walker’s administration appealed multiple definitive rulings, wasting countless taxpayer dollars in the process. That action also drove up our legal costs,” Riis said.

Riis said the plaintiffs do not know when Conley will issue the ruling that will determine whether Schimel will have to compensate them for legal fees.

Andrew Wiseman, a deputy clerk in the U.S. District Court, Western District of Wisconsin, told Rewire the court could not offer a prediction about the date of Conley’s ruling.

Affiliated Medical Services, which operates a clinic in Milwaukee, is being represented by the American Civil Liberties Union of Wisconsin, while private attorneys are representing Planned Parenthood.

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