Newland v. Burwell

Citations: 83 F. Supp. 3d 1122; 2015 WL 1757148; 2015 U.S. Dist. LEXIS 51899Docket: Civil Action No. 1:12-cv-1123

Court: District Court, D. Colorado; March 16, 2015; Federal District Court

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The Plaintiffs, consisting of the Newland family and Hercules Industries, filed a lawsuit against Defendants regarding the enforcement of the Patient Protection and Affordable Care Act (ACA), specifically objecting to the Preventive Services Mandate requiring them to provide coverage for abortifacient drugs, contraception, sterilization, and related services. A preliminary injunction was granted on July 27, 2012, preventing enforcement of the Mandate against the Plaintiffs, and this decision was affirmed by the Tenth Circuit, which determined the Plaintiffs were likely to succeed on their Religious Freedom Restoration Act (RFRA) claim and would suffer irreparable harm. The Tenth Circuit's ruling led to a remand pending the Supreme Court's decision in Burwell v. Hobby Lobby Stores, Inc. On June 30, 2014, the Supreme Court ruled that the Contraceptive Mandate violates RFRA as applied to closely-held corporations, prompting the reinitiation of proceedings in this case.

The parties agree on the issuance of a permanent injunction in favor of the Plaintiffs regarding their RFRA claim but disagree on its specific scope. Plaintiffs propose converting the preliminary injunction into a permanent one, while Defendants argue for a more restricted language aligned with the Supreme Court's Hobby Lobby decision. The memorandum will address the nature of the permanent injunction, outlining the law of injunctions, summarizing the relevant decisions from the Tenth Circuit and the Supreme Court, and resolving the parties' specific disagreements regarding the injunction's scope.

Discretion in formulating an injunction is guided by equitable principles, as established in ClearOne Commc’ns, Inc. v. Bowers. The authority to grant injunctive relief persists even after the cessation of the illegal conduct necessitating the injunction, supported by F.T.C. v. Accusearch, Inc. The prevailing party expects that relief will remain in place unless modified or vacated by the court, as noted in Dowell by Dowell v. Bd. of Educ. of Okla. City Pub. Sch. The injunction must be narrowly tailored to address the proven harm. The order must articulate the reasons for issuance, specify its terms, and detail the acts restrained or required, in accordance with Fed. R. Civ. P. 65(d). 

When an injunction involves congressional acts, the court must respect Congressional intent, as highlighted in United States v. Oakland Cannabis Buyers’ Co-op, and any changes to substantive law by Congress take precedence over past injunctions, as stated in Biodiversity Assoc. v. Cables. Changes in administrative regulations are assessed differently in terms of discretion. An injunction must be complied with until overturned, regardless of its validity or jurisdictional issues, as noted in Dan B. Dobbs. However, a party may seek modification or dissolution of the injunction if significant factual or legal changes occur, with the burden of proof resting on the party seeking relief, as per Horne v. Flores. The court, rather than the parties, holds the authority to modify or dissolve an injunction based on changes in statutes, which is a key reason for maintaining jurisdiction over such matters.

The document also discusses the Hobby Lobby case, where the owners of closely-held corporations challenged the Contraceptive Mandate on grounds of religious beliefs under RFRA, the First Amendment, and the Administrative Procedure Act. After the district court denied their preliminary injunction motion, the owners appealed, and the Tenth Circuit granted en banc consideration, ultimately overturning the district court's decision based on a strong likelihood of success on the merits of their RFRA claim.

The Tenth Circuit found that the corporations, Hobby Lobby and Mardel, had standing to challenge the Contraceptive Mandate, but did not address the individual standing of the owners. It ruled that closely-held corporations can exercise religion under the Religious Freedom Restoration Act (RFRA) and determined that the Contraceptive Mandate substantially burdens their exercise of religion, given the unanimous religious beliefs of the owners. The Tenth Circuit rejected the government's claim of a compelling interest in the Mandate, citing the broad formulation of the government's interest and the numerous exemptions that undermined its argument. Additionally, it concluded that the Mandate was not the least restrictive means of achieving any compelling interest. The case was remanded for further consideration of the preliminary injunction factors.

The Supreme Court upheld the Tenth Circuit’s decision, affirming that closely-held corporations can exercise religion under RFRA and that the Mandate violated Hobby Lobby’s sincere religious beliefs. However, unlike the Tenth Circuit, the Supreme Court did not evaluate whether the Mandate served a compelling governmental interest, instead assuming it did but stating that it was not the least restrictive means to do so. The Court emphasized the adequacy of existing accommodations for non-profits with religious objections, which it found did not impede Hobby Lobby's religious beliefs while still serving the government's interests.

Defendants in the ongoing case argue that the Supreme Court's decision was specific to the 2013 contraceptive mandate regulations as applied to closely-held corporations and contend that the permanent injunction should only prevent the government from enforcing these regulations against Hercules Industries, Inc., allowing for potential revisions to the Mandate that could be applied to other plaintiffs without violating the injunction.

Defendants assert that the injunction should be limited to Hercules, arguing that the Hobby Lobby decision pertains solely to the rights of closely-held corporations and not their ownership. They further contend that the injunction should be based on the Supreme Court's Hobby Lobby ruling and their consent. However, the plaintiffs argue for a broader injunction against the enforcement of the Contraceptive Mandate without considering potential government reforms to comply with Hobby Lobby.

The court clarifies that the scope of a permanent injunction is misunderstood by both parties. The plaintiffs’ request for a blanket injunction against the Contraceptive Mandate neglects the Supreme Court and Tenth Circuit's limited decisions regarding the specific regulations enforcing that mandate. These courts did not find the underlying statute of the Contraceptive Mandate to violate the RFRA rights of corporate plaintiffs or their owners. The plaintiffs sought relief only from the enforcement regulations related to their religious objections, not the statute itself.

The distinction between the Tenth Circuit and Supreme Court decisions is significant; while the Tenth Circuit found no compelling government interest, the Supreme Court concluded that the Contraceptive Mandate was not the least restrictive means to achieve the government's interest, implying that accommodations could be made to comply with RFRA.

Furthermore, the court emphasizes the need for an injunction to provide meaningful relief to plaintiffs, asserting that the government should not be allowed to unilaterally modify the injunction without demonstrating a change in circumstances. The government has the burden of proof to justify any modification or dissolution of the injunction based on whether the regulations enforcing the Contraceptive Mandate violate Hercules’ RFRA rights. The Supreme Court's decision allows for revisions to the Contraceptive Mandate regulations to ensure compliance with RFRA.

The government cannot unilaterally enforce regulations against the Plaintiffs as an injunction remains in effect until modified or dissolved by the court. Key unresolved issues include the individual owners’ standing and the enforceability of Plaintiffs' First Amendment claims. If the government attempts to dissolve the injunction, Plaintiffs may reassert these claims as a defense against new regulations under the Contraceptive Mandate. 

Both the Tenth Circuit and the Supreme Court did not decide on the standing of closely-held corporation owners to assert a RFRA claim. Plaintiffs contend the injunction should apply to both Hercules and the Newlands, while Defendants argue it should apply only to Hercules. Regardless of this dispute, the government is enjoined from violating Hercules’ RFRA rights, which inherently include the rights of the Newlands. Consequently, the injunction is limited to Hercules, leaving the individual owners' claims unresolved.

Defendants incorrectly assert that the injunction should be based on the Hobby Lobby decision and their consent, which undermines the jurisdiction of the United States District Court. The injunction is issued under the court's jurisdictional authority and remains effective unless modified or dissolved by the District Court or reviewed by the Court of Appeals. 

A permanent injunction against the Defendants is granted in favor of Hercules Industries, Inc., while claims from the individual owners are temporarily abated pending further court action. Following the Tenth Circuit's decision in Hobby Lobby, the Secretary of Health and Human Services was changed to Sylvia Burwell, who replaced Kathleen Sebelius as the Petitioner on appeal. The Tenth Circuit did not reach the Plaintiffs’ First Amendment claims.