Court Finds For-Profit Company a ‘Vessel’ for Religious Beliefs, Grants Injunction Against Birth Control Benefit

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Analysis Law and Policy

Court Finds For-Profit Company a ‘Vessel’ for Religious Beliefs, Grants Injunction Against Birth Control Benefit

Jessica Mason Pieklo

A federal court blocked the Obama administration's birth control benefit from applying to a for-profit company, further blurring the lines between the secular and religious when it comes to constitutional rights.

On Thursday a federal judge granted a preliminary injunction to Domino’s Farms (DF) and its owner, Tom Monaghan, that blocks enforcement of the birth control benefit in the Affordable Care Act while Monaghan’s challenge to the constitutionality of the benefit moves forward. Domino’s Farms is a property-management company.

Monaghan is one of more than 20 secular, for-profit employers challenging the benefit as a violation of his, and his corporation’s, rights to religious exercise. Federal courts across the country have split on the issue of whether or not a for-profit, secular corporation has religious exercise rights. U.S. District Court Judge Lawrence P. Zatkoff had issued a temporary restraining order back in December as soon as Monaghan and Domino’s Farms challenge was filed. Monaghan and Domino’s Farms asked the judge to convert that temporary order into a preliminary injunction, which would stay in force pending any appeal.

Bloomberg reports that “[t]he U.S. opposed that request, contending that ‘the relevant question’ was whether Monaghan’s religious beliefs were ‘substantially burdened by a regulation that applies only to the health plan of a wholly separate legal entity,’ according to court papers.”

By treating Mr. Monaghan and Domino’s Farms as one and the same, the court ignored the layers of legal separation between Mr. Monaghan and the corporation, only the latter of which is responsible for providing health coverage that includes contraceptive coverage,” Justice Department lawyers said in a Jan. 28 filing.

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But ignoring the legal separation between Monaghan and Domino’s Farms is exactly what the court did. In the opinion granting the injunction, the court cites a string of recent decisions including Tyndale House and Hobby Lobby supporting the proposition that corporations can have religious rights and therefore standing to sue under the Religious Freedom Restoration Act (one of the claims asserted by Monaghan and Domino’s Farms); in fact the court argues that Monaghan’s case is even stronger than the other for-profit, secular businesses who have brought similar challenges. Those businesses generally had more than one owner and may not have done things like make available to employees on the premises Catholic teachings and literature. Monaghan is sole owner and does this for his employees. “Unlike Tyndale, Stormans, and Townley—where the companies in question had multiple owners—Mongahan is DF’s sole shareholder, director, and decision-maker. As such, DF is even more closely held than those companies, making the beliefs of DF and its owners even more indistinguishable.”

The blurring of the relationship between corporate entity and owner is a dangerous one, but that doesn’t seem to bother the court which continues, “DF is merely the instrument through which Monaghan expresses his religious beliefs.”

Since the court found this religious right existed, a finding that was possible only by accepting the argument that Domino’s Farms is merely the “vessel” by which Monaghan expresses his religious beliefs, it was a much smaller leap to the next prong of the analysis—whether complying with the mandate substantially burdens that right. “Denying plaintiffs’ motion will result in a substantial burden on Monaghan’s right to free exercise of religion, since the mandate requires him to choose whether to comply and violate his beliefs, or accept the financial consequences of not doing so,” Zatkoff said in the 20-page decision. “Such an infringement upon plaintiffs’ First Amendment rights—even for a short time—constitutes irreparable injury,” Zatkoff wrote.

The court goes to great pains in more than one place in the opinion to make it clear it is not the court’s job to judge the sincerity of Monaghan’s beliefs, but to merely take him at his word that operating a for-profit, secular property management company is an expression of religious faith. And, while this is largely a true expression of the court’s role as a neutral arbitrator of claims, it is also true that in making a preliminary ruling such as whether or not for-profit corporations can benefit from protections designed to shield religious employers, the court must wade into those waters and judge the appropriateness of those religious beliefs in the context of the commercial sector. Failing to do so amounts to the kind of decision we have here—where First Amendment religious principles are invoked as a shield to break the law and where decades of jurisprudence detailing the important and necessary split between the beliefs of a for-profit business owner and the actions of his secular business venture.

To grant the injunction the court had to balance the interests of Monaghan and the Obama administration. Nowhere does the court consider the interests of the employees affected by loss of coverage of critical preventive care coverage they have earned, an oversight not made in other federal court decisions denying similar requests by for-profit companies. Instead the court views the balancing of interests narrowly as one simply between Monaghan and the federal government and concludes that exempting an organization with less than 100 employees “can hardly be considered a significant or ‘irreparable’ harm to the Government.”

The ruling means the benefit will be blocked while Monaghan’s claim to the constitutionality of the benefit proceeds on the merits. And while attorneys for the Obama administration have not yet said they will appeal this particular ruling, it is all but inevitable that the issue of for-profit, secular religious exercise rights will land before the Supreme Court, even as early as next term. In the meantime, though, Monaghan and Domino’s Farms were given a green light to move ahead with discriminating against employees by refusing to provide access to insurance plans that cover contraception in compliance with the law.