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GROTE v. SEBELIUS
WILLIAM D. GROTE, III, et al., Plaintiffs-Appellants,
v.
KATHLEEN SEBELIUS, in her official capacity as the Secretary of the United States Department of Health and Human Services, et al., Defendants-Appellees.
No. 13-1077.
United States Court of Appeals, Seventh Circuit.
January 30, 2013.*
Before JOEL M. FLAUM, Circuit Judge, ILANA DIAMOND ROVNER, DIANE S. SYKES, Circuit Judge.
ORDERThe following are before the court: 1. PLAINTIFFS-APPELLANTS' MOTION FOR AN INJUNCTION PENDING APPEAL, filed on January 11, 2013, by counsel for the appellants. 2. OPPOSITION TO PLAINTIFFS' MOTION FOR AN INJUNCTION PENDING APPEAL, filed on January 17, 2013, by counsel for the appellees. 3. PLAINTIFFS-APPELLANTS' REPLY IN SUPPORT OF THEIR MOTION FOR AN INJUNCTION PENDING APPEAL, filed January 24, 2013, by counsel for the appellants. Members of the Grote Family and their company, Grote Industries, appeal the district court's order denying their motion for a preliminary injunction against the enforcement of provisions of the Patient Protection and Affordable Care Act ("ACA") and related regulations that require Grote Industries to provide coverage for contraception and sterilization procedures in its group health-insurance plan.1 They have moved for an injunction pending appeal. See FED. R. APP. P. 8. We recently granted such an injunction in a similar case. See Korte v. Sebelius, No. 12-3841, 2012 WL 6757353 (7th Cir. Dec. 28, 2012). As explained below, this case is materially indistinguishable. Accordingly, we consolidate this case with Korte and likewise grant the motion here. The Grote Family owns Grote Industries, a privately held, family-run business headquartered in Madison, Indiana. Grote Industries manufactures vehicle safety systems. The company has 1,148 full-time employees working at various locations and provides a group health-insurance plan for the benefit of its employees. The plan is self-insured and renews every year on January 1.
* This order is being released in typescript. It will be published; a printed version will follow.
1. The individual plaintiffs are William D. Grote, III; William Dominic Grote, IV; Walter F. Grote, Jr.; Michael R. Grote; W. Frederick Grote, III; and John R. Grote. For ease of reference, we refer to them collectively as the Grote Family. Grote Industries consists of two companies formed under the laws of Indiana: Grote Industries, LLC, and Grote Industries, Inc. The Grote Family, including members not listed as plaintiffs, fully own Grote Industries, Inc. This entity, in turn, serves as the managing member of Grote Industries, LLC.
2. We evaluate a motion for an injunction pending appeal using the same factors and "sliding scale" approach that govern an application for a preliminary injunction. See Cavel Int'l, Inc. v. Madigan, 500 F.3d 544, 547-48 (7th Cir. 2007). The moving party must establish that it has "(1) no adequate remedy at law and will suffer irreparable harm if a preliminary injunction is denied and (2) some likelihood of success on the merits." Ezell v. City of Chicago, 651 F.3d 684, 694 (7th Cir. 2011). Once the threshold requirements are met, the court weighs the equities, balancing each party's likelihood of success against the potential harms. Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the U.S., Inc., 549 F.3d 1079, 1100 (7th Cir. 2008). The more the balance of harms tips in favor of an injunction, the lighter the burden on the party seeking the injunction to demonstrate that it will ultimately prevail. Abbott Labs. v. Mead Johnson & Co., 971 F.2d 6, 12 (7th Cir. 1992).
3. RFRA prohibits the federal government from imposing a "substantial[] burden [on] a person's exercise of religion even if the burden results from a rule of general applicability" unless the government demonstrates that the burden "(1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest." 42 U.S.C. § 2000bb-1(a)-(b).
1. Compare E.E.O.C. v. Townley Eng'g & Mfg. Co., 859 F.2d 610, 619 (9th Cir. 1988) (finding manufacturer of mining equipment to be a primarily secular company and therefore not a religious organization exempt from Title VII, despite, inter alia, religious beliefs of owners, company's financial support for religious missions, company's inclusion of religious tracts in company's outgoing mail and printing of Bible verses on its commercial documents, and weekly devotional services at workplace, where company was organized for profit, produced a secular product, was not affiliated with or supported by a church, and did not mention religious purpose in articles of incorporation) with LeBoon v. Lancaster Jewish Community Center Ass'n, 503 F.3d 217, 227-28 (3d Cir. 2007) (finding community center to be exempt from Title VII as religious organization in view of, inter alia, its not-for-profit nature, recognition in articles of incorporation and bylaws that its purpose was to "enhance and promote Jewish identity, life, and continuity," presentation of Judaic programming, advisory role of rabbis in center's management, and center's close ties with, and receipt of financial support from, local synagogues).
2. Cf. Townley Eng'g & Mfg. Co., supra n.1, 859 F.2d at 620 (owners of corporation argued that "Townley Company is an extension of the beliefs of Mr. and Mrs. Townley, and for all purposes, the beliefs of Mr. and Mrs. Townley are the beliefs and tenets of the Townley Company.").
3. But see also Leister v. Dovetail, Inc., 546 F.3d 875, 879 (7th Cir. 2008) (noting that although "the plan is the logical and normally the only proper defendant" in a suit for benefits, "in cases . . . in which the plan has never been unambiguously identified as a distinct entity, we have permitted the plaintiff to name as defendant whatever entity or entities, individual or corporate, control the plan").
4. Some cases in this line do conclude that application of a nondiscrimination statute can meaningfully interfere with the religious liberties of a business owner. E.g., McClure, 370 N.W.2d at 852 (relying on state agency's concession that statute abridged the business owners' religious beliefs). However, the cases also consistently emphasize the importance of an owner's voluntary decision to engage in commercial activity, whether as a reason why any burden imposed by such statutes on their religious beliefs and practices should be viewed as minimal, or as a reason why that burden, even if substantial, is outweighed by the State's compelling interest in eradicating discrimination. Id. at 853; see also, e.g., Smith, 913 P.2d at 928-29; Swanner, 874 P.2d at 283; Elane Photography, 284 P.3d at 443-44.
5. See also Zobrest v. Catalina Foothills Sch. Dist., 509 U.S. 1, 10, 113 S.Ct. 2462, 2467 (1993) (providing publicly-funded interpreter for deaf student attending Catholic high school did not violate Establishment Clause: "The service at issue in this case is part of a general government program that distributes benefits neutrally to any child qualifying as disabled under the [Individuals With Disabilities Education Act, 20 U.S.C. § 1400 et seq.], without regard to the `sectarian-nonsectarian, or public-nonpublic nature' of the school the child attends. By according parents freedom to select a school of their choice, the statute ensures that a government-paid interpreter will be present in a sectarian school only as a result of the private decision of individual parents. In other words, because the IDEA creates no financial incentive for parents to choose a sectarian school, an interpreter's presence there cannot be attributed to state decisionmaking. . . .").
6. There was an alternative means by which student organizations might seek funding through a student referendum process. The Court noted that "[t]o the extent the referendum substitutes majority determinations for viewpoint neutrality it would undermine the constitutional protection the program requries." Id. at 235, 120 S. Ct. at 1357. As the record was not welldeveloped on this avenue of funding, the Court therefore remanded the case for further exploration of that point. Id. at 235-36, 120 S. Ct. at 1357.
7. By one judge's count, some forty lawsuits have been filed challenging the mandate. See Catholic Diocese of Peoria v. Sebelius, 2013 WL 74240, at *1 & n.1 (C.D. Ill. Jan. 4, 2013) (coll. cases).
8. Parallel mandates applicable to insurers and group insurance plans have existed at the state level for a number of years. Beginning with Maryland in 1998, some twenty-eight States had adopted mandates requiring insurers to include coverage of prescription contraceptives by the time the federal mandate took effect in 2012. See National Women's Law Center, Guaranteeing Coverage of Contraceptives: Past & Present (Aug. 1, 2012), available at http://www.nwlc.org/resource/ guaranteeing-coverage-contraceptives-past-and-present (last visited Jan. 27, 2013); Guttmacher Institute, STATE POLICIES IN BRIEF, Insurance Coverage of Contraceptives (as of Jan. 1, 2013), available at http://www.guttmacher.org/statecenter/spibs/spib_ICC.pdf (last visited Jan. 27, 2013). Due in part to these mandates, nine in ten employer-based insurance plans were already covering prescription contraceptives by that time. Guttmacher Institute, FACT SHEET, Contraceptive Use in the United States, at 4 (July 2012), available at http://www.guttmacher.org/pubs/fb_contr_use.html (last visited Jan. 27, 2012).
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