Courage of Hercules: HHS Mandate Enjoined by Federal Court. Catholic Family Run HVAC Business Prevails

While we were all expecting the first victory against the unconstitutional HHS mandate to come in one of the many lawsuits filed on behalf of Colleges, Dioceses or other Church related non-profits, we were surprised when the victory came on another front

Every American, including family business owners, should be free to live and do business according to their faith. For the time being, Hercules Industries will be able to do just that. The cost of freedom for this family could be millions of dollars per year in fines that will cripple their business if the Obama administration ultimately has its way. This lawsuit seeks to ensure that Washington bureaucrats cannot force families to abandon their faith just to earn a living.

P>DENVER, CO (Catholic Online) - As the August 1, 2012 date for the initial implementation requirements of the HHS mandate drew near, the Alliance Defending Freedom (formerly Alliance Defense Fund) issued an opinion advising Catholic Colleges and other Church related institutions of the a "temporary one year safe harbor" which could delay the consequences of their non-compliance for one year.

Ironically, it was that "safe harbor" offered by the Obama Administration which was seized upon by Federal Judges in dismissing several lawsuits for "ripeness". For example, on July 18, 2012, Federal Judge James Boasberg of the DC District Court dismissed the Lawsuit filed by Belmont Abbey College. These lawsuits alleged that the mandate was an unconstitutional violation of the Free Exercise of Religion.

The HHS mandate requires all employers, including Catholic and other religious employers, to cover sterilization, abortion inducing drugs and contraception in their health care plans. The "exemption" provided for religious employers does not cover hospitals, universities, soup kitchens, outreaches to the poor and many other vital expressions of our Catholic faith and mission.

Following the strong outcry from every single Catholic Bishop in the United States and the massive resistance from the Catholic faithful, as well as the numerous lawsuits filed by Catholic and other Christian institutions, the Obama administration established this "safe harbor". It allows the institutions and outreaches affected to have an extension until Aug. 1, 2013.

Based upon this "safe harbor", the Federal Courts' accepted the Governments argument that the cases were premature because the mandate would not cause any immediate injury. In addition, in the Belmont Abbey case, the Court somehow even took judicial notice that an accommodation might be reached. The Judge wrote a 24 page opinion which held in part, 

"The court holds that the challenged rule is not 'sufficiently final. The government has done nothing to suggest that it might abandon its efforts to modify the rule - indeed, it has steadily pursued that course - and it is entitled to a presumption that it acts in good faith. At the end of the day, the Court offers no opinion on the merits of the current contraception-coverage regulations or any proposed future ones. If Plaintiff is displeased by the ultimate regulations, it may certainly renew its suit at that time. All the Court holds here is that Belmont has no basis to proceed now,"

However, the Alliance Defending Freedom was doing more than just helping Colleges and other organizations delay the punitive effects of this mandate. They were busy on another front, showing themselves to be outstanding religious liberty lawyers. While most of us were focused on the Non-Profit Church related institutions, they raised the related issue of compelling Catholics engaged in for profit businesses from having to comply with this unconstitutional mandate. It is also unconstitutional!

On April 30, 2012, they filed a Federal Cause of Action in the U.S. District Court for the District of Colorado entitled Newland et al v. Sebelius. Hercules Industries, Inc. is a Colorado for profit Corporation which manufactures heating, ventilation, and air conditioning ("HVAC") products and equipment.  The company is owned by William, Paul and James Newland and Christine Ketterhagen, members of a Catholic family who seek to live a morally coherent life. They do not separate their faith from their business life. In fact, they have integrated the teachings of the faith into the operation of their business.

The Corporation and its Catholic family leadership asked the Federal Court to enjoin the Obama Administration from compelling them to comply with the HHS Mandate. They properly argued that to do so would force them to violate their deeply held religious beliefs. They sought what is called in the law an "injunction". It is an order of Court stopping enforcement. It is called an "extraordinary remedy" because the party seeking an injunction must show there will be irreparable harm if the Court does not intervene.

In the opinion the Judge noted that "Although Hercules is a for-profit, secular employer - the Newlands adhere to the Catholic denomination of the Christian faith. According to the Newlands, "they seek to run Hercules in a manner that reflects their sincerely held religious beliefs" The Court issued an Order enjoining the Obama Administration. The Order and opinion accompanying it can be read here. 

The opinion recognizes and explains the serious constitutional issues which are raised by the HHS mandate. It provides hope for all who are concerned about stopping the implementation. It also offers Catholics and other Christian businesses some guidance in their corporate formation, corporate governance and operation. For example, Senior Judge John L. Kane of the U.S. District Court for the District of Colorado noted in his opinion that:

"For or the past year and a half the Newlands have implemented within Hercules a program designed to build their corporate culture based on Catholic principles. Hercules recently made two amendments to its articles of incorporation, which reflect the role of religion in its corporate governance: (1) it added a provision specifying that its primary purposes are to be achieved by "following appropriate religious, ethical or moral standards, and"

"(2) it added a provision allowing members of its board of directors to prioritize those "religious, ethical or moral standards" at the expense of profitability. Furthermore, Hercules has donated significant amounts of money to Catholic organizations and causes. According to Plaintiffs, Hercules maintains a self-insured group plan for its employees "[a]s part of fulfilling their organizational mission and Catholic beliefs and commitments."

"Significantly, because the Catholic Church condemns the use of contraception, Hercules self-insured plan does not cover abortifacent drugs, contraception, or sterilization. Hercules' health insurance plan is not "grandfathered" under the ACA. Furthermore, notwithstanding the Newlands' religious beliefs, as a secular, for-profit corporation, Hercules does not qualify as a "religious employer" within the meaning of the preventive care regulations."

'Nor may it seek refuge in the enforcement "safe harbor." Accordingly, Hercules will be required to either include no-cost coverage for contraception in its group health plan or face monetary penalties. Faced with a choice between complying with the ACA or complying with their religious beliefs, Plaintiffs filed the instant suit challenging the women's preventive care coverage mandate as violative of RFRA, the First Amendment, the Fifth Amendment, and the Administrative Procedure Act. Believing the alleged injury to their constitutional and statutory rights to be imminent, Plaintiffs filed the instant Motion for Preliminary Injunction."

"Absent injunctive relief, Plaintiffs will be required to provide FDA-approved contraceptive methods, sterilization procedures, and patient education and counseling for women with reproductive capacity as part of their employee insurance plan. Per the terms of the preventive care coverage mandate, that coverage must begin on the start date of the first plan year following the effective date of the regulations, November 1, 2012.

"Defendants (The Government) argue this harm, three months in the future, is not sufficiently imminent to justify injunctive relief. In light of the extensive planning involved in preparing and providing its employee insurance plan, and the uncertainty that this matter will be resolved before the coverage effective date, Plaintiffs have adequately established that they will suffer imminent irreparable harm absent injunctive relief. This factor strongly favors entry of injunctive relief."

When I was engaged in the private practice of law I advised faith based businesses to draft their articles of incorporation or articles of organization - as well as their by laws or operating agreements - in a manner which reflected their mission and the connection between their faith and their business. I did so for many reasons. Some other lawyers I knew insisted it was unnecessary. I disagreed. Now, after this opinion, it becomes eminently clear that in a culture growing increasingly hostile to the Christian faith, such a practice is not only a good witness to the faith it is a defensive move.  

While we were all expecting the first victory against the unconstitutional HHS mandate to come in one of the many lawsuits filed on behalf of Colleges, Dioceses or other Church related non-profits, we were surprised when the victory came on another front. The lawyers of the Alliance Defending Freedom succeeded in obtaining the first order against the HHS mandate for a for profit business run by a Catholic family courageously living their faith in a true unity of life! 

Matt Bowman and the Alliance Defending Freedom are both to be commended. Matt Bowman expressed his pleasure in these words from the organizations press Release:

"Every American, including family business owners, should be free to live and do business according to their faith. For the time being, Hercules Industries will be able to do just that. The cost of freedom for this family could be millions of dollars per year in fines that will cripple their business if the Obama administration ultimately has its way. This lawsuit seeks to ensure that Washington bureaucrats cannot force families to abandon their faith just to earn a living. Americans don't want politicians and bureaucrats deciding what faith is, who the faithful are, and where and how that faith may be lived out."

---

'Help Give every Student and Teacher FREE resources for a world-class Moral Catholic Education'

Copyright 2021 - Distributed by Catholic Online