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The Supreme Court's Hobby Lobby decision continues to spawn plenty of litigation

November 5, 2015 | Peter Hoffman

In the case of Sharpe Holdings, Inc., et. al. v. U.S. Department of Health and Human Services, the U.S. Circuit Court of Appeals for the Eighth Circuit upheld a preliminary injunction issued by the U.S. District Court for the Eastern District of Missouri, which enjoined the government from enforcing certain provisions of the Affordable Care Act against two nonprofit religious organizations that offer health care coverage to employees through a self- insured plan.

CNS International Ministries, Inc. (CNS) and Heartland Christian College (HCC) are nonprofit religious organizations offering health care coverage to employees through a self-insured plan. Both organizations strive “to promote certain moral and ethical standards in their employees including …a belief in the sanctity of life which precludes abortion on demand.” In accordance with their sincerely held religious beliefs, CNS and HCC oppose abortion on demand. The two organizations contended that certain contraceptives required under the contraceptive mandate of the Affordable Care Act were functionally equivalent to abortion on demand.

They filed suit against the government, claiming that the Religious Freedom Restoration Act of 1993 (RFRA) prohibited the government from imposing a substantial burden on their exercise of religion. The District Court, had granted a preliminary injunction in favor of the two religious organizations, on their claim that the government was coercing them to violate their religious beliefs by threatening to impose severe monetary penalties unless they either directly provided coverage for objectionable to them contraceptive methods or indirectly provided the objectionable coverage through a Health and Human Services notice accommodation process.

The Eighth Circuit first noted that the district court has broad discretion when ruling on a request for a preliminary injunction, and that an appeals court could reverse the decision only on an abuse of discretion. The Court of Appeals utilized the substantial-burden test identified in Burwell v. Hobby Lobby, 134 S. Ct. 2751 (2014) and determined that the government requirement that the two religious organizations fill out notification forms to opt out of providing insurance coverage imposed a substantial burden on their exercise of religion. It should be pointed out, however, that the Court of Appeals itself said that only a minimal record had so far been developed because of the procedural stage at which the case had been appealed.

The case has been sent back to the District Court for further proceedings.

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About Employment & Labor Law Blog

The BSCR Employment & Labor Law Blog examines topics and developments of interest to employers, Human Resources professionals, and others with an interest in recent legal developments concerning the workplace. This blog will focus on Missouri and Kansas law, and on major developments under federal law, and at the EEOC and NLRB.  Learn more about the editor, David M. Eisenberg, and our Employment & Labor  practice.

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