Court: No religious freedom for businesses

The 6th U.S. Circuit Court of Appeals ruled against a Catholic business challenging the contraceptive mandate on Tuesday, the second time this particular court has said “no” to religious businesses challenging the mandate.

The circuit court ruling underscores the division between appeals courts on this question of applying religious freedom protection to for-profits, and makes a U.S. Supreme Court review all the more likely. The 6th Circuit also ruled against Eden Foods in a similar case at the end of June, although the ruling came from different judges.

In this case, the Catholic owners of Autocam, a large manufacturing business based in Michigan with 661 U.S. employees and more abroad, challenged the mandate as a violation of their religious freedom. The owners, the Kennedy family, said in the suit that their faith compels them to provide health insurance to their employees, but also forbids coverage for contraceptives or abortion-inducing drugs.

The 6th Circuit in its ruling acknowledged that “our sister circuits … have split on the proper answer to the question.” The court said the Catholic family members did not have standing to sue, since the mandate applied to their business and not to them personally. The court said the business itself had standing to sue, but ruled that businesses do not have religious freedom protections. It noted that this is a new question for the courts—in legalese, a matter of “first impression.”

The Kennedys made a choice “to create a separate legal entity to operate their business,” the court said. “The Kennedys’ actions with respect to Autocam are not actions taken in an individual capacity, but as officers and directors of the corporation. … The decision to comply with the mandate falls on Autocam, not the Kennedys.”

And the court added that it found no hard evidence that corporations have rights under the Religious Freedom Restoration Act (RFRA).

“Looking to RFRA’s relevant context, we find strong indications that Congress did not intend to include corporations primarily organized for secular, profit-seeking purposes as ‘persons’ under RFRA,” the court ruled. “Congress did not intend to expand the scope of the Free Exercise Clause.”

Lawyers for the Kennedys argued that their corporation should have First Amendment protections in part based on the Supreme Court’s Citizens United ruling. But the circuit court wasn’t buying it: The judges said Citizens United only applied to free speech, not to free exercise of religion.

Autocam has estimated that if it does not comply with the mandate, it faces fines of $19 million a year.