It’s not a church, and it’s not a religious charity or educational organization. It’s a business. And under a federal rule that took effect Aug. 1, its employee health-insurance plan must cover certain preventive care for women — including contraception, sterilization and certain drugs that can cause early abortions.
But that requirement presents a moral dilemma for the owners of Hercules Industries, a Colorado business owned by a Catholic family. Hercules could comply, but doing so would be a violation of conscience for the owners. Or it could fail to comply, which would lead to heavy fines for the company.
Just days before Aug. 1, however, Hercules was granted a preliminary injunction, allowing it to take its case forward and challenge the Department of Health and Human Services’ so-called “contraception mandate.”
And that has given hope to private companies and religiously affiliated employers concerned with religious liberty.
“We’re very pleased the judge recognized that religious freedom applies to families and their activities in business and that a mandate that violates religious freedom cannot be imposed against faithful Christian believers,” said Matt Bowman, legal counsel for Alliance Defending Freedom, a coalition of Christian attorneys. Alliance Defending Freedom was formerly called the Alliance Defense Fund.
The July 27 court order halts the HHS mandate for Hercules Industries while the lawsuit is pending. “In the meantime, these bureaucrats in Washington can’t decide what faith is or who the faithful are,” Bowman said.
Archbishop William Lori of Baltimore, chairman of the U.S. Conference of Catholic Bishops’ Ad Hoc Committee on Religious Liberty, commented, “The Colorado case is very positive news. The issue hasn’t been fully decided, but it’s heading in the right direction. We are delighted that it pertained to a private Catholic employer.”
Judge John Kane of the U.S. District Court of Colorado wrote in his ruling that the federal government’s arguments in Newland v. Sebelius — that it had a public-health interest to compel private companies to offer birth-control services — are “countered, and indeed outweighed, by the public interest in the free exercise of religion.”
“On balance, the threatened harm to plaintiffs, impingement of their right to freely exercise their religious beliefs and the concomitant public interest in that right strongly favor the entry of injunctive relief,” Kane wrote.
The judge also said that the government’s lawyers had not proven that Health and Human Services had taken less-restrictive means of ensuring access to all Food and Drug Administration-approved forms of birth control rather than mandating that all employer-provided health-insurance plans provide those services.

Far From Settled
The government’s arguments that allowing exemptions for private companies like Hercules Industries — which manufactures and distributes heating, ventilation and air conditioning products — would cripple the HHS birth-control statutory scheme was undermined by the exemptions already granted to some religiously affiliated employers, employers with grandfathered health-insurance plans and temporary exemptions for some nonprofits.
“The government has exempted over 190 million health-plan participants from the preventive-care coverage mandate; this massive exemption completely undermines any compelling interest in applying the preventive-care coverage mandate to (Hercules),” Kane wrote.
Hercules Industries would have been required to start offering birth-control services as soon as their health-insurance plan was up for renewal after Aug. 1, which is the effective date for all non-exempt organizations to comply with the mandate. Some religiously affiliated institutions, such as hospitals and universities, have been given until August 2013 to find an accommodation with the federal government.
Hercules owners William Newland, Paul Newland, James Newland and Christine Ketterhagen, the company’s vice president, endeavor to run their company in a manner that reflects their Catholic faith. The family said in court filings that it has implemented a program to build a corporate culture based on Catholic principles, with a directive that board members prioritize religious, ethical and moral considerations above profitability.
Kane’s injunction allows Hercules to keep its current self-insured employee health plan — which does not cover birth control — while the lawsuit is pending. However, the issue remains far from settled. While sounding a skeptical note, the judge said the government may still present arguments to justify that its mandate regarding for-profit businesses like Hercules does not violate religious liberty and that it is also the least-restrictive means in furthering a “compelling interest.”
The federal government presents the HHS mandate as a means to improve the health and well-being of women and children by guaranteeing “preventive care” for women so that they are on an equal footing with men in the workplace. The government argued that private businesses are not engaged in any exercise of religion protected by the First Amendment.
The Department of Health and Human Services provided the following statement from HHS Secretary Kathleen Sebelius:
“We are disappointed with the court’s decision to preliminarily enjoin application of part of the women’s preventive-services policy to this particular for-profit company in Colorado. This lawsuit was not brought by a religious organization. Rather, it was brought by a for-profit commercial enterprise whose purpose is to sell HVAC equipment. We are confident that as this case moves through the courts, the policy that most health-insurance plans cover contraception will be upheld. Preventive services are critical to women’s health, and the administration is committed to ensuring women have access to the health care they need, regardless of where they work. Health decisions should be between women and their doctors, not their employers.”
Deeper questions of the HHS mandate’s relationship to religious freedom also remain largely unanswered. Kane said the arguments thus far in the Newland case raise issues such as whether corporations can exercise religion and whether small, private companies operated by people of faith can be treated differently than large, publicly traded companies.
“These questions merit more deliberate investigation,” Kane said.

Victorious Mood
In the meanwhile, though, Catholic organizations and legal groups still battling the HHS mandate — there are currently 22 pending federal lawsuits nationwide — are declaring a victory in Kane’s injunction.
Maureen Ferguson and Ashley McGuire of The Catholic Association, an organization that seeks to represent Catholic principles in the public square, hailed Kane’s ruling as “an encouraging, great first step in the restoration of religious freedom in America.”
Ferguson and McGuire said: “Conscience rights are not the property of government. The Constitution protects the right of every American, including those who run a family business, to act as Catholics, not simply pray as Catholics.”
Christen Varley, executive director of Conscience Clause, a nonpartisan advocacy group, said Kane’s ruling was a “tremendous victory for religious freedom” and sent a message that the “first phase of this attack on religious liberty ... will not stand.”
The Becket Fund for Religious Liberty, which is representing clients in at least four pending lawsuits challenging the mandate — including one by EWTN, the parent company of the Register — said Kane got the law right.
“This decision portends the demise of the current administration’s attempts to drive religious activity from the public square and confine it within the four walls of a church,” said Hannah Smith, senior counsel at the Becket Fund.
Kane’s ruling also provided an opening for former Massachusetts Gov. Mitt Romney, the presumptive Republican presidential nominee, to declare that freedom of conscience had won an important victory.
“But it is only a step, not the end of the struggle. We must ensure that freedom to live according to one’s faith is available to all Americans,” said Romney, who vowed to “never cease fighting” for conscience rights if he is elected.
Bowman said he expects the government may appeal Kane’s injunction. Otherwise, the lawsuit will proceed, with the question of religious freedom hanging in the balance: “For now, the (injunction) means the family and their business do not have to choose between their faith and severe penalties under Obamacare — at least while this case is pending.”
 

Brian Fraga writes from
El Paso, Texas.