PHILADELPHIA — The Third Circuit Court of Appeals, in a 2-1 decision, ruled that the Conestoga Wood Specialties Corp. must comply with the federal contraception mandate and cover co-pay-free Plan B and Ella in its employee health plan.

The Third Circuit’s ruling in the closely watched case, one of about 30 legal challenges to the Health and Human Services’ mandate filed by for-profit employers, increases the likelihood that the U.S. Supreme Court will ultimately rule on this issue.

The 10th Circuit had already decided that another legal challenge filed by Hobby Lobby, a craft-store chain, would likely win on the merits and ordered a lower court to approve a restraining order that protected the company from massive penalties it would incur for refusing to comply with the federal law.

The split decision, said legal experts, means that the high court will be under pressure to clarify whether free exercise rights protected under the federal Religious Freedom Restoration Act apply to religious nonprofits as well as businesses like Conestoga, which is wholly owned by the Hahns, a Mennonite family. Lancaster Online, a local news site, reported that the cabinet-making company was presently providing the drugs in order to avoid financial penalties of $95,000 a day.

Kyle Duncan, general counsel of the Becket Fund for Religious Liberty, the public interest group that represents Hobby Lobby, noted the dueling judicial rulings and predicted that other HHS for-profit cases before the Sixth and Seventh Circuits that await review would "deepen the split decision. We expect the Justice Department would seek review of  Hobby Lobby, by September at the latest," Duncan told the Register.

The Becket Fund also represents EWTN in its legal challenge to the HHS mandate. The Register is a service of EWTN.

The Third Circuit ruling was a victory for the Obama administration, which has consistently argued that for-profit employers have no religious-freedom protections.

"Since Conestoga is distinct from the Hahns, the mandate does not actually require the Hahns to do anything," stated Third Circuit Judge Robert Cowen, in his majority opinion that echoed the administration’s position.

"It is Conestoga that must provide the funds to comply with the mandate — not the Hahns."

Judge Cowen noted that the court did not question the sincerity of the Hahns’ objections to the mandate.

"We accept that the Hahns sincerely believe that the termination of a fertilized embryo constitutes an intrinsic evil and a sin against God, to which they are held accountable, and that it would be a sin to pay for or contribute to the use of contraceptives which may have such a result," read the majority opinion.

"We simply conclude that the law has long recognized the distinction between the owners of a corporation and the corporation itself," the ruling continued.

Dueling Rulings

University of Virginia law professor Douglas Laycock, an expert on religious-freedom issues, agreed that the dueling appellate rulings made it more likely that the high court would hear the case. But he disputed the Third Circuit’s refusal to consider religious exemptions for businesses.

"The court failed to take the Religious Freedom Restoration Act seriously. Congress plainly understood RFRA to apply to for-profit corporations," Laycock told the Register, while noting that the courts would likely distinguish between the merits of First Amendment cases brought by family-owned businesses and large, publicly held corporations.

"‘How big is too big?’ is a serious question. But the court’s holding that no for-profit corporation can ever be protected by RFRA is simply inconsistent with what Congress enacted," said Laycock.

Alliance Defending Freedom’s Matt Bowman, who has joined the team defending Conestoga, told the Register that the Third Circuit’s decision "declares that families are not allowed to exercise religion in their business companies, and that is incompatible with religious freedom in the Constitution."

HHS Arguments Targeted

The Hahn family has strongly objected to the federal mandate’s requirement that it cover "abortifacient" drugs in its employee health plan. And in his 34-page dissent, Third Circuit Judge Kent Jordan took aim at the Obama administration’s counsel, who, in oral arguments, sought to characterize "abortifacient" as a purely "theological term."

Judge Jordan stated that the administration’s legal argument "must come as a surprise to the editors of dictionaries that include entries like the following: ‘abortifacient [MED]: any agent that induces abortion.’"

"The government evidently would like to drain the debate of language that might indicate the depth of feeling the Hahns have about what they are being coerced to do," stated Judge Jordan.

"Don’t let anything that sounds like ‘abortion’ come up, lest the weight of that word disturb a happily bland consideration of corporate veils and insurance contracts. Like it or not, however, big issues — life and death, personal conscience, religious devotion, the role of government and liberty — are in play here," the judge said.

His dissent challenged the administration’s effort to block statutory protections for businesses.

Said Jordan, "The government takes us down a rabbit hole where religious rights are determined by the tax code, with nonprofit corporations able to express religious sentiments, while for-profit corporations and their owners are told that business is business and faith is irrelevant.

"Meanwhile, up on the surface, where people try to live lives of integrity and purpose, that kind of division sounds as hollow as it truly is."

Church Supports Plaintiffs

Archbishop William Lori of Baltimore, the U.S. bishops’ point man on religious-freedom issues, noted the broad effort to downplay the moral concerns of all plaintiffs involved in HHS mandate cases, not only in the administration’s arguments included in legal briefs, but also in media commentary.

"The New York Times ran stories that tried to convince us that these drugs are not abortifacient," said Archbishop Lori during a July 30 interview with the Register.

"The Church’s teaching is not a matter of dogma or sectarian doctrine; it is based entirely on reason. It is a well-accepted medical definition. The Church’s teaching is eminently reasonable, and the attempt to put it in a theological box is intellectually dishonest, in my opinion."

The U.S. bishops have consistently defended the right of businesses that oppose the federal mandate to secure religious exemptions that would shield them from any financial penalties for non-compliance.

The Pennsylvania-based Conestoga Corp., which employs 950 people, has not been able to secure a reprieve and chose to provide the drugs in its health plan, while Hobby Lobby, like the majority of for-profit HHS mandate plaintiffs, has secured an injunction that will shield the company from penalties that will be triggered after the company updates its health benefits.

While some critics within the Church have questioned whether the U.S. bishops should defend the religious freedom of for-profit employers opposed to the mandate, Archbishop Lori expressed the hope that other businesses "will show the kind of courage and tenacity that Hobby Lobby has manifested. At the end of the day, our hope is that these cases will ripen and make their way to the Supreme Court."

He noted that, within the Church, "there is a fairly broad consensus that religious liberty first and foremost adheres in the individual before it adheres in the institution. The right of individuals to bring their faith to the marketplace is well established in Dignitatis Humanae. Almost all bishops that I know of look with great admiration at the efforts of these for-profits to defend their religious liberty."

The Bishops’ Next Step

The U.S. Conference of Catholic Bishops is still fully engaged in defending the right of Catholic social agencies, universities and hospitals to secure a full exemption from the mandate. The U.S. bishops are clearly dissatisfied with the finalized "accommodation" for non-exempt religious nonprofits, but they have yet to outline their plans for the future — beyond the legal challenges that have already been filed and are slowly moving through the courts.

Said Archbishop Lori, "We are in the middle of working on our next step, and you will hear about that soon."