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Sharpe Holdings, Inc. v. United States Department of Health and Human Services

United States District Court, E.D. Missouri, Northern Division

March 28, 2018

SHARPE HOLDINGS, INC., et al., Plaintiffs,



         This action is before the court on the motion of plaintiffs CNS International Ministries (CNS) and Heartland Christian College (HCC) for permanent injunction and declaratory relief following remand from the United States Court of Appeals for the Eighth Circuit and the United States Supreme Court. (Doc. 138). For the reasons set forth below, plaintiffs' motion is granted. An appropriate Judgment Order is entered herewith.


         This action was commenced on December 20, 2012, by certain individual and corporate for-profit plaintiffs against the Department of Health and Human Services (HHS), the Secretary of HHS, the Department of the Treasury, the Secretary of the Treasury, the Department of Labor, and the Secretary of Labor. These plaintiffs claim the Affordable Care Act's[1] contraceptive mandate violates the Religious Freedom Restoration Act (RFRA); the Free Exercise and Establishment Clauses of the First Amendment to the Constitution of the United States; plaintiffs' freedoms of speech and association guaranteed by the First Amendment; and the Administrative Procedures Act, 5 U.S.C. § 706(2).[2] They sought a declaration from the court that the ACA's contraceptive mandate and its enforcement violate the First Amendment, the Fifth Amendment, RFRA, and the APA. They also sought an order prohibiting the enforcement of the mandate against them and moved for a temporary restraining order and a preliminary injunction on December 20, 2012. This court issued a temporary restraining order on December 31, 2012, and then a preliminary injunction on June 28, 2013.

         Plaintiffs then amended their complaint to add CNS and HCC, both non-profit organizations and the current movants, as plaintiffs on December 4, 2013. The temporary restraining order and the preliminary injunction were expanded to include these plaintiffs on December 30, 2013, a decision defendants appealed as to CNS and HCC in February 2014.

         New decisions by the United States Supreme Court and changing regulations necessitated supplemental briefing and letters to the United States Court of Appeals for the Eighth Circuit. (Doc. 144 at 7). On September 17, 2015, that Court affirmed this Court's decision in favor of CNS and HCC. Sharpe Holdings, Inc. v. Dept. of Health and Human Serv., 801 F.3d 927 (8th Cir. 2015). This created a split in the circuits, and the Supreme Court granted petitions for certiorari brought by other religious claimants in similar cases on November 6, 2015. Defendants filed their petition for a writ of certiorari on December 15, 2015, which the Supreme Court granted on June 16, 2016, vacating the Eighth Circuit's decision and remanding for further proceedings. It vacated all of the circuits' decisions on this issue, and it required the parties find an alternative solution to the problematic “augmented accommodation” in place at the time. Zubik v. Burwell, 136 S.Ct. 1557, 1560 (2016). On June 22, 2016, pursuant to the Zubik opinion, the Court of Appeals vacated its September 17, 2015 opinion and reopened the case.

         On October 6, 2017, the government issued new interim final rules (new IFRs) that greatly expanded the scope of permissible religious objections to the contraceptive mandate. Accordingly, on October 13, 2017, defendants dismissed their appeal. On November 17, 2017, plaintiffs moved for a permanent injunction from this court. Defendants objected on December 8, 2017, asserting that the new IFRs rendered the matter moot and that a permanent injunction was therefore inappropriate.

         On December 15, 2017, the United States District Court for the Eastern District Court of Pennsylvania issued a preliminary injunction barring the application of the new IFRs. Pennsylvania v. Trump, 281 F.Supp.3d 553 (E.D. Pa. 2017) On December 21, 2017, the United States District Court for the Northern District of California followed suit. California v. Health and Human Services, 281 F.Supp.3d 806 (N.D. Cal. 2017). On December 22, 2017, in the case at bar, the government subsequently dropped its mootness challenge, declined to advance any substantive defense of the “augmented accommodation, ” and adopted no position as to the appropriateness of permanent injunctive relief in this case. (Doc. 152 at 2).


         In Zubik, the Supreme Court directed that “the parties on remand should be afforded an opportunity to arrive at an approach going forward that accommodates petitioners' religious exercise while at the same time ensuring that women covered by petitioners' health plans ‘receive full and equal health coverage, including contraceptive coverage.'” Zubik, 136 S.Ct. at 1560. Shortly thereafter, the government expressed its opinion that: “there [is] ‘no feasible approach . . . at this time that would resolve the concerns of religious objectors, while still ensuring that the affected women receive full and equal health coverage, including contraceptive coverage.'” California, 281 F.Supp.3d at 818 (quoting Department of Labor, FAQs about Affordable Care Act Implementation Part 36 (Jan. 9, 2017)). Insofar as the new IFRs are now presented as the government's position, they are presently enjoined from enforcement by District Courts in Pennsylvania and California. See Pennsylvania, 281 F.Supp.3d at 585; California, 281 F.Supp.3d at 832.

         Thus, the parties before this Court are “[returned] to the state of affairs before October 6, 2017 . . . the exemption and accommodation as they existed following the Zubik remand remain in effect, as do any court orders enjoining Defendants from enforcing those rules against specific plaintiffs.” California, 281 F.Supp.3d at 832-33; see also Pennsylvania, 281 F.Supp.3d at 585 (“A preliminary injunction will maintain the status quo: those with exemptions or accommodations prior to October 6, 2017 will maintain their status, those with injunctions preventing enforcement of the Contraceptive Mandate will maintain their injunctions, but those with coverage will maintain their coverage as well.”).

         This Court is mindful of the Supreme Court's statement that it:

expresses no view on the merits of the cases. In particular, the Court does not decide whether petitioners' religious exercise has been substantially burdened, whether the Government has a compelling interest, or whether the current ...

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