Case 5:14-cv-00685-R Document 1 Filed 07/01/14 Page 1 of 80

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA

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THE CATHOLIC BENEFITS

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ASSOCIATION LCA; THE

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CATHOLIC INSURANCE

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COMPANY, INC.

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Plaintiffs,

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v.

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SYLVIA M. BURWELL, Secretary of )

the United States Department of Health ) Civil Case No. _______________

and Human Services; UNITED STATES )

DEPARTMENT OF HEALTH AND )

HUMAN SERVICES; THOMAS E.

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PEREZ, Secretary of the United States )

Department of Labor; UNITED

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STATES DEPARTMENT OF LABOR; )

JACOB J. LEW, Secretary of the United )

States Department of the Treasury;

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UNITED STATES DEPARTMENT OF )

THE TREASURY

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Defendants.

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VERIFIED COMPLAINT Plaintiffs THE CATHOLIC BENEFITS ASSOCIATION LCA, a nonprofit Oklahoma limited cooperative association, on behalf of itself and its members, and THE CATHOLIC INSURANCE COMPANY, an Oklahoma corporation, on behalf of itself and its insureds, by their attorneys, allege:

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I. NATURE OF THE ACTION 1. This case is about our country’s most cherished freedoms: the freedom to
exercise one’s religion according to the dictates of conscience and to be free of government establishment or favor of one religion over another. Conscience is the source of the dignity of humankind. It is the most distinctive aspect of humanity. This is why James Madison called it “a fundamental and undeniable truth, that Religion or the duty which we owe to our Creator and the manner of discharging it, can be directed only by reason and conviction, not by force or violence.” James Madison, Memorial and Remonstrance (circa June 20, 1785). Those words resonate today as they did in 1785. Defendants here, federal agencies and their officers, seek to coerce Plaintiffs’ members and insureds into supporting practices—contraception, abortion, sterilization, and related counseling—that they find morally abhorrent and that violate their sincerely held religious beliefs. Faced with the prospect of ruinous fines if they do not comply with the government’s mandate, Plaintiffs ask this Court to enjoin Defendants, and declare and secure to Plaintiffs, their members and insureds, and their contracting providers that which the Constitution and laws have long guaranteed: the right to exercise their religion free of government control, to be free of the selective burdens this administration has imposed on their practices, to proclaim their convictions freely, to associate with others, particularly their co-religionists, in defense of their liberty; and to hold the government to its most fundamental charge, obedience to the rule of law.
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2. Plaintiff The Catholic Benefits Association, LCA (“Association”) is an association of Catholic employers who currently provide health benefits to their employees through insured group health plans or self-funded plans.
3. The Association brings this action on behalf of a subset of its members consisting of all members who joined the Association after June 4, 2014 (the “PostInjunction Members”). At times herein, Plaintiffs may refer to a seemingly broader category of Association members, such as “Group II Members.” Where such a term appears, Plaintiffs intend for it to be read as restricted to Post-Injunction Members that fall into the stated category, unless context dictates otherwise.
4. Some of the Post-Injunction Members desire to provide health benefits to their employees through individual self-funded plans and to purchase stop-loss insurance coverage from Plaintiff The Catholic Insurance Company (“Insurance Company”). These Post-Injunction Members plan to implement this insurance arrangement upon completion of their current plan years and successful resolution of this lawsuit.
5. All Post-Injunction Members are Catholic organizations and, as part of their religious witness and exercise, are committed to providing no healthcare benefits to their employees inconsistent with Catholic teaching. According to Catholic teaching, such benefits must not include any artificial interference with the creation and nurture of new life, specifically contraception, abortion-inducing drugs and devices, surgical abortion, sterilization, and related counseling. Such is contrary to Catholic teaching and, thus, to Plaintiffs’ and the Post-Injunction Members’ sincerely held religious beliefs.
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6. Because their faith forbids it, the Post-Injunction Members’ health plans do not cover contraception, abortion-inducing drugs or devices, sterilization, and related counseling (“CASC Services”).
7. Defendants have promulgated a series of rules that burden the PostInjunction Members’ sincerely held religious beliefs. These rules (collectively, the “Mandate”) require the Post-Injunction Members to provide, pay for, or otherwise directly or indirectly facilitate access to CASC services for their employees.
8. The Post-Injunction Members cannot provide, pay for, or directly or indirectly facilitate access to CASC services without violating the teachings of the Catholic Church. If the Post-Injunction Members fail to comply with the Mandate, however, they face ruinous fines of up to $36,500 per affected beneficiary per year, in addition to other penalties.
9. Defendants have thus put the Post-Injunction Members to a damnable choice: comply with the Mandate and abandon their religious beliefs, or defy the Mandate and face crippling fines and other penalties. The Post-Injunction Members are forced to choose between following the dictates of their conscience or caving to the diktat of the government. Compliance means material cooperation with evil. Defiance means devastating consequences.
10. The Mandate also impermissibly coerces the Association and the Insurance Company. The Association and the Insurance Company exist to enable member employers to provide morally compliant health benefits to their employees and plan
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participants, and to provide an effective vehicle for protection of members’ shared interests. But the Mandate makes the mission of the Association and the Insurance Company effectively illegal by preventing Association members from cooperating with the Insurance Company and its third party administrator to provide morally compliant health benefits to employees and plan participants.
11. Federal law prohibits the government from putting Plaintiffs and the PostInjunction Members to this choice. The Religious Freedom Restoration Act (“RFRA”), 42 U.S.C. § 2000bb-1(b), prohibits the government from substantially burdening a person’s exercise of religion unless the government can demonstrate that application of the burden to that person is in furtherance of a compelling governmental interest and is the least restrictive means of achieving it. The government cannot meet that standard here. The Mandate likewise violates the Free Exercise, Establishment, and Free Speech Clauses of the First Amendment and the Administrative Procedure Act, 5 U.S.C. § 551 et seq. (“APA”).
12. Some of the Post-Injunction Members are in need of emergency relief from this Court because the Mandate will take effect against them on July 1, 2014, the anniversary of their plan years.
13. Upon completion of their current plan years, many Post-Injunction Members intend to explore remaining or becoming self-funded and contracting with the Insurance Company for stop-loss insurance coverage. Such an arrangement will permissibly avoid state insurance mandates but not the federal Mandate or its effects.
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Thus, whether or not the Post-Injunction Members choose to arrange insurance through the Insurance Company, these members’ plans will exclude or continue to exclude coverage of CASC services only if they acquire the relief sought in this action.
14. Plaintiffs seek a declaration that the Mandate cannot legally be applied to them or the Post-Injunction Members. Plaintiffs also seek an injunction barring its enforcement against them and the Post-Injunction Members. II. GENESIS OF THIS LAWSUIT
15. On March 12, 2014, the Association, the Insurance Company, and several Association members filed a substantially similar action in this Court against these same Defendants, seeking to enjoin the Mandate (“CBA I”). Plaintiffs in CBA I (“CBA I Plaintiffs”) filed that day their Verified Complaint, Motion for Preliminary Injunction, and Brief in Support of Motion for Preliminary Injunction. CBA I Plaintiffs sought relief on behalf of themselves and all others similarly situated. In addition, the Association sought relief on behalf of its present and future members.
16. On June 4, 2014, this Court granted some CBA I Plaintiffs some of the preliminary injunctive relief they requested. See Order, The Catholic Benefits Ass’n v. Sebelius, No. 5:14-cv-00240-R (W.D. Okla. June 4, 2014) [hereinafter “PI Order”]. The Court concluded, among other things, that (1) the Association “possesses associational standing to pursue its members’ claims,” id. at 9; (2) that the Association’s “Group II Members” and “Group III Members” were or would be substantially burdened by the Mandate, id. at 13 n.10, 16; and (3) that, under Hobby Lobby Stores, Inc. v. Sebelius, 723
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F.3d 1114 (10th Cir. 2013), the Mandate could not satisfy strict scrutiny under RFRA, see id. at 13. The Court therefore granted preliminary injunctive relief to the Association’s Group II and Group III Members.
17. The Court nonetheless concluded that the Insurance Company lacked standing. See id. at 11. The Court also ruled that the Association’s “Group I Members” were not entitled to preliminary injunctive relief because they are exempt from the Mandate; in the Court’s view, the Mandate “ask[ed] nothing of” Group I Members. See id. at 14-15.
18. The Court held that preliminary injunctive relief extended “to all present members of the [Association] that fit within Groups II and III.” Id. at 19. The Court was “satisfied” that the Association’s tests for membership “have ensured the uniformity of belief among the current Group II and Group III members to which this preliminary relief will extend.” Id. at 20 n.16. Nonetheless, the Court refused to extend this relief to future members of the Association, concluding that “it is too difficult for the Court to presently determine whether these future members are entitled to relief.” Id. at 20 (emphasis added).
19. On the date the Court entered its PI Order (June 4, 2014), the Association had over 400 member employers, plus over 2,000 Catholic parishes that were and still are members of the Association.
20. On June 18, 2014, the Association filed a Motion to Amend Preliminary Injunction in CBA I, requesting that this Court amend its PI Order “to include those
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Catholic employers who joined the Association after June 4, 2014[,] and are now ‘current members.’” Motion to Amend Preliminary Injunction at 1, The Catholic Benefits Ass’n v. Sebelius, No. 5:14-cv-00240-R (W.D. Okla. June 18, 2014) [hereinafter “Motion to Amend PI”]. The Association noted that, from the time the Court issued its PI Order until the time the Association filed its Motion to Amend, three new Catholic employers had joined the Association under identical membership criteria and were “identically situated to the Association’s pre-June 4 members in all relevant aspects.” Id. at 1. The Association also “anticipate[d] that it will receive more applications and accept more members before the end of June and in the months ahead.” Id. at 3-4.
21. Most importantly, the Motion to Amend PI informed the Court that “[a]ll three new current members are in acute need of relief, as they will be subject to the Mandate as of July 1[, 2014].” Id. at 4 (emphasis added). They still have this acute need.
22. Defendants opposed the Motion to Amend PI in CBA I, even though Defendants readily consented to similar relief in a substantially similar case in this Court, Reaching Souls International, Inc. v. Sebelius, 2013 WL 6804259 (W.D. Okla. Dec. 27, 2013). There, GuideStone Financial Resources of the Southern Baptist Convention (“GuideStone”), a Protestant Evangelical organization, sought preliminary injunctive relief on behalf of a class consisting of employers that “have adopted or in the future adopt the GuideStone Plan to provide medical coverage for their employees.” Class Action Complaint, Reaching Souls International, Inc. v. Sebelius, No. CIV-13-1092-D (W.D. Okla. Oct. 11, 2013), available at http://www.becketfund.org/wp-
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content/uploads/2013/10/Reaching-Souls-Complaint.pdf (last visited June 26, 2014). Defendants “d[id] not object to the scope of the resulting preliminary injunction including the named plaintiffs as well as any members of the class plaintiffs have proposed in their complaint.” Reaching Souls, 2013 WL 6804259, at *1 (quotation omitted). Therefore, when this Court, through Judge Timothy D. DeGiusti, entered a preliminary injunction in the Reaching Souls case, injunctive relief extended to both present and future members of the GuideStone Plan. See id.
23. Defendants have never adequately explained to the Court why they consented to future-member relief in Reaching Souls but opposed substantially similar future-member relief requested by the Association in CBA I.
24. On June 26, 2014—a mere five days before the Mandate was scheduled to take effect against some of the Post-Injunction Members—the Court denied the Association’s Motion to Amend PI. See Order, The Catholic Benefits Ass’n v. Sebelius, No. 5:14-cv-00240-R (W.D. Okla. June 26, 2014) [hereinafter “Order Denying Motion to Amend”]. The Court reasoned that, when it entered the PI Order, it was “well aware of the possibility of the [Association] subsequently adding new members,” and it “decided not to extend the relief to future members of the [Association], which necessarily includes those entities that acquired membership in the [Association] even a few days after the Court’s entry of the preliminary injunction.” Id. at 3. Although the Motion to Amend PI explained that the Mandate was bearing down on new members and new members were in acute need of relief, the Court was “unpersuaded that there is any need to act in order to correct clear error or prevent manifest injustice.” Id. The Court
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concluded that new members were “not left without the means to protect their interests” because “they are free to seek their own relief.” Id.
25. Employers have continued to join the Association after June 4. From that date to the date of this filing, the CBA has accepted approximately 151 new member employers plus around 958 more parish employers. Each of these members satisfy the Association’s strict membership criteria, and pay or agree to pay the requisite dues and fees. These are the “Post-Injunction Members” referred to above.
26. Because the Post-Injunction Members were denied relief in CBA I and because some of the Post-Injunction Members are in need of immediate relief from the Mandate, which will (absent action by this Court) take effect against them on July 1, 2014, the Association has filed this action on behalf of the Post-Injunction Members. III. JURISDICTION AND VENUE
27. The Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1361 because this action arises under the Constitution and laws of the United States. The Court has jurisdiction to render declaratory and injunctive relief pursuant to 28 U.S.C. §§ 2201 and 2202, and 42 U.S.C. § 2000bb-1.
28. Venue lies in this district under 28 U.S.C. § 1391(e)(1). The Association is an organization incorporated under the laws of the State of Oklahoma, and it has standing to represent its members’ interests in this district. The Insurance Company resides in this district because it is an organization incorporated under the laws of the State of Oklahoma, and its principal place of business is here.
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29. Some of the Association’s officers, and one of its directors, reside in this district. The depositories and bank accounts of the Association and Insurance Company are located and maintained in this district. Member dues and fees are paid to the Association in this district and deposited with the Association’s and Insurance Company’s depository in this district.
30. In addition, a substantial part of the events or omissions giving rise to the claims occurred in this district. The Association has done significant work for its members in this district, and it is presently a plaintiff in a substantially similar case in this district (CBA I) in which its then-current members were granted preliminary injunctive relief. The present case arises out of both the Court’s refusal in CBA I to extend preliminary relief to the Association’s Post-Injunction Members and the Court’s express recognition that the Post-Injunction Members are “free to seek their own relief.” Also, the Insurance Company would be harmed by the application of the Mandate in this district because the Mandate prohibits it from participating in and providing morally compliant insurance arrangements for Association members.
IV. PARTIES A. Plaintiffs 1. The Catholic Benefits Association 31. The Catholic Benefits Association is an Oklahoma nonprofit limited
cooperative association. Its articles of organization state that it is organized “exclusively for religious, charitable, and educational purposes” that are “consistent with Catholic values, doctrine, and canon law.” Specifically, they state that the Association is
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organized “[t]o support Catholic employers . . . that, as part of their religious witness and exercise, provide health or other benefits to their respective employees in a manner that is consistent with Catholic values”; “[t]o work and advocate for religious freedom of Catholic and other employers seeking to conduct their ministries and businesses according to their religious values”; “[t]o make charitable donations to Catholic ministries”; and “[t]o incorporate . . . one or more Catholic insurance companies, in furtherance of the Association’s purposes.” See Articles of Organization of The Catholic Benefits Association LCA, art. IV, attached as Exhibit A.
32. The Most Reverend William E. Lori, Archbishop of Baltimore, is the Association’s incorporator.
33. All of the Association’s directors are Catholic archbishops. Three-fourths of its directors are required to be Catholic. See Bylaws of The Catholic Benefits Association LCA, art. 5.2, attached as Exhibit B.
34. All of the Association’s officers are Catholic.
35. The Association has a standing Ethics Committee, comprised exclusively of Catholic bishops. The Association’s bylaws state:
The Ethics Committee shall have exclusive authority to review all benefits, products, a nd serv ices provided b y th e Association, its af filiates or subsidiaries, or their r espective contract ors t o ensure such conf orm with Catholic values and doctrine. If they do not, the committee shall determine the necessary corrections to bring s uch benefits, products, and services into conformity with Catholic values and d octrine. The decisio n of the committee shall be f inal and b inding on t he Association, its board, and its officers . . . . Ex. B, art. 5.13.2.
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36. To be a member of the Association, an organization must meet these criteria, among others: (1) “[i]t shall be a Catholic employer,” and (2) “[w]ith regard to the benefits it provides to its employees, it shall, as part of its religious witness and exercise, be committed to providing no benefits inconsistent with Catholic values.” Ex. A, art. VI.
37. The Bylaws of the Association provide that “[a]n employer shall satisfy the requirement of being Catholic if either the employer is listed in the current edition of The Official Catholic Directory or the secretary or his or her designee makes such a determination.” Ex. B, art. III, § 3.1.1.
38. The Bylaws further provide that a for-profit employer seeking membership in the Association “shall be deemed Catholic only if (i) Catholics (or trusts or other entities wholly controlled by such Catholic individuals) own 51% or more of employer, (ii) 51% or more of the members of the employer’s governing body, if any, is comprised of Catholics, and (iii) either the employer’s owners or governing body has adopted a written policy stating that the employer is committed to providing no benefits to the employer’s employees or independent contractors inconsistent with Catholic values.” Ex. B, art. III, § 3.1.2.
39. All members of the Association meet the Association’s criteria for being Catholic.
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40. The Association has only one class of membership. However, and as a result of Defendants’ arbitrary classification scheme under the Mandate, the Association refers to its members as falling into three categories:
• Group I Members are Catholic employers (as defined in paragraph 37, supra) that meet Defendants’ definition of “religious employers” and are exempt from the Mandate.
• Group II Members are Catholic employers (as defined in paragraph 37, supra) that meet Defendants’ definition of “eligible organizations” for purposes of the “accommodation.”
• Group III Members are Catholic employers (as defined in paragraphs 37 and 38, supra) that do not fall into the previous two categories, a group composed largely, if not exclusively, of for-profit employers.
41. As of June 4, 2014—the date the Court issued a preliminary injunction in CBA I—the Association had 459 employer members, with substantial numbers in each of Groups I, II, and III. In addition, it had over 2,000 parish employer members.
42. As of June 30, the Association has around 570 employer members plus over 3,000 parish employer members, including over 150 Post-Injunction employer members plus over 950 Post-Injunction parish employer members.
43. To remain a member of the Association in good standing, an employer must pay certain membership dues and fees to the Association. These dues and fees depend on the number of “covered employees” in the member-employer’s health plan. As of June 30, 2014, a member with 1,000 covered employees in its health plan would pay annual dues and fees to the Association of approximately $18,000.
44. Several of these Post-Injunction Members, including the Roman Catholic Diocese of Norwich, it affiliates, and Catholic Charities and Family Services, Diocese of
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Norwich, have a pressing need for relief from the Mandate because their next plan year begins on July 1, 2014.
45. The Association has standing to represent all of its present and future members.
46. The Mandate harms the Association’s Post-Injunction Members. 47. The Association is seeking to protect Post-Injunction Members’ ability to access morally compliant health coverage for their respective employees or agents. 48. Neither the claims asserted nor the relief requested by the Association requires individualized proof. 49. The Association can adequately represent Post-Injunction Members’ interests. All Post-Injunction Members are similarly situated in that all are compelled by the Mandate either to pay for, provide, or directly or indirectly facilitate access to CASC services for their own employees or those of their affiliates in violation of their sincerely held Catholic beliefs.
2. The Catholic Insurance Company 50. The Catholic Insurance Company is a Catholic for-profit insurance company, incorporated in Oklahoma and operating with its principal office in Oklahoma City. 51. The Insurance Company “at all times act[s] in a manner consistent with Catholic values, doctrine, and canon law, including supporting Catholic employers . . . that, as part of their religious witness and exercise, provide health or other benefits to
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their respective employees in a manner that is consistent with Catholic values.” Certificate of Incorporation of the Catholic Insurance Company, art. IV, attached as Exhibit C; see also Bylaws of the Catholic Insurance Company, Inc., art. 3.1, attached as Exhibit D.
52. The Association owns 100 percent of the Insurance Company’s stock.
53. All of the Insurance Company’s directors are Catholic archbishops.
54. All of the Insurance Company’s officers are Catholic.
55. The Insurance Company “is organized and authorized to provide, in a manner consistent with Catholic values, doctrine, and canon law, . . . stop loss insurance providing protection to employers that are Members . . . of The Catholic Benefits Association. . .” Ex. C, art. IV.
56. The Insurance Company has a standing Ethics Committee, comprised exclusively of Catholic bishops. Its bylaws state:
The Ethics Committee of the Catholic Benef its Association shall also serve as the Ethics Committee f or the Ins urance Company. In that ca pacity, it shall have exclusive authority to review all benefits, products, and se rvices provided b y t he Corpo ration, and its re spective contractors t o ensur e such conform with Catholic values and doctrine. If they do not, the committee shall det ermine the necessary c orrections to bring su ch benefits, pr oducts, and services into c onformity wi th Cat holic values and doctri ne. The decision of the committee shall be f inal and binding on the Corporation, its board, and its officers. Ex. D, art. 8.5. 57. The Oklahoma Department of Insurance regulates the Insurance Company.
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58. The Insurance Company also contracts with medical provider networks, one or more third party administrators, a reinsurer, a benefits consultant, and others to arrange health coverage for Association members’ employees when such members have self-funded plans.
59. The Insurance Company is “authorized to contribute such portions of its earnings or surplus to Catholic charitable or religious organizations as may from time to time be determined by the Corporation’s board of directors.” Ex. C, art. IV; Ex. D, art. 3.1(i).
60. Many of the Association’s members, including Post-Injunction Members, have indicated a desire to maintain self-funded health plans and seek stop-loss coverage through the Insurance Company. Even under these arrangements, however, the Association’s Group II and Group III Members will not avoid the Mandate or its effects. Thus, whether or not Post-Injunction Members arrange for health coverage through the Insurance Company, they are subject to the Mandate or its effects absent the judicial relief sought here.
B. Post-Injunction Members 61. After June 4, 2014, the Association accepted approximately 151 Catholic employers and around 958 parishes for membership in the Association. Each of these Post-Injunction Members satisfies the same membership criteria that every Association member has been required to satisfy from the founding of the Association. These PostInjunction Members include, by way of example, the Roman Catholic Diocese of
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Norwich and its affiliates, among others, Catholic Charities and Family Services, Diocese of Norwich, Inc. (“Catholic Charities and Family Services”).
1. Roman Catholic Diocese of Norwich 62. The Roman Catholic Diocese of Norwich is that “portion of the people of God,” located in Eastern Connecticut and Fisher Island, New York, “which is entrusted to [the Bishop of Norwich] for him to shepherd with his priests. See Code of Canon Law, c. 369 (1983). The Diocese carries out the spiritual, educational, and social service mission of the Catholic Church in eastern Connecticut. He exercises pastoral care for more than 80 parishes and missions and other Catholic ministries within the Diocese. 63. The Roman Catholic Diocese of Norwich comprises about 2,000 square miles. Through its parishes and related Catholic organizations, the Diocese ministries to more than 230,000 Catholics and tens of thousands of others in eastern Connecticut. 64. The educational mission of the Roman Catholic Diocese of Norwich is carried out, in part, through the Diocesan School Office, which oversees thirteen elementary schools, two diocesan secondary schools, another private religious secondary school, and a residential treatment program that provides integrated treatment services to adolescent boys and young men, all serving a school population of about 4,800. 65. The charitable mission of the Roman Catholic Diocese of Norwich is carried out through local parishes and various ministries founded or otherwise related to the Diocese, including Catholic Charities and Family Services, Diocese of Norwich.
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66. The Roman Catholic Diocese of Norwich provides health care through a Catholic insurance trust. The plan covers about 540 lives.
67. Consistent with Catholic values and teaching, the Roman Catholic Diocese of Norwich’s health plan does not cover CASC services.
68. The plan year for the Roman Catholic Diocese of Norwich begins July 1. 69. Many of the affiliated ministries within the Roman Catholic Diocese of Norwich participate in the diocesan plan, including Catholic Charities and Family Services, Diocese of Norwich, Inc. Unlike the Diocese, some of these affiliated ministries are not exempt from the Mandate but are eligible for the so-called “accommodation.” Absent emergency judicial relief, these ministries will be required by law to provide or arrange for CASC coverage for their employees by July 1, 2014. 70. The Roman Catholic Diocese of Norwich’s plan is not a “grandfathered plan” under the grandfathered plan provisions of Section 1251 of the Affordable Care Act and regulations published thereunder.
2. Catholic Charities and Family Services, Diocese of Norwich, Inc. 71. The mission of Catholic Charities and Family Services is to respond to Christ’s call to care for those in need by providing compassionate social services for individuals and families living in the Diocese of Norwich, with special attention to people who are poor or disadvantaged.
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72. Catholic Charities and Family Services adheres to Catholic social teachings, including those teachings about the sanctity of life, the care for one’s neighbors, and the stewardship of God’s creation.
73. One of the ministries of Catholic Charities and Family Services is Refugee, Migration and Immigration Services, which helps families navigate issues relating to citizenship and immigration issues and helps them feel at home in their new community.
74. Catholic Charities and Family Services also operates the Office of Emergency Services & Basic Needs, which helps individuals and families deal with urgent needs as a result of a crisis such as fire, flood, family violence, and loss of income.
75. Catholic Charities and Family Services participates in the Roman Catholic Diocese of Norwich’s health plan, and the employees of Catholic Charities and Family Services, Inc. are offered insurance through the plan. The plan does not cover CASC services.
C. Defendants 76. Defendants are appointed officials of the federal government and federal government agencies responsible for promulgating, administering, and enforcing the Mandate. 77. Defendant Sylvia M. Burwell is the Secretary of the United States Department of Health and Human Services. She is sued only in her official capacity.
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78. Defendant United States Department of Health and Human Services (“HHS”) is an executive agency of the United States government and is responsible for the promulgation, administration, and enforcement of the Mandate.
79. Defendant Thomas E. Perez is the Secretary of the United States Department of Labor. He is sued only in his official capacity.
80. Defendant United States Department of Labor is an executive agency of the United States government and is responsible for the promulgation, administration, and enforcement of the Mandate.
81. Defendant Jacob J. Lew is the Secretary of the United States Department of the Treasury. He is sued only in his official capacity.
82. Defendant United States Department of the Treasury is an executive agency of the United States government and is responsible for the promulgation, administration, and enforcement of the Mandate. V. FACTUAL ALLEGATIONS: PLAINTIFFS’ AND POST-INJUNCTION
MEMBERS’ BELIEFS AND PRACTICES REGARDING CONTRACEPTION, ABORTION, STERILIZATION, AND RELATED COUNSELING 83. The Post-Injunction Members, like all Association members, adhere in belief and practice to the teachings of the Catholic Church on contraception, abortion, sterilization, and related counseling.
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84. While the Catholic Church uses the term “abortion” to include both surgical abortion and abortion-inducing drugs and devices, Defendants refer to some abortion-inducing drugs and devices as “contraceptives.”
85. The Catechism of the Catholic Church (“Catechism”) teaches that life begins at conception and that “[h]uman life must be respected and protected absolutely from the moment of conception.” See Catechism § 2270 (1994). Thus, “[d]irect abortion, that is to say, abortion willed either as an end or a means, is gravely contrary to the moral law.” Id. § 2271. Moreover, “[f]ormal cooperation in an abortion constitutes a grave offense. “ Id. § 2272.
86. The Catholic Church also teaches that sexual union between spouses must at all times “remain ordered per se to the procreation of human life.” Catechism § 2366. Accordingly, the Church teaches that all forms of contraception and sterilization are contrary to the moral law. Section 2370 of the Catechism provides that “every action which, whether in anticipation of the conjugal act, or in its accomplishment, or in the development of its natural consequences, proposes, whether as an end or as a means, to render procreation impossible is intrinsically evil.”
87. Section 234 of the Compendium of the Social Doctrine of the Church (2004) provides that “[a]ll programmes of economic assistance aimed at financing campaigns of sterilization and contraception . . . are to be morally condemned as affronts to the dignity of the person and the family.”
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88. Section 91 of the papal encyclical Evangelium Vitae (1995) teaches that “[i]t is . . . morally unacceptable to encourage, let alone impose, the use of methods such as contraception, sterilization, and abortion in order to regulate births.”
89. Catholic moral theology teaches that a person’s material cooperation in an intrinsically evil act is morally illicit. Material cooperation occurs when the cooperator does not share the principal’s evil intent but participates in circumstances that are essential to the commission of the act, such that the act would not occur but for the cooperator’s participation. Catholics may not materially cooperate with evil unless they have exhausted every other alternative that does not effect a greater evil than the first evil to be avoided.
90. Catholic moral theology also prohibits an act that, although morally licit, may give rise to “scandal.” The Catechism defines scandal as “an attitude or behavior which leads another to do evil.” Catechism § 2284. The Catechism teaches that “[a]nyone who uses the power at his disposal in such a way that it leads others to do wrong becomes guilty of scandal and responsible for the evil that he has directly or indirectly encouraged.” Id. § 2287. This is so even if the act itself is morally permissible.
91. As Catholic institutions, Plaintiffs and the Post-Injunction Members believe they must adhere to the above teachings as matters of religious faith and doctrine. Consequently, Plaintiffs and the Post-Injunction Members believe that the use or procurement of contraception, abortion-inducing drugs, sterilization, or related
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counseling is contrary to the Catholic faith. Plaintiffs and the Post-Injunction Members further believe, as part of their faith, that they must not provide, pay for, or directly or indirectly facilitate access to such services and, therefore, that they must not include CASC benefits in their group health plans.
92. In order to avoid engaging in morally illicit acts, materially cooperating with evil, and creating scandal, the Post-Injunction Members sponsor or participate in health plans that exclude coverage of CASC services. VI. THE MANDATE: STATUTORY AND REGULATORY BACKGROUND
A. The Affordable Care Act 93. On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act, Pub. L. 111-148, 124 Stat. 119 (Mar. 23, 2010). Days later, the President signed into law the Health Care and Education Reconciliation Act of 2010, Pub. L. 111-152, 124 Stat. 1029 (Mar. 30, 2010). These two acts, together, are known as the Affordable Care Act (the “Affordable Care Act” or “Act”). 94. The Act imposes a series of mandates. The “individual mandate” requires an “applicable individual” to purchase a health insurance policy that provides “minimum essential coverage.” See 26 U.S.C. § 5000A(a). 95. All individual health insurance coverage, whether purchased through the federally funded exchange or otherwise, must include preventive care, without cost sharing. 45 C.F.R. § 147.130(a)(1).
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96. The “employer mandate” requires large employers to sponsor “group health plans” for the benefit of their employees or pay a penalty. See 26 U.S.C. §§ 4980H(a)(1), 5000A(f)(2). A “group health plan” is “a plan (including a self-insured plan) of, or contributed to by, an employer . . . to provide health care (directly or otherwise) to the employees, former employees, . . . or their families.” Id. § 5000(b)(1).
97. The Act also imposes new requirements on group health plans. As relevant here, the Act requires certain employers’ group health plans to cover “preventive care and screenings” for women “as provided for in comprehensive guidelines supported by the Health Resources and Services Administration.” 42 U.S.C. § 300gg-13(a)(4). In covering these services, the plan may not “impose any cost sharing requirements,” such as deductibles or copays, on plan participants. See id.
98. As discussed below, it is through these comprehensive guidelines supported by the Health Resources and Services Administration that Defendants are attempting to force the Post-Injunction Members to provide, pay for, or directly or indirectly facilitate access to CASC services in violation of their religious beliefs.
99. Failure to comply with the above mandates results in fines, penalties, and potential civil lawsuits.
100. An “applicable individual” that fails to maintain “minimum essential coverage” is subject to monetary penalties that may vary based on the individual’s income. See 26 U.S.C. § 5000A(c).
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101. A large employer that fails to sponsor a group health plan for its employees is subject to an excise tax of $2,000 per employee per year after the first 30 employees. 26 U.S.C. § 4980H(a), (c)(1).
102. Any employer (other than a “religious employer” and an employer providing coverage under a grandfathered plan) that sponsors a group health plan but fails to offer required coverage for women’s “preventive care” is subject to an excise tax of $36,500 per affected beneficiary per year. 26 U.S.C. § 4980D(b), (e)(1).
103. None of the above mandates is generally applicable. Each is subject to significant qualifications and exceptions.
104. The individual mandate is subject to two explicitly religious exceptions, neither of which applies to or benefits Catholics.
105. First, individuals who are members of a “health care sharing ministry” are not required to purchase health insurance. See 26 U.S.C. § 5000A(d)(2)(B). A “health care sharing ministry” (hereinafter “HCSM”) is a nonprofit organization whose members “share a common set of ethical or religious beliefs and share medical expenses among members in accordance with those beliefs,” that “has been in existence at all times since December 31, 1999,” and that meets other criteria. See id.
106. The HCSM exemption applies to only three organizations: Samaritan Ministries International, Christian Care Ministry, Inc. (through its “Medi-Share” program), and Christian Healthcare Ministries, Inc. Upon information and belief, each organization is Evangelical Protestant. See Samaritan Ministries, Healthcare for People
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of Biblical Faith, http://samaritanministries.org/healthreform/ (last visited Feb. 23, 2014) (explaining exemption); Medi-Share, How Does Medi-Share Work?, http://mychristiancare.org/exemption.aspx (last visited Feb. 23, 2014) (same); Christian Healthcare Ministries, Is Christian Healthcare Ministries Included in U.S. Health Care Legislation?, http://www.chministries.org/downloads/ACAInsert.pdf (last visited Feb. 23, 2014) (same).
107. Second, the individual mandate does not apply to individuals who are members of “a recognized religious sect or division” that is “conscientiously opposed to acceptance of the benefits of any private or public insurance,” that has “made provision” for its members for a “substantial” period of time, and that “has been in existence at all times since December 31, 1950.” See 26 U.S.C. §§ 5000A(d)(2)(A), 1402(g)(1).
108. Though phrased in general terms, this exemption was designed for, and applies exclusively to, members of historic Anabaptist congregations (Amish, Mennonites, Hutterites, and members of the Bruderhof Communities).
109. The mandates applicable to group health plans are also subject to substantial secular exceptions.
110. First, small employers—employers with fewer than 50 full-time employees—are not required to sponsor a group health plan at all. See 26 U.S.C. § 4980H(c)(2)(A).
111. By the government’s own estimates, the small-employer exemption exempts 96 percent of all employers in the United States. These small employers employ
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nearly 34 million workers. See The White House, The Affordable Care Act Increases Choice and Saving Money for Small Businesses, at 1, http://www.whitehouse.gov/ files/documents/health_reform_for_small_businesses.pdf (last visited Dec. 26, 2013).
112. Second, “grandfathered” group health plans are not required to cover certain, otherwise mandated services. As relevant here, grandfathered plans are not required to cover women’s “preventive care” services as described in 42 U.S.C. § 300gg13(4). See 42 U.S.C. § 18011; 45 C.F.R. § 147.140(c)(1).
113. Estimates indicate that 54 percent of employers that sponsor group health plans have at least one grandfathered plan. See Kaiser Family Foundation, Employer Health Benefits: 2013 Annual Survey, at 220-21, available at http://kaiserfamilyfoundation.files, wordpress.com/2013/08/8465-employer-healthbenefits-20131.pdf (last visited Dec. 26, 2013). By the government’s own estimates, 98 million individuals were enrolled in grandfathered group health plans in 2013. See 75 Fed. Reg. 41,726, 41,732 (July 19, 2010).
B. Anti-Abortion Provisions in or Applicable to the Affordable Care Act 114. The text, context, and history of the Affordable Care Act reflect clear congressional intent that no group health plan be required to cover abortion services. 115. The Act provides that “[n]otwithstanding any other provision of this title (or any amendment made by this title) . . . nothing in this title (or any amendment made by this title), shall be construed to require a qualified health plan to provide coverage of [abortion] services . . . as part of its essential health benefits for any plan year.” 42
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U.S.C. § 18023(b)(1)(A)(i). The Act also provides that “the issuer of a qualified health plan shall determine whether or not the plan provides coverage of [abortion] services . . . as part of such benefits for the plan year.” Id. § 18023(b)(1)(A)(ii).
116. The Affordable Care Act itself does not contain a restriction on the use of federal funds to pay for abortion services. This omission nearly defeated the Act’s passage when a group of pro-life Democrats in the House of Representatives, led by Rep. Bart Stupak of Michigan, threatened to withhold their votes from the bill. To secure their votes, President Obama issued an executive order that prohibited the use of federal funds to pay for “abortion services . . . , consistent with a longstanding Federal statutory restriction that is commonly known as the Hyde Amendment.” Exec. Order No. 13,535, Patient Protection and Affordable Care Act’s Consistency with Longstanding Restrictions on the Use of Federal Funds for Abortion, 3 C.F.R. 201 (2010).
117. In addition, the Weldon Amendment—a feature of every appropriations act for HHS since 2005—provides, “None of the funds made available in this Act [making appropriations for the Departments of Labor and HHS] may be made available to a Federal agency or program, or to a State or local government, if such agency, program, or government subjects any institutional or individual health care entity to discrimination on the basis that the health care entity does not provide, pay for, provide coverage of, or refer for abortions.” Consolidated Appropriations Act of 2012, Pub. L. No. 112-74, div. F, tit. V, § 507(d)(1), 125 Stat. 786, 1111 (2011). The term “health care entity” includes “a health insurance plan.” Id.
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118. The Affordable Care Act and the Weldon Amendment prohibit the government from coercing the consciences of health care providers that respect the sanctity of life. Executive Order 13,535 reflects the federal government’s longstanding avoidance of coercing the consciences of taxpayers that oppose abortion and government funding of abortion services.
119. As explained below, Defendants’ Mandate breaches the federal government’s historic protection of conscience with regard to abortion and violates the Affordable Care Act, the Weldon Amendment, and other federal laws.
C. Regulatory Background 1. The Interim Final Rules and the IOM Guidelines
120. On July 19, 2010, Defendants published interim final rules (“Interim Final Rules”) addressing the requirement that group health plans cover “preventive care” services for women. See 75 Fed. Reg. 41,726 (July 19, 2010).
121. Defendants did not permit notice and public comment prior to issuance of the Interim Final Rules, stating that “it would be impracticable and contrary to the public interest to delay putting the provisions in these interim final regulations in place until a full public notice and comment process was completed.” 75 Fed. Reg. at 41,730. The Interim Final Rules further stated that “it is essential that participants, beneficiaries, insureds, plan sponsors, and issuers have certainty about their rights and responsibilities.” Id.
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122. Defendants opted to publish interim final regulations, rather than proposed regulations subject to a notice-and-comment period, because “interim final regulations provide the public with an opportunity for comment, but without delaying the effective date of the regulations.” 75 Fed. Reg. at 41,730.
123. Despite the alleged urgent necessity of the Interim Final Rules and the supposed need for immediate “certainty” concerning coverage requirements, the Interim Final Rules did not define “preventive care” services for women. They instead provided that “HHS is developing these guidelines and expects to issue them no later than August 1, 2011.” Id. at 41,731.
124. HHS delegated its duty to develop the preventive care guidelines to a nongovernmental health policy organization, the Institute of Medicine (“IOM”). IOM thereafter convened the Committee on Preventive Services for Women (“Committee”), consisting of sixteen members.
125. At least seven committee members had explicit ties to Planned Parenthood, NARAL Pro-Choice America, and other organizations that advocate for increased access to abortion and contraception. Such organizations stand to benefit from guidelines that require group health plans to cover CASC services.
126. In developing its guidelines, the Committee held three “open sessions” and invited a select group of individuals and organizations to make presentations on preventive care. Presenters included Planned Parenthood Federation of America, The Guttmacher Institute, the National Women’s Law Center, the National Women’s Health
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Network, and the American Congress of Obstetricians and Gynecologists, all of which are well-known advocates for increased access to abortion and contraception.
127. None of the selected presenters included groups or individuals, religious or otherwise, that opposed government-mandated coverage of CASC services.
128. On July 19, 2011, IOM published its report (“Report”) identifying the women’s preventive services that should be subject to mandatory coverage. In Recommendation 5.5 of the Report, IOM recommended mandatory coverage for “the full range of Food and Drug Administration-approved contraceptive methods, sterilization procedures, and patient education and counseling for women with reproductive capacity.” IOM, Clinical Preventive Services for Women: Closing the Gaps (July 2011), at 10, available for download at http://www.iom.edu/Reports/2011/Clinical-PreventiveServices-for-Women-Closing-the-Gaps.aspx (last visited Dec. 26, 2013).
129. As the Report acknowledged, the scope of the Committee’s review was extremely limited and focused primarily on clinical efficacy of certain preventive services, not on insurance coverage. See Report at 75-76. Even within that narrow scope, the Committee “had neither the time and resources nor a charge to conduct its own systematic reviews” of the evidence on efficacy. Id. at 75.
130. Furthermore, because its review was so limited, the Committee did not consider “a host of other issues” that should be evaluated when considering whether to cover preventive services as part of a health plan. These issues include “established practice; patient and clinician preferences; availability; ethical, legal, and social issues;
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and availability of alternatives,” as well as cost-effectiveness. Report at 76 (emphasis added).
131. Because the Committee did not consider these issues, it did not evaluate the impact of its recommendations on sponsors of group health plans that object on religious grounds to providing, paying for, or directly or indirectly facilitating access to CASC services. Nor did the Committee evaluate its recommendations in light of RFRA and other federal laws and policies that protect rights of conscience.
132. One member of the Committee, Dr. Anthony Lo Sasso, dissented from the Committee’s recommendations, noting that “the lack of time prevented a serious and systematic review of evidence for preventive services” and that “the process set forth in the law was unrealistic in the time allocated to such an important and time-intensive undertaking.” Report at 232. In Dr. Lo Sasso’s view, “the committee process for evaluation of the evidence lacked transparency and was largely subject to the preferences of the committee’s composition. Troublingly, the process tended to result in a mix of objective and subjective determinations filtered through a lens of advocacy.” Id.
133. On August 1, 2011, less than two weeks after IOM published the Report, the Health Resources and Services Administration (“HRSA”), a sub-agency within HHS, issued the Women’s Preventive Services Guidelines (“Guidelines”). The Guidelines adopted the Report’s recommendations nearly verbatim.
134. In particular, the Guidelines provided that non-grandfathered group health plans are required to provide coverage, without cost-sharing, for “[a]ll Food and Drug
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Administration approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity.” HRSA, Women’s Preventive Services Guidelines, http://www.hrsa.gov/womensguidelines/ (last visited Dec. 26, 2013) (“HRSA Guidelines”).
135. HRSA did not explain how, if at all, the Guidelines accounted for the various factors relevant to insurance coverage decisions that IOM declined to consider. Nor did HRSA consider how the Committee’s composition and ideological biases affected its deliberations and ultimate recommendations.
136. HRSA simply rubber-stamped IOM’s recommendations. Indeed, in issuing the Guidelines, HRSA admitted that the Guidelines were “developed” by IOM and simply “supported” by HRSA. See HRSA Guidelines (“The HRSA-supported health plan coverage guidelines, developed by the Institute of Medicine, will help ensure that women receive a comprehensive set of preventive services without having to pay a copayment, co-insurance or a deductible.”).
137. HHS did not permit public comment on the Report or the Guidelines prior to issuing the Guidelines. The Guidelines were enacted via publication on the HRSA website, rather than through the Federal Register or the Code of Federal Regulations.
138. The contraceptive methods approved by the FDA include birth-control pills, “emergency contraception,” intrauterine devices (“IUDs”), and sterilization procedures. See FDA, Birth Control: Medicines to Help You, http://www.fda.gov/ForConsumers/ByAudience/ForWomen/FreePublications/
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ucm313215.htm (last visited Dec. 26, 2013). Some of these methods, including Plan B (the “morning after pill”), Ella (the “week after pill”), and the Copper IUD, are known or reasonably believed to be abortion-inducing because they operate by “preventing attachment (implantation) to the womb (uterus).” See id.
2. The Amended Interim Final Rules and the “Religious Employer” Exemption
139. On August 1, 2011, Defendants promulgated regulations amending the Interim Final Rules. See 76 Fed. Reg. 46,621 (Aug. 3, 2011).
140. Defendants acknowledged the “considerable feedback” they had received concerning mandatory coverage for preventive services, including “several” comments on the religious liberty implications of requiring religious organizations to cover CASC services as part of their health plans. 76 Fed. Reg. at 46,623.
141. In response to these comments, Defendants amended the Interim Final Rules “to provide HRSA additional discretion to exempt certain religious employers from the Guidelines where contraceptive services are concerned.” 76 Fed. Reg. at 46,623.
142. “Religious employer” was defined in an exceedingly narrow fashion as an organization meeting the following criteria: “(1) [t]he inculcation of religious values is the purpose of the organization”; “(2) [t]he organization primarily employs persons who share the religious tenets of the organization”; “(3) [t]he organization serves primarily persons who share the religious tenets of the organization”; and “(4) [t]he organization is a nonprofit organization as described in section 6033(a)(1) and section 6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code of 1986, as amended.” 76 Fed. Reg. at 46,626.
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143. Section 6033(a)(3)(A) of the Internal Revenue Code refers to “churches, their integrated auxiliaries, and conventions or associations of churches,” and “the exclusively religious activities of any religious order.” 26 U.S.C. § 6033(a)(3)(A)(i), (iii).
144. So defined, the “religious employer” exemption applied only to a subset of churches, their integrated auxiliaries, and religious orders that satisfied the first three prongs of this test. The exemption did not apply to churches with significant charitable or educational activities, such as a parish food pantry or parochial school that either served individuals regardless of their faith or employed people of other faiths. It did not apply to separately incorporated ministries such as faith-based charitable organizations, religious colleges, and religious health care institutions. And it did not apply to for-profit employers that seek to run their businesses consistent with their religious values.
145. The “religious employer” exemption did not apply to the vast majority of organizations with religious objections to mandatory coverage of CASC services.
146. As Defendants admitted, the exemption was designed for the limited purpose of “accommodat[ing] . . . the unique relationship between a house of worship and its employees in ministerial positions.” 76 Fed. Reg. at 46,623.
147. Even so, under the amended Interim Final Rules, Defendants contemplated that the religious employer exemption would apply to “plans established or maintained by religious employers.” 76 Fed. Reg. at 46,626 (emphasis added). So written, the exemption applied on a plan-by-plan basis and would allow a religious employer, such as
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a diocese, to sponsor a plan that excluded CASC coverage and in which non-exempt employers could permissibly participate. In colloquial terms, this was known as the “Piggyback Option.”
148. Consistent with the amended Interim Final Rules, HRSA exercised its discretion to exempt “religious employers” from the requirement to cover CASC services. HRSA did so via a footnote on its website. See HRSA Guidelines n.**.
149. As they had done before, Defendants promulgated the amended Interim Final Rules without notice or opportunity for public comment, determining that “an additional opportunity for public comment would be impractical and contrary to the public interest.” 76 Fed. Reg. at 46,624.
3. The Safe Harbor 150. After the amended Interim Final Rules were issued, Defendants received “over 200,000 responses” addressed to the religious employer exemption. 77 Fed. Reg. 8,725, 8,726 (Feb. 15, 2012). 151. In a press release on January 20, 2012, HHS acknowledged the “important concerns some have raised about religious liberty.” HHS, A Statement by U.S. Department of Health and Human Services Secretary Kathleen Sebelius, http://www.hhs.gov/news/press/2012pres/01/20120120a.html (last visited Dec. 26, 2013). 152. On February 10, 2012, Defendants “finalize[d], without change,” the amended Interim Final Rules and maintained the definition of “religious employer.” 77 Fed. Reg. at 8,725.
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153. At the same time, Defendants created a one-year “temporary enforcement safe harbor,” a self-imposed moratorium on enforcement of the CASC coverage requirement for “certain non-exempted, non-profit organizations with religious objections to covering contraceptive services.” 77 Fed. Reg. at 8,728.
154. The safe harbor applied to “group health plans sponsored by non-profit organizations that, on and after February 10, 2012, do not provide some or all of the contraceptive coverage otherwise required . . . because of the religious beliefs of the organization.” See 77 Fed. Reg. 16,501, 16,502-03 (Mar. 21, 2012). The safe harbor would remain in effect for an eligible organization until its first plan year beginning on or after August 1, 2013. Id. at 16,503.
155. In the interim, Defendants promised new rules that would “accommodat[e]” the religious objections of these organizations. 77 Fed. Reg. at 8,727.
156. The safe harbor did not apply to group health plans sponsored by for-profit employers.
4. The Advance Notice of Proposed Rulemaking 157. On March 21, 2012, Defendants issued an Advance Notice of Proposed Rulemaking (“ANPRM”), seeking comment on “alternative ways of providing contraceptive coverage without cost sharing in order to accommodate non-exempt, nonprofit religious organizations with religious objections to such coverage.” Certain Preventive Services Under the Affordable Care Act, 77 Fed. Reg. 16,501, 16,503.
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158. The ANPRM presented “questions and ideas to help shape these discussions” and set forth “two goals” that Defendants sought to achieve. 77 Fed. Reg. at 16,503. The first was “to maintain the provision of contraceptive coverage without cost sharing to individuals who receive coverage through non-exempt, non-profit religious organizations with religious objections to contraceptive coverage in the simplest way possible.” Id. The second goal was to “protect such religious organizations from having to contract, arrange, or pay for contraceptive coverage.” Id. (emphases added).
159. Defendants thus envisioned an “accommodation,” an “arrangement under which contraceptive coverage is provided without cost sharing to participants and beneficiaries covered under a plan independent of the objecting religious organization that sponsors the plan.” Id. (emphasis added).
5. The Final Rules and the Purported “Accommodation” 160. After receiving over 200,000 comments in response to the ANPRM, Defendants issued proposed rules (“Proposed Rules”) on February 1, 2013. See 78 Fed. Reg. 8,456 (Feb. 6, 2013). 161. Defendants received over 400,000 comments in response to the Proposed Rules. See 78 Fed. Reg. 39,870, 39,871 (July 3, 2013). The comment period closed on April 8, 2013. See 78 Fed. Reg. at 8,457. 162. On June 28, 2013, “[a]fter consideration of the comments,” Defendants issued final rules (“Final Rules”). See 78 Fed. Reg. at 39,871. The Final Rules make two principal changes to the amended Interim Final Rules.
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163. First, the Final Rules revise the definition of “religious employer” to mean “an organization that is organized and operates as a nonprofit entity and is referred to in section 6033(a)(3)(A)(i) or (a)(3)(A)(iii) of the Internal Revenue Code of 1986, as amended.” 45 C.F.R. § 147.131(a). Although Defendants have clarified that an organization does not fail to qualify for the exemption simply because its “purposes extend beyond the inculcation of religious values or because [it] hires or serves people of different religious faiths,” the exemption is still limited to “houses of worship.” 78 Fed. Reg. at 39,874. Defendants admit that the revised definition does “not materially expand the universe of religious employers.” Id.
164. Second, the Final Rules purport to “accommodate” so-called “eligible organizations.” An organization is eligible for the “accommodation” if it meets four criteria: “(1) [t]he organization opposes providing coverage for some or all of any contraceptive services required to be covered . . . on account of religious objections”; “(2) [t]he organization is organized and operates as a nonprofit entity”; “(3) [t]he organization holds itself out as a religious organization”; and “(4) [t]he organization self-certifies, in a form and manner specified by the Secretary, that it satisfies the [above] criteria.” 26 C.F.R. § 54.9815-2713A(a).
165. An eligible organization seeking the “accommodation” must execute the self-certification “prior to the beginning of the first plan year to which an accommodation is to apply” and provide a copy of the self-certification to its insurance provider (if it maintains an insured group health plan) or its third party administrator (if it maintains a
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self-insured plan). 78 Fed. Reg. at 39,875. A copy of the self-certification form, EBSA Form 700, is attached as Exhibit E.
166. Upon receipt of the self-certification, an insurer under a group health plan must “[e]xpressly exclude [CASC] coverage from the group health coverage provided in connection with the group health plan” and must “[p]rovide separate payments for any [CASC] services . . . for plan participants and beneficiaries for so long as they remain enrolled in the plan.” 26 C.F.R. § 54.9815-2713A(c)(2).
167. Likewise, a third party administrator (“TPA”) that receives a copy of the self-certification must “provide or arrange separate payments for contraceptive services for participants and beneficiaries in the plan without cost sharing.” 78 Fed. Reg. at 39,880; 26 C.F.R. § 54.9815-2713A(b)(2).
168. The Final Rules impose additional requirements and limitations for eligible organizations with self-insured health plans.
169. The organization’s self-certification to its TPA must include notice that “[t]he eligible organization will not act as the plan administrator or claims administrator with respect to claims for [CASC] services, or contribute to the funding of [CASC] services,” and that the “[o]bligations of the third party administrator are set forth in 29 CFR [§] 2510.3-16 and 26 CFR [§] 54.9815-2713A,” viz., regulatory sections outlining the duties of the TPA with respect to CASC coverage. 26 C.F.R. § 54.98152713A(b)(1)(ii).
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170. The Final Rules also state that the self-certification form “shall be an instrument under which the plan is operated.” 29 C.F.R. § 2510.3-16(b). EBSA Form 700 itself says that it is “an instrument under which the plan is operated.” See Ex. E.
171. The TPA, having received the notice, is obligated to pay the full cost of contraceptive coverage, or arrange for the provision of contraceptive coverage, without cost sharing, to plan participants and beneficiaries. 26 C.F.R. § 54.9815-2713A(b)(2); 29 C.F.R. § 2510.3-16(b).
172. A purpose of the form, therefore, is to require the TPA to deliver CASC benefits to the eligible organization’s covered employees. 29 C.F.R. § 2510.3-16(b)(1) (duties arising from delivery of the self-certification are exclusively “with respect to coverage of contraceptive services”).
173. The delivery of the certification form makes the TPA both the plan administrator and the claims administrator for the new contraceptive services plan. 78 Fed. Reg. at 39,879; 29 C.F.R. § 2510.3-16(b) (“[T]he self-certification provided by the eligible organization to a [TPA] . . . shall be treated as a designation of the [TPA] as the plan administrator . . . responsible for [t]he plan’s compliance . . . with respect to coverage of contraceptive services[.]”).
174. Delivery of the self-certification is the necessary cause of the insurer’s or TPA’s duty to provide CASC coverage. Absent such delivery, the insurer or TPA has no such duty, and the eligible organization remains obligated to cover CASC services in its health plan. See 26 C.F.R. § 54.9815-2713A(b), (c).
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175. An eligible organization’s employees receive CASC benefits only because they are enrolled in the eligible organization’s health plan and the eligible organization has a contractual relationship with its insurer or TPA. See 26 C.F.R. § 54.98152713A(b), (c). Thus, an employee’s receipt of CASC benefits is directly tied to the employee’s enrollment in the eligible organization’s group health plan, and the CASC benefits cease when the employee ceases to be enrolled in the plan.
176. As a result, the Final Rules still compel religious organizations to “contract, arrange, or pay for contraceptive coverage,” despite Defendants’ promise in the ANPRM that it would “protect” religious organizations from having to do so. 77 Fed. Reg. at 16,503 (emphases added).
177. The insurer or TPA must also provide written notice of the availability of CASC benefits to eligible organization’s employees at the same time that the TPA delivers other plan enrollment materials. 26 C.F.R. § 54.9815-2713A(d); 29 C.F.R. § 2590.715-2713A(d); 45 C.F.R. § 147.131(d).
178. When a self-insured eligible organization signs and delivers the selfcertification, the form itself, coupled with the regulations it references, becomes an addendum to the eligible organization’s plan, and the TPA, previously in possession of the names and contact information for the organization’s employees, becomes the plan administrator for the CASC benefits portion of the amended plan.
179. The Final Rules make the TPA, for the first time, a fiduciary “under section 3(16) of ERISA.” 29 C.F.R. § 2510.3-16(b); 78 Fed. Reg. at 39,879. Such TPAs,
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therefore, become subject to criminal penalties, 29 U.S.C. § 501, civil penalties, 29 U.S.C. § 502(l), and civil liability to participants, 29 U.S.C. § 502(a), if they fail to provide coverage of CASC services.
180. The Final Rules also impose a gag order on eligible organizations with selfinsured plans by providing, “The eligible organization must not, directly or indirectly, seek to interfere with a third party administrator’s arrangements to provide or arrange separate payments for contraceptive services for participants or beneficiaries, and must not, directly or indirectly, seek to influence the third party administrator’s decision to make any such arrangements.” 26 C.F.R. § 54.9815-2713A(b)(1)(iii).
181. Thus, not only must the eligible organization tell its TPA that the TPA must provide CASC coverage. The organization is also prohibited from saying anything that might “directly or indirectly . . . interfere” with that message or “influence” the TPA’s coverage decision.
182. In combination, these two rules (1) force the eligible organization to convey the government’s message and (2) prohibit the eligible organization from conveying its own message. The Final Rules thus enlist eligible organizations as mouthpieces for the government.
183. Under the Final Rules, a TPA that receives a copy of an eligible organization’s self-certification has discretion concerning whether to “enter into or remain in a contractual relationship with the eligible organization or its plan to provide administrative services for the plan.” 26 C.F.R. § 54.9815-2713A(b)(2).
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184. The Final Rules do not limit the grounds on which a TPA may object to providing or arranging separate payments for CASC services. A TPA may, therefore, object on religious grounds to these responsibilities, and it would have “no obligation . . . to enter into or remain in a contract with the eligible organization.” 78 Fed. Reg. at 39,880.
185. Finally, the Final Rules eliminated the Piggyback Option and, in so doing, eliminated the last viable moral alternative for Group II employers to avoid the Mandate. The Final Rules declared that the religious employer exemption would be “determined on an employer-by-employer basis,” not a plan-by-plan basis, and each eligible organization—even those participating in plans sponsored by exempt religious employers—“must independently satisfy the self-certification standard.” 78 Fed. Reg. at 39,886. VII. THE MANDATE VIOLATES FEDERAL LAW.
186. The Mandate violates federal law. It substantially burdens Plaintiffs’ and the Post-Injunction Members’ religious practices, intentionally discriminates against their religious practices, intrudes upon their internal decisions, restricts their speech, compels them to convey a morally repugnant message, prohibits them from associating with others in an effort to provide health benefits consistent with their moral values, and creates a religious caste system of the favored and disfavored. The Mandate is also the result of arbitrary and capricious action by Defendants, including an improper delegation of their regulatory authority to a nongovernmental and ideologically biased panel of unaccountable decision makers.
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A. The Affordable Care Act Creates a Discriminatory Religious Caste System.
187. The Affordable Care Act, its regulations, and Defendants’ admissions have created a religious caste system where the quantum of government-permitted religious freedom depends upon where a religious person or religious institution falls within this system. In direct contravention of the First Amendment Establishment Clause, the government has stratified religious persons and religious organizations into at least six religious classifications.
188. First, Anabaptists are exempt from the individual mandate and, therefore, are not forced to go to the federally funded exchanges that offer only health insurance policies that include contraceptive coverage. 26 U.S.C. § 5000A(d)(2)(A), 26 U.S.C. § 1402(g); 26 U.S.C. § 4980H(a), (c)(1); 45 C.F.R. §§ 147.130, 147.131(c) (all individual health insurance coverage, whether on the exchange or otherwise, must include preventive care, without cost sharing). The denominations in the Anabaptist tradition include Amish, Mennonites, Hutterites, and the Bruderhof Communities.
189. Second, members of HCSMs can avoid buying insurance that includes CASC coverage because they, too, are exempt from the individual mandate. 26 U.S.C. § 5000A(d)(2)(B). There are only three HCSMs: Samaritan Ministries, Medi-Share, and Christian Healthcare Ministries. Each is Evangelical Protestant. The government closed this option to Catholics and other religious groups by limiting this exemption to organizations formed before December 31, 1999.
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190. Third, Defendants deem some employers sufficiently religious and have granted them exemption from the Mandate. 45 C.F.R. § 147.131(a). These employers include churches, conventions of churches, and the exclusively religious activities of religious orders. 26 U.S.C. 6033(a)(3)(A)(i) and (iii). They also include the ministries of these religious groups—so long as they are not separately incorporated.1 Finally, they include “integrated auxiliaries” of these ministries. 45 C.F.R. § 147.131(a). Whether an auxiliary is deemed “integrated” depends in part on whether it is internally supported. See 26 C.F.R. § 1.6033-2(h)(4).
191. Fourth, an eligible organization is not exempt. As previously alleged, in order to qualify for the “accommodation,” it must engage an insurer or TPA to act as a surrogate plan and benefits administrator for the CASC portion of its health plan and must cause the insurer or TPA to inform employees of the CASC coverage. In addition, an eligible organization with a self-funded plan must engage in actions that amend its plan to include CASC services and must censor its own speech with its TPA.
192. Fifth, a TPA with moral objections to providing or arranging for CASC benefits can opt out of its contract just after an eligible organization provides it with the self-certification form and the TPA thereby learns of its contraceptive coverage obligations. 78 Fed. Reg. at 39,879-80. The government has now contended in several cases that a TPA of a church plan may either opt out of its contract to serve as a TPA or
1 See 45 C.F.R. § 147.131(a) (separately incorporated ministries other than “churches, their integrated auxiliaries, and conventions or associations of churches” or “exclusively religious activities of religious orders” listed in 26 U.S.C. § 6033(a)(3)(A)(i), (iii) do not qualify for “religious employer” exemption); see also 77 Fed. Reg. at 16,502.
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stay in its contract and avoid penalties and sanctions because “ERISA enforcement authority is not available with respect to TPAs of self-insured church plans.” See, e.g., Defendants’ Motion to Dismiss at 11-12, Little Sisters of the Poor Home for the Aged v. Sebelius, No. 13-cv-02611-WJM-BNB (D. Colo. Nov. 8, 2013).
193. Sixth, Defendants have asserted that some religious for-profit employers (sole proprietors and general partnerships) have standing to invoke religious liberty protections while all others (corporations, limited partnerships, etc.) do not. See Transcript of Oral Argument at 61-63, Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114 (10th Cir. 2013) (No. 12-6294), attached as Exhibit F. The United States Supreme Court rejected this argument. Burwell v. Hobby Lobby Stores, Inc., No. 13-354) slip op. 16-31 (U.S., June 30, 2014).
194. For people of Catholic faith, the Association’s Group I, II, or III Members are no more and no less religious, and the respect for and protection of their consciences is no more or less important.
195. The Mandate thus provides selective quanta of religious freedom depending upon the type or classification of each religious person or entity.
B. The Mandate Substantially Burdens Plaintiffs’ and the Post-Injunction Members’ Religious Beliefs and Practices.
196. The decisions of the Post-Injunction Members to provide health plans for their employees and to exclude CASC coverage therefrom qualify as the exercise of religion.
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1. The Mandate Substantially Burdens Group II Members’ Religious Exercise.
197. The Post-Injunction Members who qualify as Group II Members of the Association are not deemed to be “religious employers” under the Final Rules. They are “eligible organizations,” or would be if they executed and delivered the self-certification required by 26 C.F.R. § 54.9815-2713A(a)(4).
198. The Mandate’s regulatory scheme has left no option for Group II Members that does not substantially burden the exercise of their Catholic faith. Their options are: (1) participate in a “piggyback” plan sponsored by an exempt employer like a diocese or religious order, (2) provide a group health plan that includes coverage of CASC services, (3) provide a group health plan that excludes coverage of CASC services, (4) provide a group health plan under the so-called accommodation, or (5) cease providing health care coverage.
199. Group II Members do not avoid the Mandate under Option 1 because the Final Rules eliminate the Piggyback Option. See 78 Fed. Reg. at 39,886 (eliminating the plan exemption and determining the availability of exemption or accommodation “on an employer-by-employer basis”).
200. Option 2, directly providing the CASC benefits, is contrary to Catholic teaching, would constitute material cooperation with evil, and would give rise to scandal.
201. Option 3 is ruinous because it would subject Group II Members to fines of up to $100 per affected beneficiary per day, or as much as $36,500 per affected beneficiary annually. It is also impractical because insurers and TPAs, who operate in a
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highly regulated industry, are unlikely—absent invalidation of the Mandate—to risk fines, liability, and regulatory scrutiny by excluding coverage of CASC services.
202. Option 4, entering into the accommodation, would burden Group II Members’ exercise of its Catholic values because:
a. The Final Rules require “accommodated” employers to give notices to TPAs of their legal obligation to provide CASC benefits; b. The Final Rules require the “accommodated” employers to sign a notice that amends the employers’ plans to include a second binder of CASC benefits; c. The Final Rules require the “accommodated” employers to engage in a statutory scheme that makes their TPAs the plan and benefits administrators for the CASC benefit portion of their plan; d. The Final Rules require the “accommodated” employers to permit their TPAs to utilize their knowledge of the names and contact information of employers’ employees for the purpose of providing them CASC benefits; e. The Final Rules bar the “accommodated” employers from communicating with their TPAs about not providing the CASC benefits; and f. The Final Rules require “accommodated” employers to give notices to TPAs of their legal obligations to inform the employers’ employees that
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the TPAs will provide CASC benefits at no cost to the employee, thus giving rise to scandal among those employees. 203. At its core, the “accommodation” requires Group II Members to engage and cause a surrogate to provide benefits that their religious values prevent them from providing. The “accommodation,” therefore, does not alleviate Group II Members’ religious objections to the Mandate. 204. The Final Rules also create the risk of scandal. When a Group II Member, having entered into the “accommodation,” distributes plan information to its employees in connection with enrollment in coverage, the insurer or TPA must notify employees in writing that the eligible organization does not administer or fund CASC benefits, but that the insurer or TPA provides separate payments for CASC services. See 26 C.F.R. § 54.9815-2713A(d). Such notice must be provided at the same time as, though separate from, any materials distributed by the Group II Member. Id. 205. Employees are unlikely to read the disclaimer provided by the insurer or TPA. Those who do are unlikely to grasp the distinction the Final Rules purport to draw between the employer and its insurer or TPA. Employees will simply know that, as a direct result of their enrollment in the Group II Member’s plan, they receive CASC benefits. 206. This situation creates the risk of scandal because employees will perceive that their employer professes one thing but does another. Such scandal devastates ministry.
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207. Defendants’ regulations admit that there is no meaningful separation between the eligible organization and the provision of CASC benefits to employees under the “accommodation.” Employees still receive CASC benefits “under . . . the employer’s plan.” 78 Fed. Reg. at 39,879 (emphasis added).
208. The predecessor of Defendant Secretary Burwell, Secretary Kathleen Sebelius, herself admitted the true effect of the “accommodation” in her remarks at Harvard University on April 8, 2013, the final day for comment on the Proposed Rules. Secretary Sebelius stated:
We have just co mpleted the open co mment perio d f or the s o-called accommodation and b y August 1st of this year, ever y e mployer will be covered by the law with one excep tion. Churches and ch urch diocese [sic] as emplo yers are exe mpted f rom this be nefit. But, Catholic hospitals, Catholic universities, other religious entities, will be pro viding coverage to their employees starting August 1st. . . . [W]e are about to pro mulgate the f inal rule and as of August 1st, 2013, every employee who doesn’t work directly for a church or a diocese will be included in the benefit package. See Kathleen Sebelius, Remarks at The Forum at Harvard School of Public Health (Apr. 8, 2013), available at http://theforum.sph.harvard.edu/events/conversationkathleen-sebelius/ (last visited March 2, 2014) (emphasis added).
209. From these remarks, it is clear that even Defendants view the “accommodation” as still requiring eligible organizations to “provid[e] coverage” of CASC benefits to their employees. Accordingly, the regulations state that the employer participating in the “accommodation” “is considered to comply” with the Mandate. 78 Fed. Reg. at 39,879.
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210. Secretary Sebelius’s remarks also reveal that Defendants were poised “to promulgate the final rule” before the comment period closed. Defendants apparently gave no consideration to the 400,000 comments received on the Proposed Rules, including comments that explained that the proposed “accommodation” would not alleviate the objections of many religious organizations.
211. Option 5, dropping health care benefits, would burden the Group II Members’ exercise of their Catholic values because:
a. Catholic values commend providing just compensation and benefits supportive of family values, including, whenever possible, health care; b. Eliminating health care benefits would drive employees, most of whom do not have the Anabaptist or HCSM exemptions available to them, to the federally funded exchanges. Individual plans are less attractive, less convenient, more expensive, and less tax-efficient, and, even more troubling, almost certainly drive employees to a market with no options that exclude CASC coverage; c. Eliminating health insurance for employees subjects Group II Members to annual excise taxes beginning in 2016 of $2,000 per employee after the first 30 employees; and d. Eliminating health insurance would put Group II Members at a significant disadvantage in the market for recruiting the best workers and thereby harm the operation of their ministries.
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212. The risk of burden on the Group II Members is immediate. Several of the Post-Injunction Members who qualify as Group II Members have health plans that renew on July 1, 2014. At that time, these organizations must be in compliance with the Final Rules or face severe penalties.
2. The Mandate Substantially Burdens Group III Members’ Religious Exercise.
213. The Post-Injunction Members who qualify as Group III Members of the Association are not eligible for the “religious employer” exemption or the “accommodation” under the Final Rules.
214. Under the Mandate, Group III Members are faced with three options: (1) provide a group health plan that includes coverage of CASC services, (2) provide a group health plan that excludes coverage of CASC services, or (3) cease providing health care coverage.
215. Option 1, directly providing the CASC benefits, is contrary to Catholic teaching, would constitute material cooperation with evil, and would give rise to scandal.
216. Option 2 is ruinous because it would subject Group III Members to fines of up to $100 per affected beneficiary per day, or as much as $36,500 per affected beneficiary annually. Such fines have the potential to force Group III Members out of business. Option 2 is also impractical since insurers and TPAs, who operate in a highly regulated industry, are unlikely—absent invalidation of the Mandate—to risk fines, liability, and regulatory scrutiny by excluding coverage of CASC services.
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217. Option 3, dropping health care benefits, would burden Group III Members’ exercise of their Catholic values for the same reasons as those alleged in paragraph 210, supra.
3. The Mandate Substantially Burdens Group I Members’ Religious Exercise.
218. While the Post-Injunction Members who qualify as Group I Members of the Association are exempt from the Mandate with regard to the health care coverage they provide for their own employees and, in the cases of dioceses and archdioceses, the employees of their parishes, the Mandate nevertheless burdens Group I Members’ religious exercise.
219. Part of the religious purpose and mission for most Group I Members is to provide support services to local parishes and affiliated Catholic ministries. Many such affiliated ministries are Group II Members.
220. As part of their religious mission, many Group I Members sponsor diocesan-wide group health plans for themselves, their parishes, and their related nonexempt ministries.
221. Part of the religious purpose and mission for most Group I Members is to educate the Catholic faithful and Catholic ministry leaders regarding Catholic doctrine and values, including the values prohibiting provision of CASC benefits. Part of such education is to model ways to access morally compliant health care coverage that does not include CASC services.
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222. The Mandate and the “accommodation,” along with the elimination of the Piggyback Option, burden the religious exercise of Group I Members, who serve their affiliates by maintaining life-affirming health care plans.
223. As a result of the Mandate, Group I Members have four options: (1) sponsor a group health plan that provides CASC coverage (as a result of participation by non-exempt employers); (2) sponsor a group health plan that excludes CASC coverage but subjects non-exempt participants to onerous fines; (3) expel non-exempt participants from the plan; or (4) do not sponsor a group health plan at all.
224. None of these options is morally acceptable to the Group I Members, and each substantially burdens their religious exercise.
4. The Mandate Substantially Burdens the Association’s and the Insurance Company’s Religious Exercise.
225. The Association’s purpose, as stated in its Articles of Organization, is to “support Catholic employers . . . that, as part of their religious witness and exercise, provide health or other benefits to their respective employees in a manner that is consistent with Catholic values” and “[t]o incorporate . . . one or more Catholic insurance companies, in furtherance of the Association’s purposes.” Ex. A, art. IV. The Association has done this, in part, by providing a means by which members, if they choose, may access morally compliant health care benefits for their employees through the Association’s captive insurer, the Insurance Company.
226. The Mandate burdens the Association’s religious exercise by imposing burdens on the Post-Injunction Members, and by precluding the Association from
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providing the Post-Injunction Members its full range of benefits, including access to the services of its captive insurer.
227. The Insurance Company’s purpose, as stated in its articles, is “consistent with Catholic values, doctrine, and canon law [to] suppor[t] Catholic employers . . . that, as part of their religious witness and exercise, provide health or other benefits to their respective employees in a manner that is consistent with Catholic values.” Ex. C, art. IV; see also Ex. D, art. 3.1.
228. The Mandate burdens the Insurance Company’s religious exercise by imposing burdens on the Association’s Post-Injunction Members, each of which is an eligible insured for the Insurance Company, and by precluding the Insurance Company from providing Post-Injunction Members the full range of benefits it otherwise could provide them in the absence of the Mandate.
229. The Mandate substantially burdens Plaintiffs and the Post-Injunction Members by requiring participation in an activity prohibited by their sincerely held Catholic beliefs, preventing participation in conduct consistent with their sincerely held Catholic beliefs, and placing substantial pressure on them to engage in conduct contrary to their sincerely held Catholic beliefs. See Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114, 1138 (10th Cir. 2013).
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C. The Mandate Is Not a Generally Applicable Law, and Defendants Have No Compelling Interest in Enforcing It Against Plaintiffs or the Post-Injunction Members.
230. The Mandate is not generally applicable. It is riddled with exemptions that undermine the government’s supposed purpose in imposing it.
231. In imposing the Mandate, Defendants assert “compelling . . . interests” in “providing more women broad access to recommended preventive services, including contraceptive services, without cost sharing.” 78 Fed. Reg. at 39,873. Yet the Mandate, and the Affordable Care Act more broadly, leave tens of millions of women beyond the reach of this supposed interest.
232. Organizations with grandfathered plans, covering tens of millions of employees, are exempt from the requirement to provide CASC coverage for their employees.
233. Small employers with fewer than 50 full-time employees are exempt from the requirement to provide a group health plan at all. This leaves tens of millions of American workers without access to CASC coverage.
234. Hundreds of thousands of other individuals are left potentially untouched by the CASC coverage requirement because they are Anabaptists or members of HCSMs. See Young Ctr. for Anabaptist & Pietist Studies, Elizabethtown Coll., Q&A With Author Donald B. Kraybill, http://www.etown.edu/centers/young-center/conciseencyclopedia.aspx (last visited Dec. 27, 2013) (estimating the Anabaptist population in North America at 1.3 million); Alliance of Health Care Sharing Ministries, What Is a
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Health Care Sharing Ministry?, http://www.healthcaresharing.org/hcsm/ (last visited Dec. 27, 2013) (“HCSMs serve more than 210,000 people . . . .”). While they may be employed by organizations with group health plans that cover CASC benefits, Anabaptists and HCSM members have the option to participate in alternative health arrangements that may permissibly exclude some or all CASC benefits. Defendants chose not to impose the Mandate on these alternative health arrangements.
235. As a result of these categorical exemptions, some secular and some religious, the Mandate is not generally applicable.
236. Furthermore, Defendants do not have a compelling interest in enforcing the Mandate against Plaintiffs or the Post-Injunction Members. The requirement to cover CASC services applies to some, but not nearly all, employers, and confers benefits on some, but not nearly all, employees. The Mandate thus leaves appreciable damage to Defendants’ supposedly vital interest unprohibited and unregulated.
237. Also beyond the reach of the CASC coverage requirement are the employees of exempt “religious employers.” Defendants’ stated reason for the exemption is that these organizations “are more likely than other employers to employ people of the same faith who share the same objection, and who would therefore be less likely than other people to use contraceptive services even if such services were covered under their plan.” 78 Fed. Reg. at 39,874.
238. Under this reasoning, many Group II Members should also be exempt because, as Catholic organizations, they are just as likely as exempt “religious
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employers”—and more likely than secular, non-Catholic organizations—to employ persons of the Catholic faith who have the same religious objections to CASC services. Even so, Defendants may not condition a religiously based exemption on whether an organization’s employees share the same beliefs with, or have the same intensity of beliefs as, the organization itself.
239. Moreover, Defendants’ reasoning does not explain why the Affordable Care Act exempts small employers and employers with grandfathered plans without regard to whether their employees are more or less likely to use CASC services. Nor does it explain why the government chose not to impose the Mandate on alternate health arrangements by Anabaptists and Evangelical Protestants without regard to whether those individuals are more or less likely to use CASC services.
240. Defendants’ supposed interest in enforcing the Mandate against the PostInjunction Members is further undermined by Defendants’ admission that it cannot enforce the Mandate against TPAs that administer self-insured church plans for eligible organizations. In similar litigation that reached the Supreme Court on emergency review, Defendants conceded that they lack “authority to regulate either the church plan or the third party administrator of a self-insured church plan, and thus the third party administrator is under no legal compulsion to provide contraceptive coverage where an eligible organization with a self-insured church plan invokes the accommodation.” Mem. for Resp’ts in Opp’n, at 15, Little Sisters of the Poor Home for the Aged, Denver, Colorado v. Sebelius, Case No. 13A691 (U.S. Jan. 3, 2014).
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241. Defendants’ concession is fatal to its assertion of a compelling interest. It renders the Mandate’s regulatory scheme incomplete and, for Group II Members with church plans, potentially worthless. A Group II Member with a church plan could comply with the Mandate’s requirements and deliver its self-certification to its TPA (together with notice of the TPA’s duties). In that situation, Defendants contend, they would be powerless to do anything.
242. In other words, the Mandate forces some eligible organizations to fill out the self-certification form that, while violating the organizations’ religious beliefs, may serve no governmental interest. If the government has no power to enforce a law, it cannot have a compelling interest in enforcing that law.
D. The Mandate Is Not Neutral. 243. The Mandate is not neutral because the government discriminates between religious individuals and religious employers based on its classification system and because the government exempts other employers from the Mandate for wholly secular reasons. 244. Statements of Defendant Secretary Burwell’s predecessor, Secretary Sebelius, also show that the Mandate is not neutral. Secretary Sebelius is an avowed advocate for abortion rights and a vocal critic of Plaintiffs’ and the Post-Injunction Members’ religious teachings and beliefs regarding the sanctity of life. On October 5, 2011, Secretary Sebelius spoke at a NARAL Pro-Choice America fundraiser where she criticized individuals and organizations like Plaintiffs and the Post-Injunction Members
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that object to CASC benefits on religious grounds. She stated that “[w]e are in a war,” referring to religious opponents of the Mandate. She also stated, “Wouldn’t you think that people who want to reduce the number of abortions would champion the cause of widely available, widely affordable contraceptive services? Not so much.”
245. In a speech on July 16, 2013, Secretary Sebelius compared opposition to the Mandate to opposition to civil rights legislation in the 1960s. She accused opponents of the Mandate of spreading “fear and misinformation.” She applauded her listeners for supporting the Mandate just as they had supported “the fight against lynching.” See Kathleen Sebelius, Remarks at 104th NAACP Annual Conference (July 16, 2013), available at http://www.hhs.gov/secretary/about/speeches/sp20130716.html (last visited Dec. 27, 2013).
246. Defendants evidenced their intent to foreclose all moral options available to eligible organizations by eliminating the Piggyback Option in the Final Rules, despite their contrary assurances in the ANPRM.
E. The Mandate Is Not the Least Restrictive Means of Furthering the Government’s Interests.
247. The government has numerous means at its disposal, other than the Mandate or the accommodation, for advancing its goal of expanding access to CASC services.
248. The government could: (1) directly provide coverage of CASC benefits for individuals who do not currently receive such benefits through their health plans; (2) reimburse those who pay for CASC benefits through a combination of direct subsidies,
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tax deductions, and tax credits; (3) facilitate greater access to CASC benefits through the health insurance exchanges; or (4) work with other, willing organizations to expand access to CASC services.
249. Each of these avenues would more directly advance the government’s interest and simultaneously avoid the substantial burden on Plaintiffs’ and the PostInjunction Members’ religious practices imposed by the Mandate. In particular, the PostInjunction Members would not be conscripted as conduits for delivery of CASC services to their employees, as they are under the Mandate. VIII. CAUSES OF ACTION
FIRST CLAIM Violation of RFRA, 42 U.S.C. § 2000bb-1 250. Plaintiffs incorporate by reference all preceding paragraphs. 251. The Post-Injunction Members’ sincerely held religious beliefs prohibit them from in any way paying for, providing, or facilitating access to CASC benefits, including by maintaining a group health plan that covers or otherwise provides access to these services. 252. The Post-Injunction Members’ sincerely held religious beliefs equally prohibit them from contracting or arranging for provision of CASC services through a surrogate, such as an insurer or TPA.
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253. The Post-Injunction Members’ compliance with these sincerely held religious beliefs constitutes the exercise of religion, and such exercise is protected by the Religious Freedom Restoration Act, 42 U.S.C. § 2000bb-1.
254. The Mandate requires the Post-Injunction Members to provide, pay for, or directly or indirectly facilitate access to or to contract or arrange for provision of CASC services for their employees in violation of their sincerely held religious beliefs.
255. By threatening the Post-Injunction Members with ruinous fines and other penalties for failure to comply, the Mandate puts substantial pressure on the PostInjunction Members to abandon their religious beliefs or engage in conduct that violates their religious beliefs.
256. The Mandate exposes the Post-Injunction Members to significant competitive disadvantages.
257. The Mandate substantially burdens the Post-Injunction Members’ exercise of religion.
258. Defendants have no compelling interest in applying the Mandate to the Post-Injunction Members.
259. Applying the Mandate to the Post-Injunction Members is not the least restrictive means of furthering Defendants’ interests.
260. By enacting the Mandate and threatening to enforce it against the PostInjunction Members, Defendants have violated RFRA.
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SECOND CLAIM Violation of the Establishment Clause, Government Discrimination Among Religious Individuals and Religious Groups 261. Plaintiffs incorporate by reference all preceding paragraphs. 262. The Establishment Clause of the First Amendment to the United States Constitution requires government neutrality toward religion and prohibits the government from discriminating among religions and preferring some religious views over others. 263. The Establishment Clause also forbids discrimination among religious institutions based on the source of the institution’s financial support or on the religious composition of the organization’s employees. 264. Through its elaborate religious classifications, the Affordable Care Act and the Mandate discriminate among religious persons and organizations. 265. The Affordable Care Act and the Mandate impose selective burdens on certain religious adherents and certain religious institutions. 266. The Mandate’s narrow exemption for “religious employers” discriminates among religious organizations on the basis of religious views, religious status, or incidental institutional structure or affiliation by determining that some organizations are “religious enough” to qualify for a full exemption while others are not. 267. The Mandate’s exemption of integrated auxiliaries of churches, coupled with the government’s refusal to exempt organizations such as the Association’s Group II Members, is irrational and discriminatory.
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268. The Mandate adopts a particular theological view of what is acceptable moral complicity in an organization’s provision of CASC services, favoring some organizations with full exemption, requiring others to enter into the morally unacceptable “accommodation,” and extending neither exemption nor “accommodation” to still others.
269. The Mandate reflects Defendants’ judgment about the importance or centrality of religious mission, favoring the purpose and mission of “religious employers” over the purpose and mission of eligible organizations, and totally denying protection to organizations engaged in for-profit activities.
270. The Affordable Care Act and the Mandate violate the Establishment Clause.
THIRD CLAIM Violation of the Free Exercise Clause, Substantial Burden 271. Plaintiffs incorporate by reference all preceding paragraphs. 272. The Post-Injunction Members’ sincerely held religious beliefs prohibit them from in any way paying for, providing, or directly or indirectly facilitating access to CASC benefits, including by maintaining a group health plan that covers or otherwise provides access to these services. 273. The Post-Injunction Members’ sincerely held religious beliefs equally prohibit them from contracting or arranging for provision of CASC services by another.
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274. The Post-Injunction Members’ compliance with these sincerely held religious beliefs constitutes the exercise of religion. Such exercise is protected by the First Amendment Free Exercise Clause.
275. The Mandate is not a law of general applicability. 276. The Mandate is subject to categorical exemptions that undermine Defendants’ stated interests in the law. 277. The Mandate is not neutral. 278. The Mandate was promulgated for the purpose of discriminating against the Post-Injunction Members’ sincerely held religious beliefs regarding contraception, abortion, sterilization, and related counseling. 279. The Mandate substantially burdens the Post-Injunction Members’ exercise of religion. 280. The Mandate does not further a compelling governmental interest. 281. The Mandate is not the least restrictive means of furthering Defendants’ stated interests. 282. By enacting and threatening to enforce the Mandate against the PostInjunction Members, Defendants have violated the Free Exercise Clause.
FOURTH CLAIM Violation of the Free Exercise Clause, Intentional Discrimination 283. Plaintiffs incorporate by reference all preceding paragraphs.
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284. In promulgating the Mandate and refusing to exempt all but a narrow subset of religious organizations, Defendants deliberately targeted religious organizations like the Post-Injunction Members for discriminatory treatment.
285. In eliminating the Piggyback Option in the Final Rules, Defendants deliberately targeted religious organizations like the Post-Injunction Members for discriminatory treatment and sought to suppress their religious exercise.
286. By enacting and threatening to enforce the Mandate against the PostInjunction Members, Defendants have violated the Free Exercise Clause.
FIFTH CLAIM Violation of the Free Exercise and Establishment Clauses, Interference in Matters of Internal Religious Governance 287. Plaintiffs incorporate by reference all preceding paragraphs. 288. The Free Exercise Clause and the Establishment Clause protect the freedom of religious organizations to decide for themselves, free from government interference, matters of internal governance as well as those of faith and doctrine. 289. Under these Clauses, the government may not interfere with a religious organization’s internal decisions concerning the organization’s religious structure, leadership, or doctrine. 290. Under these Clauses, the government may not interfere with a religious organization’s internal decision if that interference would affect the faith and mission of the organization itself.
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291. Each Group I and Group II Member of the Association, including the PostInjunction Members that fall into these categories, has made an internal decision, dictated by its Catholic faith, that the health plans it makes available to its employees may not provide, pay for, or directly or indirectly facilitate access to CASC services.
292. The Mandate interferes with these Group I and Group II Members’ internal decisions concerning their structure and mission by requiring them to provide, pay for, or directly or indirectly facilitate practices that directly conflict with their Catholic beliefs.
293. The Mandate creates the risk of scandal by requiring Group I and Group II Members to provide, pay for, or directly or indirectly facilitate practices that directly conflict with Catholic teaching.
294. The Mandate artificially divides Catholic ministries into those that are exempt (such as dioceses) and those that are not (such as Catholic Charities). In so doing, the Mandate inhibits the Church’s ability to speak with one voice on issues of sexual morality and sanctity of life. The Mandate also interferes with the ability of Group I Members to provide support to their non-exempt affiliated ministries by sponsoring diocesan health plans both for their own employees and for employees of those non-exempt ministries.
295. The Mandate thus interferes with the faith and mission of the Catholic Church and its affiliated ministries.
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296. Because the Mandate intrudes on matters of internal religious governance and interferes with the faith and mission of the Catholic Church and its affiliated ministries, it violates the Establishment Clause and Free Exercise Clause.
SIXTH CLAIM Violation of the Free Speech Clause 297. Plaintiffs incorporate by reference all preceding paragraphs. 298. The Free Speech Clause of the First Amendment to the United States Constitution prohibits the government from compelling a speaker to convey a message that the speaker finds morally repugnant. 299. The Free Speech Clause also prohibits the government from regulating speech based on the content of the message, the viewpoint expressed in the message, the motivation for the message, or the identity of the speaker. 300. By requiring self-insured Group II Members to notify their TPA of the TPA’s obligations to provide or arrange for separate payment of CASC services, the Mandate compels such Group II Members to convey a message they find morally repugnant. 301. By prohibiting self-insured Group II Members from “interfer[ing] with” or “influencing” the TPA’s decision whether to provide or arrange for separate payments of CASC services, even while the TPA may lawfully refuse to do so, the Mandate restricts such Group II Members’ speech based on its religious content, viewpoint, and motivation.
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302. The Mandate also restricts self-insured Group II Members’ speech based on their identity as religious organizations because the Mandate contains no comparable restrictions on other organizations, who may freely attempt to “interfere with” or “influence” their TPA’s decisionmaking for any number of reasons.
303. Neither the speech compelled nor the speech restricted by the Mandate is commercial speech.
304. Defendants have no compelling interest in enlisting self-insured Group II Members as government mouthpieces or in censoring their religiously motivated speech concerning CASC services.
305. The Mandate’s combination of compelled speech and censorship is not necessary to further any interest of Defendants.
306. The Mandate’s combination of compelled speech and censorship is substantially underinclusive.
307. The Mandate’s combination of compelled speech and censorship violates self-insured Group II Members’ rights under the Free Speech Clause.
SEVENTH CLAIM Violation of the Free Speech and Free Exercise Clauses, Unbridled Discretion
308. Plaintiffs incorporate by reference all preceding paragraphs. 309. By purporting to give HHS, through HRSA, “discretion to exempt certain religious employers from the Guidelines,” the Mandate vests HHS with unbridled discretion over which organizations will have their First Amendment rights protected.
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310. Defendants have exercised unbridled discretion in a discriminatory manner by granting an exemption via a footnote on HRSA’s website for Group I Members but not for other organizations with identical religious objections to the Mandate, like the Association’s Group II and Group III Members.
311. Defendants have further exercised unbridled discretion by indiscriminately waiving enforcement of some provisions of the Affordable Care Act while refusing to waive enforcement of the Mandate, despite its conflict with the free exercise of religion.
312. Defendants’ actions violate Plaintiffs’ and the Post-Injunction Members’ right not to be subjected to a system of unbridled discretion when engaging in speech or religious exercise, as secured to them by the First Amendment to the United States Constitution.
EIGHTH CLAIM Violation of the Administrative Procedure Act, Lack of Good Cause and Improper Delegation 313. Plaintiffs incorporate by reference all preceding paragraphs. 314. The Affordable Care Act expressly delegates to HHS, through HRSA, the authority to establish guidelines concerning the “preventive care” that a group health plan and health insurance issuer must provide. 315. In light of this express delegation, Defendants were required to engage in formal notice-and-comment rulemaking in a manner prescribed by law before issuing the Guidelines. Proposed regulations were required to be published in the Federal Register
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and interested persons were required to be given an opportunity to participate in the rulemaking through the submission of written data, views, or arguments.
316. Defendants promulgated the Guidelines without engaging in formal noticeand-comment rulemaking in a manner prescribed by law.
317. Defendants, instead, wholly delegated their responsibility for issuing the Guidelines to a nongovernmental entity, the IOM.
318. The IOM did not permit or provide for the broad public comment otherwise required under the APA concerning the Guidelines.
319. Within two weeks of the IOM’s issuing its recommendations, HHS issued the Guidelines. HHS admitted that the Guidelines were “developed” by IOM.
320. HHS abdicated its responsibility to administer, interpret, and faithfully execute the Affordable Care Act by adopting the IOM’s recommendations wholesale, without further notice-and-comment rulemaking and without consideration of numerous relevant factors that IOM explicitly declined to consider.
321. Defendants’ stated reasons that public comments were unnecessary, impractical, and opposed to the public interest are false and insufficient, and do not constitute “good cause.”
322. Without proper notice and opportunity for public comment, Defendants were unable to take into account the full implications of the Guidelines by completing a meaningful “consideration of the relevant matter presented.”
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323. Thereafter, Defendants did not consider or respond to the voluminous subsequent comments they received in opposition to the Interim Final Rules or the NPRM.
324. Therefore, Defendants have taken agency action not in observance with procedures required by law, and Defendants’ actions should be set aside pursuant to the Administrative Procedure Act, 5 U.S.C. § 500 et seq.
NINTH CLAIM Violation of the Administrative Procedure Act,
Arbitrary and Capricious Action 325. Plaintiffs incorporate by reference all preceding paragraphs. 326. In promulgating the Mandate, Defendants failed to consider the constitutional and statutory implications of enforcing the Mandate against the PostInjunction Members and similar organizations. 327. The Mandate arbitrarily distinguishes between exempt “religious employers,” accommodated “eligible organizations,” and fully subject for-profit employers. 328. Defendants’ explanation for their decision not to exempt Group II organizations from the Mandate runs counter to the evidence submitted by religious organizations during the comment periods. 329. Defendant Secretary Burwell’s predecessor, Secretary Sebelius, in remarks made at Harvard University on April 8, 2013, essentially conceded that the Defendants
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completely disregarded the religious liberty concerns submitted by thousands of religious organizations and individuals.
330. Defendants’ issuance of the Mandate was arbitrary and capricious within the meaning of 5 U.S.C. § 706(2)(A) because Defendants failed to consider the full implications of the Mandate and they did not take into consideration the evidence against it.
TENTH CLAIM Violation of the Administrative Procedure Act, Agency Action Not in Accordance With the Law 331. Plaintiffs incorporate by reference all preceding paragraphs. 332. The Weldon Amendment prohibits Defendants HHS and the Department of Labor from discriminating against a group health plan, including those maintained by the Post-Injunction Members, on the basis that the plan fails to provide, pay for, provide coverage of, or refer for abortions. 333. Section 1303(b)(1)(A) of the Affordable Care Act states that “nothing in this title” (including the provision requiring plans to cover women’s “preventive care” services”) “shall be construed to require a qualified health plan to provide coverage of [abortion] services . . . as part of its essential health benefits for any plan year.” 42 U.S.C. § 18023(b)(1)(A)(i). 334. Some of the drugs approved as “contraceptives” by the FDA and thus required to be covered by the Mandate are drugs known to cause medical abortions.
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335. The Mandate violates the Weldon Amendment because it discriminates against the Post-Injunction Members by requiring these members’ group health plans to provide, pay for, or facilitate access to abortion services.
336. The Mandate violates Section 1303(b)(1)(A) of the Affordable Care Act by requiring the Post-Injunction Members’ group health plans to provide coverage of abortion services.
337. As set forth above, the Mandate violates RFRA and the First Amendment. 338. Under 5 U.S.C. § 706(2)(A), the Mandate is contrary to existing law and in violation of the Administrative Procedure Act.
PRAYER FOR RELIEF Wherefore Plaintiffs request that the Court: a. Declare that the Mandate and Defendants’ enforcement of the Mandate against
Plaintiffs and the Post-Injunction Members violate the Religious Freedom Restoration Act, and that no taxes, penalties, or other burdens can be charged or assessed against Plaintiffs or the Post-Injunction Members for failure to pay for, provide, or directly or indirectly facilitate access to CASC services, including any penalties under 26 U.S.C. §§ 4980D and 4980H; b. Declare that the Mandate and Defendants’ enforcement of the Mandate against Plaintiffs and the Post-Injunction Members violate the First Amendment to the United States Constitution, and that no taxes, penalties, or other burdens can be charged or assessed against Plaintiffs or the Post-Injunction Members for failure to
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pay for, provide, or directly or indirectly facilitate access to CASC services, including any penalties under 26 U.S.C. §§ 4980D and 4980H; c. Declare that the Mandate was issued in violation of the Administrative Procedure Act, and that no taxes, penalties, or other burdens can be charged or assessed against Plaintiffs or the Post-Injunction Members for failure to pay for, provide, or directly or indirectly facilitate access to CASC services, including any penalties under 26 U.S.C. §§ 4980D and 4980H; d. Declare that Defendants may not interfere with Plaintiffs’ or the Post-Injunction Members’ relationships with their insurers or TPAs, or with Plaintiffs’ or the PostInjunction Members’ attempts to contract for morally compliant health coverage for their employees and members, and that no taxes, penalties, or other burdens can be charged or assessed against such insurers or TPAs in relation to their work for Plaintiffs and the Post-Injunction Members; e. Issue a temporary restraining order, preliminary injunction, and permanent injunction prohibiting Defendants from enforcing the Mandate against Plaintiffs and the Post-Injunction Members; prohibiting Defendants from charging or assessing taxes, penalties, or other burdens against Plaintiffs or the Post-Injunction Members for failure to pay for, provide, or directly or indirectly facilitate access to CASC services; and prohibiting Defendants from interfering with Plaintiffs’ and the Post-Injunction Members’ relationships with their insurers or TPAs and with
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Plaintiffs’ and the Post-Injunction Members’ attempts to contract for morally
compliant health coverage for their employees and members;
f. Award Plaintiffs the costs of this action and reasonable attorney’s fees as provided
by law, including 42 U.S.C. § 1988(b); and
g. Award such other and further relief as the Court deems equitable and just.
DATED: July 1, 2014.
Respectfully submitted,
/s/J. Angela Ables______________________ J. Angela Ables (Okla. Bar #0112) Johnny R. Blassingame (Okla. Bar ##21110) Kerr, Irvine, Rhodes & Ables 201 Robert S. Kerr Ave., #600 Oklahoma City, OK 73102 405-272-9221; f:405-236-3121 aables@kiralaw.com jblassingame@kiralaw.com
and
L. Martin Nussbaum (Colo. Bar #15370) Ian S. Speir (Colo. Bar #45777) Eric Kniffin (D.C. Bar #999473) Lewis Roca Rothgerber LLP 90 S. Cascade Ave., Suite 1100 Colorado Springs, CO 80903 719-386-3000; f:719-386-3070 mnussbaum@lrrlaw.com ispeir@lrrlaw.com ekniffin@lrrlaw.com Pro Hac Vice Motions Pending
Attorneys for Plaintiffs
sdg
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VERIFICATION PURSUANT TO 28 U.S.C. § 1746 I declare under penalty of perjury that the foregoing allegations pertaining the teachings of the Catholic Church and to The Catholic Benefits Association LCA and The Catholic Insurance Company, Inc. are true and correct to the best of my knowledge. I further declare under penalty of perjury that Exhibit A attached hereto is a true and accurate copy of the Articles of Organization of The Catholic Benefits Association LCA, Exhibit B is a true and accurate copy of the Bylaws of The Catholic Benefits Association LCA, Exhibit C is a true and accurate copy of the Certificate of Incorporation of the Catholic Insurance Company, Inc., and Exhibit D is a true and accurate copy of the Bylaws of the Catholic Insurance Company, Inc.
Executed on July 1, 2014.
/s/Most Rev. William E. Lori Most Rev. William E. Lori Archbishop of Baltimore President, The Catholic Benefits Association LCA President, The Catholic Insurance Company, Inc.
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Case 5:14-cv-00685-R Document 1 Filed 07/01/14 Page 80 of 80 VERIFICATION PURSUANT TO 28 U.S.C. § 1746
I declare under penalty of perjury that the foregoing allegations pertaining to The Catholic Benefits Association LCA and its members are true and correct to the best of my knowledge.
Executed on July 1, 2014. /s/ Nancy Matthews, Esq. Nancy Matthews, Esq. Director of Membership, The Catholic Benefits Association LCA Corporate Secretary, The Catholic Benefits Association LCA
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 Case 5:14-cv-00685-R Document 32 Filed 10/03/14 Page 1 of 92

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA

)

THE CATHOLIC BENEFITS

)

ASSOCIATION LCA; THE

)

CATHOLIC INSURANCE

)

COMPANY, INC.

)

)

Plaintiffs,

)

)

v.

) Civil Case No. 5:14-cv-00685-R

)

SYLVIA M. BURWELL, Secretary of )

the United States Department of Health )

and Human Services; UNITED STATES )

DEPARTMENT OF HEALTH AND )

HUMAN SERVICES; THOMAS E.

)

PEREZ, Secretary of the United States )

Department of Labor; UNITED

)

STATES DEPARTMENT OF LABOR; )

JACOB J. LEW, Secretary of the United )

States Department of the Treasury;

)

UNITED STATES DEPARTMENT OF )

THE TREASURY

)

)

Defendants.

)

AMENDED VERIFIED COMPLAINT Plaintiffs THE CATHOLIC BENEFITS ASSOCIATION LCA, a nonprofit Oklahoma limited cooperative association, on behalf of itself and its members, and THE CATHOLIC INSURANCE COMPANY, an Oklahoma corporation, on behalf of itself and its insureds, by their attorneys, allege:

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I. NATURE OF THE ACTION 1. This case is about one of our country’s most cherished freedoms: the
freedom to exercise one’s religion according to the dictates of conscience and to be free of government establishment or favor of one religion over another. Conscience is the source of the dignity of humankind. It is the most distinctive aspect of humanity. This is why James Madison called it “a fundamental and undeniable truth, that Religion or the duty which we owe to our Creator and the manner of discharging it, can be directed only by reason and conviction, not by force or violence.” James Madison, Memorial and Remonstrance (circa June 20, 1785). Those words resonate today as they did in 1785. Defendants here, federal agencies and their officers, seek to coerce Plaintiffs’ members and insureds into supporting practices—contraception, abortion, sterilization, and related counseling—that they find morally abhorrent and that violate their sincerely held religious beliefs. Faced with the prospect of ruinous fines if they do not comply with the government’s mandate, Plaintiffs ask this Court to enjoin Defendants, and declare and secure to Plaintiffs, their members and insureds, and their contracting providers that which the Constitution and laws have long guaranteed: the right to exercise their religion free of government control; to be free of the selective burdens this administration has imposed on their practices; to proclaim their convictions freely; to associate with others, particularly their co-religionists, in defense of their liberty; and to hold the government to its most fundamental charge, obedience to the rule of law.
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2. Plaintiff The Catholic Benefits Association, LCA (“Association”) is an association of Catholic employers that currently provide health benefits to their employees through insured group health plans or self-funded plans.
3. The Association brings this action on behalf of a subset of its members consisting of all members who joined the Association after June 4, 2014 (the “Post-June 4 Members”).1 At times herein, Plaintiffs may refer to a seemingly broader category of Association members, such as “Group II Members.” Where such a term appears, Plaintiffs intend for it to be read as restricted to Post-June 4 Members that fall into the stated category, unless context dictates otherwise.
4. Some of the Post-June 4 Members desire to provide health benefits to their employees through individual self-funded plans and to purchase stop-loss insurance coverage from Plaintiff The Catholic Insurance Company (“Insurance Company”). These Post-June 4 Members plan to implement this insurance arrangement upon completion of their current plan years and successful resolution of this lawsuit.
5. All Post-June 4 Members are Catholic organizations and, as part of their religious witness and exercise, are committed to providing no health care benefits to their employees inconsistent with Catholic teaching. According to Catholic teaching, such benefits must not include any artificial interference with the creation and nurture of new life, specifically contraception, abortion-inducing drugs and devices, surgical abortion,

1

Plaintiffs’ Verified Complaint and Emergency Motion for Temporary Restraining

Order filed July 1, 2014, referred to these members as “Post-Injunction Members.” For

the sake of clarity, Plaintiffs will now refer to these members as “Post-June 4 Members.”

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sterilization, and related counseling. Such is contrary to Catholic teaching and, thus, to Plaintiffs’ and the Post-June 4 Members’ sincerely held religious beliefs.
6. Because their faith forbids it, the Post-June 4 Members’ health plans do not cover contraception, abortion-inducing drugs or devices, sterilization, and related counseling (“CASC Services”).
7. Defendants have promulgated a series of rules that burden the Post-June 4 Members’ sincerely held religious beliefs. These rules (collectively, the “Mandate” or “CASC Mandate”) require the Post-June 4 Members to provide, pay for, or otherwise directly or indirectly facilitate access to CASC services for their employees.
8. The Post-June 4 Members cannot provide, pay for, or directly or indirectly facilitate access to CASC services without violating the teachings of the Catholic Church. If the Post-June 4 Members fail to comply with the Mandate, however, they face ruinous fines of up to $36,500 per affected beneficiary per year, in addition to other penalties.
9. Defendants have thus put the Post-June 4 Members to a damnable choice: comply with the Mandate and abandon their religious beliefs, or defy the Mandate and face crippling fines and other penalties. The Post-June 4 Members are forced to choose between following the dictates of their conscience or caving to the diktat of the government. Compliance means material cooperation with evil. Defiance means devastating consequences.
10. The Mandate also impermissibly coerces the Association and the Insurance Company. The Association and the Insurance Company exist to enable member
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employers to provide morally compliant health benefits to their employees and plan participants, and to provide an effective vehicle for protection of members’ shared interests. But the Mandate makes the mission of the Association and the Insurance Company effectively illegal by preventing Association members from cooperating with the Insurance Company and its third party administrator to provide morally compliant health benefits to employees and plan participants.
11. Federal law prohibits the government from putting Plaintiffs and the PostJune 4 Members to this choice. The Religious Freedom Restoration Act (“RFRA”), 42 U.S.C. § 2000bb-1(b), prohibits the government from substantially burdening a person’s exercise of religion unless the government can demonstrate that application of the burden to that person is in furtherance of a compelling governmental interest and is the least restrictive means of achieving it. The government cannot meet that standard here. The Mandate likewise violates the Free Exercise, Establishment, and Free Speech Clauses of the First Amendment and the Administrative Procedure Act, 5 U.S.C. § 500 et seq. (“APA”).
12. The CASC Mandate takes effect against Association Members at different points in 2014, on the anniversary of their plan years.
13. Upon completion of their current plan years, many Post-June 4 Members intend to explore remaining or becoming self-funded and contracting with the Insurance Company for stop-loss insurance coverage. Such an arrangement will permissibly avoid state insurance mandates but not the federal Mandate or its effects. Thus, whether or not
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the Post-June 4 Members choose to arrange insurance through the Insurance Company, these members’ plans will exclude or continue to exclude coverage of CASC services only if they acquire the relief sought in this action.
14. Plaintiffs seek a declaration that the Mandate cannot legally be applied to them or the Post-June 4 Members. Plaintiffs also seek an injunction barring its enforcement against them and the Post-June 4 Members. II. GENESIS OF THIS LAWSUIT
15. On March 12, 2014, the Association, the Insurance Company, and several Association members filed a substantially similar action in this Court against these same Defendants, seeking to enjoin the Mandate (“CBA I”). Plaintiffs in CBA I (“CBA I Plaintiffs”) filed that day their Verified Complaint, Motion for Preliminary Injunction, and Brief in Support of Motion for Preliminary Injunction. CBA I Plaintiffs sought relief on behalf of themselves and all others similarly situated. In addition, the Association sought relief on behalf of its present and future members.
16. On June 4, 2014, this Court granted some CBA I Plaintiffs some of the preliminary injunctive relief they requested. See Order, The Catholic Benefits Ass’n v. Sebelius, No. 5:14-cv-00240-R (W.D. Okla. June 4, 2014) [hereinafter “PI Order”]. The Court concluded, among other things, that (1) the Association “possesses associational standing to pursue its members’ claims,” id. at 9; (2) that the Association’s “Group II Members” and “Group III Members” were or would be substantially burdened by the Mandate, id. at 13 n.10, 16; and (3) that, under Hobby Lobby Stores, Inc. v. Sebelius, 723
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F.3d 1114 (10th Cir. 2013), the Mandate could not satisfy strict scrutiny under RFRA, see id. at 13. The Court therefore granted preliminary injunctive relief to the Association’s Group II and Group III Members.
17. The Court nonetheless concluded that the Insurance Company lacked standing. See id. at 11. The Court also ruled that the Association’s “Group I Members” were not entitled to preliminary injunctive relief because they are exempt from the Mandate; in the Court’s view, the Mandate “ask[ed] nothing of” Group I Members. See id. at 14-15.
18. The Court held that preliminary injunctive relief extended “to all present members of the [Association] that fit within Groups II and III.” Id. at 19. The Court was “satisfied” that the Association’s tests for membership “have ensured the uniformity of belief among the current Group II and Group III members to which this preliminary relief will extend.” Id. at 20 n.16. Nonetheless, the Court refused to extend this relief to future members of the Association, concluding that “it is too difficult for the Court to presently determine whether these future members are entitled to relief.” Id. at 20 (emphasis added).
19. On the date the Court entered its PI Order (June 4, 2014), the Association had over 400 member employers, plus over 2,000 Catholic parishes that were and still are members of the Association.
20. On June 18, 2014, the Association filed a Motion to Amend Preliminary Injunction in CBA I, requesting that this Court amend its PI Order “to include those
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Catholic employers who joined the Association after June 4, 2014[,] and are now ‘current members.’” Motion to Amend Preliminary Injunction at 1, The Catholic Benefits Ass’n v. Sebelius, No. 5:14-cv-00240-R (W.D. Okla. June 18, 2014) [hereinafter “Motion to Amend PI”]. The Association noted that, from the time the Court issued its PI Order until the time the Association filed its Motion to Amend, three new Catholic employers had joined the Association under identical membership criteria and were “identically situated to the Association’s pre-June 4 members in all relevant aspects.” Id. at 1. The Association also “anticipate[d] that it will receive more applications and accept more members before the end of June and in the months ahead.” Id. at 3-4.
21. Most importantly, the Motion to Amend PI informed the Court that “[a]ll three new current members are in acute need of relief, as they will be subject to the Mandate as of July 1[, 2014].” Id. at 4 (emphasis added).
22. Defendants opposed the Motion to Amend PI in CBA I, even though Defendants readily consented to similar relief in a substantially similar case in this Court, Reaching Souls International, Inc. v. Sebelius, 2013 WL 6804259 (W.D. Okla. Dec. 27, 2013). There, GuideStone Financial Resources of the Southern Baptist Convention (“GuideStone”), a Protestant Evangelical organization, sought preliminary injunctive relief on behalf of a class consisting of employers that “have adopted or in the future adopt the GuideStone Plan to provide medical coverage for their employees.” Class Action Complaint, Reaching Souls International, Inc. v. Sebelius, No. CIV-13-1092-D (W.D. Okla. Oct. 11, 2013), available at http://www.becketfund.org/wpcontent/uploads/2013/10/Reaching-Souls-Complaint.pdf (last visited June 26, 2014).
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Defendants “d[id] not object to the scope of the resulting preliminary injunction including the named plaintiffs as well as any members of the class plaintiffs have proposed in their complaint.” Reaching Souls, 2013 WL 6804259, at *1 (quotation omitted). Therefore, when this Court, through Judge Timothy D. DeGiusti, entered a preliminary injunction in the Reaching Souls case, injunctive relief extended to both present and future members of the GuideStone Plan. See id.
23. Defendants have never adequately explained to the Court why they consented to future-member relief in Reaching Souls but opposed substantially similar future-member relief requested by the Association in CBA I.
24. On June 26, 2014—a mere five days before the Mandate was scheduled to take effect against some of the Post-June 4 Members—the Court denied the Association’s Motion to Amend PI. See Order, The Catholic Benefits Ass’n v. Sebelius, No. 5:14-cv00240-R (W.D. Okla. June 26, 2014) [hereinafter “Order Denying Motion to Amend”]. The Court reasoned that, when it entered the PI Order, it was “well aware of the possibility of the [Association] subsequently adding new members,” and it “decided not to extend the relief to future members of the [Association], which necessarily includes those entities that acquired membership in the [Association] even a few days after the Court’s entry of the preliminary injunction.” Id. at 3. Although the Motion to Amend PI explained that the Mandate was bearing down on new members and new members were in acute need of relief, the Court was “unpersuaded that there is any need to act in order to correct clear error or prevent manifest injustice.” Id. The Court concluded that new
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members were “not left without the means to protect their interests” because “they are free to seek their own relief.” Id.
25. Employers have continued to join the Association after June 4. Between June 4 and July 1, when Plaintiffs filed the present lawsuit, the CBA accepted approximately 151 new member employers plus around 958 more parish employers. Each of these members satisfies the Association’s strict membership criteria, and pays or agrees to pay the requisite dues and fees. These are the “Post-June 4 Members” referred to above.
26. Because the Post-June 4 Members were denied relief in CBA I, the Association has filed this action on their behalf. III. JURISDICTION AND VENUE
27. The Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1361 because this action arises under the Constitution and laws of the United States. The Court has jurisdiction to render declaratory and injunctive relief pursuant to 28 U.S.C. §§ 2201 and 2202, and 42 U.S.C. § 2000bb-1.
28. Venue lies in this district under 28 U.S.C. § 1391(e)(1). The Association is an organization incorporated under the laws of the State of Oklahoma, and it has standing to represent its members’ interests in this district. The Insurance Company resides in this district because it is an organization incorporated under the laws of the State of Oklahoma, and its principal place of business is here.
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29. Some of the Association’s officers, and one of its directors, reside in this district. The depositories and bank accounts of the Association and Insurance Company are located and maintained in this district. Member dues and fees are paid to the Association in this district and deposited with the Association’s and Insurance Company’s depository in this district.
30. In addition, a substantial part of the events or omissions giving rise to the claims occurred in this district. The Association has done significant work for its members in this district, and it is presently a plaintiff in a substantially similar case in this district (CBA I) in which its then-current members were granted preliminary injunctive relief. The present case arises out of both the Court’s refusal in CBA I to extend preliminary relief to the Association’s Post-June 4 Members and the Court’s express recognition that the Post-June 4 Members are “free to seek their own relief.” Also, the Insurance Company would be harmed by the application of the Mandate in this district because the Mandate prohibits it from participating in and providing morally compliant insurance arrangements for Association members. IV. PARTIES
A. Plaintiffs 1. The Catholic Benefits Association
31. The Catholic Benefits Association is an Oklahoma nonprofit limited cooperative association. Its articles of organization state that it is organized “exclusively for religious, charitable, and educational purposes” that are “consistent with Catholic values, doctrine, and canon law.” Specifically, they state that the Association is
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organized “[t]o support Catholic employers . . . that, as part of their religious witness and exercise, provide health or other benefits to their respective employees in a manner that is consistent with Catholic values”; “[t]o work and advocate for religious freedom of Catholic and other employers seeking to conduct their ministries and businesses according to their religious values”; “[t]o make charitable donations to Catholic ministries”; and “[t]o incorporate . . . one or more Catholic insurance companies, in furtherance of the Association’s purposes.” See Ex. 1, Articles of Organization of The Catholic Benefits Association LCA (“CBA Articles”), art. IV.
32. The Most Reverend William E. Lori, Archbishop of Baltimore, is the Association’s incorporator.
33. All of the Association’s directors are Catholic archbishops. Three-fourths of its directors are required to be Catholic. See Ex. 2, Bylaws of The Catholic Benefits Association LCA (“CBA Bylaws) art. 5.2.
34. All of the Association’s officers are Catholic.
35. The Association has a standing Ethics Committee, comprised exclusively of Catholic bishops. The Association’s bylaws state:
The Ethics Committee shall have exclusive authority to review all benefits, products, and services provided by the Association, its affiliates or subsidiaries, or their respective contractors to ensure such conform with Catholic values and doctrine. If they do not, the committee shall determine the necessary corrections to bring such benefits, products, and services into conformity with Catholic values and doctrine. The decision of the committee shall be final and binding on the Association, its board, and its officers . . . . Ex. 2, “CBA Bylaws, art. 5.13.2.
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36. To be a member of the Association, an organization must meet these criteria, among others: (1) “[i]t shall be a Catholic employer,” and (2) “[w]ith regard to the benefits it provides to its employees, it shall, as part of its religious witness and exercise, be committed to providing no benefits inconsistent with Catholic values.” Ex. 1, CBA Articles, art. VI.
37. The Bylaws of the Association provide that “[a]n employer shall satisfy the requirement of being Catholic if either the employer is listed in the current edition of The Official Catholic Directory or the secretary or his or her designee makes such a determination.” Ex. 2, CBA Bylaws, art. III, § 3.1.1.
38. The Bylaws further provide that a for-profit employer seeking membership in the Association “shall be deemed Catholic only if (i) Catholics (or trusts or other entities wholly controlled by such Catholic individuals) own 51% or more of employer, (ii) 51% or more of the members of the employer’s governing body, if any, is comprised of Catholics, and (iii) either the employer’s owners or governing body has adopted a written policy stating that the employer is committed to providing no benefits to the employer’s employees or independent contractors inconsistent with Catholic values.” Ex. 2, CBA Bylaws, art. III, § 3.1.2.
39. All members of the Association meet the Association’s criteria for being Catholic.
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40. The Association has only one class of membership. However, and as a result of Defendants’ arbitrary classification scheme under the Mandate, the Association refers to its members as falling into three categories:
 Group I Members are Catholic employers (as defined in paragraph 37, supra) that meet Defendants’ definition of “religious employers” and are exempt from the Mandate.
 Group II Members are Catholic employers (as defined in paragraph 37, supra) that meet Defendants’ definition of “eligible organizations” for purposes of the “accommodation.”
 Group III Members are Catholic employers (as defined in paragraphs 37 and 38, supra) that do not fall into the previous two categories, a group composed largely, if not exclusively, of for-profit employers.
41. As of June 4, 2014—the date the Court issued a preliminary injunction in CBA I—the Association had 459 employer members, with substantial numbers in each of Groups I, II, and III. In addition, it had over 2,000 parish employer members.
42. When Plaintiffs filed the present lawsuit, the Association had around 570 employer members plus over 3,000 parish employer members, including over 150 PostJune 4 employer members plus over 950 Post-June 4 parish employer members.
43. To remain a member of the Association in good standing, an employer must pay certain membership dues and fees to the Association. These dues and fees depend on the number of “covered employees” in the member-employer’s health plan. As of June 30, 2014, a member with 1,000 covered employees in its health plan would pay annual dues and fees to the Association of approximately $18,000.
44. The Association has standing to represent all of its present and future members.
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45. The Mandate harms the Association’s Post-June 4 Members. 46. The Association is seeking to protect Post-June 4 Members’ ability to access morally compliant health coverage for their respective employees or agents. 47. Neither the claims asserted nor the relief requested by the Association requires individualized proof. 48. The Association can adequately represent Post-June 4 Members’ interests. All Post-June 4 Members are similarly situated in that all are compelled by the Mandate either to pay for, provide, or directly or indirectly facilitate access to CASC services for their own employees or the employees of their affiliates in violation of their sincerely held Catholic beliefs.
2. The Catholic Insurance Company 49. The Catholic Insurance Company is a Catholic for-profit insurance company, incorporated in Oklahoma and operating with its principal office in Oklahoma City. 50. The Insurance Company “at all times act[s] in a manner consistent with Catholic values, doctrine, and canon law, including supporting Catholic employers . . . that, as part of their religious witness and exercise, provide health or other benefits to their respective employees in a manner that is consistent with Catholic values.” Ex. 3, Certificate of Incorporation for The Catholic Insurance Company (“CIC Certificate”), art. IV, see also Ex. 4, Bylaws of the Catholic Insurance Company, Inc. (“CBA Bylaws”), art. 3.1.
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51. The Association owns 100 percent of the Insurance Company’s stock.
52. All of the Insurance Company’s directors are Catholic archbishops.
53. All of the Insurance Company’s officers are Catholic.
54. The Insurance Company “is organized and authorized to provide, in a manner consistent with Catholic values, doctrine, and canon law, . . . stop loss insurance providing protection to employers that are Members . . . of The Catholic Benefits Association. . .” Ex. 3, CIC Certificate, art. IV.
55. The Insurance Company has a standing Ethics Committee, comprised exclusively of Catholic bishops. Its bylaws state:
The Ethics Committee of the Catholic Benefits Association shall also serve as the Ethics Committee for the Insurance Company. In that capacity, it shall have exclusive authority to review all benefits, products, and services provided by the Corporation, and its respective contractors to ensure such conform with Catholic values and doctrine. If they do not, the committee shall determine the necessary corrections to bring such benefits, products, and services into conformity with Catholic values and doctrine. The decision of the committee shall be final and binding on the Corporation, its board, and its officers. Ex. 4, Bylaws of The Catholic Insurance Company (“CIC Bylaws”) art. 8.5. 56. The Oklahoma Department of Insurance regulates the Insurance Company. 57. The Insurance Company also contracts with medical provider networks, one or more third party administrators, a reinsurer, a benefits consultant, and others to arrange health coverage for Association members’ employees when such members have self-funded plans.
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58. The Insurance Company is “authorized to contribute such portions of its earnings or surplus to Catholic charitable or religious organizations as may from time to time be determined by the Corporation’s board of directors.” Ex. 3, CIC Certificate, art. IV; Ex. 4, CIC Bylaws 3.1(i).
59. Many of the Association’s members, including Post-June 4 Members, have indicated a desire to maintain self-funded health plans and seek stop-loss coverage through the Insurance Company. Even under these arrangements, however, the Association’s Group II and Group III Members will not avoid the Mandate or its effects. Thus, whether or not Post-June 4 Members arrange for health coverage through the Insurance Company, they are subject to the Mandate or its effects absent the judicial relief sought here.
B. Post-June 4 Members 60. Each of the Association’s Post-June 4 Members satisfies the same membership criteria that every Association member has been required to satisfy from the founding of the Association. These Post-June 4 Members include, by way of example, the Roman Catholic Diocese of Norwich and its affiliates, among others, Catholic Charities and Family Services, Diocese of Norwich, Inc. (“Catholic Charities and Family Services”).
1. Roman Catholic Diocese of Norwich 61. The Roman Catholic Diocese of Norwich is that “portion of the people of God,” located in eastern Connecticut and Fisher Island, New York, “which is entrusted to [the Bishop of Norwich] for him to shepherd with his priests. See Code of Canon Law, c.
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369 (1983). The Diocese carries out the spiritual, educational, and social service mission of the Catholic Church in eastern Connecticut. The Bishop of Norwich exercises pastoral care for more than 80 parishes and missions and other Catholic ministries within the Diocese.
62. The Roman Catholic Diocese of Norwich comprises about 2,000 square miles. Through its parishes and related Catholic organizations, the Diocese ministers to more than 230,000 Catholics and tens of thousands of others in eastern Connecticut.
63. The educational mission of the Roman Catholic Diocese of Norwich is carried out, in part, through the Diocesan School Office, which oversees thirteen elementary schools, two diocesan secondary schools, another private religious secondary school, and a residential treatment program that provides integrated treatment services to adolescent boys and young men, all serving a school population of about 4,800.
64. The charitable mission of the Roman Catholic Diocese of Norwich is carried out through local parishes and various ministries founded by or otherwise related to the Diocese, including Catholic Charities and Family Services, Diocese of Norwich, Inc.
65. The Roman Catholic Diocese of Norwich provides health care through a Catholic insurance trust. The plan covers about 540 lives.
66. Consistent with Catholic values and teaching, the Roman Catholic Diocese of Norwich’s health plan does not cover CASC services.
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68. Many of the affiliated ministries within the Roman Catholic Diocese of Norwich participate in the diocesan plan, including Catholic Charities and Family Services, Diocese of Norwich, Inc. Unlike the Diocese, some of these affiliated ministries are not exempt from the Mandate but are eligible for the so-called “accommodation.”
69. The Roman Catholic Diocese of Norwich’s plan is not a “grandfathered plan” under the grandfathered plan provisions of Section 1251 of the Affordable Care Act and regulations published thereunder.
2. Catholic Charities and Family Services, Diocese of Norwich, Inc. 70. The mission of Catholic Charities and Family Services is to respond to Christ’s call to care for those in need by providing compassionate social services for individuals and families living in the Diocese of Norwich, with special attention to people who are poor or disadvantaged. 71. Catholic Charities and Family Services adheres to Catholic social teachings, including those teachings about the sanctity of life, the care for one’s neighbors, and the stewardship of God’s creation. 72. One of the ministries of Catholic Charities and Family Services is Refugee, Migration and Immigration Services, which helps families navigate issues relating to citizenship and immigration issues and helps them feel at home in their new community. 73. Catholic Charities and Family Services also operates the Office of Emergency Services & Basic Needs, which helps individuals and families deal with urgent needs as a result of a crisis such as fire, flood, family violence, and loss of income.
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74. Catholic Charities and Family Services participates in the Roman Catholic Diocese of Norwich’s health plan, and the employees of Catholic Charities and Family Services are offered insurance through the plan. The plan does not cover CASC services.
C. Defendants 75. Defendants are appointed officials of the federal government and federal government agencies responsible for promulgating, administering, and enforcing the Mandate. 76. Defendant Sylvia M. Burwell is the Secretary of the United States Department of Health and Human Services. She is sued only in her official capacity. 77. Defendant United States Department of Health and Human Services (“HHS”) is an executive agency of the United States government and is responsible for the promulgation, administration, and enforcement of the Mandate. 78. Defendant Thomas E. Perez is the Secretary of the United States Department of Labor. He is sued only in his official capacity. 79. Defendant United States Department of Labor is an executive agency of the United States government and is responsible for the promulgation, administration, and enforcement of the Mandate. 80. Defendant Jacob J. Lew is the Secretary of the United States Department of the Treasury. He is sued only in his official capacity.
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81. Defendant United States Department of the Treasury is an executive agency of the United States government and is responsible for the promulgation, administration, and enforcement of the Mandate.
V. FACTUAL ALLEGATIONS: PLAINTIFFS’ AND POST-JUNE 4 MEMBERS’ BELIEFS AND PRACTICES REGARDING CONTRACEPTION, ABORTION, STERILIZATION, AND RELATED COUNSELING 82. The Post-June 4 Members, like all Association members, adhere in belief
and practice to the teachings of the Catholic Church on contraception, abortion, sterilization, and related counseling.
83. While the Catholic Church uses the term “abortion” to include both surgical abortion and abortion-inducing drugs and devices, Defendants refer to some abortion-inducing drugs and devices as “contraceptives.”
84. The Catechism of the Catholic Church (“Catechism”) teaches that life begins at conception and that “[h]uman life must be respected and protected absolutely from the moment of conception.” See Catechism § 2270 (1994). Thus, “[d]irect abortion, that is to say, abortion willed either as an end or a means, is gravely contrary to the moral law.” Id. § 2271. Moreover, “[f]ormal cooperation in an abortion constitutes a grave offense.” Id. § 2272.
85. The Catholic Church also teaches that sexual union between spouses must at all times “remain ordered per se to the procreation of human life.” Catechism § 2366. Accordingly, the Church teaches that all forms of contraception and sterilization are contrary to the moral law. Section 2370 of the Catechism provides that “every action
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which, whether in anticipation of the conjugal act, or in its accomplishment, or in the development of its natural consequences, proposes, whether as an end or as a means, to render procreation impossible is intrinsically evil.”
86. Section 234 of the Compendium of the Social Doctrine of the Church (2004) provides that “[a]ll programmes of economic assistance aimed at financing campaigns of sterilization and contraception . . . are to be morally condemned as affronts to the dignity of the person and the family.”
87. Section 91 of the papal encyclical Evangelium Vitae (1995) teaches that “[i]t is . . . morally unacceptable to encourage, let alone impose, the use of methods such as contraception, sterilization, and abortion in order to regulate births.”
88. Catholic moral theology teaches that a person’s material cooperation in an intrinsically evil act is morally illicit. Material cooperation occurs when the cooperator does not share the principal’s evil intent but participates in circumstances that are essential to the commission of the act, such that the act would not occur but for the cooperator’s participation. Catholics may not materially cooperate with evil unless they have exhausted every other alternative that does not effect a greater evil than the first evil to be avoided.
89. Catholic moral theology also prohibits an act that, although morally licit, may give rise to “scandal.” The Catechism defines scandal as “an attitude or behavior which leads another to do evil.” Catechism § 2284. The Catechism teaches that “[a]nyone who uses the power at his disposal in such a way that it leads others to do
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wrong becomes guilty of scandal and responsible for the evil that he has directly or indirectly encouraged.” Id. § 2287. This is so even if the act itself is morally permissible.
90. As Catholic institutions, Plaintiffs and the Post-June 4 Members believe they must adhere to the above teachings as matters of religious faith and doctrine. Consequently, Plaintiffs and the Post-June 4 Members believe that the use or procurement of contraception, abortion-inducing drugs and devices, sterilization, or related counseling is contrary to the Catholic faith. Plaintiffs and the Post-June 4 Members further believe, as part of their faith, that they must not provide, pay for, or directly or indirectly facilitate access to such services and, therefore, that they must not include CASC benefits in their group health plans.
91. On September 12, 2014, the CBA Ethics Committee, consisting of four Catholic archbishops, convened to reexamine the CASC Mandate in light of the Defendants’ August 27, 2014, Interim Final Rules. Having concluded their examination, the Ethics Committee adopted this resolution: “that the use of contraceptives, abortioninducing drugs and devices, sterilization, and counseling in support of such options (‘CASC services’) is contrary to Catholic values. A Catholic employer, therefore, cannot, consistent with Catholic values, comply with the government’s CASC mandate, with the ‘accommodation’ provided to ‘eligible employers,’ or with the ‘augmented accommodation’—unless such an employer has exhausted all alternatives that do not effect a greater evil and unless such an employer has taken reasonable steps to avoid giving scandal.”
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92. In order to avoid engaging in morally illicit acts, materially cooperating with evil, and creating scandal, the Post-June 4 Members sponsor or participate in health plans that exclude coverage of CASC services. VI. THE MANDATE: STATUTORY AND REGULATORY BACKGROUND
A. The Affordable Care Act 93. On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act, Pub. L. 111-148, 124 Stat. 119 (Mar. 23, 2010). Days later, the President signed into law the Health Care and Education Reconciliation Act of 2010, Pub. L. 111-152, 124 Stat. 1029 (Mar. 30, 2010). These two acts, together, are known as the Affordable Care Act (the “Affordable Care Act” or “Act”). 94. The Act imposes a series of mandates. The “individual mandate” requires an “applicable individual” to purchase a health insurance policy that provides “minimum essential coverage.” See 26 U.S.C. § 5000A(a). 95. All individual health insurance coverage, whether purchased through the federally funded exchange or otherwise, must include preventive care, without cost sharing. 45 C.F.R. § 147.130(a)(1). 96. The “employer mandate” requires large employers to sponsor “group health plans” for the benefit of their employees or pay a penalty. See 26 U.S.C. §§ 4980H(a)(1), 5000A(f)(2). A “group health plan” is “a plan (including a self-insured plan) of, or contributed to by, an employer . . . to provide health care (directly or otherwise) to the employees, former employees, . . . or their families.” Id. § 5000(b)(1).
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97. The Act also imposes new requirements on group health plans. As relevant here, the Act requires certain employers’ group health plans to cover “preventive care and screenings” for women “as provided for in comprehensive guidelines supported by the Health Resources and Services Administration.” 42 U.S.C. § 300gg-13(a)(4). In covering these services, the plan may not “impose any cost sharing requirements,” such as deductibles or copays, on plan participants. See id.
98. As discussed below, it is through these comprehensive guidelines supported by the Health Resources and Services Administration that Defendants are attempting to force the Post-June 4 Members to provide, pay for, or directly or indirectly facilitate access to CASC services in violation of their religious beliefs.
99. Failure to comply with the above mandates results in fines, penalties, and potential civil lawsuits.
100. An “applicable individual” that fails to maintain “minimum essential coverage” is subject to monetary penalties that may vary based on the individual’s income. See 26 U.S.C. § 5000A(c).
101. A large employer that fails to sponsor a group health plan for its employees is subject to an excise tax of $2,000 per employee per year after the first 30 employees. 26 U.S.C. § 4980H(a), (c)(1).
102. Any employer (other than a “religious employer” and an employer providing coverage under a grandfathered plan) that sponsors a group health plan but
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fails to offer required coverage for women’s “preventive care” is subject to an excise tax of $36,500 per affected beneficiary per year. 26 U.S.C. § 4980D(b), (e)(1).
103. None of the above mandates is generally applicable. Each is subject to significant qualifications and exceptions. “All told, the contraceptive mandate ‘presently does not apply to tens of millions of people.’” Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751, 2763 (2014) (quoting Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114, 1143 (10th Cir. 2013)).
104. The individual mandate is subject to two explicitly religious exceptions, neither of which applies to or benefits Catholics.
105. First, individuals who are members of a “health care sharing ministry” are not required to purchase health insurance. See 26 U.S.C. § 5000A(d)(2)(B). A “health care sharing ministry” (hereinafter “HCSM”) is a nonprofit organization whose members “share a common set of ethical or religious beliefs and share medical expenses among members in accordance with those beliefs,” that “has been in existence at all times since December 31, 1999,” and that meets other criteria. See id.
106. The HCSM exemption applies to only three organizations: Samaritan Ministries International, Christian Care Ministry, Inc. (through its “Medi-Share” program), and Christian Healthcare Ministries, Inc. Each organization is Evangelical Protestant on Mennonite in its founding. See Samaritan Ministries, Healthcare for People of Biblical Faith, http://samaritanministries.org/healthreform/ (last visited Feb. 23, 2014) (explaining exemption); Medi-Share, How Does Medi-Share Work?,
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http://mychristiancare.org/exemption.aspx (last visited Feb. 23, 2014) (same); Christian Healthcare Ministries, Is Christian Healthcare Ministries Included in U.S. Health Care Legislation?, http://www.chministries.org/downloads/ACAInsert.pdf (last visited Feb. 23, 2014) (same).
107. Second, the individual mandate does not apply to individuals who are members of “a recognized religious sect or division” that is “conscientiously opposed to acceptance of the benefits of any private or public insurance,” that has “made provision” for its members for a “substantial” period of time, and that “has been in existence at all times since December 31, 1950.” See 26 U.S.C. §§ 5000A(d)(2)(A), 1402(g)(1).
108. Though phrased in general terms, this exemption was designed for, and applies exclusively to, members of historic Anabaptist congregations (Amish, Mennonites, Hutterites, and members of the Bruderhof Communities).
109. The mandates applicable to group health plans are also subject to substantial secular exceptions.
110. First, small employers—employers with fewer than 50 full-time employees—are not required to sponsor a group health plan at all. See 26 U.S.C. § 4980H(c)(2)(A).
111. By the government’s own estimates, the small-employer exemption exempts 96 percent of all employers in the United States. These small employers employ nearly 34 million workers. See The White House, The Affordable Care Act Increases
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Choice and Saving Money for Small Businesses, at 1, http://www.whitehouse.gov/ files/documents/health_reform_for_small_businesses.pdf (last visited Dec. 26, 2013).
112. Second, “grandfathered” group health plans are not required to cover certain, otherwise mandated services. As relevant here, grandfathered plans are not required to cover women’s “preventive care” services as described in 42 U.S.C. § 300gg13(4). See 42 U.S.C. § 18011; 45 C.F.R. § 147.140(c)(1).
113. Estimates indicate that 37 percent of employers that sponsor group health plans have at least one grandfathered plan and that 26 percent of all employees are enrolled in such a plan. See Kaiser Family Foundation, Employer Health Benefits: 2014 Annual Survey, at 252, available at http://files.kff.org/attachment/2014-employer-healthbenefits-survey-full-report (last visited Oct. 2, 2014). By the government’s own estimates, 98 million individuals were enrolled in grandfathered group health plans in 2013. See 75 Fed. Reg. 41,726, 41,732 (July 19, 2010).
B. Anti-Abortion Provisions in or Applicable to the Affordable Care Act 114. The text, context, and history of the Affordable Care Act reflect clear congressional intent that no group health plan be required to cover abortion services. 115. The Act provides that “[n]otwithstanding any other provision of this title (or any amendment made by this title) . . . nothing in this title (or any amendment made by this title), shall be construed to require a qualified health plan to provide coverage of [abortion] services . . . as part of its essential health benefits for any plan year.” 42 U.S.C. § 18023(b)(1)(A)(i). The Act also provides that “the issuer of a qualified health
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plan shall determine whether or not the plan provides coverage of [abortion] services . . . as part of such benefits for the plan year.” Id. § 18023(b)(1)(A)(ii).
116. The Affordable Care Act itself does not contain a restriction on the use of federal funds to pay for abortion services. This omission nearly defeated the Act’s passage when a group of pro-life Democrats in the House of Representatives, led by Rep. Bart Stupak of Michigan, threatened to withhold their votes from the bill. To secure their votes, President Obama issued an executive order that prohibited the use of federal funds to pay for “abortion services . . . , consistent with a longstanding Federal statutory restriction that is commonly known as the Hyde Amendment.” Exec. Order No. 13,535, Patient Protection and Affordable Care Act’s Consistency with Longstanding Restrictions on the Use of Federal Funds for Abortion, 3 C.F.R. 201 (2010).
117. In addition, the Weldon Amendment—a feature of every appropriations act for HHS since 2005—provides, “None of the funds made available in this Act [making appropriations for the Departments of Labor and HHS] may be made available to a Federal agency or program, or to a State or local government, if such agency, program, or government subjects any institutional or individual health care entity to discrimination on the basis that the health care entity does not provide, pay for, provide coverage of, or refer for abortions.” Consolidated Appropriations Act of 2012, Pub. L. No. 112-74, div. F, tit. V, § 507(d)(1), 125 Stat. 786, 1111 (2011). The term “health care entity” includes “a health insurance plan.” Id.
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118. The Affordable Care Act and the Weldon Amendment prohibit the government from coercing the consciences of health care providers that respect the sanctity of life. Executive Order 13,535 reflects the federal government’s longstanding avoidance of coercing the consciences of taxpayers that oppose abortion and government funding of abortion services.
119. As explained below, Defendants’ Mandate breaches the federal government’s historic protection of conscience with regard to abortion and violates the Affordable Care Act, the Weldon Amendment, and other federal laws.
C. Regulatory Background 1. The 2010 Interim Final Rules and the IOM Guidelines
120. On July 19, 2010, Defendants published interim final rules (“2010 Interim Final Rules”) addressing the requirement that group health plans cover “preventive care” services for women. See 75 Fed. Reg. 41,726 (July 19, 2010).
121. Defendants did not permit notice and public comment prior to issuance of the 2010 Interim Final Rules, stating that “it would be impracticable and contrary to the public interest to delay putting the provisions in these interim final regulations in place until a full public notice and comment process was completed.” 75 Fed. Reg. at 41,730. The 2010 Interim Final Rules further stated that “it is essential that participants, beneficiaries, insureds, plan sponsors, and issuers have certainty about their rights and responsibilities.” Id.
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122. Defendants opted to publish interim final regulations, rather than proposed regulations subject to a notice-and-comment period, because “interim final regulations provide the public with an opportunity for comment, but without delaying the effective date of the regulations.” 75 Fed. Reg. at 41,730.
123. Despite the alleged urgent necessity of the 2010 Interim Final Rules and the supposed need for immediate “certainty” concerning coverage requirements, the 2010 Interim Final Rules did not define “preventive care” services for women. They instead provided that “HHS is developing these guidelines and expects to issue them no later than August 1, 2011.” Id. at 41,731.
124. HHS delegated its duty to develop the preventive care guidelines to a nongovernmental health policy organization, the Institute of Medicine (“IOM”). IOM thereafter convened the Committee on Preventive Services for Women (“Committee”), consisting of sixteen members.
125. At least seven committee members had explicit ties to Planned Parenthood, NARAL Pro-Choice America, and other organizations that advocate for increased access to abortion and contraception. Such organizations stand to benefit from guidelines that require group health plans to cover CASC services.
126. In developing its guidelines, the Committee held three “open sessions” and invited a select group of individuals and organizations to make presentations on preventive care. Presenters included Planned Parenthood Federation of America, The Guttmacher Institute, the National Women’s Law Center, the National Women’s Health
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Network, and the American Congress of Obstetricians and Gynecologists, all of which are well-known advocates for increased access to abortion and contraception.
127. None of the selected presenters included groups or individuals, religious or otherwise, that opposed government-mandated coverage of CASC services.
128. On July 19, 2011, IOM published its report (“Report”) identifying the women’s preventive services that should be subject to mandatory coverage. In Recommendation 5.5 of the Report, IOM recommended mandatory coverage for “the full range of Food and Drug Administration-approved contraceptive methods, sterilization procedures, and patient education and counseling for women with reproductive capacity.” IOM, Clinical Preventive Services for Women: Closing the Gaps (July 2011), at 10, available for download at http://www.iom.edu/Reports/2011/Clinical-PreventiveServices-for-Women-Closing-the-Gaps.aspx (last visited Oct. 1, 2014).
129. As the Report acknowledged, the scope of the Committee’s review was extremely limited and focused primarily on clinical efficacy of certain preventive services, not on insurance coverage. See Report at 75-76. Even within that narrow scope, the Committee “had neither the time and resources nor a charge to conduct its own systematic reviews” of the evidence on efficacy. Id. at 75.
130. Furthermore, because its review was so limited, the Committee did not consider “a host of other issues” that should be evaluated when considering whether to cover preventive services as part of a health plan. These issues include “established practice; patient and clinician preferences; availability; ethical, legal, and social issues;
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and availability of alternatives,” as well as cost-effectiveness. Report at 76 (emphasis added).
131. Because the Committee did not consider these issues, it did not evaluate the impact of its recommendations on sponsors of group health plans that object on religious grounds to providing, paying for, or directly or indirectly facilitating access to CASC services. Nor did the Committee evaluate its recommendations in light of RFRA and other federal laws and policies that protect rights of conscience.
132. One member of the Committee, Dr. Anthony Lo Sasso, dissented from the Committee’s recommendations, noting that “the lack of time prevented a serious and systematic review of evidence for preventive services” and that “the process set forth in the law was unrealistic in the time allocated to such an important and time-intensive undertaking.” Report at 232. In Dr. Lo Sasso’s view, “the committee process for evaluation of the evidence lacked transparency and was largely subject to the preferences of the committee’s composition. Troublingly, the process tended to result in a mix of objective and subjective determinations filtered through a lens of advocacy.” Id.
133. On August 1, 2011, less than two weeks after IOM published the Report, the Health Resources and Services Administration (“HRSA”), a sub-agency within HHS, issued the Women’s Preventive Services Guidelines (“Guidelines”). The Guidelines adopted the Report’s recommendations nearly verbatim.
134. In particular, the Guidelines provided that non-grandfathered group health plans are required to provide coverage, without cost-sharing, for “[a]ll Food and Drug
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Administration approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity.” HRSA, Women’s Preventive Services Guidelines, http://www.hrsa.gov/womensguidelines/ (last visited Dec. 26, 2013) (“HRSA Guidelines”).
135. HRSA did not explain how, if at all, the Guidelines accounted for the various factors relevant to insurance coverage decisions that IOM declined to consider. Nor did HRSA consider how the Committee’s composition and ideological biases affected its deliberations and ultimate recommendations.
136. HRSA simply rubber-stamped IOM’s recommendations. Indeed, in issuing the Guidelines, HRSA admitted that the Guidelines were “developed” by IOM and simply “supported” by HRSA. See HRSA Guidelines (“The HRSA-supported health plan coverage guidelines, developed by the Institute of Medicine, will help ensure that women receive a comprehensive set of preventive services without having to pay a copayment, co-insurance or a deductible.”).
137. HHS did not permit public comment on the Report or the Guidelines prior to issuing the Guidelines. The Guidelines were enacted via publication on the HRSA website, rather than through the Federal Register or the Code of Federal Regulations.
138. The contraceptive methods approved by the FDA include birth-control pills, “emergency contraception,” intrauterine devices (“IUDs”), and sterilization procedures. See FDA, Birth Control: Medicines to Help You, http://www.fda.gov/ForConsumers/ByAudience/ForWomen/FreePublications/
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ucm313215.htm (last visited Dec. 26, 2013). Some of these methods, including Plan B (the “morning after pill”), Ella (the “week after pill”), and the Copper IUD, are known or reasonably believed to be abortion-inducing because they operate by “preventing attachment (implantation) to the womb (uterus).” See id.
2. The Amended 2010 Interim Final Rules and the “Religious Employer” Exemption
139. On August 1, 2011, Defendants promulgated regulations amending the 2010 Interim Final Rules. See 76 Fed. Reg. 46,621 (Aug. 3, 2011).
140. Defendants acknowledged the “considerable feedback” they had received concerning mandatory coverage for preventive services, including “several” comments on the religious liberty implications of requiring religious organizations to cover CASC services as part of their health plans. 76 Fed. Reg. at 46,623.
141. In response to these comments, Defendants amended the 2010 Interim Final Rules “to provide HRSA additional discretion to exempt certain religious employers from the Guidelines where contraceptive services are concerned.” 76 Fed. Reg. at 46,623.
142. “Religious employer” was defined in an exceedingly narrow fashion as an organization meeting the following criteria: “(1) [t]he inculcation of religious values is the purpose of the organization”; “(2) [t]he organization primarily employs persons who share the religious tenets of the organization”; “(3) [t]he organization serves primarily persons who share the religious tenets of the organization”; and “(4) [t]he organization is a nonprofit organization as described in section 6033(a)(1) and section 6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code of 1986, as amended.” 76 Fed. Reg. at 46,626.
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143. Section 6033(a)(3)(A) of the Internal Revenue Code refers to “churches, their integrated auxiliaries, and conventions or associations of churches,” and “the exclusively religious activities of any religious order.” 26 U.S.C. § 6033(a)(3)(A)(i), (iii).
144. So defined, the “religious employer” exemption applied only to a subset of churches, their integrated auxiliaries, and religious orders that satisfied the first three prongs of this test. The exemption did not apply to churches with significant charitable or educational activities, such as a parish food pantry or parochial school that either served individuals regardless of their faith or employed people of other faiths. It did not apply to separately incorporated ministries such as faith-based charitable organizations, religious colleges, and religious health care institutions. And it did not apply to for-profit employers that seek to run their businesses consistent with their religious values.
145. The “religious employer” exemption did not apply to the vast majority of organizations with religious objections to mandatory coverage of CASC services.
146. As Defendants admitted, the exemption was designed for the limited purpose of “accommodat[ing] . . . the unique relationship between a house of worship and its employees in ministerial positions.” 76 Fed. Reg. at 46,623.
147. Even so, under the amended 2010 Interim Final Rules, Defendants contemplated that the religious employer exemption would apply to “plans established or maintained by religious employers.” 76 Fed. Reg. at 46,626 (emphasis added). So written, the exemption applied on a plan-by-plan basis and would allow a religious
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employer, such as a diocese, to sponsor a plan that excluded CASC coverage and in which non-exempt employers could permissibly participate. In colloquial terms, this was known as the “Piggyback Option.”
148. Consistent with the amended 2010 Interim Final Rules, HRSA exercised its discretion to exempt “religious employers” from the requirement to cover CASC services. HRSA did so via a footnote on its website. See HRSA Guidelines n.**.
149. As they had done before, Defendants promulgated the amended 2010 Interim Final Rules without notice or opportunity for public comment, determining that “an additional opportunity for public comment would be impractical and contrary to the public interest.” 76 Fed. Reg. at 46,624.
3. The Safe Harbor 150. After the amended 2010 Interim Final Rules were issued, Defendants received “over 200,000 responses” addressed to the religious employer exemption. 77 Fed. Reg. 8,725, 8,726 (Feb. 15, 2012). 151. In a press release on January 20, 2012, HHS acknowledged the “important concerns some have raised about religious liberty.” HHS, A Statement by U.S. Department of Health and Human Services Secretary Kathleen Sebelius, http://www.hhs.gov/news/press/2012pres/01/20120120a.html (last visited Dec. 26, 2013). 152. On February 10, 2012, Defendants “finalize[d], without change,” the amended 2010 Interim Final Rules and maintained the definition of “religious employer.” 77 Fed. Reg. at 8,725.
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153. At the same time, Defendants created a one-year “temporary enforcement safe harbor,” a self-imposed moratorium on enforcement of the CASC coverage requirement for “certain non-exempted, non-profit organizations with religious objections to covering contraceptive services.” 77 Fed. Reg. at 8,728.
154. The safe harbor applied to “group health plans sponsored by non-profit organizations that, on and after February 10, 2012, do not provide some or all of the contraceptive coverage otherwise required . . . because of the religious beliefs of the organization.” See 77 Fed. Reg. 16,501, 16,502-03 (Mar. 21, 2012). The safe harbor would remain in effect for an eligible organization until its first plan year beginning on or after August 1, 2013. Id. at 16,503.
155. In the interim, Defendants promised new rules that would “accommodat[e]” the religious objections of these organizations. 77 Fed. Reg. at 8,727.
156. The safe harbor did not apply to group health plans sponsored by for-profit employers.
4. The Advance Notice of Proposed Rulemaking 157. On March 21, 2012, Defendants issued an Advance Notice of Proposed Rulemaking (“ANPRM”), seeking comment on “alternative ways of providing contraceptive coverage without cost sharing in order to accommodate non-exempt, nonprofit religious organizations with religious objections to such coverage.” Certain Preventive Services Under the Affordable Care Act, 77 Fed. Reg. 16,501, 16,503 (Mar. 21, 2012).
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158. The ANPRM presented “questions and ideas to help shape these discussions” and set forth “two goals” that Defendants sought to achieve. 77 Fed. Reg. at 16,503. The first was “to maintain the provision of contraceptive coverage without cost sharing to individuals who receive coverage through non-exempt, non-profit religious organizations with religious objections to contraceptive coverage in the simplest way possible.” Id. The second goal was to “protect such religious organizations from having to contract, arrange, or pay for contraceptive coverage.” Id. (emphases added).
159. Defendants thus envisioned an “accommodation,” an “arrangement under which contraceptive coverage is provided without cost sharing to participants and beneficiaries covered under a plan independent of the objecting religious organization that sponsors the plan.” Id. (emphasis added).
5. The Final Rules and the Purported “Accommodation” 160. After receiving over 200,000 comments in response to the ANPRM, Defendants issued proposed rules (“Proposed Rules”) on February 1, 2013. See 78 Fed. Reg. 8,456 (Feb. 6, 2013). 161. Defendants received over 400,000 comments in response to the Proposed Rules. See 78 Fed. Reg. 39,870, 39,871 (July 3, 2013). The comment period closed on April 8, 2013. See 78 Fed. Reg. at 8,457. 162. On June 28, 2013, “[a]fter consideration of the comments,” Defendants issued final rules (“Final Rules”). See 78 Fed. Reg. at 39,871. The Final Rules make two principal changes to the amended Interim Final Rules.
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163. First, the Final Rules revise the definition of “religious employer” to mean “an organization that is organized and operates as a nonprofit entity and is referred to in section 6033(a)(3)(A)(i) or (a)(3)(A)(iii) of the Internal Revenue Code of 1986, as amended.” 45 C.F.R. § 147.131(a). Although Defendants have clarified that an organization does not fail to qualify for the exemption simply because its “purposes extend beyond the inculcation of religious values or because [it] hires or serves people of different religious faiths,” the exemption is still limited to “houses of worship.” 78 Fed. Reg. at 39,874. Defendants admit that the revised definition does “not materially expand the universe of religious employers.” Id.
164. Second, the Final Rules purport to “accommodate” so-called “eligible organizations.” An organization is eligible for the “accommodation” if it meets four criteria: “(1) [t]he organization opposes providing coverage for some or all of any contraceptive services required to be covered . . . on account of religious objections”; “(2) [t]he organization is organized and operates as a nonprofit entity”; “(3) [t]he organization holds itself out as a religious organization”; and “(4) [t]he organization self-certifies, in a form and manner specified by the Secretary, that it satisfies the [above] criteria.” 26 C.F.R. § 54.9815-2713A(a).
165. Defendants justified this distinction between “religious employers” and “eligible organizations” by reasoning that “houses of worship and their integrated auxiliaries that object to contraceptive coverage on religious grounds are more likely than other employers to employ people of the same faith who share the same objection, and who would therefore be less likely than other people to use contraceptive services even if
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such services were covered under their plan.” 78 Fed. Reg. at 39,874. Defendants drew this conclusion without reviewing the available evidence, and the conclusion is not supported by substantial evidence.
166. An eligible organization seeking the “accommodation” must execute the self-certification “prior to the beginning of the first plan year to which an accommodation is to apply” and provide a copy of the self-certification to its insurance provider (if it maintains an insured group health plan) or its third party administrator (if it maintains a self-insured plan). 78 Fed. Reg. at 39,875. A copy of the original self-certification form, EBSA Form 700, is attached as Ex. 5.
167. An eligible organization that executes the self-certification and sends it to its insurance provider or its third party administrator “is considered to comply with any requirement” to provide CASC services. 78 Fed. Reg. at 39,897; 45 C.F.R. § 147.131(e)(2).
168. Upon receipt of the self-certification, an insurer under a group health plan purportedly must “[e]xpressly exclude [CASC] coverage from the group health coverage provided in connection with the group health plan” and purportedly must “[p]rovide separate payments for any [CASC] services . . . for plan participants and beneficiaries for so long as they remain enrolled in the plan.” 78 Fed. Reg. at 39,895; 26 C.F.R. § 54.9815-2713A(c)(2); 26 C.F.R. § 54.9815-2713AT(c)(2).
169. Likewise, a third party administrator (“TPA”) that receives a copy of the self-certification must “provide or arrange separate payments for contraceptive services
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for participants and beneficiaries in the plan without cost sharing.” 78 Fed. Reg. at 39,880; 26 C.F.R. § 54.9815-2713A(b)(2); 26 C.F.R. § 54.9815-2713AT(b)(2).
170. The Final Rules impose additional requirements and limitations for eligible organizations with self-insured health plans.
171. The Final Rules state that the self-certification form “shall be an instrument under which the plan is operated.” 78 Fed. Reg. at 39,894; 29 C.F.R. § 2510.3-16(b). The original self-certification form likewise states that it is “an instrument under which the plan is operated.” See Ex. 5, EBSA Form 700 (“Form 700”).
172. By executing and delivering the certification form, the eligible organization makes the TPA both the plan administrator and the claims administrator for contraceptive services provided under the plan. 78 Fed. Reg. at 39,879; 29 C.F.R. § 2510.3-16(b) (“[T]he self-certification provided by the eligible organization to a [TPA] . . . shall be treated as a designation of the [TPA] as the plan administrator . . . responsible for [t]he plan’s compliance . . . with respect to coverage of contraceptive services[.]”).
173. The organization’s self-certification to its TPA must include notice that “[t]he eligible organization will not act as the plan administrator or claims administrator with respect to claims for [CASC] services, or contribute to the funding of [CASC] services,” and that the “[o]bligations of the third party administrator are set forth in 29 CFR [§] 2510.3-16 and 26 CFR [§] 54.9815-2713A,” viz., regulatory sections outlining the duties of the TPA with respect to CASC coverage. 78 Fed. Reg. at 39,894-95; 26 C.F.R. § 54.9815-2713A(b)(1)(ii).
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174. The TPA, having received the notice, is obligated to pay the full cost of contraceptive coverage, or arrange for the provision of contraceptive coverage, without cost sharing, to plan participants and beneficiaries. 78 Fed. Reg. at 39,894-95; 26 C.F.R. § 54.9815-2713A(b)(2); 29 C.F.R. § 2510.3-16(b).
175. A purpose of the self-certification form, therefore, is to require the TPA to deliver CASC benefits to the eligible organization’s covered employees. 78 Fed. Reg. at 39,894; 29 C.F.R. § 2510.3-16(b)(1) (duties arising from delivery of the self-certification are exclusively “with respect to coverage of contraceptive services”).
176. Delivery of the self-certification is the necessary cause of the insurer’s or TPA’s duty to provide CASC coverage. Absent such delivery, the insurer or TPA has no such duty, and the eligible organization remains obligated to cover CASC services directly. See 78 Fed. Reg. at 39,894-95; 26 C.F.R. § 54.9815-2713A(b), (c).
177. An eligible organization’s employees receive CASC benefits only because they are enrolled in the eligible organization’s health plan and the eligible organization has a contractual relationship with its insurer or TPA. See 78 Fed. Reg. at 39,894-95; 26 C.F.R. § 54.9815-2713A(b), (c). Thus, an employee’s receipt of CASC services is directly tied to the employee’s enrollment in the eligible organization’s group health plan, and coverage of the CASC services ceases when the employee ceases to be enrolled in the plan.
178. As a result, the Final Rules still compel religious organizations to “contract, arrange, or pay for contraceptive coverage,” despite Defendants’ promise in
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the ANPRM that it would “protect” religious organizations from having to do so. 77 Fed. Reg. at 16,503 (emphases added).
179. The insurer or TPA must also provide written notice of the availability of CASC benefits to an eligible organization’s employees at the same time that the TPA delivers other plan enrollment materials. 78 Fed. Reg. at 39,893-96; 26 C.F.R. § 54.9815-2713A(d); 29 C.F.R. § 2590.715-2713A(d); 45 C.F.R. § 147.131(d).
180. When a self-insured eligible organization signs and delivers the selfcertification, the form itself, coupled with the regulations it references, becomes an addendum to the eligible organization’s plan, and the TPA, previously in possession of the names and contact information for the organization’s employees, becomes the plan administrator for the CASC benefits portion of the amended plan.
181. The Final Rules require the eligible organization to make its TPA, for the first time, a fiduciary “under section 3(16) of ERISA.” 78 Fed. Reg. at 39, 879, 39,894; 29 C.F.R. § 2510.3-16(b). Such TPAs, therefore, become subject to criminal penalties, 29 U.S.C. § 501; civil penalties, 29 U.S.C. § 502(l); and civil liability to participants, 29 U.S.C. § 502(a), if they fail to provide coverage of CASC services.
182. Section 3(16) of ERISA, 29 U.S.C. 1002(16), states that the term “administrator” means “the person specifically so designated by the terms of the instrument under which the plan is operated” or, “if an administrator is not so designated, the plan sponsor.”
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183. The Final Rules also impose a gag order on eligible organizations with selfinsured plans by providing, “The eligible organization must not, directly or indirectly, seek to interfere with a third party administrator’s arrangements to provide or arrange separate payments for contraceptive services for participants or beneficiaries, and must not, directly or indirectly, seek to influence the third party administrator’s decision to make any such arrangements.” 78 Fed. Reg. at 39,893 at 26 C.F.R. § 54.98152713A(b)(1)(iii).
184. Thus, under the Final Rules, not only must the eligible organization tell its TPA that the TPA must provide CASC coverage. The organization is also prohibited from saying anything that might “directly or indirectly . . . interfere” with that message or “influence” the TPA’s coverage decision.
185. In combination, these two rules (1) force the eligible organization to convey the government’s message and (2) prohibit the eligible organization from conveying its own message. The Final Rules thus enlist eligible organizations as mouthpieces for the government.
186. Under the Final Rules, a TPA that receives a copy of an eligible organization’s self-certification has discretion concerning whether to “enter into or remain in a contractual relationship with the eligible organization or its plan to provide administrative services for the plan.” 26 C.F.R. § 54.9815-2713A(b)(2).
187. The Final Rules do not limit the grounds on which a TPA may object to providing or arranging separate payments for CASC services. A TPA may, therefore,
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object on religious grounds to these responsibilities, and it would have “no obligation . . . to enter into or remain in a contract with the eligible organization.” 78 Fed. Reg. at 39,880.
188. The Affordable Care Act (“ACA”) imposes a “medical loss ratio” on insurers: if the insurer pays out less than 85% of total premiums in claims, the difference must be refunded to the plan sponsor. 42 U.S.C. § 300gg-18(b)(1)(A)(i) and (b)(1)(B).
189. The Final Rules promise “guidance that an issuer . . . that makes payments for contraceptive services [under the accommodation] may treat those payments as an adjustment to claims costs for purposes of medical loss ratio . . . calculations.” 78 Fed. Reg. at 39,878. This “adjustment” would “compensate[] for any increase in incurred claims associated with making payments for contraceptive services.” Id. As a result, insured employers who enter into the accommodation will nevertheless share in paying the premiums for CASC services.
190. Finally, the Final Rules eliminated the Piggyback Option and, in so doing, eliminated the last viable moral alternative for Group II employers to avoid the Mandate. The Final Rules declared that the religious employer exemption would be “determined on an employer-by-employer basis,” not a plan-by-plan basis, and each eligible organization—even those participating in plans sponsored by exempt religious employers—“must independently satisfy the self-certification standard.” 78 Fed. Reg. at 39,886.
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6. Hobby Lobby and Defendants’ Proposed Rules 191. On June 30, 2014, the Supreme Court held in Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751 (2014), that Defendants’ CASC Mandate, “as applied to closely held corporations, violates RFRA. Id. at 2785. 192. The Court held that the CASC Mandate substantially burdened the forprofit businesses’ religious exercise and that Defendants had failed to satisfy the “leastrestrictive means standard.” Id. at 2779, 2783. 193. On August 27, 2014, Defendants published Proposed Rules “in light of” Hobby Lobby that would extend the accommodation to “certain closely held for-profit entities.” 79 Fed. Reg. 51,118, 51,122 (Aug. 27, 2014). 194. The Proposed Rules propose for comment “two possible approaches to defining a qualifying closely held for-profit entity.” Id. 195. The Proposed Rules will not be adopted until, at the earliest, October 21, 2014, the close of the notice-and-comment period. See 79 Fed. Reg. at 51,119.
7. Wheaton College and Defendants’ Augmented Accommodation 196. On July 3, 2014, the Supreme Court issued an order in Wheaton College v. Burwell, 134 S. Ct. 2806 (2014), granting the nonprofit plaintiff an injunction against the CASC Mandate pending appellate review, without forcing Wheaton College to sign and submit the self-certification form. Instead, Wheaton College merely had to inform the Secretary of HHS in writing that it is a religious nonprofit and “has religious objections
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to providing coverage for contraceptives.” 134 S. Ct. at 2807. The Court did not require Wheaton College to disclose its TPA’s contact information.
197. On August 27, 2014, Defendants issued Interim Final Rules in order to “augment” the July 2013 Final Rules “in light of” the Supreme Court’s order in Wheaton College. 79 Fed. Reg. 51,092, 51,092 (Aug. 27, 2014).
198. The Interim Final Rules leave the original accommodation in place and merely create “an alternative to the EBSA Form 700 method of self-certification.” 79 Fed. Reg. at 51,094.
199. Under this new “alternative,” an employer must send a notice to HHS that not only states its name, that it is a religious non-profit, and that it objects to some or all CASC services; it must also provide “the plan name and type” and “the name and contact information for any of the plan’s third party administrators and health insurance issuers.” 26 C.F.R. 54.9815-2713AT(b)(1), (c)(1); 29 C.F.R. § 2590.715-2713A(b)(1), (c)(1).
200. The “augmented” accommodation also requires the employer to update HHS if any of this information changes. 26 C.F.R. 54.9815-2713AT(b)(1), (c)(1); 29 C.F.R. § 2590.715-2713A(b)(1), (c)(1).
201. If the employer participating in the “augmented” accommodation has an insured group health plan, HHS “will send a separate notification to each of the plan’s health insurance issuers that the Secretary of [HHS] has received a notice” and “describing the obligations of the issuer” under 26 C.F.R. § 54.9815-2713AT & -2713A (Treasury) and 29 C.F.R. 2590.715-2713A (Labor). See 26 C.F.R. § 54.98152713AT(c)(1)(ii); 29 C.F.R. § 2590.715-2713A(c)(1)(ii).
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202. If the employer participating in the “augmented” accommodation has a selfinsured group health plan, “the Department of Labor (working with the Department of [HHS]), shall send a separate notification to each of the plans’ third party administrators that [HHS] has receive a notice” and “describing the obligations of the third party administrator” under 26 C.F.R. § 54.9815-2713AT & -2713A (Treasury), 29 C.F.R. § 2510.3-16 (Labor), and 29 C.F.R. § 2590.715-2713A (Labor). See 26 C.F.R. § 54.9815-2713AT(c)(1)(ii); 29 C.F.R. § 2590.715-2713A(c)(1)(ii).
203. The regulatory obligations of insurers and TPAs are the same under the original and the augmented accommodation. 26 C.F.R. § 54.9815-2713AT(c)(2)-(4); 29 C.F.R. § 2590.715-2713A(c)(2)-(4).
204. If an employer with a self-insured plan submits a notice to HHS, the Departments claim that the Department of Labor’s notice to third party administrators “will be an instrument under which the [employer’s] plan is operated and shall supersede any earlier designation [of a plan administrator].” 79 Fed. Reg. at 51,095; 29 C.F.R. § 2510.3-16(b).
205. The Departments assert that the Department of Labor has the ability to affect these changes under “its broad rulemaking authority under Title I of ERISA, which includes the ability to interpret and apply and apply the definition of a plan administrator under ERISA section 3(16)(A).” Id.
206. Under the accommodation (including the augmented accommodation), the moment an eligible organization contracts with an insurer, the insurer becomes obligated to provide coverage for CASC services as part of its insurance policy. While the
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accommodation and the augmented accommodation may provide two mechanisms for an employer to satisfy the CASC mandate and avoid employer liability, they do not provide any avenue by which an employer’s insurer can abstain from providing CASC coverage. Thus, for Group II Members, it is impossible to contract with an insurer without triggering coverage for CASC services.
207. Along with the Interim Final Rules, Defendants issued a revised EBSA Form 700. This revised self-certification form is attached as Ex. 6. The revised form states that instead of signing and submitting it to the employer’s insurer or TPA, an “eligible organization” may “[a]lternatively” “provide notice to the Secretary of [HHS].” Ex. 6, EBSA Form 700 (revised August 2014) (“Aug. 2014 Form 700) at 1.
208. The revised Form 700 describes what the alternative notice to the Secretary of HHS must contain and provides a link to a model notice that meets these requirements. Id. at 2; see also http://www.cms.gov/CCIIO/Resources/Regulations-andGuidance/Downloads/Model-Notice-8-22-14.pdf (“Model Notice”).
209. The revised Form 700 informs eligible organizations that “[t]his form or a notice to the Secretary [of HHS] is an instrument under which the plan is operated.” Id. at 2.
210. The Interim Final Rules formally withdraw the “gag order” described in paragraph 183 above by “delet[ing] the language” in the Final Rules “prohibiting an eligible organization from interfering with or seeking to influence a third party administrator’s decision or efforts to provide separate payments for contraceptive services.” 79 Fed. Reg. at 51,095.
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211. Defendants have removed this “non-interference provision” because they believe that “other state and federal laws” already prohibit the speech targeted by the July 2013 Final Rules. Id. The Defendants therefore maintain that the “gag order” described in the previous paragraph is still in place and is simply enforced through separate means. VII. THE MANDATE VIOLATES FEDERAL LAW.
212. The Mandate violates federal law. It substantially burdens Plaintiffs’ and the Post-June 4 Members’ religious practices, intentionally discriminates against their religious practices, intrudes upon their internal decisions, restricts their speech, compels them to convey a morally repugnant message, prohibits them from associating with others in an effort to provide health benefits consistent with their moral values, and creates a religious caste system of the favored and disfavored. The Mandate is also the result of arbitrary and capricious action by Defendants, including an improper delegation of their regulatory authority to a nongovernmental and ideologically biased panel of unaccountable decision makers.
A. The Affordable Care Act Creates a Discriminatory Religious Caste System.
213. The Affordable Care Act, its regulations, and Defendants’ admissions have created a religious caste system where the quantum of government-permitted religious freedom depends upon where a religious person or religious institution falls within this system. In direct contravention of the First Amendment Establishment Clause, the government has stratified religious persons and religious organizations into at least six religious classifications.
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214. First, Anabaptists are exempt from the individual mandate and, therefore, are not forced to go to the federally funded exchanges that offer only health insurance policies that include contraceptive coverage. 26 U.S.C. §§ 5000A(d)(2)(A), 1402(g), 4980H(a), (c)(1); 45 C.F.R. §§ 147.130, 147.131(c) (all individual health insurance coverage, whether on the exchange or otherwise, must include preventive care, without cost sharing). The denominations in the Anabaptist tradition include Amish, Mennonites, Hutterites, and the Bruderhof Communities.
215. Second, members of HCSMs can avoid buying insurance that includes CASC coverage because they, too, are exempt from the individual mandate. 26 U.S.C. § 5000A(d)(2)(B). There are only three HCSMs: Samaritan Ministries, Medi-Share, and Christian Healthcare Ministries. Each is Evangelical Protestant or Mennonite in its founding. The government closed this option to Catholics and other religious groups by limiting this exemption to organizations formed before December 31, 1999.
216. Third, Defendants deem some employers sufficiently religious and have granted them exemption from the Mandate. 45 C.F.R. § 147.131(a). These employers include churches, conventions of churches, and the exclusively religious activities of religious orders. 26 U.S.C. § 6033(a)(3)(A)(i) and (iii). They also include the ministries of these religious groups—so long as they are not separately incorporated.2 Finally, they include “integrated auxiliaries” of these ministries. 45 C.F.R. § 147.131(a). Whether an
2 See 45 C.F.R. § 147.131(a) (separately incorporated ministries other than “churches, their integrated auxiliaries, and conventions or associations of churches” or “exclusively religious activities of religious orders” listed in 26 U.S.C. § 6033(a)(3)(A)(i), (iii) do not qualify for “religious employer” exemption); see also 77 Fed. Reg. at 16,502.
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auxiliary is deemed “integrated” depends in part on whether it is internally supported. See 26 C.F.R. § 1.6033-2(h)(4).
217. Fourth, an eligible organization is not exempt. As previously alleged, in order to qualify for the “accommodation,” it must engage an insurer or TPA to act as a surrogate plan and benefits administrator for the CASC portion of its health plan and must cause the insurer or TPA to inform employees of the CASC coverage. In addition, an eligible organization with a self-funded plan must engage in actions that amend its plan to include CASC services and must censor its own speech with its TPA.
218. Fifth, a TPA with moral objections to providing or arranging for CASC benefits can opt out of its contract just after an eligible organization provides it with the self-certification form and the TPA thereby learns of its contraceptive coverage obligations. 78 Fed. Reg. at 39,879-80. The government has now contended in several cases that a TPA of a church plan may either opt out of its contract to serve as a TPA or stay in its contract and avoid penalties and sanctions because “ERISA enforcement authority is not available with respect to TPAs of self-insured church plans.” See, e.g., Defendants’ Motion to Dismiss at 11-12, Little Sisters of the Poor Home for the Aged v. Sebelius, No. 13-cv-02611-WJM-BNB (D. Colo. Nov. 8, 2013).
219. Sixth, Defendants have asserted that some religious for-profit employers (sole proprietors and general partnerships) have standing to invoke religious liberty protections while all others (corporations, limited partnerships, etc.) do not. See Transcript of Oral Argument, Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114 (10th
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Cir. 2013) (No. 12-6294), attached as Ex. 7. The United States Supreme Court rejected this argument. Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751, 2768-75 (2014).
220. For people of Catholic faith, the Association’s Group I, II, or III Members are no more and no less religious, and the respect for and protection of their consciences is no more or less important.
221. The Mandate thus provides selective quanta of religious freedom depending upon the type or classification of each religious person or entity.
B. The Mandate Substantially Burdens Plaintiffs’ and the Post-June 4 Members’ Religious Beliefs and Practices.
222. The decisions of the Post-June 4 Members to provide health plans for their employees and to exclude CASC coverage therefrom qualify as the exercise of religion.
1. The Mandate Substantially Burdens Group II Members’ Religious Exercise.
223. The Post-June 4 Members who qualify as Group II Members of the Association are not deemed to be “religious employers” under the Final Rules. They are “eligible organizations,” or would be if they executed and delivered the self-certification required by 26 C.F.R. § 54.9815-2713A(a)(4).
224. The Mandate’s regulatory scheme has left no option for Group II Members that does not substantially burden the exercise of their Catholic faith. Their options are: (1) participate in a “piggyback” plan sponsored by an exempt employer like a diocese or religious order, (2) provide a group health plan that includes coverage of CASC services, (3) provide a group health plan that excludes coverage of CASC services, (4) provide a
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group health plan under the so-called accommodation, (5) provide a group health plan under the augmented accommodation, or (6) cease providing health care coverage.
225. Group II Members do not avoid the Mandate under Option 1 because the Final Rules eliminate the Piggyback Option. See 78 Fed. Reg. at 39,886 (eliminating the plan exemption and determining the availability of exemption or accommodation “on an employer-by-employer basis”).
226. Option 2, directly providing the CASC benefits, is contrary to Catholic teaching, would constitute material cooperation with evil, and would give rise to scandal.
227. Option 3 is ruinous because it would subject Group II Members to fines of up to $100 per affected beneficiary per day, or as much as $36,500 per affected beneficiary annually. It is also impractical because insurers and TPAs, who operate in a highly regulated industry, are unlikely—absent invalidation of the Mandate—to risk fines, liability, and regulatory scrutiny by excluding coverage of CASC services.
228. Option 4, entering into the accommodation by signing and submitting Form 700, burdens Group II Members’ exercise of their Catholic values.
229. Entering into the accommodation by using Form 700 substantially burdens the religious exercise of self-insured Group II Members’ because:
a. The Final Rules require “accommodated” employers to give notices to TPAs of their legal obligation to provide CASC benefits;
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b. The Final Rules require the “accommodated” employers to sign a notice that amends self-insured employers’ plans to include a second binder of CASC benefits; c. The Final Rules require the “accommodated” employers to engage in a statutory scheme that makes their TPAs the plan and benefits administrators for the CASC benefit portion of their plan; d. The Final Rules require the “accommodated” employers to permit their TPAs to utilize their knowledge of the names and contact information of employers’ employees for the purpose of providing them CASC benefits; e. The Final Rules bar the “accommodated” employers from communicating with their TPAs about not providing the CASC benefits; and f. The Final Rules require “accommodated” employers to give notices to TPAs of their legal obligations to inform the employers’ employees that the TPAs will provide CASC benefits at no cost to the employee, thus giving rise to scandal among those employees. 230. The Mandate and the “accommodation” affect CBA members with insured plans differently. a. When a CBA member contracts with an insurer, that insurer is automatically obligated to provide “coverage” for CASC services as part of the contracted plan or coverage. See 42 U.S.C. § 300gg-13(a).
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b. Defendants’ state that insurers’ payments for CASC services under the accommodation “are not benefits under a health insurance policy.” 78 Fed. Reg. at 29,876.
c. However, under 42 U.S.C. § 300gg-13(a), Defendants only have the authority to require “insurers” to provide CASC services as part of a contracted obligation to provide “group or individual health insurance coverage.”
d. Defendants do not cite any statute that authorizes them to impose on insurers a direct obligation to supply CASC services.
e. To the contrary, Defendants tacitly admit that an insurers’ duty under the accommodation to “provide payments for contraceptive services for plan participants and beneficiaries, separate from the group health plan” is merely “a federal regulatory requirement.” 78 Fed. Reg. at 39,876.
f. The Final Rules’ “medical loss ratio” promise—that “an issuer . . . that makes payments for contraceptive services [under the accommodation] may treat those payments as an adjustment to claims costs for purposes of medical loss ratio . . . calculations,” 78 Fed. Reg. at 39,878—confirms that even under the accommodation CASC services are being provided by CBA members through their own health care plans.
231. At its core, the Mandate and the “accommodation” require Group II Members to engage and cause a surrogate to provide benefits that their religious values
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prevent them from providing, and to do so through the members’ own plans. The “accommodation,” therefore, does not alleviate Group II Members’ religious objections to the Mandate.
232. The Final Rules also create the risk of scandal. When a Group II Member, having entered into the “accommodation,” distributes plan information to its employees in connection with enrollment in coverage, the insurer or TPA must notify employees in writing that the eligible organization does not administer or fund CASC benefits, but that the insurer or TPA provides separate payments for CASC services. See 26 C.F.R. § 54.9815-2713A(d). Such notice must be provided at the same time as, though separate from, any materials distributed by the Group II Member. Id.
233. Employees are unlikely to read the disclaimer provided by the insurer or TPA. Those who do are unlikely to grasp the distinction the Final Rules purport to draw between the employer and its insurer or TPA. Employees will simply know that, as a direct result of their enrollment in the Group II Member’s plan, they receive CASC benefits.
234. This situation creates the risk of scandal because employees will perceive that their employer professes one thing but does another. Such scandal devastates ministry.
235. Defendants’ regulations admit that there is no meaningful separation between the eligible organization and the provision of CASC benefits to employees under
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the “accommodation.” Employees still receive CASC benefits “under . . . the employer’s plan.” 78 Fed. Reg. at 39,879 (emphasis added).
236. The predecessor of Defendant Secretary Burwell, Secretary Kathleen Sebelius, herself admitted the true effect of the “accommodation” in her remarks at Harvard University on April 8, 2013, the final day for comment on the Proposed Rules. Secretary Sebelius stated:
We have just completed the open comment period for the so-called accommodation and by August 1st of this year, every employer will be covered by the law with one exception. Churches and church diocese [sic] as employers are exempted from this benefit. But, Catholic hospitals, Catholic universities, other religious entities, will be providing coverage to their employees starting August 1st. ... [W]e are about to promulgate the final rule and as of August 1st, 2013, every employee who doesn’t work directly for a church or a diocese will be included in the benefit package. See Kathleen Sebelius, Remarks at The Forum at Harvard School of Public Health (Apr. 8, 2013), available at http://theforum.sph.harvard.edu/events/conversationkathleen-sebelius/ (last visited March 2, 2014) (emphasis added).
237. From these remarks, it is clear that even Defendants view the “accommodation” as still requiring eligible organizations to “provid[e] coverage” of CASC benefits to their employees. Accordingly, the regulations state that the employer participating in the “accommodation” “is considered to comply” with the Mandate. 78 Fed. Reg. at 39,879.
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238. Then-Secretary Sebelius’s remarks also reveal that Defendants were poised “to promulgate the final rule” before the comment period closed. Defendants apparently gave no consideration to the 400,000 comments received on the Proposed Rules, including comments that explained that the proposed “accommodation” would not alleviate the objections of many religious organizations.
239. Option 5, entering into the accommodation by way of the alternative notice to HHS described in Defendants’ August 27, 2014, Interim Final Rules, does not alleviate these burdens.
240. Before and after the Interim Final Rules, the accommodation has the same goal: “preserving participants’ and beneficiaries access” to CASC services. 79 Fed. Reg. at 51,092.
241. Before and after the Interim Final Rules, the accommodation works by forcing a self-insured employer to amend its plan and appoint its TPA as the plan administrator for CASC services. See 78 Fed. Reg. at 39,879-80; 79 Fed. Reg. at 51,095; 29 U.S.C. § 1002(16)(A)(i) (a plan administrator is designated “by the terms of the instrument under which the plan is operated”).
242. Before and after the Interim Final Rules, the accommodation has the same effect: “Regardless of whether the eligible organization self-certifies in accordance with the July 2013 final rules [using Form 700], or provides notice to HHS in accordance with the August 2014 [Interim Final Rules], the obligations of insurers . . . are the same.” The Center for Consumer Information & Insurance Oversight, Fact Sheet: Women's
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Preventive Services Coverage, Non-Profit Religious Organizations, and Closely-Held For-Profit Entities, http://www.cms.gov/CCIIO/Resources/Fact-Sheets-andFAQs/womens-preven-02012013.html.
243. Thus, under the “augment[ed]” accommodation, Group II Members and their plans remain the central cog in Defendants’ “mechanism” for delivering CASC services to the employers’ employees and beneficiaries. 79 Fed. Reg. at 51092.
244. Option 6, dropping health care benefits, would burden the Group II Members’ exercise of their Catholic values because:
a. Catholic values commend providing just compensation and benefits supportive of family values, including, whenever possible, health care; b. Eliminating health care benefits would drive employees, most of whom do not have the Anabaptist or HCSM exemptions available to them, to the federally funded exchanges. Individual plans are less attractive, less convenient, more expensive, and less tax-efficient, and, even more troubling, almost certainly drive employees to a market with no options that exclude CASC coverage; c. Eliminating health insurance for employees subjects Group II Members to annual excise taxes beginning in 2016 of $2,000 per employee after the first 30 employees; and d. Eliminating health insurance would put Group II Members at a significant disadvantage in the market for recruiting the best workers and thereby harm the operation of their ministries.
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2. The Mandate Substantially Burdens Group III Members’ Religious Exercise.
245. The Post-June 4 Members who qualify as Group III Members of the Association are not eligible for the “religious employer” exemption or the “accommodation” under the Final Rules.
246. While Defendants have issued a Proposed Rule that would extend the accommodation and augmented accommodation to some or all Group III Members, the definition of “eligible organizations” from the July 2013 Final Rules, which excludes all for-profit employers, is still law.
247. Under the Mandate, Group III Members are now faced with three options: (1) provide a group health plan that includes coverage of CASC services, (2) provide a group health plan that excludes coverage of CASC services, or (3) cease providing health care coverage.
248. Option 1, directly providing the CASC benefits, is contrary to Catholic teaching, would constitute material cooperation with evil, and would give rise to scandal.
249. Option 2 is ruinous because it would subject Group III Members to fines of up to $100 per affected beneficiary per day, or as much as $36,500 per affected beneficiary annually. Such fines have the potential to force Group III Members out of business. Option 2 is also impractical since insurers and TPAs, who operate in a highly regulated industry, are unlikely—absent invalidation of the Mandate—to risk fines, liability, and regulatory scrutiny by excluding coverage of CASC services.
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250. Option 3, dropping health care benefits, would burden Group III Members’ exercise of their Catholic values for the same reasons as those alleged in paragraph 244, supra.
251. If and when Defendants offer the accommodation and augmented accommodation to Group III Members, their religious exercise will be still be burdened; the accommodation and augmented accommodation are unacceptable to Group III Members for all the reasons these rules are unacceptable to Group II Members, as described in paragraphs 223 to 244, supra.
3. The Mandate Substantially Burdens Group I Members’ Religious Exercise.
252. While the Post-June 4 Members who qualify as Group I Members of the Association are exempt from the Mandate with regard to the health care coverage they provide for their own employees and, in the cases of dioceses and archdioceses, the employees of their parishes, the Mandate nevertheless burdens Group I Members’ religious exercise.
253. Part of the religious purpose and mission for most Group I Members is to provide support services to local parishes and affiliated Catholic ministries. Many such affiliated ministries are Group II Members.
254. As part of their religious mission, many Group I Members sponsor diocesan-wide group health plans for themselves, their parishes, and their related nonexempt ministries.
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255. Part of the religious purpose and mission for most Group I Members is to educate the Catholic faithful and Catholic ministry leaders regarding Catholic doctrine and values, including the values prohibiting provision of CASC benefits. Part of such education is to model ways to access morally compliant health care coverage that does not include CASC services.
256. The Mandate and the “accommodation,” along with the elimination of the Piggyback Option, burden the religious exercise of Group I Members, who serve their affiliates by maintaining life-affirming health care plans.
257. As a result of the Mandate, Group I Members have four options: (1) sponsor a group health plan that provides CASC coverage (as a result of participation by non-exempt employers); (2) sponsor a group health plan that excludes CASC coverage but subjects non-exempt participants to onerous fines; (3) expel non-exempt participants from the plan; or (4) do not sponsor a group health plan at all.
258. None of these options is morally acceptable to the Group I Members, and each substantially burdens their religious exercise.
4. The Mandate Substantially Burdens the Association’s and the Insurance Company’s Religious Exercise.
259. The Association’s purpose, as stated in its Articles of Organization, is to “support Catholic employers . . . that, as part of their religious witness and exercise, provide health or other benefits to their respective employees in a manner that is consistent with Catholic values” and “[t]o incorporate . . . one or more Catholic insurance companies, in furtherance of the Association’s purposes.” Ex. 1, CBA Articles, art. IV.
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The Association has done this, in part, by providing a means by which members, if they choose, may access morally compliant health care benefits for their employees through the Association’s captive insurer, the Insurance Company.
260. The Mandate burdens the Association’s religious exercise by imposing burdens on the Post-June 4 Members, and by precluding the Association from providing the Post-June 4 Members its full range of benefits, including access to the services of its captive insurer.
261. The Insurance Company’s purpose, as stated in its articles, is “consistent with Catholic values, doctrine, and canon law [to] suppor[t] Catholic employers . . . that, as part of their religious witness and exercise, provide health or other benefits to their respective employees in a manner that is consistent with Catholic values.” Ex. 3, CIC Certificate, art. IV; see also Ex. 4, CIC Bylaws, art. 3.1.
262. The Mandate burdens the Insurance Company’s religious exercise by imposing burdens on the Association’s Post-June 4 Members, each of which is an eligible insured for the Insurance Company, and by precluding the Insurance Company from providing Post-June 4 Members the full range of benefits it otherwise could provide them in the absence of the Mandate.
263. The Mandate substantially burdens Plaintiffs and the Post-June 4 Members by requiring participation in an activity prohibited by their sincerely held Catholic beliefs, preventing participation in conduct consistent with their sincerely held Catholic beliefs, and placing substantial pressure on them to engage in conduct contrary to their
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sincerely held Catholic beliefs. See Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114, 1138 (10th Cir. 2013).
C. The Mandate Is Not a Generally Applicable Law, and Defendants Have No Compelling Interest in Enforcing It Against Plaintiffs or the Post-June 4 Members.
264. The Mandate is not generally applicable. It is riddled with exemptions that undermine the government’s supposed purpose in imposing it.
265. In imposing the Mandate, Defendants assert “compelling . . . interests” in “providing more women broad access to recommended preventive services, including contraceptive services, without cost sharing.” 78 Fed. Reg. at 39,873. Yet the Mandate, and the Affordable Care Act more broadly, leave tens of millions of women beyond the reach of this supposed interest.
266. Organizations with grandfathered plans, covering tens of millions of employees, are exempt from the requirement to provide CASC coverage for their employees.
267. Small employers with fewer than 50 full-time employees are exempt from the requirement to provide a group health plan at all. This leaves tens of millions of American workers without access to CASC coverage.
268. Hundreds of thousands of other individuals are left potentially untouched by the CASC coverage requirement because they are Anabaptists or members of HCSMs. See Young Ctr. for Anabaptist & Pietist Studies, Elizabethtown Coll., Q&A With Author Donald B. Kraybill, http://www.etown.edu/centers/young-center/concise-
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encyclopedia.aspx (last visited Dec. 27, 2013) (estimating the Anabaptist population in North America at 1.3 million); Alliance of Health Care Sharing Ministries, What Is a Health Care Sharing Ministry?, http://www.healthcaresharing.org/hcsm/ (last visited Dec. 27, 2013) (“HCSMs serve more than 210,000 people . . . .”). While they may be employed by organizations with group health plans that cover CASC benefits, Anabaptists and HCSM members have the option to participate in alternative health arrangements that may permissibly exclude some or all CASC benefits. Defendants chose not to impose the Mandate on these alternative health arrangements.
269. As a result of these categorical exemptions, some secular and some religious, the Mandate is not generally applicable.
270. Furthermore, Defendants do not have a compelling interest in enforcing the Mandate against Plaintiffs or the Post-June 4 Members. The requirement to cover CASC services applies to some, but not nearly all, employers, and confers benefits on some, but not nearly all, employees. The Mandate thus leaves appreciable damage to Defendants’ supposedly vital interest unprohibited and unregulated.
271. Also beyond the reach of the CASC coverage requirement are the employees of exempt “religious employers.” Defendants’ stated reason for the exemption is that these organizations “are more likely than other employers to employ people of the same faith who share the same objection, and who would therefore be less likely than other people to use contraceptive services even if such services were covered under their plan.” 78 Fed. Reg. at 39,874.
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272. Under this reasoning, many Group II Members should also be exempt because, as Catholic organizations, they are just as likely as exempt “religious employers”—and more likely than secular, non-Catholic organizations—to employ persons of the Catholic faith who have the same religious objections to CASC services. Even so, Defendants may not condition a religiously based exemption on whether an organization’s employees share the same beliefs with, or have the same intensity of beliefs as, the organization itself.
273. Moreover, Defendants’ reasoning does not explain why the Affordable Care Act exempts small employers and employers with grandfathered plans without regard to whether their employees are more or less likely to use CASC services. Nor does it explain why the government chose not to impose the Mandate on alternate health arrangements by Anabaptists and Evangelical Protestants without regard to whether those individuals are more or less likely to use CASC services.
274. Defendants’ supposed interest in enforcing the Mandate against the PostJune 4 Members is further undermined by Defendants’ admission that it cannot enforce the Mandate against TPAs that administer self-insured church plans for eligible organizations. Defendants’ August 27, 2014, Interim Final Rules concede that because “[c]hurch plans are exempt from ERISA,” a “third party administrator of a self-insured church plan cannot become the plan administrator by operation of 29 CFR [§] 2510.3-16, although such third party administrators may voluntarily provide or arrange separate payments for contraceptive services.” 79 Fed. Reg. at 51,095 n.8. Defendants made a similar concession before the Supreme Court in January 2014. See Mem. for Resp’ts in
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Opp’n, at 15, Little Sisters of the Poor Home for the Aged, Denver, Colorado v. Sebelius, Case No. 13A691 (U.S. Jan. 3, 2014) (Defendants lack “authority to regulate either the church plan or the third party administrator of a self-insured church plan, and thus the third party administrator is under no legal compulsion to provide contraceptive coverage where an eligible organization with a self-insured church plan invokes the accommodation.”).
275. Defendants’ concession is fatal to its assertion of a compelling interest. It renders the Mandate’s regulatory scheme incomplete and, for Group II Members with church plans, potentially worthless. A Group II Member with a church plan could comply with the Mandate’s requirements and deliver its self-certification to its TPA (together with notice of the TPA’s duties). In that situation, Defendants contend, they would be powerless to compel any party to deliver CASC services to the beneficiaries of the church plan.
276. In other words, the Mandate forces some eligible organizations to fill out the self-certification form that, while violating the organizations’ religious beliefs, may serve no governmental interest. If the government has no power to enforce a law, it cannot have a compelling interest in enforcing that law.
D. The Mandate Is Not Neutral. 277. The Mandate is not neutral because the government discriminates between religious individuals and religious employers based on its classification system and
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because the government exempts other employers from the Mandate for wholly secular reasons.
278. Statements of Defendant Secretary Burwell’s predecessor, Secretary Sebelius, also show that the Mandate is not neutral. Secretary Sebelius is an avowed advocate for abortion rights and a vocal critic of Plaintiffs’ and the Post-June 4 Members’ religious teachings and beliefs regarding the sanctity of life. On October 5, 2011, Secretary Sebelius spoke at a NARAL Pro-Choice America fundraiser where she criticized individuals and organizations like Plaintiffs and the Post-June 4 Members that object to CASC benefits on religious grounds. She stated that “[w]e are in a war,” referring to religious opponents of the Mandate. She also stated, “Wouldn’t you think that people who want to reduce the number of abortions would champion the cause of widely available, widely affordable contraceptive services? Not so much.”
279. In a speech on July 16, 2013, Secretary Sebelius compared opposition to the Mandate to opposition to civil rights legislation in the 1960s. She accused opponents of the Mandate of spreading “fear and misinformation.” She applauded her listeners for supporting the Mandate just as they had supported “the fight against lynching.” See Kathleen Sebelius, Remarks at 104th NAACP Annual Conference (July 16, 2013), available at http://www.hhs.gov/secretary/about/speeches/sp20130716.html (last visited Dec. 27, 2013).
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280. Defendants evidenced their intent to foreclose all moral options available to eligible organizations by eliminating the Piggyback Option in the Final Rules, despite their contrary assurances in the ANPRM.
E. The Mandate Is Not the Least Restrictive Means of Furthering the Government’s Interests.
281. The government has numerous means at its disposal, other than the Mandate or the accommodation, for advancing its goal of expanding access to CASC services.
282. The government could: (1) directly provide coverage of CASC benefits for individuals who do not currently receive such benefits through their health plans; (2) reimburse those who pay for CASC benefits through a combination of direct subsidies, tax deductions, and tax credits; (3) facilitate greater access to CASC benefits through the health insurance exchanges; or (4) work with other, willing organizations to expand access to CASC services.
283. Each of these avenues would more directly advance the government’s interest and simultaneously avoid the substantial burden on Plaintiffs’ and the Post-June 4 Members’ religious practices imposed by the Mandate. In particular, the Post-June 4 Members would not be conscripted as conduits for delivery of CASC services to their employees, as they are under the Mandate.
284. Defendants have admitted that they did not consider any such alternatives before issuing the Final Rules. See Ex. 8, Transcript of Gary M. Cohen Deposition, Roman Catholic Archdiocese of New York v. Sebelius (D.Ct. E.D.N.Y. April 16, 2013).
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VIII. CAUSES OF ACTION FIRST CLAIM
Violation of RFRA, 42 U.S.C. § 2000bb-1 285. Plaintiffs incorporate by reference all preceding paragraphs. 286. The Post-June 4 Members’ sincerely held religious beliefs prohibit them from in any way paying for, providing, or facilitating access to CASC benefits, including by maintaining a group health plan that covers or otherwise provides access to these services. 287. The Post-June 4 Members’ sincerely held religious beliefs equally prohibit them from contracting or arranging for provision of CASC services through a surrogate, such as an insurer or TPA. 288. The Post-June 4 Members’ compliance with these sincerely held religious beliefs constitutes the exercise of religion, and such exercise is protected by the Religious Freedom Restoration Act, 42 U.S.C. § 2000bb-1. 289. The Mandate requires the Post-June 4 Members to provide, pay for, or directly or indirectly facilitate access to or to contract or arrange for provision of CASC services for their employees in violation of their sincerely held religious beliefs. 290. By threatening the Post-June 4 Members with ruinous fines and other penalties for failure to comply, the Mandate puts substantial pressure on the Post-June 4 Members to abandon their religious beliefs or engage in conduct that violates their religious beliefs.
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291. The Mandate exposes the Post-June 4 Members to significant competitive disadvantages.
292. The Mandate substantially burdens the Post-June 4 Members’ exercise of religion.
293. Defendants have no compelling interest in applying the Mandate to the Post-June 4 Members.
294. Applying the Mandate to the Post-June 4 Members is not the least restrictive means of furthering Defendants’ interests.
295. By enacting the Mandate and threatening to enforce it against the Post-June 4 Members, Defendants have violated RFRA.
SECOND CLAIM Violation of the Establishment Clause, Government Discrimination Among Religious Individuals and Religious Groups 296. Plaintiffs incorporate by reference all preceding paragraphs. 297. The Establishment Clause of the First Amendment to the United States Constitution requires government neutrality toward religion and prohibits the government from discriminating among religions and preferring some religious views over others. 298. The Establishment Clause also forbids discrimination among religious institutions based on the source of the institution’s financial support or on the religious composition of the organization’s employees.
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299. Through its elaborate religious classifications, the Affordable Care Act and the Mandate discriminate among religious persons and organizations.
300. The Affordable Care Act and the Mandate impose selective burdens on certain religious adherents and certain religious institutions.
301. The Mandate’s narrow exemption for “religious employers” discriminates among religious organizations on the basis of religious views, religious status, or incidental institutional structure or affiliation by determining that some organizations are “religious enough” to qualify for a full exemption while others are not.
302. The Mandate’s exemption of integrated auxiliaries of churches, coupled with the government’s refusal to exempt organizations such as the Association’s Group II Members, is irrational and discriminatory.
303. The Mandate adopts a particular theological view of what is acceptable moral complicity in an organization’s provision of CASC services, favoring some organizations with full exemption, requiring others to enter into the morally unacceptable “accommodation,” and extending neither exemption nor “accommodation” to still others.
304. The Mandate reflects Defendants’ judgment about the importance or centrality of religious mission, favoring the purpose and mission of “religious employers” over the purpose and mission of eligible organizations, and totally denying protection to organizations engaged in for-profit activities.
305. The Affordable Care Act and the Mandate violate the Establishment Clause.
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THIRD CLAIM Violation of the Free Exercise Clause, Substantial Burden 306. Plaintiffs incorporate by reference all preceding paragraphs. 307. The Post-June 4 Members’ sincerely held religious beliefs prohibit them from in any way paying for, providing, or directly or indirectly facilitating access to CASC benefits, including by maintaining a group health plan that covers or otherwise provides access to these services. 308. The Post-June 4 Members’ sincerely held religious beliefs equally prohibit them from contracting or arranging for provision of CASC services by another. 309. The Post-June 4 Members’ compliance with these sincerely held religious beliefs constitutes the exercise of religion. Such exercise is protected by the First Amendment Free Exercise Clause. 310. The Mandate is not a law of general applicability. 311. The Mandate is subject to categorical exemptions that undermine Defendants’ stated interests in the law. 312. The Mandate is not neutral. 313. The Mandate was promulgated for the purpose of discriminating against the Post-June 4 Members’ sincerely held religious beliefs regarding contraception, abortion, sterilization, and related counseling. 314. The Mandate substantially burdens the Post-June 4 Members’ exercise of religion.
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315. The Mandate does not further a compelling governmental interest. 316. The Mandate is not the least restrictive means of furthering Defendants’ stated interests. 317. By enacting and threatening to enforce the Mandate against the Post-June 4 Members, Defendants have violated the Free Exercise Clause.
FOURTH CLAIM Violation of the Free Exercise Clause, Intentional Discrimination 318. Plaintiffs incorporate by reference all preceding paragraphs. 319. In promulgating the Mandate and refusing to exempt all but a narrow subset of religious organizations, Defendants deliberately targeted religious organizations like the Post-June 4 Members for discriminatory treatment. 320. In eliminating the Piggyback Option in the Final Rules, Defendants deliberately targeted religious organizations like the Post-June 4 Members for discriminatory treatment and sought to suppress their religious exercise. 321. By enacting and threatening to enforce the Mandate against the Post-June 4 Members, Defendants have violated the Free Exercise Clause.
FIFTH CLAIM Violation of the Free Exercise and Establishment Clauses, Interference in Matters of Internal Religious Governance 322. Plaintiffs incorporate by reference all preceding paragraphs.
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323. The Free Exercise Clause and the Establishment Clause protect the freedom of religious organizations to decide for themselves, free from government interference, matters of internal governance as well as those of faith and doctrine.
324. Under these Clauses, the government may not interfere with a religious organization’s internal decisions concerning the organization’s religious structure, leadership, or doctrine.
325. Under these Clauses, the government may not interfere with a religious organization’s internal decision if that interference would affect the faith and mission of the organization itself.
326. Each Group I and Group II Member of the Association, including the PostJune 4 Members that fall into these categories, has made an internal decision, dictated by its Catholic faith, that the health plans it makes available to its employees may not provide, pay for, or directly or indirectly facilitate access to CASC services.
327. The Mandate interferes with these Group I and Group II Members’ internal decisions concerning their structure and mission by requiring them to provide, pay for, or directly or indirectly facilitate practices that directly conflict with their Catholic beliefs.
328. The Mandate creates the risk of scandal by requiring Group I and Group II Members to provide, pay for, or directly or indirectly facilitate practices that directly conflict with Catholic teaching.
329. The Mandate artificially divides Catholic ministries into those that are exempt (such as dioceses) and those that are not (such as Catholic Charities). In so
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doing, the Mandate inhibits the Church’s ability to speak with one voice on issues of sexual morality and sanctity of life. The Mandate also interferes with the ability of Group I Members to provide support to their non-exempt affiliated ministries by sponsoring diocesan health plans both for their own employees and for employees of those non-exempt ministries.
330. The Mandate thus interferes with the faith and mission of the Catholic Church and its affiliated ministries.
331. Because the Mandate intrudes on matters of internal religious governance and interferes with the faith and mission of the Catholic Church and its affiliated ministries, it violates the Establishment Clause and Free Exercise Clause.
SIXTH CLAIM Violation of the Free Speech Clause 332. Plaintiffs incorporate by reference all preceding paragraphs. 333. The Free Speech Clause of the First Amendment to the United States Constitution prohibits the government from compelling a speaker to convey a message that the speaker finds morally repugnant. 334. The Free Speech Clause also prohibits the government from regulating speech based on the content of the message, the viewpoint expressed in the message, the motivation for the message, or the identity of the speaker. 335. By requiring self-insured Group II Members to notify their TPA of the TPA’s obligations to provide or arrange for separate payment of CASC services, the
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Mandate compels such Group II Members to convey a message they find morally repugnant.
336. By prohibiting self-insured Group II Members from “interfer[ing] with” or “influencing” the TPA’s decision whether to provide or arrange for separate payments of CASC services, even while the TPA may lawfully refuse to do so, the Mandate restricts such Group II Members’ speech based on its religious content, viewpoint, and motivation.
337. The Mandate also restricts self-insured Group II Members’ speech based on their identity as religious organizations because the Mandate contains no comparable restrictions on other organizations, who may freely attempt to “interfere with” or “influence” their TPA’s decisionmaking for any number of reasons.
338. Neither the speech compelled nor the speech restricted by the Mandate is commercial speech.
339. Defendants have no compelling interest in enlisting self-insured Group II Members as government mouthpieces or in censoring their religiously motivated speech concerning CASC services.
340. The Mandate’s combination of compelled speech and censorship is not necessary to further any interest of Defendants.
341. The Mandate’s combination of compelled speech and censorship is substantially underinclusive.
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342. The Mandate’s combination of compelled speech and censorship violates self-insured Group II Members’ rights under the Free Speech Clause.
SEVENTH CLAIM Violation of the Free Speech and Free Exercise Clauses, Unbridled Discretion
343. Plaintiffs incorporate by reference all preceding paragraphs. 344. By purporting to give HHS, through HRSA, “discretion to exempt certain religious employers from the Guidelines,” the Mandate vests HHS with unbridled discretion over which organizations will have their First Amendment rights protected. 345. Defendants have exercised unbridled discretion in a discriminatory manner by granting an exemption via a footnote on HRSA’s website for Group I Members but not for other organizations with identical religious objections to the Mandate, like the Association’s Group II and Group III Members. 346. Defendants have further exercised unbridled discretion by indiscriminately waiving enforcement of some provisions of the Affordable Care Act while refusing to waive enforcement of the Mandate, despite its conflict with the free exercise of religion. 347. Defendants’ actions violate Plaintiffs’ and the Post-June 4 Members’ right not to be subjected to a system of unbridled discretion when engaging in speech or religious exercise, as secured to them by the First Amendment to the United States Constitution.
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EIGHTH CLAIM Violation of the Administrative Procedure Act, Lack of Good Cause and Improper Delegation 348. Plaintiffs incorporate by reference all preceding paragraphs. 349. The Affordable Care Act expressly delegates to HHS, through HRSA, the authority to establish guidelines concerning the “preventive care” that a group health plan and health insurance issuer must provide. 350. In light of this express delegation, Defendants were required to engage in formal notice-and-comment rulemaking in a manner prescribed by law before issuing the Guidelines. Proposed regulations were required to be published in the Federal Register and interested persons were required to be given an opportunity to participate in the rulemaking through the submission of written data, views, or arguments. 351. Defendants promulgated the Guidelines without engaging in formal noticeand-comment rulemaking in a manner prescribed by law. 352. Defendants, instead, wholly delegated their responsibility for issuing the Guidelines to a nongovernmental entity, the IOM. 353. The IOM did not permit or provide for the broad public comment otherwise required under the APA concerning the Guidelines. 354. Within two weeks of the IOM’s issuing its recommendations, HHS issued the Guidelines. HHS admitted that the Guidelines were “developed” by IOM.
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355. HHS abdicated its responsibility to administer, interpret, and faithfully execute the Affordable Care Act by adopting the IOM’s recommendations wholesale, without further notice-and-comment rulemaking and without consideration of numerous relevant factors that IOM explicitly declined to consider.
356. Defendants’ stated reasons that public comments were unnecessary, impractical, and opposed to the public interest are false and insufficient, and do not constitute “good cause.”
357. Without proper notice and opportunity for public comment, Defendants were unable to take into account the full implications of the Guidelines by completing a meaningful “consideration of the relevant matter presented.”
358. Thereafter, Defendants did not consider or respond to the voluminous subsequent comments they received in opposition to the Interim Final Rules or the ANPRM.
359. Therefore, Defendants have taken agency action not in observance with procedures required by law, and Defendants’ actions should be set aside pursuant to the Administrative Procedure Act, 5 U.S.C. § 500 et seq.
NINTH CLAIM Violation of the Administrative Procedure Act,
Arbitrary and Capricious Action 360. Plaintiffs incorporate by reference all preceding paragraphs.
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361. In promulgating the Mandate, Defendants failed to consider the constitutional and statutory implications of enforcing the Mandate against the Post-June 4 Members and similar organizations.
362. The Mandate arbitrarily distinguishes between exempt “religious employers,” accommodated “eligible organizations,” and fully subject for-profit employers.
363. Defendants’ explanation for their decision not to exempt Group II organizations from the Mandate runs counter to the evidence submitted by religious organizations during the comment periods and is not supported by substantial evidence.
364. Defendant Secretary Burwell’s predecessor, Secretary Sebelius, in remarks made at Harvard University on April 8, 2013, essentially conceded that the Defendants completely disregarded the religious liberty concerns submitted by thousands of religious organizations and individuals.
365. Defendants’ issuance of the Mandate was arbitrary and capricious within the meaning of 5 U.S.C. § 706(2)(A) because Defendants failed to consider the full implications of the Mandate and they did not take into consideration the evidence against it.
TENTH CLAIM Violation of the Administrative Procedure Act, Agency Action Not in Accordance With the Law 366. Plaintiffs incorporate by reference all preceding paragraphs.
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367. The Weldon Amendment prohibits Defendants HHS and the Department of Labor from discriminating against a group health plan, including those maintained by the Post-June 4 Members, on the basis that the plan fails to provide, pay for, provide coverage of, or refer for abortions.
368. Section 1303(b)(1)(A) of the Affordable Care Act states that “nothing in this title” (including the provision requiring plans to cover women’s “preventive care” services”) “shall be construed to require a qualified health plan to provide coverage of [abortion] services . . . as part of its essential health benefits for any plan year.” 42 U.S.C. § 18023(b)(1)(A)(i).
369. Some of the drugs approved as “contraceptives” by the FDA and thus required to be covered by the Mandate are drugs known to cause medical abortions.
370. The Mandate violates the Weldon Amendment because it discriminates against the Post-June 4 Members by requiring these members’ group health plans to provide, pay for, or facilitate access to abortion services.
371. The Mandate violates Section 1303(b)(1)(A) of the Affordable Care Act by requiring the Post-June 4 Members’ group health plans to provide coverage of abortion services.
372. As set forth above, the Mandate violates RFRA and the First Amendment. 373. Under 5 U.S.C. § 706(2)(A), the Mandate is contrary to existing law and in violation of the Administrative Procedure Act.
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ELEVENTH CLAIM Violation of the Administrative Procedure Act, Agency Action Not in Accordance With the Law 374. Plaintiffs incorporate by reference all preceding paragraphs. 375. Defendants’ regulations claim that the Department of Labor has the authority to unilaterally amend private health plans and appoint administrators by virtue of its “broad rulemaking authority . . . to interpret the definition of plan administrator under ERISA section 3(16)(A)(i) [29 U.S.C. § 1002(16)(A)(i)].” 78 Fed. Reg. at 39,880; id. at 51,095. 376. The statute referenced, 29 U.S.C. § 1002(16)(A)(i), states that an administrator is designated “by the terms of the instrument under which the plan is operated.” 377. Only the employer, as plan sponsor, may establish and maintain a plan and create and issue instruments under which the plan is operated. The only person with authority to amend the plan is the person expressly designated by the plan documents as having such authority. 378. The Department of Labor has no authority, statutory or otherwise, to establish and maintain a plan for employees of a private employer, to create or issue instruments under which a private employer’s plan is operated, or to amend a private employer’s plan. 379. Defendants’ new “federal regulatory requirement” that insurers under the accommodation must “provide payments for contraceptive services for plan participants
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and beneficiaries, separate from the group plan,” has no basis in 42 U.S.C. § 300gg-13(a) or in any other statute.
380. Under 5 U.S.C. § 706(2)(A), the Mandate is contrary to existing law and in violation of the Administrative Procedure Act.
TWELFTH CLAIM Violation of the Administrative Procedure Act, Agency Action Not in Accordance With the Law 381. Plaintiffs incorporate by reference all preceding paragraphs. 382. Defendants’ Mandate relies almost entirely on an IOM Report commissioned by Defendant HHS. 383. The IOM Report does not demonstrate a direct causal link between the CASC Mandate and furthering the Defendants’ asserted interests. 384. The IOM Report acknowledges that it did not have enough time to perform an adequate review. 385. The IOM Report includes a dissenting opinion that Defendants failed to give adequate consideration. 386. The Defendants’ and IOM’s factual determinations are not supported by substantial evidence. 387. Under 5 U.S.C. § 706(2)(A), the Mandate is contrary to existing law and in violation of the Administrative Procedure Act.
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PRAYER FOR RELIEF Wherefore Plaintiffs request that the Court: a. Declare that the Mandate and Defendants’ enforcement of the Mandate against
Plaintiffs and the Post-June 4 Members violate the Religious Freedom Restoration Act, and that no taxes, penalties, or other burdens can be charged or assessed against Plaintiffs, the Post-June 4 Members, these members’ employee health insurance plans, or their plan brokers, plan insurers, or third party administrators, for failure to pay for, provide, or directly or indirectly facilitate access to CASC services, including any penalties under 26 U.S.C. §§ 4980D and 4980H; b. Declare that the Mandate and Defendants’ enforcement of the Mandate against Plaintiffs and the Post-June 4 Members violate the First Amendment to the United States Constitution, and that no taxes, penalties, or other burdens can be charged or assessed against Plaintiffs, the Post-June 4 Members, these members’ employee health insurance plans, or their plan brokers, plan insurers, or third party administrators, for failure to pay for, provide, or directly or indirectly facilitate access to CASC services, including any penalties under 26 U.S.C. §§ 4980D and 4980H; c. Declare that the Mandate was issued in violation of the Administrative Procedure Act, and that no taxes, penalties, or other burdens can be charged or assessed against Plaintiffs, the Post-June 4 Members, these members’ employee health insurance plans, or their plan brokers, plan insurers, or third party administrators,
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for failure to pay for, provide, or directly or indirectly facilitate access to CASC services, including any penalties under 26 U.S.C. §§ 4980D and 4980H; d. Declare that Defendants may not interfere with Plaintiffs’ or the Post-June 4 Members’ relationships with their insurers or TPAs, or with Plaintiffs’ or the PostJune 4 Members’ attempts to contract for morally compliant health coverage for their employees and members, and that no taxes, penalties, or other burdens can be charged or assessed against such insurers or TPAs in relation to their work for Plaintiffs and the Post-June 4 Members; e. Issue a preliminary injunction and permanent injunction prohibiting Defendants from enforcing the Mandate against Plaintiffs and the Post-June 4 Members; prohibiting Defendants from charging or assessing taxes, penalties, or other burdens against Plaintiffs, the Post-June 4 Members, these members’ employee health insurance plans, or their plan brokers, plan insurers, or third party administrators, for failure to pay for, provide, or directly or indirectly facilitate access to CASC services; f. Award Plaintiffs the costs of this action and reasonable attorney’s fees as provided by law, including 42 U.S.C. § 1988(b); and g. Award such other and further relief as the Court deems equitable and just.
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DATED: October 3, 2014.
Respectfully submitted,
_s/ L. Martin Nussbaum__________________ L. Martin Nussbaum (Colo. Bar #15370) Eric Kniffin (D.C. Bar #999473) Ian S. Speir (Colo. Bar #45777) Lewis Roca Rothgerber LLP 90 S. Cascade Ave., Suite 1100 Colorado Springs, CO 80903 719-386-3000; f:719-386-3070 mnussbaum@lrrlaw.com ekniffin@lrrlaw.com ispeir@lrrlaw.com Admitted Pro Hac Vice and Angela Ables (Okla. Bar #0112) Johnny R. Blassingame (Okla. Bar ##21110) Kerr, Irvine, Rhodes & Ables 201 Robert S. Kerr Ave., #600 Oklahoma City, OK 73102 405-272-9221; f:405-236-3121 aables@kiralaw.com jblassingame@kiralaw.com Attorneys for Plaintiffs
sdg
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VERIFICATION PURSUANT TO 28 U.S.C. § 1746 I declare under penalty of perjury that the foregoing allegations pertaining the teachings of the Catholic Church and to The Catholic Benefits Association LCA and The Catholic Insurance Company, Inc. are true and correct to the best of my knowledge. I further declare under penalty of perjury that Exhibit 1 attached hereto is a true and accurate copy of the Articles of Organization of The Catholic Benefits Association LCA, Exhibit 2 is a true and accurate copy of the Bylaws of The Catholic Benefits Association LCA, Exhibit 3 is a true and accurate copy of the Certificate of Incorporation of the Catholic Insurance Company, Inc., and Exhibit 5 is a true and accurate copy of the Bylaws of the Catholic Insurance Company, Inc. Executed on October 2, 2014.
/s/ Most Rev. William E. Lori Most Rev. William E. Lori Archbishop of Baltimore President, The Catholic Benefits Association LCA President, The Catholic Insurance Company, Inc.
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VERIFICATION PURSUANT TO 28 U.S.C. § 1746 I declare under penalty of perjury that the foregoing allegations pertaining to The Catholic Benefits Association LCA and its members are true and correct to the best of my knowledge. Executed on October 2, 2014.
/s/ Nancy Matthews Nancy Matthews, Esq. Director of Membership,
The Catholic Benefits Association LCA Corporate Secretary,
The Catholic Benefits Association LCA
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Case 5:14-cv-00685-R Document 32 Filed 10/03/14 Page 92 of 92 CERTIFICATE OF SERVICE
I hereby certify that on October 3, 2014, I electronically filed the foregoing with the Clerk of the Court using the CM/ECF system, which sent notice of such filing to all parties.
/s/ L. Martin Nussbaum L. Martin Nussbaum
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 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA

THE CATHOLIC BENEFITS ASSOCIATION LCA; THE CATHOLIC INSURANCE COMPANY, )

Plaintiffs, )

v.

)

SYLVIA M. BURWELL, Secretary of the United States Department of Health and Human Services et al.,

Defendants.

)

) ) )
)
) Case No. CIV-14-685-R
) ) ) ) ) )

ORDER

Before the Court is Plaintiffs’ Motion fo r Preliminary Injunction. Doc. No. 30.

This motion stems from an action challenging a provision of the Affor dable Care Act (“ACA”)1 and the regulations issued under it, which m andate that certain em ployers

provide health coverage for co ntraceptives to their em ployees, or face substantial fines

for failing to do so (“the Mandate”). On June 4, 2014, the C ourt entere d an Or der

enjoining Defendants from “any effort to apply or enforce, as to [certain] members of the

Catholic Benefits Association LCA” the provisions of the ACA requiring them to provide

their employees health insuranc e coverage for contraceptives. Catholic Benefits Ass’n

1 The ACA is com posed of the Patient Protection an d Affordable Care Act, Pub. L. No. 1 11-148, 124 Stat. 119 (2010), and t he Health Care and Education Reconciliation Act, Pub. L. No. 111- 152, 124 Stat. 1029 (2010).

LCA v. Sebelius , 2014 WL 2522357, at *10 (W .D. Okla. June 4, 2014). 2 Plaintiffs filed this motion for preliminary in junction for two reasons: (1) to pr otect Catholic employers that have joine d and continue to join the Catholic Benefits Association LCA (“CBA”) after June 4 that are not covered by t he Court’s June 4 Order, and (2 ) to protect all CBA members from the interim final regulations issued by the Depart ment of Health and Human Ser vices (“HHS”), Labor, and the Tr easury (“the Departments”) on August 27, 2014. Doc. No. 33, at 8.
CBA is an Oklahoma nonprofit limited cooperative association that was organized in relevant part t o a ssist Catholic em ployers in providing health benefits to their respective employees in a manner consistent with Catholic values . Doc. No. 32, ¶ 31. CBA members “adhere in belief and practice to the teachings of the Catholic Church on contraception, abortion, steriliz ation, and related counseling. ” Doc. No. 32, ¶ 82. They assert that the Mandate violates th eir sincerely held religious beliefs. Id. ¶ 289. Plaintiffs have brought this action agains t Sylvia Burwell, Secretary of the U.S. Department of Health and Human Services, along with other gove rnment officials and agencies, advancing constitutional and stat utory challenges to the Manda te. In the present motion, Plaintiffs seek a preliminar y inj unction on behalf of certain CBA members against Defendants’ collective ability to enforce the Mandate against them, basing their arguments on t he Religious Freedom Restor ation Act (“RFRA”), the Establishment Clause, and the Administrative Procedure Act (“APA”). Doc. No. 30, at 2.
2 This June 4 Order w as entered in a cas e with s ubstantially the sa me part ies a s the pr esent c ase. Following this Court’s June 26 Order denying the plaintiffs’ motion to amend the June 4 Order to extend preliminary injunctive relief to members that have jo ined Catholic Benefits Association LCA since June 4, Plaintiffs filed this separate action in order to obtain such relief. Doc. No. 32, ¶¶ 24-26.
2

I. ACA Under 42 U.S.C. § 300gg-13(a)(4), cert ain em ployer health plans m ust cove r
“preventive care and screenings” for women. Based on the gui delines adopted by the Health Res ources and Services Administrati on, “preventive care” includes “[a]ll Food and Drug Administration approved contracep tive methods, sterilization procedures, and patient education and counseling for all wo men with repr oductive capacity.” Health Resources & Servic es Adm inistration, “Wom en’s Preventive Serv ices Guidelines,” http://www.hrsa.gov/womensguidelines (last visited Dec. 18, 2014). If an employer subject to the Mandate fails to provide the required contraceptive coverage in its health plan, then it faces fines of $ 100 per day per employee, or, in other words, up to $36,500 per year pe r em ployee. See 26 U .S.C. § 4980D(b)( 1). Furt her, if the employer fails to provide any health plan whatsoever to its employees, it faces fines of $2, 000 per year per full-time employee (less 30 employees). Id. § 4980H(a), (c)(1), (c)(2)(D)(i)(I).
The regulations and guidelines issued under the Mandate provide an exemption for certain “religious em ployers.” 45 C.F.R. § 147.131(a); 79 Fe d. Reg. 51,092-01; 51,092. For purposes of the regulations, “religious e mployer” is narrowly defined as a nonprofit entity referred to in 26 U.S.C. § 6033(a)(3)(A)(i) or (iii), pa rt of the Internal Revenue Code. 45 C.F.R. § 147.131(a); 78 Fed. Reg. 39,870, 39,873-74. The groups referred to in those subsections include “churches, their integrated auxiliaries, and conventions or associations of churches,” and “the excl usively religious activities of any religious order.”
3

The regulations further provide for an accom modation for certain non-exem pt employers that do not want to provi de cove rage for the required contracepti ve services based on religious objections. 78 Fed. Reg. 39,870-01; 39 , 874. A n em ployer is a n “eligible organization” for this accommodation if it satisfies the following requirements: (1) it opposes providi ng coverage for som e or all of the required contracept ive services due to religious objections; (2) it is a nonprofit entity; (3) it “holds itself out as a religiou s organization;” and (4) it “self-cer tifies, in a form and m anner specified by the Secretaries of Health and Human Services and Labor, that it satisfies the [previous three] criteria.” 26 C.F.R. § 54.9815-2713A(a); 29 C.F.R. § 2590 .715-2713A(a); 45 C.F.R. § 147.131(b); 78 Fed. Reg. at 39,874.
At the time the Court issued its June 4 Or der, in order to meet the self-certification requirement, an employer had only one option. It had to execute and deliver EBS A Form 700 to its issuer, or if the em ployer was se lf-insured, to its third-party a dministrator (“TPA”). 78 Fed. Re g. at 39,875. If a nonprofit religious em ployer executed and delivered EBSA Form 700 to its issuer or TPA, the issuer or TP A w ould t hen provide notice to the organizat ion’s employees that it would be providi ng contraceptive services to these employees. 26 C.F.R. § 54.9815- 2713A(d); 29 C.F.R. § 25 90.715-2713A(d); 45 C.F.R. § 147.131(d).
On July 3, 2014, the Supreme Court issued an interim order in Wheaton College v. Burwell, 134 S. Ct. 2806, 2807 (2014 ), holding that the college “need not use the form prescribed by the G overnment, EB SA F orm 70 0, a nd need not send copies to health insurance issuers or third-party administrators” in order to obtain a preliminary injunction
4

against enforcement of the Mand ate. It is sufficient if the college “informs the Secretary

of Health and Human Services in writing th at it is a nonpr ofit or ganization that holds

itself out as religious and has religious objections to providing coverage for contraceptive

services.” Id.

“[I]n light of” this int erim order, on A ugust 27, 2014, the Departments issued

interim fin al regulations to “augment” the above regulations. 79 Fed. Reg. 51, 092-01,

51,092. In addition to submittin g ESBA For m 700 t o i ts issu er or TPA, the new r ules

provide for an additional process by which an organization may notif y HHS directly in

writing of its religious objection. 26 C .F.R. § 54.9815- 2713AT(c)(1); 29 C. F.R.

§ 2590.715-2713A(c)(1); 45 C.F. R. § 147.131(c)(1); 79 Fed. Reg. at 51,094. This notice

must include the organization’s name; th e basis on which it qualifies for the

accommodation; the nature of its objection; the plan name and t ype; and the name and

contact information for the plan’s TPAs and health ins urance issuers. 26 C. F.R.

§ 54. 9815-2713AT(c)(1)(ii); 29 C.F.R. § 2590. 715-2713A(c)(1)(ii); 45 C.F.R.

§ 147.131(c)(1)(ii); 79 Fed. Reg. at 51,094-95.

This above information is “the mi

nimum information necessary for the

Departments to determine which entities are covered by the accommodation, to

administer the accommodation, and to implem ent the policies in th e July 2013 final

regulations.” 79 Fed. Reg. at 51,095. Once the objecting or ganization provides such

notice, it need not “c ontract, arrange, pay, or refer for such coverage.” 79 Fed. Reg. at

51,095. Af ter the or ganization sends its notice to HHS, the Department of Labor will

send a notification to the plan’s issuer or TPA, inf orming them of the orga nization’s

5

religious objection a nd of t he i ssuer’s or TPA’s obligations regarding contraceptiv e benefits. 26 C.F.R. § 54.9815-2713AT(c)(1 )(ii); 29 C.F.R. § 2590 .715-2713A(c)(1)(ii); 45 C.F.R. § 147. 131(c)(1)(ii); 79 Fed. Reg. at 51,094-95. These obligations include t he responsibility to provide the contraceptive services that the objecting organization objects to providing. 26 C.F.R. § 54.9815-2713AT(b)(2); 29 C.F.R. § 2590.715-2713A(b)(2); 45 C.F.R. § 147.131(d); 79 Fed. Reg. 51,092-01; 51,095. Pl aintiffs argue that this new process still im poses a substantial burde n on CBA members’ exercise of their religious beliefs, because the effect is the same: they mu st still initiate the pr ocess that results in the insurers or TPAs provi ding contraceptive coverage to their em ployees. Doc. No. 31, at 12-13. II. Standard
To prevail on their Motion for Preliminary Injunction, Plaintiffs must show: “(1) a likelihood of success on the merits; (2) a likely threat of irreparable harm to the movant[s]; (3) the harm alleged by the movant[s] outweighs any harm to the non-moving party; and (4) an inj unction is in the public interest.” Hobby L obby St ores, Inc. v. Sebelius, 723 F.3d 1114, 11 28 (10th Cir. 2013), aff’d, Burwell v. Hobby L obby St ores, Inc., 134 S. Ct. 2751 (2014) (citing Winter v. NRDC, 555 U.S. 7, 20 (2008)). Because this preliminary injunction seeks to alter the status quo, Plaintiffs m ust m ake a “strong showing both with regard to the likelihood of success on the merits and with regard to the balance of harm s.” Awad v. Ziriax , 670 F. 3d 1111, 1125- 26 (10th Cir. 2012) (quoting Summum v. Pleasant Grove , 483 F.3d 1044, 1048- 49 (10th Cir. 2007), rev’d on ot her
6

grounds, 555 U.S. 460 (2009)). For i rreparable injury and public interest, Plaintiffs must show only that these two requirements weigh in their favor. Id. at 1126. III. Analysis
A. Likelihood of Success on the Merits Under RFRA Under RFRA, the federal government is prohibited from substantially burdening a
person’s exercise of religion, unle ss the government can demonstrate that the challenge d action “constitutes the least restrictive me ans of serving a compelling government interest.” Hobby Lobby, 134 S. Ct. at 2759. Therefore, in order to establish a claim under RFRA, a plaintiff must first show “that the gover nment su bstantially burdens a sincere religious exercise.” Hobby Lobby, 723 F. 3d at 1125-26 (citation omitted). If the plaintiff can establish this, then the bu rden shifts to the government “to show that the ‘compelling interest test is satisfied through application of the ch allenged law to the person—the particular claimant whose sincere exercise o f religion is being substantially burde ned.’” Id. at 1126 (quoting Gonzales v. O Centro Espirita Beneficente Uni ao do Vegetal , 546 U.S. 418, 420 (2006)) (int ernal quotation marks omitte d). This burden-shifting framework applies even at the preliminary injunction stage. Id. (citing Gonzales, 546 U.S. at 429). In this case, Defendants do not challenge the sincerity of CBA members’ religious beliefs. But Defendants do argue that their religious beliefs are not substantially burdened, and, e ven i f they are substantia lly burdened, the govern ment can satisfy the compelling interest test.
7

1. Substantial Burden The Court will first determine if the gove rnment’s enforcement of the challenged
provisions of the AC A and accom panying re gulations im poses a substantial burde n on CBA members’ exercise of their religion. Under RF RA, an act by the gover nment imposes a substantial bur den on religious exercise if it “(1) requires participation in an activity prohibited by a sincerely held relig ious belief, (2) preven ts participation in conduct motivated by a sincerel y held religious belief, or (3 ) places substantial pressure on an adhe rent . . . to engage i n conduct c ontrary to a sincerely held religious belief.” Hobby Lobby, 723 F.3d at 1138 (quoting Abdulhaseeb v. Cal bone, 600 F.3d 1301, 1315 (10th Cir. 2010)) (internal qu otation marks omitted). Only the third prong concerning “substantial pressure” is applicable in this case. See id.
CBA members believe in the Catholic teac hing that any artificial interference with the creation and nurture of new life is wrong. Doc. No. 32, ¶ 5. Thus, it would be contrary to this belief for them to prov ide health benefits to their em ployees that include coverage for contraception, abortion-inducing drugs and devices, surgical abortion, sterilization, and related counseling. Id. Furthermore, they believe th at the accom modation, both preand post-augm entation, forces them to pl ay a centr al role in the pr ovision of the contraceptive services to which they religi ously object. Plainti ffs argue that both accommodations require CBA members to cause another “to provide that which their Catholic faith will not permit.” Doc. No. 33 , at 18. The crux of their objection to the alternative process provided in the final interim regulations is that their no tice to HHS of their religious objection t o the Mandate “t rigger[s] gover nment action m odifying t heir
8

own pla ns and causi ng their thir d party a dministrators … or gr oup ins urers to delive r [contraception] services to their plan beneficiaries.” Id. at 9. This, in their view , constitutes “material cooperation with evil because of the cascading effects.” Id. at 17-18.
In response, Defendants argue that the Sixth and Se venth Circuits (and now the D.C. Circuit) have rejected the “trigger theory ” that Plaintiffs ad vance. Doc. No. 36, at 14. In University of Notre Dam e v. Sebelius , 743 F. 3d 547, 554 (7th Cir. 2014), the Seventh Ci rcuit held that th e cer tification requirem ent, as it stood prior t o t he A ugust 2014 augmentation, did not s ubstantially burden the plainti ff’s religious beliefs because “[f]ederal law, not the religious organiza tion’s signing and m ailing t he for m, requires health-care insurers, along with t hird-party administrators of self-insured health plans, t o cover contraceptive services.” Accord Priests for Life v. United States Dep’t of Health & Human Servs., 772 F.3d 229, 252-53 (D.C. Cir. 2014); Michigan Catholic Conference & Catholic Family Servs. v. Burwell , 755 F.3d 372, 389 (6th Cir. 2014). The Eleventh Circuit dis agrees. See Eternal W orld Television Netw ork, Inc. v. Sec’y of the United States Dep’t of Health & Human Servs., 756 F.3d 1339, 1347 (11th Cir. 2014) (“Even if the form alone does not ‘tri gger’ coverage—whatever that m eans—it is undeniable t hat the United States has compelle d the Network to participat e in the m andate schem e by requiring t he Netw ork not onl y to sign but also to deliver the form to its third-party administrator of its health insurance plan.”).
The Court agrees with th e Ele venth Circuit and finds its conclusion equall y applicable to the August 20 14 interim final rules. Rega rdless of whether the federal government has an indepe ndent obligation to provide contraceptive services when CBA
9

members decline to pr ovide it, and also declin e to participate in th e notification pr ocess, the analysis remains the same. “First, we must identify the religious belief …. Second, we must determine whether this belief is sincere…. Third, we turn to the question of whether the government places substantial pr essure on the religious believer.” Hobby Lobby, 723 F.3d at 1140. The question of what, if anything, is actually required to activate employees’ right to cost-free contraceptive services is inapposite . “[T] his is not a question of legal causation but of religious faith,” Notre Dame, 743 F. 3d at 566 ( Flaum, J., dissenting), a nd the Court is not a uthorized “to say that the relig ious beliefs of th e plaintiffs are mistaken or unreasonable,” Hobby Lobby, 134 S. Ct. at 2757.
This case is distinguishable from both Hobby Lob by and Wheaton College , because in neither of those cases did the pl aintiffs argue that they had a religious objection t o the act of notifyi ng the governm ent of it s religious objection. Defenda nts’ repeated assertions that CBA’s members are “effectively exempt,” see, e.g., Doc. No. 36, at 5, demonstrate their misunderstanding regarding the religious belief at issue. Although CBA m embers m ay be “effectively exem pt” from directly pr oviding contraceptive services if they comp ly with the notification requireme nt, they are not exempt from the notification requirement itself. This requirem ent also violates their religious beliefs because, they argue, it requires them to be complicit in indire ctly providing their employees with contraceptive services.
Thus, unde r the challenge d regulations , CB A m embers have five options from which to c hoose: (1) directly pr ovide cont raceptive covera ge to their em ployees; (2) refuse to provide the coverage and face severe monetary pe nalties; (3) com pletely drop
10

their employees’ health plans and face mone tary penalties for doing so; (4) self-certify that they qualify fo r the accommodation by filling out EBSA Form 700; or (5) notify HHS that they qualify for the accommodati on and provide the required information. Because options (1), (4), and (5) violate thei r religious beliefs, th e only alternatives offered in opti ons (2) and ( 3), paying m onetary penalties, create a Hobson’s choice for CBA members. See Hobby Lobby, 723 F.3d at 1141.
The A ugust 2014 augm ented regulations thus do not remove the substantial burden pla ced on C BA m embers by the notif ication requirement. There remains a substantial burden on the relig ious beliefs of CBA members that meet the definition of “eligible organization” for purposes of the accom modation (“Gr oup II m embers”), as well as those members that are closely-held for-profit corporations that are neither exempt from the Mandates, nor qualify for the accommodation (“Group III members”).3
2. Compelling Interest Because Plaintiffs h ave made a str ong showing of a su bstantial burden,
Defendants m ust now show t hat they are like ly to pass the compelli ng interest test. In Hobby Lobby, the Tenth Circuit held that the government’s articulated interests “in public health and … gender equality … do not satisfy the Supreme Court’s compelling interest standards.” 723 F.3d at 1143-44. In the sa me case, the Suprem e Court assum ed without deciding that the regulations at issu e satisfy the compe lling interest test. Hobby Lobby ,
3 See Hobby Lobby, 134 S. Ct. at 2775. Consistent with its J une 4 Order, the Court finds that those CBA members that meet the ACA’ s definition of “religious em ployer,” and are thus exempt from the Mandate (“Group I members”), are not substantially burdened by the Mand ate or the su bsequent regulations. See Catholic Benefits, 2014 WL at *7, 10.
11

134 S. Ct. at 2780. De fendants argue t hat in Hobby Lobby , five Justices found the

compelling interest test to be satisfied. Doc. No. 36, at 16.

In

Hobby Lobby, Justices Ginsburg, S otomayor, Breyer, and Kaga n dissented and

concluded that the government satisfied the compelling interest test. Hobby Lobby, 134 S.

Ct. at 2799 (Ginsburg, J., dissenting). Wh ether Justice Kennedy came to the same

conclusion in his c oncurrence is unclear. He de voted one paragraph to t he issue, and

stated that HHS “makes the case that the Mandate serves the Government ’s compelling

interest in providing in surance coverage that is necessary to protect the health of female

employees.” Id. at 2785 (Ke nnedy, J., concurring). H e further noted that “[t]here are

many m edical conditi ons f or w hich pregnancy is cont raindicated.” Id. at 2786 (citation

omitted). Even assuming Justi ce Kennedy did find that the government had established a

compelling interest, becau se the other Justices in the majo rity simply assumed that fact

without fully debating th e issue, this Court is not bound by the Justices’ conclusions on

this issue. See Cent. Virginia Cmty. College v. Katz, 546 U.S. 356, 363 (2006) (“[W]e are

not bound to follow our dicta in a prior case in which the point now at issue was not fully

debated” (citation omitted)). Thus, the Tenth Circuit’s ruling that the government has not

satisfied the compelling interest test is bi nding on t his Court, and Plaintiffs have

consequently shown a likelihood of success on the merits of their RFRA claim.

12

B. Likelihood of Success o n the Merits Un der the Establishmen t Clause and the APA

Because the Court has found that Plainti ffs have shown a likelihood of success on

the merits under RFRA, the Court declin

es to address their claims under the

Establishment Clause and the APA.

C. Remaining Requirements for Preliminary Injunction

In addition to showi ng a likely RFR A viol ation, Plaintiffs must also satisfy the

three remaining requirements for a prelimin ary injunction. First, “establishing a likely

RFRA viol ation satisfies the irreparable harm factor.” Hobby Lobby , 723 F.3d at 1146

(citations omitted). Second, the harm to CBA members outweighs any harm to

Defendants’ interest in enforcing the chal lenged regulations. De fendants conte nd that

there is an inherent ha rm in prohi biting them from enforcing the challenge d regulations

against CBA members. Doc. No. 36, at 27. Yet Defendants have already exempted health

plans covering millions of others, including those plans of many re ligious organizations.

Hobby Lobby, 723 F.3d at 1143. This brings into question how tangible the harm could

possibly be by the Court’s entry of a prelim inary injunction in Plaintiffs’ favor. By

comparison, the harm posed to these Plainti ffs absent relief is quite tangible—they will

either face severe monetary penalties or be required to violate th eir religious beliefs.

Finally, “it is always in the public intere st to prevent the violation of a party’s

constitutional rights,” and the same is true of RFRA violations. Hobby Lobby, 723 F.3d at

1147 (quoting Awad, 670 F.3d at 1132) (“[A]lth ough RFRA violations are not

constitutional violations, Congress has given RFRA similar importance by subjecting all

13

subsequent congressional enactments to a strict scrutiny standard of review unless those enactments explicitly exclud e themselves from RFRA.” (citing 42 U.S.C. § 2000bb3(b))). Accordingly, Plaintiffs have satisfi ed all four requirements for a preliminary injunction. IV. Extension Beyond Current CBA Members
Plaintiffs ask the Court to grant preliminary injunctiv e relief for all present and future CBA Members that have joined or will join CBA after June 4, 2014. Doc. No. 31, at 32. Consistent with its June 4 Order, t he Court extends prelim inary relief only t o current CBA members that fit within Groups II and III.4 That is, only current members of CBA that either qualify for the accommodation as nonprofit religious employers, or those members that are non-exempt closely-held co rporations and thus do not qual ify for the accommodation, are entitled to preliminary relief. V. Conclusion
In accordance with the fore going, Plaintiffs’ Motion for Preliminary Injunction is GRANTED in part a nd DENIED in part. Although Gr oup I m embers of CBA are not entitled to preliminary injunctive relief, current Group II and Group III members of CBA are entitled to such relief based on Plaintiffs’ RFRA challenge.
4 All current Group II and Group III members of CBA were required to meet certain requirements in order to be eligible for membership, as set out in CBA’s Articles of Organization and Bylaws. See Doc. No. 32, ¶¶ 36-39. The Court is satisfied that th ese tests have ensured the uniform ity of belief among the current Group II and Group III members to which this prelimin ary relief will extend. If Defendants do not object to including within the scope of this pr eliminary injunction future CBA Group II and Group III mem bers, they are directed to file such a notice with the Court.
14

PRELIMINARY INJUNCTION

Defendants, their agents, officers, and em ployees, and all others in active concert

or participation with t hem, are hereby EN JOINED AND RE STRAINED from any effort

to apply or enforce, as to current members of the Catholic Benefits Association LCA who

qualify for the accommodation (Group II member s), as defined by 26 C.F.R. § 54.9815-

2713A(a), 29 C.F. R. § 2590. 715-2713A(a), and 45 C.F.R. § 147.131(b), or that are

closely-held for- profit corporations t hat neither qual ify for the “religious em ployer”

exemption nor qualify for the accommodation (Group III members), the substantive

requirements at issue in this case that are im posed by 42 U.S. C. § 300gg-13(a)(4) and its

related regulations, including any penalties, fines and assessments for noncompliance

with these provisions, until further order of the Court.

Defendants, their agents, officers, and em ployees, and all others in active concert

or participation with them, are FURT HER ENJOI NED AND RE STRAINED from any

effort to appl y or enforce the Mandate

against group ins urers and third-part y

administrators of current Group II and Group III members and from interfering with these

members’ attempts to arrange or contract for morally com pliant health or stop-loss

coverage or related services for their employees. IT IS SO ORDERED this 29th day of December, 2014.

15

 
 Case 5:14-cv-00685-R Document 98 Filed 08/15/18 Page 1 of 36

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA

THE CATHOLIC BENEFITS

)

ASSOCIATION LCA, et al.,

)

)

Plaintiffs,

)

)

v.

)

)

ALEX M. AZAR II, in his official capacity )

as Acting Secretary, Department of Health )

and Human Services, et al.,

)

)

Defendants.

)

Case Nos. CIV-14-240-R CIV-14-685-R

ORDER

“A request for attorney’s fees should not result in a second major litigation,” yet here

we are with Plaintiffs’ counsel Martin Nussbaum’s (“Counsel”) Motion for Attorneys’ Fees

and Non-Taxable Costs Under 42 U.S.C. § 1988. Hensley v. Eckerhart, 461 U.S. 424, 437

(1983); CBA I (CIV-14-240-R) Docs. 187, 188; CBA II (CIV-14-685-R) Docs. 82, 83.1

Plaintiffs—the “prevailing party” entitled to a “reasonable” attorneys’ fee under Section

1988—are Catholic employers that obtained a declaratory judgment and permanent

injunction under the Religious Freedom and Restoration Act (“RFRA”) to enjoin the

Defendant U.S. Departments of Health and Human Services, Treasury, and Labor, and their

respective Secretaries (“the Government”), from enforcing the Affordable Care Act’s

contraceptive mandate. Doc. 184. In a case that involved no discovery, summary judgment

briefing, trial, or merits briefing on appeal, Counsel’s request of $3,103,966 in attorneys’ fees

1 The Court treats CBA I (CIV-14-240-R) and CBA II (CIV-14-685-R) as one case for purposes of this attorneys’ fees motion. Docket numbers refer to CBA I unless otherwise noted.
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Case 5:14-cv-00685-R Document 98 Filed 08/15/18 Page 2 of 36
for 6,098.8 hours and of $38,149.74 in costs is not “reasonable.” 42 U.S.C. § 1988. It is, quite frankly, indefensible.
After a thorough review of the litigation history, attorneys’ fees briefs, and billing records, the Court hereby awards Plaintiffs $699,725.95 in fees for 3,451.45 hours reasonably expended litigating this case and $18,881.41 in expenses not recoverable under 28 U.S.C. § 1920. The Court begins with a litigation recap before scrutinizing Counsel’s billing records to limit fees to hours “reasonably expended on the litigation.” Webb v. Bd. of Educ. of Dyer County, 471 U.S. 234, 242 (1985) (quoting Hensley, 461 U.S. at 433). That time multiplied by a reasonable hourly rate yields the lodestar amount, $1,272,229, which the Court adjusts downward after considering the Johnson factors. Finally, the Court concludes by deducting costs that lack substantiation, are tied to non-compensable matters, or should be absorbed as part of law firm overhead.
I. Background This case—like the dozens filed before it nationwide by employers with religious objections to providing certain health insurance benefits—concerns the Government’s promulgation of Affordable Care Act rules known as the “contraceptive mandate.” The mandate required employers to “provide, pay for, or otherwise” facilitate access to “contraception, abortion-inducing drugs or devices, sterilization, and related counseling” (“CASC benefits”) through employee health insurance. Complaint, Doc. 1, at 4–5. Plaintiffs are “Catholic organizations and, as part of their religious witness and exercise, are committed to providing no healthcare benefits to their employees inconsistent with Catholic teaching.” Catholic teaching prohibits CASC benefits because they involve “artificial interference with
2

Case 5:14-cv-00685-R Document 98 Filed 08/15/18 Page 3 of 36
the creation and nurture of new life.” Id. at 4. A. CBA I and CBA II
Plaintiffs filed a ninety-four page complaint comprising ten claims under RFRA, the First Amendment, and the Administrative Procedure Act, as well as a motion for a preliminary injunction, in March 2014. Docs. 1, 4, 5. Because the case dealt primarily with issues of law, the parties agreed to suspend discovery and responsive pleadings until the Court ruled on the preliminary injunction and the parties exhausted their inevitable appeals. Docs. 47, 49. The Court considered the briefing, supplemental authority provided by both parties, an amicus brief filed by the ACLU of Oklahoma, and the parties’ arguments at a hearing, and granted a preliminary injunction on June 4, 2014; it enjoined the contraceptive mandate and associated financial penalties against then-current members of the Catholic Benefits Association (“CBA”). Doc. 68. The Government appealed the injunction to the Tenth Circuit U.S. Court of Appeals, and Plaintiffs cross-appealed. Docs. 74, 77. Plaintiffs also moved for class certification, but the Court agreed with the Government that judicial economy would be best served by staying consideration of that motion pending exhaustion of appeals. Docs. 53, 88.
When the Court declined to expand the preliminary injunction to protect new CBA members, Plaintiffs filed a new lawsuit in July 2014, CBA II (CIV-14-685-R). See Docs, 68, 73. Soon thereafter the Court granted a temporary restraining order (“TRO”) in CBA II. CBA II Doc. 12. The Court granted Plaintiffs’ motion to convert the CBA II TRO to a preliminary injunction in December 2014. CBA II Doc. 40.
This began a series of appeals and motions to amend the preliminary injunctions in
3

Case 5:14-cv-00685-R Document 98 Filed 08/15/18 Page 4 of 36
both cases, all as the Government modified rules governing the contraceptive mandate. See Doc. 188-1, at 12–13, 52–54; Doc. 190, at 19. The Court granted Plaintiffs a streamlined method to expand injunctive relief to new CBA members every three months, which the Government opposed and appealed nearly every time. Doc. 107; see Docs. 118, 129, 140. The Tenth Circuit held both CBA cases’ appeals in abeyance, first pending resolution of three other Tenth Circuit cases on substantially similar issues and then at least until the Supreme Court ruled on the Tenth Circuit’s Little Sisters decision. Little Sisters of the Poor Home for the Aged, Denver, Colo. v. Burwell, 794 F.3d 1151 (10th Cir. 2015); Docs. 82, 123.
The Supreme Court vacated and remanded the seven consolidated contraceptivemandate cases in 2016 to allow “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 v. Burwell, 136 S. Ct. 1557, 1560 (2016) (internal quotations omitted). Next the Government sought public comment on changes to the mandate’s accommodation process, but ultimately decided against changes. Doc. 188-1, at 55.
A new presidential administration in 2017 brought a complete shift in the Government’s position on the mandate. President Trump issued an executive order urging greater accommodations for religious employers, the Government issued new interim final rules effectively ending the mandate, and the Government dropped all of its appeals in CBA I and CBA II. Doc. 188-1, at 56; Docs. 151, 153, 155, 157, 159; CBA II Doc. 55. Plaintiffs then filed a motion for a permanent injunction and declaratory judgment to protect themselves from any future regulatory changes or financial penalties related to CASC benefits. Doc. 57.
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Case 5:14-cv-00685-R Document 98 Filed 08/15/18 Page 5 of 36
While the Government conceded that the mandate violated RFRA, it took no position on whether permanent relief was warranted given the apparent mootness of the issue. Doc. 167. But other districts enjoined Defendants from enforcing the new interim final rules, prompting the Government to abandon its mootness argument. Doc. 174. Thus, on March 7, 2018, nearly four years after this case started, the Court entered a permanent injunction and declaratory judgment protecting Plaintiffs under RFRA. Doc. 184; see also CBA II Doc. 79. B. Attorneys’ Fees Litigation
The parties have extensively litigated attorneys’ fees and costs for this case largely due to Counsel’s attempts to conceal the unreasonableness of his fees request. These tactics are best described in three stages—(1) Take our word for it; (2) Litigation, et cetera; and (3) Doubling (and tripling) down.
1. Take our word for it In the Motion for Attorneys’ Fees, Counsel first requested—without a shred of
documentation—$3,334,696.50 in attorneys’ fees for nineteen attorneys’ 6,538.15 work hours and $39,188.06 in expenses. Doc. 188.2 The motion offered only Lewis Roca Rothgerber Christie LLP (“LRRC”) attorneys’ purported billing rates and total hours without “meticulous, contemporaneous time records.” Ramos v. Lamm, 713 F.2d 546, 553 (10th Cir. 1983), disapproved of on other grounds by Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 483 U.S. 711 (1987); see Doc. 188-1, at 48. Of note, Counsel also represented that—unlike in many civil rights cases where clients are not billed during the
2 Counsel ignored LCvR7.1’s page limits by styling his attorneys’ fees arguments as “declarations” appended as exhibits, rather than seeking leave of court to file oversized briefs. See Docs. 188, 200.
5

Case 5:14-cv-00685-R Document 98 Filed 08/15/18 Page 6 of 36
litigation and the Court must “simulate the market” for services—“the Court need not speculate as to what hours would reasonably have been billed to a client, because LRRC did bill the Catholic Benefits Association for the hours reported in Martin Nussbaum’s declaration.” Nussbaum Declaration, Doc. 188, at 6 (quoting Robinson v. City of Edmond, 160 F.3d 1275, 1281 (10th Cir. 1998)). By not including contemporaneous billing records, Counsel implied that his proposed billing rates and hours were an accurate reflection of what Plaintiffs paid in attorneys’ fees—“Take our word for it. This is what our services were worth.”
The Government strongly objected to this “outrageously excessive” request, and the Court instructed Counsel to file a supplemental brief with billing records. Doc. 190; see Doc. 191, 202. In that supplemental brief, attaching over 800 pages of billing invoices, Counsel decreased his requested fees to $3,064,474.50 for fifteen attorneys’ 6,001.3 hours and increased his requested costs to $39,302.98. Doc. 193. These invoices revealed that the hourly rates from Counsel’s opening brief were nearly thirty-five percent higher than those billed to the clients.3 In other words, Counsel actually simulated a market for services much more beneficial to him and his LRCC team and relied on the absence of billing records to mask this markup.
2. Litigation, et cetera The invoices also showed Counsel’s efforts to recover fees for time far beyond
litigating this case. See Defendant’s Supplemental Brief, Doc. 197, at 9–16. In particular, the
3 LCCR billed Plaintiffs $2,483,742.50, but requested $3,334,969.50 in his opening brief. See Ex. 1 – Adjusted Fees (total “Billed Amount”) & n.2; Doc. 188, at 1.
6

Case 5:14-cv-00685-R Document 98 Filed 08/15/18 Page 7 of 36
invoices are separated into four categories: (1) “Litigation,” (2) “Corporate,” (3) “Member services,” and (4) “Morally compliant insurance.” Docs. 193-1 through 193-8. “Litigation” includes not only tasks like drafting motions and researching in this case, but also LRRC’s “staffing a moot court before the Tenth Circuit argument” in Little Sisters—to which Plaintiffs were not a party—“and provid[ing] amicus advocacy at the Supreme Court” in Zubik. Doc. 188-1, at 19; see, e.g., Doc. 193-3, at 59–60, 74–76; Doc. 193-4, at 89; Doc. 1935, at 3. “Corporate” includes tasks like “[d]raft[ing] articles of organization and bylaws,” assembling a board of directors, and conducting webinars for members on mandate-related issues. See, e.g., Doc. 193-1, at 19, 29, 46. “Member services” appears to overlap with “Corporate,” at least with respect to member webinars, but the category also consists of LRCC’s member recruitment for the CBA and correspondence and advice on various issues. See, e.g., Doc. 193-3, at 32–33, 49–50. Lastly, “Morally compliant insurance” services predate the filing of this case and include regulatory advice for “a Catholic employer that became the CBA’s first member.” Doc. 200, at 11; see, e.g., Doc. 193-1, at 1, 3, 6, 9.
3. Doubling (and tripling) down In light of the broad scope of matters billed and the apparent excessiveness of
Counsel’s request, the Court ordered that Counsel (1) file a second supplemental brief to address these concerns and (2) reformat the billing invoices into a clearer format to enable the Court’s reasonableness inquiry.4 Doc. 196. Counsel violated this order by filing two briefs with fourteen exhibits, only two of which the Court actually requested, a simplified fees
4 “[T]he district court may quite properly impose on the claimant the burden of organizing or summarizing the billing records in such a manner as to facilitate judicial review of the reasonableness of the claim for attorneys’ fees.” Robinson v. City of Edmond, 160 F.3d 1275, 1285 & n.11 (10th Cir. 1998).
7

Case 5:14-cv-00685-R Document 98 Filed 08/15/18 Page 8 of 36
spreadsheet and a costs spreadsheet. Docs. 200, 201. Counsel removed some billing entries but increased his overall requested fees—largely due to $210,875, or 441 hours, sought on attorneys’ fees litigation alone—to $3,103,966 for 6,098.80 hours, and he decreased his costs request to $38,149.74. Docs. 201-1, 201-2.
Counsel’s second supplemental brief repeated many of the arguments in the opening brief, but was more important for what it did not do—concede that most of his categories for LRRC work have little to do with this litigation. Doc. 200. The moot court and amicus work, Counsel argues, were compensable efforts to secure binding precedent on this Court. Id. at 13–15. He characterizes the “Corporate” category as necessary to build “a Catholic ministry capable of invoking associational standing so it could bring this case for all its members.” Id. at 11. The “Member Services” category is recruitment time spent “communicati[ng] with prospective [CBA] members.” Id. at 12. Counsel justifies billing “Morally Compliant Insurance” work—some of which predated the filing of this case by nearly a year and a half— as “time necessary to determine who should be the appropriate plaintiffs or whether the suit may even be brought.” Id. at 11 (quoting Case v. Unified Sch. Dist. No. 233, Johnson Cnty., Kan., 157 F.3d 1243, 1251 (10th Cir. 1998)). And media-related matters, which appear in nearly every category, are framed as necessary “to publicize [the] litigation to potential class members.” Id. at 12 (internal quotation omitted).
Counsel’s third supplemental brief, filed without leave of Court, finally provided the simplified billing records the Court asked for in Excel format, but also included nine exhibits intended to show how the Government’s supplemental-brief exhibits are misleading. Doc. 201 (citing Doc. 197); see CBA’s Submitted Fees, Doc. 201-1; CBA’s Submitted Costs, Doc.
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201-2. Apparently the Government, by employing “a key word search without much selectivity,” exaggerated Counsel’s billing excess and double-counted various time entries. Doc. 201, at 7.
Despite serious concerns raised by the Government, in none of these supplemental briefs did Counsel (1) cut much of the excess; (2) separate out the block-billed entries that cover multiple categories, which made detailed review nearly impossible; or (3) explain why he categorized similar tasks, like webinars, differently throughout the billing records. Instead, Counsel insisted on doubling (and tripling) down on excessive billing and inclusion of matters way beyond the scope of this litigation.
II. Discussion The Court faces one question, what is a “reasonable” attorneys’ fees award “sufficient to induce a capable attorney to undertake the representation of a meritorious civil rights case”? 42 U.S.C. § 1988; Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 552 (2010). The answer starts with the “guiding light of our fee-shifting jurisprudence,” the “lodestar amount”—“the product of reasonable hours times a reasonable rate.” Perdue, 559 U.S. at 551 (quoting Gisbrecht v. Barnhart, 535 U.S. 789, 801 (2002)); Cooper v. State of Utah, 894 F.2d 1169, 1171 (10th Cir. 1990). “It [is] counsel’s burden to prove and establish the reasonableness of each dollar, each hour, above zero.” Mares v. Credit Bureau of Raton, 801 F.2d 1197, 1210 (10th Cir. 1986). “Where the documentation of hours is inadequate, the district court may reduce the award accordingly.” Hensley, 461 U.S. at 433. But once Counsel has met this burden to show reasonable hours and rates, “the resulting product is presumed to be a reasonable fee as contemplated by Section 1988.” Robinson, 160 F.3d at 1280–81 (quoting
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Cooper, 894 F.2d at 1171). Nonetheless, after calculating the lodestar, “other considerations . . . may lead the
district court to adjust the fee upward or downward,” including the “factors identified in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717–719 (CA5 1974).” Hensley, 461 U.S. at 434 & n.9. “[M]any of these factors usually are subsumed within the initial calculation of hours reasonably expended at a reasonable hourly rate.” Id.
Due to the nearly 3,000 rows of time entries in this case, it is “practically impossible” for the Court to “identify and justify each disallowed hour.” Case, 157 F.3d at 1250 (quoting Mares, 801 F.2d at 1202). However, by attaching detailed, color-coded spreadsheet exhibits to illustrate the reductions applied, the Court herein outlines which hours and costs are compensable and employs “general reduction[s] of hours claimed” where necessary. Mares, 801 F.2d at 1203; see Ex. 1 – Adjusted Fees; Ex. 3 – Adjusted Costs.5 Wholesale deletions of time entries are indicated in red; twenty-percent cuts are yellow; fifty-percent cuts are orange; seventy percent cuts are green; and eighty percent cuts are blue. Id. A. Lodestar
1. The hours expended There are several tasks and types of matters that Counsel has failed to show are
reasonably compensable under Section 1988. Counsel “should exercise ‘billing judgment’ with respect to hours worked,” making a “good-faith effort to exclude from a fee request
5 Ex. 1 – Adjusted Fees is copied directly from the Excel version of Counsel’s “Exhibit 1: CBA’s Submitted Fees” (Doc. 201-1), after which the Court changed two of the column headings and added columns and highlights to show deductions. See Ex. 1 – Adjusted Fees nn. 1 & 3. The Court did the same with Counsel’s “Exhibit 2: CBA’s Submitted Costs” (Doc. 201-2) to produce Ex. 3 – Adjusted Costs.
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hours that are excessive, redundant, or otherwise unnecessary.” Hensley, 461 U.S. at 434, 437. Accordingly, the Court looks to those hours “‘necessary’ under the circumstances” and “approach[es] this reasonableness inquiry ‘much as a senior partner in a private law firm would review the reports of subordinate attorneys when billing clients. . . .’” Robinson, 160 F.3d at 1281 (quoting Ramos, 713 F.2d at 555).
a) Pre-filing Many of the pre-filing hours were not reasonably expended on this case. Counsel’s first billing entries date back to December 2012, over fifteen months before Plaintiffs filed their CBA I complaint. “In some instances, such as when the litigation involves particularly difficult questions of standing, . . . attorneys may be awarded time necessary to determine who should be the appropriate plaintiffs or whether the suit may even be brought.” Case, 157 F.3d at 1251. Counsel is correct that in a case like this—Plaintiff CBA represents hundreds of Catholic employers, albeit the case was never certified a class action—pre-filing compensation is appropriate. But the billing records’ first mention of standing does not appear until September 1, 2013, just over six months pre-filing. See Ex. 1 – Adjusted Fees. Further, there is no indication that any of the “Morally Compliant Insurance” work that Counsel performed for “a Catholic employer that became the CBA’s first member” even remotely resembles the sort of compensable “pre-recruitment” time approved of by the Tenth Circuit. Doc. 200, at 11; Case, 157 F.3d at 1251 (citing Dowdell v. City of Apopka, Fla., 698 F.2d 1181, 1188 (11th Cir. 1983)). It is telling that once Counsel removed the “Morally Compliant Insurance” category—time that was exclusively billed pre-filing—and moved
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those matters into the “Litigation” category, he renamed the category “Litigation: General.”6 Compare Billing Invoice, Doc. 193-1, at 25, with CBA’s Submitted Fees, Doc. 201-1. Inserting the qualifier “General” appears to be Counsel’s way of acknowledging that many of the matters billed in this category may be litigation-related, but they were “unnecessary” to this litigation. Hensley, 461 U.S. at 434. Because Counsel has not met his burden to show that most of these pre-filing time entries are compensable, the Court bars recovery of any hours billed before September 1, 2013, when it appears that Counsel began working on this litigation.
The Court also finds unreasonable Counsel’s effort to bill for attorney Brent R. Owen’s 10.6 pre-filing hours preparing a memorandum on “wrongful life claims.” See Ex. 1 – Adjusted Fees (12/17/2013–12/18/2013, Brent R. Owen). Counsel has not shown the relevance of wrongful life claims to this litigation on the contraceptive mandate, nor does the phrase “wrongful life” even appear once in the dockets for CBA I or CBA II.
b) Moot court and amicus Counsel’s entire “Litigation: Other (inc. moot and amicus)” category is noncompensable because it was not “‘necessary’ under the circumstances” to this litigation. Robinson, 160 F.3d at 1281. LRRC coordinated a moot court in Denver for the parties in Little Sisters before the Tenth Circuit and then filed Supreme Court amicus briefs at the certiorari and merits stage in the consolidated Zubik contraceptive-mandate cases.7 Counsel
6 Naming the category “Litigation: General” violates the Court’s order regarding simplified billing records, which requested a simple “Yes” or “No” column next to the “Litigation” column to advise “if the work was expended on this case” or another one. Doc. 196, at 1. 7 See Brief of The Catholic Benefits Association and The Catholic Insurance Company, as amici curiae in support of Petitioners, Little Sisters of the Poor v. Burwell, No. 15-105 (Aug. 24, 2015), available at http://www.scotusblog.com/wp-content/uploads/2015/08/LSP-Amicus-Final.pdf; Brief of The Catholic
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argues this is compensable work “on the litigation” because it was necessary to create binding precedent in this case. Doc. 200, at 13–14. It was reasonable for Plaintiffs to monitor other contraceptive-mandate cases and file status reports in the Tenth Circuit, but Counsel has only presented evidence to show that LRRC’s moot and amicus work were, at best, helpful to achieving a favorable outcome in courts that “might issue a controlling precedent.” Doc. 200, at 14 (emphasis added); see Doc. 188-1, at 20 (“The CBA submitted the second of these amicus briefs as an exhibit to the CBA’s motion for permanent injunction and declaratory relief.”); Doc. 190, at 18.
The attorneys before the Tenth Circuit and Supreme Court were well qualified to successfully challenge the contraceptive mandate without LRRC’s assistance. Counsel concedes that plaintiffs’ counsel before the Tenth Circuit in Little Sisters were “seasoned,” but argues that the LRRC moot court was necessary because they “had little Tenth Circuit experience.” Doc. 200, at 14. Regardless of the marginal benefit of experience advocating before a particular court, the Little Sisters plaintiffs assembled a highly specialized and experienced team of appellate religious liberty advocates before the Tenth Circuit. Lead counsel Mark Rienzi, who provided a declaration supporting LRRC’s attorneys’ fees (Doc. 188-2), was on the successful 2013 Hobby Lobby litigation team before the Tenth Circuit en banc and is an experienced “religious liberty litigator and scholar.” Doc. 188-1, at 6; see Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114, 1120 (10th Cir. 2013), aff’d sub nom. Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751 (2014). “[T]he law firms representing
Benefits Association and The Catholic Insurance Company, as amici curiae in support of Petitioners, Zubik v. Burwell, Nos. 14-1418, 14-1453, 14-1505, 15-35, 15-105, 15-119, & 15-191 (January 11, 2016), Doc. 161-1; Doc. 188-1, at 19–20.
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the plaintiffs in the three [Tenth Circuit] Mandate cases . . . already had more than sufficient ‘staffing’ for a moot court.”8 Government’s Response, Doc. 190, at 21. Cf Case, 157 F.3d at 1252 (“If an attorney is consulting on a case, the assistance provided must be actually necessary or essential to proper representation rather than merely comforting or helpful.”).
Perhaps aware that the moot court was unnecessary, Counsel alternatively frames it as “CBA[’s] . . . opportunity to test its arguments, in what constituted a real life mock trial.” Doc. 200, at 14. But none of the cases “grant[ing] fees for focus groups, mock juries, [or] similar litigation tools” that Counsel cites dealt with moot work in other cases. Id. It is disingenuous for Counsel to argue that LRCC should be compensated for appellate moot court work when (1) the Tenth Circuit abated the appeals in this case, (2) there were no pending trials or oral arguments to prepare for in CBA I or CBA II, and (3) Plaintiffs were not parties to the Little Sisters Tenth Circuit case.
As to Zubik plaintiffs’ attorneys before the Supreme Court—former U.S. Solicitor General Paul Clement and current Solicitor General Noel Francisco—that team’s abilities and the dozens of other amici show the absurdity of arguing that any one of Counsel’s amicus briefs was necessary to a favorable outcome in this case. This is especially true given that the Supreme Court ultimately “expresse[d] no view on the merits of the cases,” which undermines Mr. Rienzi’s contention that “LRRC’s amicus briefs made important contributions to the favorable outcome in Zubik . . . .” Zubik, 136 S. Ct. at 1560; Doc. 188-2, at 7 (emphasis added). Accordingly, the Court deducts all hours from this “Litigation: Other”
8 Mr. Rienzi was already organizing his own moot court to prepare for oral argument when on May 22, 2014, Counsel “offer[ed] to assist . . . .” Ex. 1 – Adjusted Fees.
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category. c) Corporate The Court also deducts all fees for work in the “Corporate” category. It may seem
obvious that a party cannot recover fees in civil rights litigation for hours expended on corporate or transactional work, but the issue is not so clear. LRRC’s “Corporate” work occurred in two stages. Stage 1 is 2013–14 groundwork building the CBA for this case—in order to create “a Catholic ministry capable of invoking associational standing so it could bring this case for all its members,” LRRC “prepared CBA’s organizational documents and membership application forms and included within those documents many unique provisions necessary to establish” CBA members’ uniformity of beliefs and burden from the contraceptive mandate. Doc. 188-1, at 10. LRRC also recruited a CBA board of directors and created an ethics committee that consulted with attorneys and religious bodies to assess whether the Government’s rule changes burdened Catholic beliefs. Id. at 10–11. At Stage 2 post-filing, LRRC maintained and grew the CBA with tasks like board meetings, member recruitment, marketing, press releases, webinars, website maintenance, and emails.
While much of the Stage 1 work was reasonably expended on matters that allowed Plaintiffs to prosecute their case more efficiently, this does not transform transactional work into compensable litigation work. Essentially, Counsel’s argument boils down to two arguments: (1) Plaintiff CBA likely would not have had standing to sue in this case without laying the groundwork for associational standing, see Order Granting Permanent Injunction, Doc. 68, at 5, 8–10; Burrage Declaration, Doc. 188-3, at 5; and (2) the litigation would have been more complicated and lengthy without this corporate work.
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To the first point, the component employers of the CBA would still have been able to sue absent Stage 1 work. Associational standing was not the only way to prevail in this litigation; rather, a class action may have required the same amount of work in the aggregate. And to the second point, transactional attorneys work in anticipation of litigation all the time; but once the client ends up litigating, the firm will not consider that transactional work part of the litigation for billing purposes. In other words, Counsel attempts to capitalize on LRRC’s role as a one-stop shop for all of the CBA’s legal matters—regulatory, corporate, advocacy, and litigation—with Counsel Martin Nussbaum acting as CBA’s general counsel. Doc. 197, at 10; Doc. 188-1, at 5. That does not make every matter compensable in litigation against the Government. Counsel basically conceded this point by separating Plaintiffs’ billing invoices into four categories (“Litigation,” “Corporate,” “Member services,” and “Morally compliant insurance”), meaning the Corporate Stage 1 “tasks sought to be charged to the adverse party would normally be billed to a paying client” separate from the bills for work “on the litigation.” Ramos, 713 F.2d at 554; Webb, 471 U.S. at 242.
Stage 2 “Corporate” work differs from litigation even more than Stage 1 work. Hours planning and attending board meetings are non-compensable for the same reasons as above. Counsel characterizes press work as recruiting potential class members and educating current ones, but he offers no evidence to support that claim; the Court is left to assume that these press releases were purely promotional and therefore non-compensable. Doc. 200, at 12 & n.14; see Rum Creek Coal Sales, Inc v. Caperton, 31 F.3d 169, 176 (4th Cir. 1994) (“The legitimate goals of litigation are almost always attained in the courtroom, not in the media.”); Davis v. City & Cnty. of San Francisco, 976 F.2d 1536, 1545 (9th Cir. 1992) (“Where . . .
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press conferences and [the] performance of. . . public relations work is directly and intimately related to the successful representation of a client, private attorneys do such work and bill their clients. Prevailing civil rights plaintiffs may do the same.”) (emphasis added).
The rest of the Stage 2 work with CBA members—recruitment, marketing, webinars, website maintenance, and emails—were only spent “on the litigation” to the extent attorneys were actually recruiting potential class members or fulfilling their obligation to consult with Plaintiffs and apprise them of developments in the case. Webb, 471 U.S. at 242. Counsel has made it practically impossible to discern which “Corporate” hours meet this description by inexplicably categorizing seemingly identical “Corporate” matters in the “Litigation: General” or “Member Services” categories. Take webinars as just one example. Counsel categorizes as “Corporate” the following matters: “Prepare presentation for webinar” (11/25/2013), “Conference . . . re webinar” (1/28/2014), and “Prepare presentations to members for webinars” (6/25/2014). See Ex. 1 – Adjusted Fees. But he also categorizes indistinguishable tasks as “Litigation: General”: “Prepare webinar slides for report on litigation” (6/22/2014), “Review of materials from CBA webinar” (10/9/2014), and “meeting . . . regarding upcoming CBA member webinar” (4/18/2016). Id. And he categorizes as “Member Services,” “schedule membership webinar and communication with each presenter” (2/27/2015), “Email regarding 3/12 webinar planning meeting” (3/10/2015), and “Prepare for 3/31 CBA webinar” (3/27/2015). Id. Perhaps some of these webinars focused on litigation and some on unrelated corporate matters, but “[i]t remains counsel’s burden to prove and establish the reasonableness of each dollar.” Mares, 801 F.2d at 1210. Without a logical explanation, the Court can only assume that matters labeled “Corporate” were not
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expended “on the litigation.” Hensley, 461 U.S. at 433 Given this failure to differentiate between billable and non-billable tasks, the lack of
evidence to substantiate that work was tied to class member recruitment, and Counsel’s apparent concession that it is “time recorded under ‘member services’”—rather than “Corporate”—that “was spent helping members understand” the litigation, the Court finds the remaining Stage 2 “Corporate” hours unreasonable. Doc. 200, at 13.
d) Member services The Court next deducts half of the hours in the “Member Services” category for two reasons. First, as with the “Corporate” category, Counsel’s disparate categorization of identical matters in “Member Services” and “Litigation: General” makes it impossible to differentiate which client communications like webinars, website work, and emails were necessary to representing Plaintiffs effectively. Second, the “Member Services” category appears to be a catch-all for any advice LRRC provided to CBA members at the intersection of religion and employment law, regardless of its relation to this contraceptive-mandate litigation. “CBA ‘[m]ember services include consultations regarding moral and legal issues from preeminent legal and religious experts, practical business guidance, and educational resources in the areas of employment and benefits.’” Doc. 197, at 12 (quoting CATHOLIC BENEFITS ASSOCIATION, FAQ, https://catholicbenefitsassociation.org/about/faqs/). Counsel believes that all of these member services concern this litigation, but the Tenth Circuit has been clear to distinguish between work actually on the litigation and work “ensuring that the problems motivating the [litigation] have been eliminated.” Johnson v. City of Tulsa, Okla., 489 F.3d 1089, 1108–09
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(10th Cir. 2007). Only hours expended on the former are compensable. Id. Moreover, of the CBA’s $1.50-per-employee monthly membership fee to pay for services, “[h]alf [is] allocated to litigation fees” and “half [is] allocated to dues.” FAQ. Thus, it seems that about half of “[t]hese Member Services . . . were not performed on the litigation, but rather, consist of the general services that CBA members are promised upon joining the association.” Doc. 197, at 12. A fifty-percent deduction of “Member Services” matters is warranted, which the Court indicates in orange. See Ex. 1 – Adjusted Fees.
e) Travel It is unreasonable to bill a client for time spent travelling at the same rate for time actually working. “[A]n attorney’s [travel] time, while necessary, is essentially unproductive and, therefore, compensable at a reduced hourly rate.” Smith v. Freeman, 921 F.2d 1120, 1122 (10th Cir. 1990). Although some of the billing records indicate billing judgment in this regard—“Transit from Colorado Springs to Oklahoma City (6.00 hours; billed at 50% rate),” Ex. 1 – Adjusted Hours (5/7/2014, L. Martin Nussbaum)—many do not, and the Court deducts fifty percent from travel-only time entries billed at the top rate, indicated in orange. There are also four travel-related entries where Counsel, attempting to show that the Government exaggerated Plaintiffs’ excess, conceded that he and Eric Kniffin worked significantly less than the amount billed;9 those seventy-percent deductions are in green. See Doc. 201-7; Ex. 1 – Adjusted Fees (4/28/2015–4/29/2015).
9 Counsel cannot have his cake and eat it too. He claims to have “worked” 10.5 hours on April 28, 2015— “Transit to Oklahoma City for argument; review and outline issues . . . for final preparation of Mr. Kniffin”— but “billed” 7.5 hours. Then when the Government included these 7.5 hours in its chart showing LRRC’s excessive preparation time for the April 29, 2015 hearing, Counsel called that chart “overbroad“ and said that he “actually spent” only 2 hours on preparation. Doc. 197-7; Doc. 201, at 7–8; Doc. 201-7.
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f) Attorneys’ fees litigation Unsurprisingly, Counsel requests an excessive amount of fees ($210,875 for 441 hours) for litigation about a fees application that itself is wildly excessive. Attorneys are generally entitled to “at least some compensation . . . for work reasonably expended on the fee application.” Mares, 801 F.2d at 1206. “There is a difference, however, between time necessary to prepare and submit an application for fees”—which took Counsel 140 hours— and the remaining 301 “hours spent disputing a fee award. The latter are especially suspect, and may be disallowed in their entirety.” Id. (“[H]ours not spent representing the client are at best on the borderline of what Congress intended to be compensable.”); see Ex. 1 – Adjusted Fees (4/2/2018–7/16/2018). Given Counsel’s excessive time litigating fees and consistent failure to abide by Local Rules and the Court’s orders throughout the fees litigation, the Court bars all recovery for attorneys’ fees work done after April 21, 2018, when Counsel submitted the Motion for Attorneys’ Fees. See Doc. 188; supra Part I(B)(3) & nn. 2, 6. But even for work expended on the initial attorneys’ fees application, awarding full recovery of those 140 hours would ignore Counsel’s (1) lack of success in his motion for fees,10 (2) initial withholding of billing records that facilitated his rate misrepresentation, and (3) seeking compensation for categories of work clearly outside the scope of this litigation. See Mares, 801 F.2d at 1207 (“Congress [did not] intend[] to award fees solely for fruitless work in seeking them. Compensation for labor invested in a fee application must be joined with and ancillary to compensation for necessary professional representation on the merits of the case.”). Counsel frames this time preparing the fees application as “less than 2.5% of the
10 Excluding time spent litigating attorneys’ fees, Counsel will only recover around 24% of fees requested.
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overall hours of effort,” but that argument carries less weight when the “overall hours” are equally excessive. Doc. 188, at 7. The Court therefore deducts eighty percent of the fees devoted to preparing the Motion for Attorneys’ Fees (Doc. 188), indicated in blue.
g) Post-injunction Attorneys’ fees work is not the only kind that Counsel billed after Plaintiffs prevailed in this case. In April and June 2018, after the March permanent injunction, Counsel billed 4.9 non-compensable hours on updating “template letters for CBA members” and reviewing permanent injunctions granted in other cases. See Ex. 1 – Adjusted Fees (4/25/2018– 4/27/2018, Eric N. Kniffin); id. (6/12/2018–6/13/2018, Eric N. Kniffin and L. Martin Nussbaum). It is unclear what these templates were exactly, Counsel offers no evidence that this work was necessary to “protect[] the fruits of victory,” and the Court finds these hours unreasonable. Johnson v. City of Tulsa, Okla., 489 F.3d 1089, 1109 (10th Cir. 2007). h) Block billing Counsel also block billed in various ways that frustrated the Court’s ability to conduct a thorough reasonableness inquiry. Block billing is “the time-keeping method by which each lawyer and legal assistant enters the total daily time spent working on a case, rather than itemizing the time expended on specific tasks.” Robinson, 160 F.3d at 1284 n.9 (quoting Harolds Stores, Inc. v. Dillard Dep’t Stores, Inc., 82 F.3d 1533, 1554 n. 15 (10th Cir. 1996)). It is particularly concerning “in a situation where a party is seeking to have his opponent pay for his own lawyer’s work.” Id. at 1284. For the most part, Counsel’s “summaries of the tasks are quite specific,” but they “do not allocate the precise amounts of time spent on each particular task during each individual
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day.” Id. at 1285. For example, the Court has no ability to assess whether on April 4, 2014,
Counsel spent a reasonable number of hours on any particular task in the following seven-
and-a-half hour, block-billed list:
Review court’s order granting motion for leave to file amicus brief; conference with Mr. I. Speir re same; revision of stipulations; phone conference with colleagues re same; phone conference with Mr. M. Pollack re same; review ACLU brief; conference with Mr. I. Speir and Mr. E. Kniffin re our response to the ACLU’s argument re effect on third parties; second phone conference with Mr. M. Pollack re effect on third parties; third conference with Mr. M. Pollack re proposed stipulated order; draft separate motion for enlargement of pages; revise same; prepare outline for reply brief; conference with Mr. I. Speir and Mr. E. Kniffin re same Ex. 1 – Adjusted Fees. This is especially troubling seeing as many of the block-billed time
entries tend to camouflage duplicative time LRRC attorneys, of which there were nineteen in
this case,11 billed conferencing with one another. See Sinajini v. Bd. of Educ. of San Juan Cty.
Sch. Dist., 53 F. App’x 31, 34–35 (10th Cir. 2002) (unpublished); Case, 157 F.3d at 1252–
53; New Mexico Citizens for Clean Air & Water v. Espanola Mercantile Co., 72 F.3d 830,
835 (10th Cir. 1996); Doc. 197, at 19–22. When the Government alerted Counsel to this
concern, Counsel declined to “supplement[] these billing statements with . . . the specific
amounts of time allocated to each individual task.” Robinson, 160 F.3d at 1285; see Doc. 197,
at 22–24; Doc. 200, at 9–10.
Thus, the Court deducts by twenty percent, indicated in yellow, (1) the most
egregiously block billed time entries and (2) entries in which even though it appears that
11 Counsel argues that the Government “used over twice as many attorneys as CBA,” but (1) that is only true if Counsel ignores the four CBA attorneys he removed from his fees request after the opening brief; (2) it appears that at least half of the Government’s attorneys were involved in this case exclusively for settlement purposes; and (3) the Government does not compare easily to a private law firm when considering staffing and decision-making. Doc. 200, at 5; Doc. 200-1.
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attorneys spent the majority of time on compensable matters, the time is block-billed with non-compensable or deducted matters. By contrast, where it appears a time entry is about equally divided between compensable and non-compensable matters, the Court applies a seventy-percent deduction, indicated in green, to account for the non-compensable matters and a twenty-percent block-billing deduction.12 See Ex. 1 – Adjusted Fees.
i) Top-heavy billing One issue not raised by the parties is particularly troubling—the unreasonably “topheavy” division of labor between LRRC senior attorneys and associates. Bridgeport Music, Inc. v. Rhyme Syndicate Music, 376 F.3d 615, 627 (6th Cir. 2004). Partner and of counsel attorneys completed 84–87 percent of the hours in this case. See Ex. 2 – Hours By Attorney. “[T]here is work that may be ably done by an associate, such as research, compiling documents, and drafting motions, the value of which is not enhanced merely because it is done by a senior partner.” Am. Petroleum Inst. v. U.S. E.P.A., 72 F.3d 907, 916 (D.C. Cir. 1996); see also Pig Newton, Inc. v. The Boards of Directors of The Motion Picture Indus. Pension Plan, No. 13-CIV-7312-KPF, 2016 WL 796840, at *7 (S.D.N.Y. Feb. 24, 2016); Driscoll v. George Washington Univ., 55 F. Supp. 3d 106, 115 n.5 (D.D.C. 2014). The Court recognizes this was a complex case. With LRRC senior partner Martin Nussbaum serving as CBA’s general counsel, perhaps Plaintiffs wanted his particular attention and experience, which could explain apportioning more work to senior attorneys.13 Senior attorneys are also
12 The Court also added a red “X” to some category cells to indicate time entries that Counsel inadequately labeled. See Ex. 1 – Adjusted Fees. 13 While there are very few associates in LRRC’s Colorado Springs office, it appears that the majority of attorneys who worked on this case came from outside the Colorado Springs office at LRRC’s Denver and Phoenix offices, which are staffed with several associates. See Doc. 188-1, at 48; LEWIS ROCA ROTHGERBER CHRISTIE, People and Locations, https://www.lrrc.com/.
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often able to complete certain tasks more cost-effectively, despite their higher rates, based on experience.
Nonetheless, the billing records are replete with basic legal research and drafting work that could have been assigned to associates at lower billing rates. For example, much of the work in this case involved monitoring developments in other contraceptive-mandate cases and repurposing prior arguments into motions to amend the Court’s preliminary injunction, four of which were filed under the Court’s streamlined and formulaic framework. See Docs. 107, 112, 124, 134, 145. While assigning more work to partners than associates is not per se unreasonable, the particular facts of this case and the 84–87 percent ratio here warrant a tenpercent deduction of all compensable “Litigation: General” hours not already deducted above, a cut tailored to matters that could have been assigned to associates.
2. Hourly rate “[T]he second half of calculating an appropriate fee award is multiplying the hours by
a reasonable rate.” Malloy, 73 F.3d at 1018. Counsel’s proposed rates are also unreasonable. A reasonable rate usually depends on “what lawyers of comparable skill and experience practicing in the area in which the litigation occurs would charge for their time . . . in civil rights or analogous litigation.” Ramos, 713 F.2d at 555. The relevant community in attorneys’ fees disputes before the Court is usually the Oklahoma City legal market, despite that LRRC’s office is in Colorado Springs, Denver. Id. However, Counsel may exceed this local rate by showing that the issues are “so unusual or require[] such special skills that it could not be handled by reasonably competent trial lawyers in” Oklahoma City. Id. It is up to Counsel to “produce satisfactory evidence—in addition to the [his] own affidavits—that the requested
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rates” meet the above reasonableness standard. Malloy, 73 F.3d at 1018 (quoting Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984)).
As to the eight attorneys who performed reasonable work not deducted above, Counsel argues that hourly rates of $335–$610 for attorney work and $250 for paralegal work are reasonable “for the skill, experience, and reputation of the attorneys and paralegals who worked on this matter” in light of this case’s “extraordinary complexity” and LRRC’s “outstanding job advocating” for Plaintiffs. Doc. 188, at 5; Nussbaum Declaration, Doc. 1881, at 5–6, 48, 57–68 (LRRC qualifications, litigation rates, and resumes); Doc. 188-2, at 4, 7. He also relies on a declaration from retired United States District Judge Michael Burrage to show that “the hourly rates requested by LRRC are reasonable from a national perspective or in the Oklahoma City legal market.” Doc. 188, at 3; Doc. 188-3, at 6.
Counsel’s arguments fall short at each turn. First, Counsel exaggerates the results obtained and complexity. LRRC obtained a laudable win on Plaintiffs’ RFRA claim, avoided billions in Government fines, and achieved permanent injunctive relief. Yet, those results became far more attainable once the Government decided to stop defending the contraceptive mandate in 2017. The number of CBA member employers overstate the litigation’s complexity. Doc. 188-1, at 4, 7–9. The Supreme Court warned that unlike the attorneys’ fees calculation in “common fund” cases “where a reasonable fee is based on a percentage of the fund bestowed on the class,” the number of plaintiffs represented is not “a consideration of significance in calculating fees under § 1988.” Blum, 465 U.S. at 900 n.16. “Presumably, counsel will spend as much time and will be as diligent in litigating a case that benefits a small class of people, or, indeed, in protecting the civil rights of a single individual.” Id. The
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potential fine amount is equally misleading because it is merely a multiplier of the number of employees working for CBA members and $100 per non-compliant day. Doc. 188-1, at 7 (citing 26 U.S.C. § 4980D). The stakes were higher with more CBA members, but each additional CBA member did not make this case any more difficult. Similarly, Counsel’s attorneys’ fees request is no more reasonable when framed as “$3,104 per employer.” Doc. 200, at 1.
Second, LRRC’s billing invoices reveal that these supposedly “reasonable” market rates requested in Counsel’s opening brief were nearly thirty-five percent higher than those billed to the clients. See supra Part I(B)(1) at 6 n.3. The market in this case demanded far lower rates than Counsel would have the Court believe.
Third, regardless of what LRRC actually billed its clients, the Court is not obligated to defer to those rates if inconsistent with rates in the relevant community. Ramos, 713 F.2d at 555. “A client may choose the ‘Cadillac’ of law firm representation,” but that client “is not automatically entitled to have an opposing party make the car payments.” Grynberg v. Ivanhoe Energy, Inc., No. 08-CV-02528-WDM-BNB, 2011 WL 3294351, at *6 (D. Colo. Aug. 1, 2011); see Beard v. Teska, 31 F.3d 942, 956 (10th Cir. 1994), abrogated on other grounds by Buckhannon Bd. & Care Home, Inc. v. W. Virginia Dep’t of Health & Human Res., 532 U.S. 598 (2001) (“[W]hen it comes down to fee shifting . . . the higher cost of [a] . . . specialist cannot properly be thrust on someone who did not, after all, make the uneconomic choice of counsel.”); Praseuth v. Rubbermaid, Inc., 406 F.3d 1245, 1257 (10th Cir. 2005).
Fourth, whereas Judge Burrage’s declaration refers generally to his knowledge of rates for comparable legal services “in the Oklahoma City legal market,” the Government submits
26

Case 5:14-cv-00685-R Document 98 Filed 08/15/18 Page 27 of 36

specific evidence of Oklahoma City hourly rates in various cases. Doc. 188-3, at 6; see Doc.

190, at 27–28; Doc. 190-1, at 83–96. Granted, those cases do not compare well to this one’s

complexity and the experience of LRRC’s highly specialized religious institutions group.

Plaintiffs faced standing issues, regulatory changes, questionable Government

representations, and the need to monitor developments in similar cases nationwide. A law

firm in this market likely would not have been similarly equipped to handle such a contentious

religious liberties dispute implicating over a thousand employers. However, the

Government’s evidence demonstrates that even increasing the rates somewhat to account for

case complexity and attorney quality, Counsel’s requested rates remain beyond the scope of

reasonableness in Oklahoma City.

In light of the unique circumstances of this case, the Court employs a hybrid approach.

The following reasonable rates reflect both customary Oklahoma City rates and the national

scope of this work:

Attorney
H. William Mahaffey Jan Steinhour L. Martin Nussbaum Eric Hall Eric N. Kniffin David M. Hyams Ian S. Speir John M. Guevara Arlene K. Martinez

Position
Partner Partner Partner Partner Of Counsel Associate Associate Summer Associate Paralegal

Graduation year
1980 1982 1985 2000 2003 2008 2011 2015 32 yrs. exp.

Requested Rate
$610 $610 $610 $510 $440 $340 $420 $335 $250

Billed Rate $450-530 $475–90 $465–550 $375–90 $325–95 $270 $225–380 $150 $190–225

Gov. Proposal14
$450 $350 $250 $110

Final Rate $470.00 $470.00 $470.00 $360.00 $350.00 $270.00 $250.00 $150.00 $130.00

See Ex. 1 – Adjusted Fees. These final rates multiplied by the lodestar-adjusted hours would

14 The Court’s final rates closely resemble the Government’s proposed rates, despite its reliance on dissimilar cases, because the Government’s rates are generally higher than those in the cases and affidavits relied on. See Doc. 190, at 27–28.
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result in $1,272,229 in attorneys’ fees. B. Johnson Factors
The Court next applies the Johnson factors not already “subsumed within the initial [lodestar] calculation” to decide if it is necessary to “adjust the fee upward or downward.” Hensley, 461 U.S. at 434 & n.9 (citing Johnson, 488 F.2d at 717–19).
The 12 factors are: (1) the time and labor required; (2) the novelty and difficulty of the question; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorney; (10) the “undesirability” of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases. Delaware Valley, 478 U.S. at 562 n.7. “The ‘novelty [and] complexity of the issues,’ ‘the special skill and experience of counsel,’ the ‘quality of representation,’ and the ‘results obtained’ from the litigation are . . . fully reflected in the lodestar amount, and thus cannot serve as independent bases for [adjusting] the basic fee award.” Id. at 565 (quoting Blum, 465 U.S. at 898–900). The parties do not raise arguments related to the preclusion of other employment, time limitations, undesirability of the case, or nature and length of the attorneyclient relationship, and the Court sees no reason why these factors would militate a lodestar adjustment. The Court also considered the “customary fee” and fee-arrangement factors above, and therefore turns to two Johnson factors at issue—the time and labor required and the awards in similar cases. 1. Time and labor required The parties sharply contest the time and labor required in this case, one of dozens of similar contraceptive-mandate cases filed across the U.S. At essentially every turn in this
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litigation, LRRC essentially had templates to use from “35 similar cases that preceded this one.” Doc. 190, at 6–7 & n.1. This should have saved significant time in drafting the CBA I complaint and motion for preliminary injunction. When Plaintiffs filed a new lawsuit in CBA II, most of the filings in that case were repetitive of these two CBA I filings. Id. at 8–9. Moreover, neither suit involved discovery, summary judgment briefing, trial, or merits briefing on appeal. Nonetheless, LRRC attorneys—experienced religious liberty litigators who should work more efficiently than the average attorney—billed over 6,000 hours and concede to having spent 135.2 hours drafting the CBA I complaint, 123.4 hours on the motion for class certification, and 99.6 hours researching and drafting a brief on forum shopping. See Ex. 1 – Adjusted Fees (“Billed Hours”); Doc. 197, at 17–18; Doc. 201, at 5–8; Docs. 201-6; 201-7; 201-9; 201-10. The Court already deducted some of these hours above as unreasonable, but they serve as further evidence of LRRC’s excessiveness at every stage of this litigation.
Also beyond the lodestar calculation is the full scope of Counsel Martin Nussbaum’s excess. His loquaciousness sometimes doubled the time in routine status conferences and hearings; his briefs were often discursive; and his first resort for an issue was usually filing for court intervention before conferring with opposing counsel. Granted, the Government is not beyond reproach; their litigating positions and regulatory practices contributed greatly to the time and labor required. Counsel characterizes the Government as “arsonists who set a house on fire, fanned the flames, then complained [that] the firefighters used too much water.” Doc. 200, at 1. This was a big litigation fire with enormous stakes for these Catholic employers, but finger-pointing cannot distract from the fact that Counsel “responded
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inappropriately to defendants’ unreasonable efforts” by pointing a ceaseless fire hose at both this fire and others in cases Plaintiffs were not parties to. Case, 157 F.3d at 1254.
2. Awards in similar cases Although the Government cites attorneys’ fees cases that do not compare perfectly
with this one, Plaintiffs’ Counsel unduly relies on the $3 million fee settlement agreement the Government reached in October 2017 with Jones Day attorneys to settle sixteen lawsuits challenging the contraceptive mandate. See Doc. 190, at 16; Doc. 200, at 7–9 (citing Zoe Tillman, The Trump Administration Agreed To Pay More Than $3 Million In Legal Fees To Settle Contraception Mandate Lawsuits, BUZZFEEDNEWS (Jan. 9, 2018), https://www.buzzfeed.com/zoetillman/the-trump-administration-agreed-to-pay-more-than3-million); Doc. 200-2, at 7, 16–17. The agreement offers no context into those cases’ litigation history, and Counsel’s attempts to make this case seem more labor-intensive and successful are unpersuasive. See Case, 157 F.3d at 1251 (“We note that while the legal principles applied in each § 1988 case are the same, the ultimate percentage of fees awarded is necessarily specific to the facts of the particular fee request.”).
Jones Day attorneys brought sixteen lawsuits in thirteen districts across nine circuit courts of appeals; Plaintiffs brought two lawsuits in one district and one circuit. Doc. 200-2, at 16–17. Plaintiffs represented far more employers, but as the Court has shown, the number of plaintiffs is not a helpful indicator of the case’s complexity or labor required. Nor do the results obtained portray a full picture of the litigation. While Jones Day attorneys only secured a settlement agreement, rather than a permanent injunction and declaratory relief like Plaintiffs obtained, that agreement binds the Government “to abide by the terms of the
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permanent injunction in Zubik v. Sebelius . . . .” Doc. 200-2, at 4. Jones Day only had a 7-of15 record in the district courts and 0-of-9 in the courts of appeals, but ultimately the Government conceded the same RFRA violation, rendering Jones Day-represented plaintiffs “prevailing part[ies]” just like these Plaintiffs. Doc. 200, at 8. Counsel also concedes that “Jones Day did extensive appellate work,” which LRRC did not, making it far more reasonable that Jones Day merits briefing in the courts of appeals produced such a high fee award. Id. at 9.
The very fact that Jones Day’s fees award resulted from a settlement and was not subject to rigorous judicial scrutiny is reason enough to doubt its applicability. Just as clients sometimes agree to “Cadillac” fee arrangements, so can the deep-pocketed Government when it wants to put an end to litigation. The Court has no way of scrutinizing the Government’s decision in those Jones Day cases, nor is it clear what attorneys’ fees negotiations occurred in this case. The CBA’s alleged “disparate treatment by the Departments” as to fees may be well-founded after all. Id. at 9. Lastly, assuming the Jones Day settlement is relevant, it would not necessarily favor a higher award. Jones Day “originally asked for more than $29 million” in fees and the Government settled on ten percent of that; the Court, meanwhile, is awarding LRRC attorneys over twenty percent of their requested fees. Tillman, supra. Jones Day also received $187,500 in fees per case, whereas the Court is awarding nearly double that amount. C. Post-Lodestar Deduction
After considering the Johnson factors, the Court adjusts the fees award downward by forty-five percent. See Ex. 1 – Adjusted Fees (“Post-Lodestar Deduction”). Ten percent accounts for the time and labor required and thirty-five percent accounts for Counsel’s billing
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rate misrepresentation. Counsel withheld billing records and suggested by inference that LRRC billed
Plaintiffs nearly thirty-five percent more than it actually did. See supra Part I(B)(1) at 6 n.3. Counsel represented that “the Court need not speculate as to what hours would reasonably have been billed to a client, because LRRC did bill the Catholic Benefits Association for the hours reported in Martin Nussbaum’s declaration.” Doc. 188, at 6. Then even after the Court requested billing records and Counsel’s markup became evident, he argued that LRRC’s proposed “rates are reasonable” based on “perfect proof of [the] market value for legal services,” what the CBA actually paid. Doc. 200, at 2–3. “The CBA continued to pay for these billed hours when . . . victory seemed like a long shot.” Id. at 3. But the CBA did not pay “these billed hours”—a market for legal services depends on the rate offered, and Plaintiffs never paid LRRC anywhere near the amount they are requesting. Id. (emphasis added). This was more than just an omission. This was a misrepresentation at best.
The Court’s downward adjustment is vital “to deter attorneys from ‘mak[ing] unreasonable demands, knowing that the only unfavorable consequence of such misconduct would be reduction of their fee to what they should have asked for in the first place.’” See Case, 157 F.3d at 1254 (quoting Brown v. Stackler, 612 F.2d 1057, 1059 (7th Cir. 1980). Rather than “awarding no fees at all” for Counsel’s “outrageously excessive request”—a method employed by at least four circuits—the Court finds this proportional sanction sufficient. Id. (citing Envir. Defense Fund, Inc. v. Reilly, 1 F.3d 1254, 1258–60 (D.C. Cir. 1993); Fair Housing Council v. Landow, 999 F.2d 92, 96–97 (4th Cir. 1993); Lewis v. Kendrick, 944 F.2d 949, 958 (1st Cir. 1991); Stackler, 612 F.2d at 1059). The post-lodestar
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deduction leaves Plaintiffs with a final fee award of $699,725.95. D. Costs
Many of LRRC’s requested costs not recoverable under 28 U.S.C. § 1920 are also not compensable under Section 1988 for the reasons above—lack of substantiation or they were expended on non-litigation matters. Counsel has the burden “to establish the amount of compensable costs and expenses to which they are entitled.” Mares, 801 F.2d at 1208. The Court looks to the billing records for context where possible, but to the extent Counsel labels costs generally, “[t]rial courts are justified in denying compensation where the affidavits and time records in the fee submissions fail to differentiate adequately between the costs attributable to billable and non-billable items.” Id. at 1209; see Ex. 3 – Adjusted Costs. Even for costs that are substantiated and pertain to this litigation, “out-of-pocket costs . . . normally absorbed as part of law firm overhead may [not] be reimbursed under 42 U.S.C. § 1988.” Ramos, 713 F.2d at 559. Counsel separates costs into four categories that the Court addresses in turn: (1) travel, food, and lodging; (2) pro hac, PACER, and related fees; (3) postage and deliveries; and (4) legal research.
1. Travel, Food, and Lodging Typically “there is no need to employ counsel from outside the area,” rendering travel
costs non-compensable, but this is an “unusual case[]” warranting a “[d]eparture from th[e] rule.” Ramos, 713 F.2d at 559; see supra Part II(A)(2) (quoting Ramos, 713 F.2d at 555) (“[T]he issues are ‘so unusual or require[] such special skills that [the case] could not be handled by reasonably competent trial lawyers in’ Oklahoma City.”). Counsel is therefore entitled to compensation for travel, food, and lodging to Oklahoma City for hearings and
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Washington, D.C. for settlement discussions. However, the Court deducts twenty percent of
compensable travel costs labeled “Travel Expense” or “Travel & Lodging” that fail to include
(1) which, or least how many, attorneys travelled, or (2) specific costs of flights versus meals
or lodging. See Doc. 190, at 30; Ex. 3 – Adjusted Costs. Without this information, the Court
cannot scrutinize travel costs, which is particularly important in a case like this with billed
matters unrelated to this litigation. The Court also declines to award the following costs,
several of which Counsel fails to explain why they are compensable (“unsubstantiated”):
 Client lunch, 11/4/13—unsubstantiated  Baltimore travel, lodging, and food for corporate matters, 11/22/2013, 12/9/2013,
12/3/2014, 12/15/2014, 11/15/2016, 11/16/2016  Lunch for corporate matters, 6/11/14  Flight change fee for preliminary injunction hearing, 6/25/14—unsubstantiated  “Mileage/meal w/Louis Brown,” 9/12/14—unsubstantiated  Denver travel for Tenth Circuit oral argument, 12/12/14, 12/15/14, 2/4/15—the
Tenth Circuit posted recordings online of oral argument for the contraceptivemandate cases, Little Sisters of the Poor Home for the Aged, Reaching Souls International, and Southern Nazarene University. See Oral Argument Recording Archive, THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT, https://www.ca10. uscourts.gov/clerk/oral-argument-recording-archive  Travel to United Conference of Catholic Bishops meeting, 7/9/15, 7/24/15— unsubstantiated  Philadelphia travel and parking for corporate matters, 7/17/15, 8/13/15, 10/8/15, 11/6/15  Travel to Franktown for corporate matters, 12/22/15  Castle Rock conference for corporate matters, 1/27/17, 10/19/17  CBA General Assembly Meeting in Kansas City, MO, 11/2/17–11/3/17— unsubstantiated
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2. Pro Hac, PACER, and Related Fees LRRC can recover PACER fees for tracking developments in other contraceptive-
mandate cases, but the Court deducts ten percent of these fees to account for the various excesses described above. The Court also declines to award the following costs:
 Filing fees with the Oklahoma and Colorado Secretaries of State for corporate matters, 11/4/2013, 4/30/2015, 7/19/2016, 10/27/162z1
 Fees for certificates of good standing from the Colorado Supreme Court and U.S. District Court for the District of Colorado, 3/10/13, 4/18/14—this district’s pro hac vice request form merely requires counsel to “list all state and federal courts or bar associations in which [they] are a member ‘in good standing’ to practice law”; certified copies are unnecessary. Docs. 17-1, 18-1, 19-1.
3. Postage and Deliveries Postage and delivery fees are not recoverable because they are normally absorbed as
overhead expenses by firms in this district. Clerk’s Guidelines for Taxation of Costs in the Western District of Oklahoma, Part IV(G), http://www.okwd.uscourts.gov/wpcontent/uploads/2015/01/Taxation-of-Costs.pdf (“[P]ostage . . . [is] traditionally absorbed in the ‘overhead’ of a law practice . . . .”); Christ Ctr. of Divine Philosophy, Inc. v. Elam, No. CIV-16-65-D, 2017 WL 4204029, at *5 (W.D. Okla. Sept. 21, 2017).
4. Legal Research The Court is unable to discern whether LRRC’s indiscriminate “Westlaw” legal
research entries relate to this litigation or non-compensable corporate matters. Accordingly, the Court deducts these entries by fifty pecent. See Ex. 3 – Adjusted Costs; Case, 157 F.3d at 1258 (citing Mares, 801 F.2d at 1209). The following Westlaw costs are also noncompensable for the reasons above:
 Pre-filing Westlaw research, 1/23/13–3/19/13
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 Amicus brief Westlaw research, 12/21/15–1/7/16  Post-fees-application Westlaw research, 5/9/18–5/17/18
III. Conclusion Accounting for the lodestar deductions and post-lodestar adjustment, the Court awards Plaintiffs $699,725.95 in attorneys’ fees and $18,881.41 in costs. The Court also denies Counsel’s request for oral argument. The parties have had more than ample opportunity to argue attorneys’ fees and costs; Counsel’s argument that there were “issues regarding fees and costs [that Counsel] left unaddressed due to page limitations” is not credible given he has shown no regard for page limits or brevity thus far. Doc. 200, at 15. The Motion for Attorneys’ Fees and Non-Taxable Costs Under 42 U.S.C. § 1988 (CIV-14-240-R Doc. 187, CIV-14-685R Doc. 82) is GRANTED as set forth herein. IT IS SO ORDERED this 15th day of August 2018.
36

 
 Case: 5:14-cv-685 As of: 01/03/2019 10:12 PM CST 1 of 11
CLOSED,GOODWIN,_RTC
U.S. District Court Western District of Oklahoma[LIVE] (Oklahoma City)
CIVIL DOCKET FOR CASE #: 5:14−cv−00685−R

Catholic Benefits Association LCA et al v. Burwell et al Assigned to: Honorable David L. Russell Case in other court: Tenth Circuit, 15−06029
Tenth Circuit, 15−06037 Cause: 42:2000 Job Discrimination (Public Accomodations)
Plaintiff

Date Filed: 07/01/2014 Date Terminated: 03/07/2018 Jury Demand: None Nature of Suit: 440 Civil Rights: Other Jurisdiction: U.S. Government Defendant

Catholic Benefits Association LCA

represented by J Angela Ables Kerr Irvine Rhodes & Ables 201 Robert S Kerr Ave Suite 600 Oklahoma City, OK 73102−4267 405−272−9221 Fax: 405−236−3121 Email: aables@kiralaw.com LEAD ATTORNEY ATTORNEY TO BE NOTICED

Eric N Kniffin Lewis Roca Rothgerber LLP 90 S Cascade Ave Suite 1100 Colorado Springs, CO 80903 719−386−3000 Fax: 719−386−3070 Email: ekniffin@LRRLaw.com ATTORNEY TO BE NOTICED

Ian S Speir Lewis Roca Rothgerber Christie LLP 90 S Cascade Ave Suite 1100 Colorado Springs, CO 80903 719−386−3000 Fax: 719−386−3070 Email: ispeir@lrrc.com PRO HAC VICE ATTORNEY TO BE NOTICED

Johnny R Blassingame , Jr Hampton Barghols Pierce PLLC 210 Park Avenue Suite 2700 Oklahoma City, OK 73102 (405) 600−9225 Email: jblassingame@hbplawok.com ATTORNEY TO BE NOTICED

L Martin Nussbaum Lewis Roca Rothgerber Christie LLP 90 S Cascade Ave Suite 1100 Colorado Springs, CO 80903 719−386−3000 Fax: 719−386−3070 Email: mnussbaum@LRRC.com PRO HAC VICE ATTORNEY TO BE NOTICED

Case: 5:14-cv-685 As of: 01/03/2019 10:12 PM CST 2 of 11

Plaintiff Catholic Insurance Company Inc

represented by J Angela Ables (See above for address) LEAD ATTORNEY ATTORNEY TO BE NOTICED
Eric N Kniffin (See above for address) ATTORNEY TO BE NOTICED
Ian S Speir (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Johnny R Blassingame , Jr (See above for address) ATTORNEY TO BE NOTICED
L Martin Nussbaum (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

V.
Defendant
Sylvia M Burwell Secretary of the United States Department of Health and Human Services

represented by Adam A Grogg US Attorney's Office − Federal Programs Branch DC 20 Massachusetts Ave NW Rm 7144 Washington, DC 20530 202−514−2395 Fax: 202−616−8470 Email: adam.a.grogg@usdoj.gov TERMINATED: 08/16/2017
Bradley P Humphreys US Attorney's Office − Federal Programs Branch DC 20 Massachusetts Ave NW Rm 7144 Washington, DC 20530 202−514−3367 Fax: 202−616−8470 Email: bradley.p.humphreys@usdoj.gov ATTORNEY TO BE NOTICED
Elizabeth L Kade US Dept of Justice Fed Prog Branch−DC Civil Division, Federal Program Branch 20 Massachusetts Ave NW Washington, DC 20530 202−616−8491 Fax: 202−616−8470 Email: Elizabeth.L.Kade@usdoj.gov TERMINATED: 01/23/2018
Michelle R Bennett US Dept of Justice Civil Div−20−DC Federal Programs Branch 20 Massachusetts Ave NW

Case: 5:14-cv-685 As of: 01/03/2019 10:12 PM CST 3 of 11

Washington, DC 20001 202−305−8902 Fax: 202−616−8470 Email: michelle.bennett@usdoj.gov ATTORNEY TO BE NOTICED

Defendant
United States Department of Health and Human Services

represented by Adam A Grogg (See above for address) TERMINATED: 08/16/2017

Bradley P Humphreys (See above for address) ATTORNEY TO BE NOTICED

Elizabeth L Kade (See above for address) TERMINATED: 01/23/2018

Michelle R Bennett (See above for address) ATTORNEY TO BE NOTICED

Defendant
Thomas E Perez Secretary of the United States Department of Labor

represented by Adam A Grogg (See above for address) TERMINATED: 08/16/2017

Bradley P Humphreys (See above for address) ATTORNEY TO BE NOTICED

Elizabeth L Kade (See above for address) TERMINATED: 01/23/2018

Michelle R Bennett (See above for address) ATTORNEY TO BE NOTICED

Defendant United States Department of Labor

represented by Adam A Grogg (See above for address) TERMINATED: 08/16/2017

Bradley P Humphreys (See above for address) ATTORNEY TO BE NOTICED

Elizabeth L Kade (See above for address) TERMINATED: 01/23/2018

Michelle R Bennett (See above for address) ATTORNEY TO BE NOTICED

Defendant
Jacob J Lew Secretary of the United States Department of the Treasury

represented by Adam A Grogg (See above for address) TERMINATED: 08/16/2017

Case: 5:14-cv-685 As of: 01/03/2019 10:12 PM CST 4 of 11

Bradley P Humphreys (See above for address) ATTORNEY TO BE NOTICED

Elizabeth L Kade (See above for address) TERMINATED: 01/23/2018

Michelle R Bennett (See above for address) ATTORNEY TO BE NOTICED

Defendant
United States Department of the Treasury

represented by Adam A Grogg (See above for address) TERMINATED: 08/16/2017

Bradley P Humphreys (See above for address) ATTORNEY TO BE NOTICED

Elizabeth L Kade (See above for address) TERMINATED: 01/23/2018

Michelle R Bennett (See above for address) ATTORNEY TO BE NOTICED

Date Filed 07/01/2014
07/01/2014 07/01/2014 07/01/2014 07/01/2014 07/01/2014 07/01/2014 07/01/2014

# Docket Text
1 VERIFIED COMPLAINT against Sylvia M Burwell, Jacob J Lew, Thomas E Perez, United States Department of Health and Human Services, United States Department of Labor, United States Department of the Treasury filed by Catholic Insurance Company Inc, Catholic Benefits Association LCA. (Attachments: # 1 Exhibit A − Articles of Organization of The Catholic Benefits Association LCA, # 2 Exhibit B − Bylaws of The Catholic Benefits Association LCA, # 3 Exhibit C − Certificate of Incorporation of The Catholic Insurance Company, # 4 Exhibit D − Bylaws of The Catholic Insurance Company, # 5 Exhibit E − EBSA Form 700, # 6 Exhibit F − Hobby Lobby Stores Inc v. Kathleen Sebelius transcript of 5/23/13 hearing, # 7 Notice of Related or Companion Case, # 8 Civil Cover Sheet)(kw) (Entered: 07/01/2014)
2 Summons Issued Electronically as to Sylvia M Burwell, Jacob J Lew, Thomas E Perez, United States Department of Health and Human Services, United States Department of Labor, United States Department of the Treasury, U.S. Attorney and U.S. Attorney General (kw) (Entered: 07/01/2014)
PAYMENT FOR A CIVIL CASE Filing fee $ 400, receipt number 1087−1887891. (Ables, J) (Entered: 07/01/2014)
3 ENTRY of Appearance by J Angela Ables on behalf of All Plaintiffs (Ables, J) (Entered: 07/01/2014)
4 EMERGENCY MOTION for Temporary Restraining Order by All Plaintiffs. (Ables, J) (Entered: 07/01/2014)
5 BRIEF IN SUPPORT re 4 EMERGENCY MOTION for Temporary Restraining Order by All Plaintiffs. (Attachments: # 1 Exhibit A, # 2 Exhibit B)(Ables, J) (Entered: 07/01/2014)
6 DISCLOSURE STATEMENT − CORPORATE by All Plaintiffs . (Ables, J) (Entered: 07/01/2014)
7 ENTRY of Appearance by Johnny R Blassingame, Jr on behalf of All Plaintiffs (Blassingame, Johnny) (Entered: 07/01/2014)

Case: 5:14-cv-685 As of: 01/03/2019 10:12 PM CST 5 of 11

07/01/2014 07/01/2014 07/01/2014 07/01/2014 07/01/2014 07/01/2014
07/02/2014 07/02/2014 07/02/2014 07/02/2014 07/03/2014 07/07/2014 07/08/2014
07/09/2014 07/17/2014
07/17/2014
07/23/2014 07/24/2014

8 MOTION for Leave to Appear Pro Hac Vice Filing fee $ 50, receipt number 1087−1888060 by All Plaintiffs. (Attachments: # 1 Exhibit 1)(Ables, J) (Entered: 07/01/2014)
9 MOTION for Leave to Appear Pro Hac Vice Filing fee $ 50, receipt number 1087−1888066 by All Plaintiffs. (Attachments: # 1 Exhibit 1)(Ables, J) (Entered: 07/01/2014)
10 MOTION for Leave to Appear Pro Hac Vice Filing fee $ 50, receipt number 1087−1888069 by All Plaintiffs. (Attachments: # 1 Exhibit 1)(Ables, J) (Entered: 07/01/2014)
11 ORDER REASSIGNING CASE. Case reassigned to Honorable David L. Russell for all further proceedings. Honorable Vicki Miles−LaGrange no longer assigned to case. Signed by Honorable Vicki Miles−LaGrange on 7/1/2014. (ks) (Entered: 07/01/2014)
12 ORDER granting 4 Motion for TRO. Signed by Honorable David L. Russell on 7/1/14. (jw) (Entered: 07/01/2014)
13 ORDER granting 8 Motion to Appear Pro Hac Vice of Eric N. Kniffin; granting 9 Motion to Appear Pro Hac Vice of Martin Nussbaum; granting 10 Motion to Appear Pro Hac Vice of Ian S. Speir. Signed by Honorable David L. Russell on 7/1/14. (jw) (Entered: 07/01/2014)
14 MOTION for Order to Convert Emergency TRO to Preliminary Injunction by All Plaintiffs. (Ables, J) (Entered: 07/02/2014)
15 ENTRY of Appearance by L Martin Nussbaum on behalf of All Plaintiffs (Nussbaum, L) (Entered: 07/02/2014)
16 ENTRY of Appearance by Eric N Kniffin on behalf of All Plaintiffs (Kniffin, Eric) STRICKEN by Notice from the Court on 7/9/2014 (kw). (Entered: 07/02/2014)
17 ENTRY of Appearance by Ian S Speir on behalf of All Plaintiffs (Speir, Ian) (Entered: 07/02/2014)
18 ENTRY of Appearance by Eric N Kniffin on behalf of All Plaintiffs (Kniffin, Eric) (Entered: 07/03/2014)
19 ENTRY of Appearance by Bradley P Humphreys on behalf of All Defendants (Humphreys, Bradley) (Entered: 07/07/2014)
20 ORDER re 12 Order on Motion for TRO is extended until the time the Court rules on 14 MOTION for Order to Convert Emergency TRO to Preliminary Injunction filed by Catholic Benefits Association LCA, Catholic Insurance Company Inc. Signed by Honorable David L. Russell on 07/08/2014. (md) (Entered: 07/08/2014)
NOTICE from the Court STRIKING 16 Entry of Appearance. It has been properly refiled as document 18 . (kw) (Entered: 07/09/2014)
21 SUMMONS Returned Executed by Catholic Insurance Company Inc, Catholic Benefits Association LCA. Sylvia M Burwell served on 7/7/2014; Thomas E Perez served on 7/7/2014; United States Department of Health and Human Services served on 7/7/2014. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3)(Ables, J) (Entered: 07/17/2014)
22 SUMMONS RETURNED EXECUTED as to Non−Party for Summons & Complaint served on Sanford C. Coats on July 2, 2014, filed by Plaintiffs Catholic Benefits Association LCA, Catholic Insurance Company Inc. (Attachments: # 1 Exhibit 1)(Ables, J) (Entered: 07/17/2014)
23 UNOPPOSED MOTION for Extension of Time to File Response/Reply as to 14 MOTION for Order to Convert Emergency TRO to Preliminary Injunction by All Defendants. (Humphreys, Bradley) (Entered: 07/23/2014)
24 ORDER granting 23 Motion for Extension of Time to File Response/Reply re 14 MOTION for Order to Convert Emergency TRO to Preliminary Injunction Responses due by 9/7/2014. Signed by Honorable David L. Russell on 7/24/14. (jw) (Entered: 07/24/2014)

Case: 5:14-cv-685 As of: 01/03/2019 10:12 PM CST 6 of 11

08/13/2014 08/14/2014
09/08/2014 09/24/2014 09/24/2014 10/02/2014 10/02/2014 10/02/2014 10/03/2014 10/03/2014 10/03/2014
10/03/2014

25 SUMMONS Returned Executed by Catholic Insurance Company Inc, Catholic Benefits Association LCA. Jacob J Lew served on 7/22/2014; United States Department of Labor served on 7/11/2014; United States Department of the Treasury served on 7/21/2014. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4)(Ables, J) (Entered: 08/13/2014)
NOTICE from the Court Re: 21 Summons Returned Executed, 25 Summons Returned Executed, 22 Summons Returned Executed as to Non−party. Counsel for Plaintiff is DIRECTED, in future filings, to comply with the Court's ECF Policies & Procedures Manual, Section II(A)(4)(a) − "Exhibits... shall be clearly labeled with the appropriate exhibit number.... Do not use alphabetical or alpha−numeric designations for exhibits. A description [more than just the exhibit no.] of the numbered exhibit must be provided in the docket entry...." Failure to comply in the future may result in filings being stricken. (md) (Entered: 08/14/2014)
26 SECOND MOTION for Extension of Time to File Response/Reply as to 14 MOTION for Order to Convert Emergency TRO to Preliminary Injunction by All Defendants. (Humphreys, Bradley) (Entered: 09/08/2014)
27 UNOPPOSED MOTION for Temporary Restraining Order Unopposed Motion Regarding Procedural Issues and Modification of Temporary Restraining Order by All Plaintiffs. (Nussbaum, L) (Entered: 09/24/2014)
28 ORDER granting 27 Plaiintiffs' Motion Regarding Procedural Issues and Modification of Temporary Restraining Order, as more fully set out. Signed by Honorable David L. Russell on 9/24/14. (jw) (Entered: 09/24/2014)
29 AMENDED COMPLAINT against All Defendants filed by All Plaintiffs. (Attachments: # 1 Exhibit Exhibit A, # 2 Exhibit Exhibit B, # 3 Exhibit Exhibit C, # 4 Exhibit Exhibit D, # 5 Exhibit Exhibit E, # 6 Exhibit Exhibit F, # 7 Exhibit Exhibit G, # 8 Exhibit Exhibit H)(Speir, Ian). STRICKEN per Notice of the Court. (md). (Entered: 10/02/2014)
30 MOTION for Preliminary Injunction by All Plaintiffs. (Speir, Ian) (Entered: 10/02/2014)
31 BRIEF IN SUPPORT re 30 MOTION for Preliminary Injunction by All Plaintiffs. (Attachments: # 1 Exhibit Exhibit A)(Speir, Ian). Stricken per Notice from the Court. Modified on 10/3/2014 (md). (Entered: 10/02/2014)
NOTICE from the Court 31 Brief STRICKEN for failure to comply with ECF Policies & Procedures Manual, Section II(A)(4)(a) − "Exhibits... shall be clearly labeled with the appropriate exhibit number.... Do not use alphabetical or alpha−numeric designations for exhibits. A description [more than just the exhibit no.] of the numbered exhibit must be provided in the docket entry...." Counsel shall refile accordingly.(md) (Entered: 10/03/2014)
NOTICE from the Court 29 Amended Complaint Stricken for failure to comply ECF Policies & Procedures Manual, Section II(A)(4)(a) − "Exhibits... shall be clearly labeled with the appropriate exhibit number.... Do not use alphabetical or alpha−numeric designations for exhibits. A description [more than just the exhibit no.] of the numbered exhibit must be provided in the docket entry...." Counsel shall refile accordingly. (md) (Entered: 10/03/2014)
32 AMENDED COMPLAINT Amended Verified Complaint against All Defendants filed by All Plaintiffs. (Attachments: # 1 Exhibit Exhibit 1: Articles of Organization of The Catholic Benefits Association LCA, # 2 Exhibit Exhibit 2: Bylaws of The Catholic Benefits Association LCA, # 3 Exhibit Exhibit 3: Certificate of Incorporation for The Catholic Insurance Company, # 4 Exhibit Exhibit 4: Bylaws of The Catholic Insurance Company, # 5 Exhibit Exhibit 5: EBSA Form 700, # 6 Exhibit Exhibit 6: EBSA Form 700 (revised August 2014), # 7 Exhibit Exhibit 7: Transcript of Oral Argument, Hobby Lobby v. Sebelius (10th Cir. May 23, 2013), # 8 Exhibit Exhibit 8: Transcript of Gary M. Cohen Deposition, Roman Catholic Archdiocese of New York v. Sebelius (D.Ct. E.D.N.Y. April 16, 2013))(Nussbaum, L) (Entered: 10/03/2014)
33 BRIEF IN SUPPORT re 30 MOTION for Preliminary Injunction Plaintiffs' Opening Brief in Support of Motion for Preliminary Injunction by All Plaintiffs. (Nussbaum, L) (Entered: 10/03/2014)

Case: 5:14-cv-685 As of: 01/03/2019 10:12 PM CST 7 of 11

10/24/2014 10/27/2014 10/31/2014 11/03/2014 11/04/2014 11/10/2014 12/29/2014 02/23/2015 02/24/2015 02/25/2015
03/02/2015 03/10/2015 03/10/2015 03/17/2015
03/24/2015
03/25/2015 03/25/2015

34 UNOPPOSED MOTION for Extension of Time to File Response/Reply as to 30 MOTION for Preliminary Injunction by All Defendants. (Humphreys, Bradley) (Entered: 10/24/2014)
35 ORDER granting 34 Motion for Extension of Time to File Response/Reply re 30 MOTION for Preliminary Injunction Responses due by 10/31/2014. Signed by Honorable David L. Russell on 10/27/14. (jw) (Entered: 10/27/2014)
36 RESPONSE in Opposition re 30 MOTION for Preliminary Injunction filed by All Defendants. (Humphreys, Bradley) (Entered: 10/31/2014)
37 MOTION to Strike Defendants' Opposition to Plaintiffs' Motion for Preliminary Injunction and to Refile in Compliance with Local Rules by All Plaintiffs. (Nussbaum, L) (Entered: 11/03/2014)
38 ORDER denying 37 Motion to Strike. Signed by Honorable David L. Russell on 11/4/14. (jw) (Entered: 11/04/2014)
39 REPLY to Response to Motion re 30 MOTION for Preliminary Injunction filed by All Plaintiffs. (Speir, Ian) (Entered: 11/10/2014)
40 ORDER granting in part and denying in part 30 Motion for Preliminary Injunction, as more fully set out. Signed by Honorable David L. Russell on 12/29/14. (jw) (Entered: 12/29/2014)
41 NOTICE OF APPEAL as to 40 Order on Motion for Preliminary Injunction by All Defendants. (Humphreys, Bradley) (Entered: 02/23/2015)
42 PRELIMINARY RECORD LETTER − Electronic Transmission of Notice of Appeal with Preliminary Record sent to Tenth Circuit Court of Appeals re 41 Notice of Appeal (jb) (Entered: 02/24/2015)
43 Tenth Circuit USCA Case Number 15−6029 for 41 Notice of Appeal filed by United States Department of the Treasury, United States Department of Health and Human Services, Thomas E Perez, United States Department of Labor, Sylvia M Burwell, Jacob J Lew. (jb) (Entered: 02/25/2015)
44 NOTICE OF CROSS APPEAL as to 40 Order on Motion for Preliminary Injunction by Catholic Benefits Association LCA, Catholic Insurance Company Inc. Filing fee $ 505, receipt number 1087−2027620. (Speir, Ian) (Entered: 03/02/2015)
45 PRELIMINARY RECORD LETTER − Electronic Transmission of Notice of Appeal with Preliminary Record sent to Tenth Circuit Court of Appeals re 44 Notice of Cross Appeal (jb) (Entered: 03/10/2015)
46 Tenth Circuit USCA Case Number 15−6037 for 44 Notice of Cross Appeal filed by Catholic Benefits Association LCA, Catholic Insurance Company Inc. (jb) (Entered: 03/10/2015)
47 ORDER of USCA as to 44 Notice of Cross Appeal filed by Catholic Benefits Association LCA, Catholic Insurance Company Inc, 41 Notice of Appeal filed by United States Department of the Treasury, United States Department of Health and Human Services, Thomas E Perez, United States Department of Labor, Sylvia M Burwell, Jacob J Lew. The unopposed motion to hold appeals in abeyance is granted. Proceedings in these appeals, including briefing on the merits, are abated pending further order of this court, and in particular pending resolution of appeals numbers 13−1540, 14−6026, and 14−6028. (jb) (Entered: 03/18/2015)
48 TRANSCRIPT Order Form by Catholic Benefits Association LCA, Catholic Insurance Company Inc re 44 Notice of Cross Appeal that transcripts are not necessary. See order form for dates and proceedings. (Speir, Ian) Modified on 3/25/2015 to correct document association (jb). (Entered: 03/24/2015)
49 TRANSCRIPT LETTER advising Tenth Circuit re 44 Notice of Cross Appeal filed by Catholic Benefits Association LCA, Catholic Insurance Company Inc that transcripts are not necessary. The record is ready for appeal purposes. (jb) (Entered: 03/25/2015)
50 ENTRY of Appearance by Adam A Grogg on behalf of All Defendants (Grogg, Adam) (Entered: 03/25/2015)

Case: 5:14-cv-685 As of: 01/03/2019 10:12 PM CST 8 of 11

01/14/2016 08/15/2017 08/15/2017 08/16/2017 10/23/2017 10/23/2017 11/01/2017 11/16/2017
11/16/2017
11/21/2017 11/22/2017 11/22/2017 11/22/2017 12/04/2017 12/13/2017 12/18/2017

51 NOTICE (other) by All Plaintiffs Notice of Firm Name Change (Nussbaum, L) (Entered: 01/14/2016)
52 MOTION to Withdraw as Attorney by All Defendants. (Grogg, Adam) (Entered: 08/15/2017)
53 ENTRY of Appearance by Michelle R Bennett on behalf of All Defendants (Bennett, Michelle) (Entered: 08/15/2017)
54 ORDER granting 52 Motion to Withdraw as Attorney. Attorney Adam A Grogg terminated. Signed by Honorable David L. Russell on 8/16/17. (jw) (Entered: 08/16/2017)
55 ORDER of USCA as to 41 Notice of Appeal filed by United States Department of the Treasury, United States Department of Health and Human Services, Thomas E Perez, United States Department of Labor, Sylvia M Burwell, Jacob J Lew. Motion to Dismiss GRANTED. Mandate to issue. (kw) (Entered: 10/23/2017)
56 USCA MANDATE Issued re 41 Notice of Appeal filed by United States Department of the Treasury, United States Department of Health and Human Services, Thomas E Perez, United States Department of Labor, Sylvia M Burwell, Jacob J Lew (kw) (Entered: 10/23/2017)
57 MOTION for Permanent Injunction and Declaratory Judgment by All Plaintiffs. (Attachments: # 1 Exhibit A, CBA Amicus Brief)(Kniffin, Eric) (Entered: 11/01/2017)
58 ORDER of USCA as to (77 in 5:14−cv−00240−R) Notice of Cross Appeal filed by Catholic Insurance Company, Cathedral Foundation Inc, Catholic Benefits Association LCA, Catholic Charities of the Archdiocese of Oklahoma City Inc, All Saints Catholic School Inc, Roman Catholic Archdiocese of Oklahoma City, Villa St Francis Catholic Care Center Inc, Good Will Publishers Inc, William E Lori, (44 in 5:14−cv−00685−R) Notice of Cross Appeal filed by Catholic Insurance Company Inc, Catholic Benefits Association LCA. Cross appeals voluntarily dismissed pursuant to Rule 42(b). (kw) (Entered: 11/16/2017)
59 USCA MANDATE Issued re (77 in 5:14−cv−00240−R) Notice of Cross Appeal filed by Catholic Insurance Company, Cathedral Foundation Inc, Catholic Benefits Association LCA, Catholic Charities of the Archdiocese of Oklahoma City Inc, All Saints Catholic School Inc, Roman Catholic Archdiocese of Oklahoma City, Villa St Francis Catholic Care Center Inc, Good Will Publishers Inc, William E Lori, (44 in 5:14−cv−00685−R) Notice of Cross Appeal filed by Catholic Insurance Company Inc, Catholic Benefits Association LCA (kw) (Entered: 11/16/2017)
60 CONSENT MOTION for Extension of Time to File Response/Reply by Catholic Benefits Association LCA. (Nussbaum, L) (Entered: 11/21/2017)
61 ORDER granting 60 Motion for Extension of Time to File Response/Reply re 57 MOTION for Permanent Injunction and Declaratory Judgment Replies due by 12/4/2017.. Signed by Honorable David L. Russell on 11/21/17. (jw) (Entered: 11/22/2017)
62 ENTRY of Appearance by Elizabeth L Kade on behalf of All Defendants (Kade, Elizabeth) (Entered: 11/22/2017)
63 MEMORANDUM in Opposition re 57 MOTION for Permanent Injunction and Declaratory Judgment filed by All Defendants. (Kade, Elizabeth) (Entered: 11/22/2017)
64 REPLY to Response to Motion re 57 MOTION for Permanent Injunction and Declaratory Judgment filed by All Plaintiffs. (Attachments: # 1 Exhibit A, Govt response brief in PA IFR case, # 2 Exhibit B, Govt response brief in CA IFR case)(Kniffin, Eric) (Entered: 12/04/2017)
65 MOTION to Supplement Authority in Support of Motion for Permanent Injunction and Declaratory Relief by All Plaintiffs. (Attachments: # 1 Attachment)(Nussbaum, L) (Entered: 12/13/2017)
66 MOTION for Leave to file supplemental authority by All Plaintiffs. (Attachments: # 1 Exhibit A − PA Opinion, # 2 Exhibit B − PA Order)(Kniffin, Eric) (Entered:

Case: 5:14-cv-685 As of: 01/03/2019 10:12 PM CST 9 of 11

12/18/2017 12/21/2017 12/22/2017 12/26/2017
01/05/2018 01/08/2018 01/09/2018 01/12/2018 01/22/2018 01/23/2018 01/23/2018 02/23/2018 03/07/2018 03/07/2018 04/21/2018 04/21/2018 04/21/2018
04/23/2018

12/18/2017)
67 ORDER granting 65 Motion to Supplement; granting 66 Motion for Leave to File Supplemental Authority. Signed by Honorable David L. Russell on 12/18/17. (jw) (Entered: 12/18/2017)
68 NOTICE (other) by All Plaintiffs re 57 MOTION for Permanent Injunction and Declaratory Judgment Notice of Supplemental Authority (Attachments: # 1 Exhibit A)(Kniffin, Eric) (Entered: 12/21/2017)
69 RESPONSE to Motion re 57 MOTION for Permanent Injunction and Declaratory Judgment SUPPLEMENTAL BRIEF filed by All Defendants. (Kade, Elizabeth) (Entered: 12/22/2017)
70 ORDER re 57 MOTION for Permanent Injunction and Declaratory Judgment filed by Catholic Benefits Association LCA, Catholic Insurance Company Inc. The Court orders that Defendants file any objections or proposed modifications to Plaintiffs proposed order, attached herein, by January 5th, 2018. Signed by Honorable David L. Russell on 12/26/17. (Attachments: Exhibit #1 proposed order)(jw) (Entered: 12/26/2017)
71 UNOPPOSED MOTION for Extension of Time to File Response/Reply as to 70 Order, by All Defendants. (Attachments: # 1 Proposed Order)(Kade, Elizabeth) (Entered: 01/05/2018)
72 ORDER granting 71 Motion for Extension of Time to File Response/Reply Objections and proposed Modifications to Plaintiffs' proposed order, Doc. 70−1, is January 9, 2018. Signed by Honorable David L. Russell on 1/8/18. (jw) (Entered: 01/08/2018)
73 OBJECTIONS re 70 Order, filed by All Defendants. (Kade, Elizabeth) (Entered: 01/09/2018)
74 REPLY by Plaintiff Catholic Benefits Association LCA 73 Response to Departments' Objections to Proposed Order filed by Catholic Benefits Association LCA. (Kniffin, Eric) Modified on 1/12/2018 (kr). (Entered: 01/12/2018)
75 NOTICE (other) by All Defendants Withdrawal of Counsel (Kade, Elizabeth) (Entered: 01/22/2018)
76 MOTION to Withdraw as Attorney by All Defendants. (Attachments: # 1 Proposed Order)(Kade, Elizabeth) (Entered: 01/23/2018)
77 ORDER granting 76 Motion to Withdraw as Attorney. Attorney Elizabeth L Kade terminated. Signed by Honorable David L. Russell on 1/23/18. (jw) (Entered: 01/23/2018)
78 NOTICE (other) by Catholic Benefits Association LCA Notice of Supplemental Authority in Relation to Plaintiffs' Motion for Permanent Injunction and Declaratory Relief (Attachments: # 1 Exhibit Exhibit A)(Kniffin, Eric) (Entered: 02/23/2018)
79 ORDER granting 57 Motion for Permanent Injunction, as more fully set out. Signed by Honorable David L. Russell on 3/7/18. (jw) (Entered: 03/07/2018)
80 JUDGMENT; In accordance with this Courts order entered today, judgement is hereby entered in favor of Plaintiffs.. Signed by Honorable David L. Russell on 3/7/18. (jw) (Entered: 03/07/2018)
81 BILL OF COSTS by All Plaintiffs. (Attachments: # 1 Exhibit A − Nussbaum Declaration, # 2 Exhibit B − Transcript Receipt)(Nussbaum, L) (Entered: 04/21/2018)
82 MOTION for Attorney Fees by All Plaintiffs. (Nussbaum, L) (Entered: 04/21/2018)
83 MEMORANDUM in Support re 82 MOTION for Attorney Fees filed by All Plaintiffs. (Attachments: # 1 Exhibit A − Nussbaum Declaration, # 2 Exhibit B − Rienzi Declaration, # 3 Exhibit C − Burrage Declaration)(Nussbaum, L) (Entered: 04/21/2018)
84 NOTICE OF BILL OF COSTS HEARING, Bill of Costs Hearing set for 6/5/2018 09:00 AM in Court Clerk's Office (jw) (Entered: 04/23/2018)

Case: 5:14-cv-685 As of: 01/03/2019 10:12 PM CST 10 of 11

05/07/2018 05/09/2018 05/29/2018 05/30/2018
06/05/2018 06/20/2018
06/21/2018 06/21/2018
06/21/2018
06/27/2018 06/28/2018 07/16/2018 07/17/2018

85 RESPONSE in Opposition re 82 MOTION for Attorney Fees filed by Sylvia M Burwell, Jacob J Lew, Thomas E Perez, United States Department of Health and Human Services, United States Department of Labor, United States Department of the Treasury. (Attachments: # 1 Exhibits)(Bennett, Michelle) (Entered: 05/07/2018)
86 UNOPPOSED MOTION for Hearing re 82 MOTION for Attorney Fees (status conference) by All Plaintiffs. (Kniffin, Eric) (Entered: 05/09/2018)
87 SUPPLEMENT re 82 MOTION for Attorney Fees with billing statements by All Plaintiffs. (Kniffin, Eric) (Entered: 05/29/2018)
88 SUPPLEMENT re Motion for Attorney Fees with Billing Statements by Catholic Benefits Association LCA. (Attachments: # 1 Attachment Part 1 of 8, # 2 Attachment Part 2 of 8, # 3 Attachment Part 3 of 8, # 4 Attachment Part 4 of 8, # 5 Attachment Part 5 of 8, # 6 Attachment Part 6 of 8, # 7 Attachment Part 7 of 8, # 8 Attachment Part 8 of 8)(Kniffin, Eric) (Entered: 05/30/2018)
89 Costs Taxed in amount of $ 1388.90 against Azar et al (Attachments: # 1 Attachment 1− Supplement to Decision on Bill of Costs) (nv) (Entered: 06/05/2018)
90 MEMORANDUM in Opposition re 82 MOTION for Attorney Fees (Supplemental Opposition Brief) filed by Sylvia M Burwell, Jacob J Lew, Thomas E Perez, United States Department of Health and Human Services, United States Department of Labor, United States Department of the Treasury. (Attachments: # 1 Exhibit)(Bennett, Michelle) (nv). STRICKEN by Notice filed 06/21/18 (nv). (Entered: 06/20/2018)
NOTICE from the Court 90 Memorandum in Opposition STRICKEN due to counsel's failure to comply with ECF Policies & Procedures Manual, Section II(A)(4)(a). (nv) (Entered: 06/21/2018)
91 ORDER re 88 Supplement, filed by Catholic Benefits Association LCA The Court therefore ORDERS Plaintiffs to reply to Defendants Supplemental Brief in Opposition and to submit simplified billing records by July 9, 2018, in accordance with the following guidelines, as more fully set out. Signed by Honorable David L. Russell on 6/21/18. (jw) (Entered: 06/21/2018)
92 MEMORANDUM in Opposition re 82 MOTION for Attorney Fees (Supplemental Opposition Brief) filed by Sylvia M Burwell, Jacob J Lew, Thomas E Perez, United States Department of Health and Human Services, United States Department of Labor, United States Department of the Treasury. (Attachments: # 1 Exhibit 1 − Summary of Reductions, # 2 Exhibit 2 − Summary of Time Entries in Litigation Category, # 3 Exhibit 3 − Fees for 10th Circuit Moot Court, # 4 Exhibit 4 − Media−Related Fees, # 5 Exhibit 5 − Webinar and Website−Related Fees, # 6 Exhibit 6 − Fees for Drafting Complaint, # 7 Exhibit 7 − Fees for April 29, 2015 Hearing Preparation, # 8 Exhibit 8 − Fees for Researching Standing, # 9 Exhibit 9 − Fees for Briefing Class Certification Motion, # 10 Exhibit 10 − Fees Regarding Forum Shopping)(Bennett, Michelle) (Entered: 06/21/2018)
93 UNOPPOSED MOTION for Extension of Time to File Response/Reply as to 82 MOTION for Attorney Fees by All Plaintiffs. (Kniffin, Eric) (Entered: 06/27/2018)
94 ORDER granting 93 Motion for Extension of Time to File Response/Reply re 82 MOTION for Attorney Fees Replies due by 7/16/2018.. Signed by Honorable David L. Russell on 6/28/18. (jw) (Entered: 06/28/2018)
95 REPLY by Plaintiffs Catholic Benefits Association LCA, Catholic Insurance Company Inc re 82 MOTION for Attorney Fees filed by All Plaintiffs. (Attachments: # 1 Exhibit A − Nussbaum Declaration, # 2 Exhibit B − Jones Day Settlement, # 3 Exhibit C − First Liberty Settlement)(Kniffin, Eric) (Entered: 07/16/2018)
96 SUPPLEMENT re 95 Reply, in support of motion for attorneys' fees by All Plaintiffs. (Attachments: # 1 Exhibit 1 − Submitted Fees, # 2 Exhibit 2 − Submitted Costs, # 3 Exhibit 3 − Analysis of "Fees for 10th Cir Moot Court", # 4 Exhibit 4 − Analysis of "Media−Related Fees", # 5 Exhibit 5 − Analysis of "Webinar and Website−Related Fees", # 6 Exhibit 6 − Analysis of "Fees for Drafting Complaint", # 7 Exhibit 7 − Analysis of "Fees for 4−29−15 Hearing Prep", # 8 Exhibit 8 − Analysis of "Fees for Researching Standing", # 9 Exhibit 9 − Analysis of "Fees for Briefing Class Cert Motion", # 10 Exhibit 10 − Analysis of "Fees re Forum Shopping", # 11 Exhibit 11 −

Case: 5:14-cv-685 As of: 01/03/2019 10:12 PM CST 11 of 11

07/18/2018 08/15/2018 08/15/2018

Billing Entries Double−counted by Ds)(Kniffin, Eric) (Entered: 07/17/2018)
97 ORDER granting 86 Motion for Immediate Status Conference. The Court held a phone conference on May 14, 2018, and resolved Plaintiffs concerns regarding disclosure of billing records. Signed by Honorable David L. Russell on 7/18/18. (jw) (Entered: 07/18/2018)
98 ORDER granting 82 Motion for Attorney Fees, as more fully set out. Signed by Honorable David L. Russell on 8/15/18. (Attachments: Exhibit #1 Adjusted Fees, Exhibit #2 Hours By Attorney, Exhibit #3 Adjusted Costs) (jw) (Entered: 08/15/2018)
99 AMENDED JUDGMENT; Pursuant to 42 U.S.C. § 1988(b), Plaintiffs are awarded $699,725.95 in attorneys fees and $18,881.41 in costs not recoverable under 28 U.S.C. § 1920. Signed by Honorable David L. Russell on 8/15/18. (jw) (Entered: 08/15/2018)