RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit I.O.P. 32.1(b)

File Name: 13a0304p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT _________________

EDEN FOODS, INC. and MICHAEL POTTER,

Chairman, President and Sole Shareholder of

Eden Foods, Inc.,

Plaintiffs-Appellants,

v.

KATHLEEN SEBELIUS, Secretary, United

States Department of Health and Human

Services; THOMAS E. PEREZ, Secretary,

United States Department of Labor; JACK

LEW, Secretary, United States Department of

the Treasury,

Defendants-Appellees.

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No. 13-1677

Appeal from the United States District Court

for the Eastern District of Michigan at Detroit.

No. 2:13-cv-11229—Denise Page Hood, District Judge.

Decided and Filed: October 24, 2013 

Before: DAUGHTREY, COLE, and WHITE, Circuit Judges.

_________________

COUNSEL

ON BRIEF: Erin Elizabeth Mersino, THOMAS MORE LAW CENTER, Ann Arbor,

Michigan, for Appellants. Mark B. Stern, Alisa B. Klein, UNITED STATES

DEPARTMENT OF JUSTICE, Washington, D.C., for Appellees. Mailee R. Smith,

AMERICANS UNITED FOR LIFE, Washington, D.C., Kimberlee Wood Colby,

CENTER FOR LAW AND RELIGIOUS FREEDOM CHRISTIAN LEGAL SOCIETY,

Springfield, Virginia, Deborah J. Dewart, LIBERTY, LIFE, AND LAW

FOUNDATION, Swansboro, North Carolina, Thomas W. Ude, Jr., LAMBDA LEGAL

AND DEFENSE AND EDUCATION FUND, INC., New York, New York, Camilla B.

Taylor, LAMBDA LEGAL DEFENSE AND EDUCATION FUND, INC., Chicago,

Illinois, Jennifer C. Pizer, LAMBDA LEGAL DEFENSE AND EDUCATION FUND,

INC., Los Angeles, California, Charles E. Davidow, PAUL, WEISS, RIFKIND,

WHARTON & GARRISON LLP, Washington, D.C., Bruce H. Schneider, STROOCK

& STROOCK & LAVAN LLP, New York, New York, Daniel Mach, AMERICAN

CIVIL LIBERTIES UNION FOUNDATION, Washington, D.C., Ayesha N. Khan,

Gregory M. Lipper, Caitlin E. O’Connell, AMERICANS UNITED FOR SEPARATION

1
No. 13-1677 Eden Foods, Inc., et al. v. Sebelius, et al. Page 2

OF CHURCH AND STATE, Washington, D.C., Jessica Ellsworth, HOGAN LOVELLS

US LLP, Washington, D.C., for Amici Curiae.

_________________

OPINION

_________________

MARTHA CRAIG DAUGHTREY, Circuit Judge. To comply with the Patient

Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), and the

Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat.

1029 (2010), collectively known as the Affordable Care Act (the Act), most businesses

employing 50 or more individuals must provide female employees with health-insurance

coverage that includes, at no cost to the employee, “such additional preventive care and

screenings . . . as provided for in comprehensive guidelines supported by the Health

Resources and Services Administration.” 42 U.S.C. § 300gg-13(a)(4). Those guidelines

require plans to cover “[a]ll Food and Drug Administration approved contraceptive

methods, sterilization procedures, and patient education and counseling for women with

reproductive capacity.” 77 Fed. Reg. 8725 (Feb. 15, 2012).

The plaintiffs, Eden Foods, Inc., and Michael Potter, appeal from a denial of their

request for a preliminary injunction that would forbid federal agencies from enforcing

that mandate against them. They contend that offering such contraceptive services to the

employees of Eden Foods would substantially burden the plaintiffs’ religious beliefs and

thus would contravene the protections afforded them under the Religious Freedom

Restoration Act, 42 U.S.C. §§ 2000bb–2000bb-4 (RFRA). However, the law of the

circuit, announced in the recent decision in Autocam Corp. v. Sebelius, __ F.3d ___,

2013 WL 5182544 (6th Cir. Sept. 17, 2013), convincingly establishes that the district

court did not abuse its discretion in denying the plaintiffs’ requests for injunctive relief.
No. 13-1677 Eden Foods, Inc., et al. v. Sebelius, et al. Page 3

FACTUAL AND PROCEDURAL BACKGROUND

The Affordable Care Act

In March 2010, Congress passed, and President Obama signed, the Affordable

Care Act. The cornerstone of the Act is the requirement that all non-exempt, nongrandfathered employers of 50 or more people ensure that their employees receive a

minimum level of health insurance. As part of that coverage, Congress mandated:

A group health plan and a health insurance issuer offering group or

individual health insurance coverage shall, at a minimum provide

coverage for and shall not impose any cost sharing requirements for – 

* * *

(4) with respect to women, such additional preventive

care and screenings . . . as provided for in comprehensive

guidelines supported by the Health Resources and

Services Administration for purposes of this paragraph.

42 U.S.C. § 300gg-13(a)(4).

The Health Resources and Services Administration (HRSA) then delegated the

task of developing appropriate preventive-services guidelines to the Institute of Medicine

(IOM), an arm of the National Academy of Sciences funded by Congress to provide the

government with expert advice on matters of public health. The IOM reviewed “what

preventive services are necessary for women’s health and well-being and therefore

should be considered in the development of comprehensive guidelines for preventive

services for women.” HRSA, Women’s Preventive Services Guidelines, available at

http://www.hrsa.gov/womensguidelines/ (last visited Oct. 22, 2013). The Institute

recommended, and the HRSA supported the suggestions, that the following preventive

services be required to be provided to women employees at no cost to the

women themselves: well-woman visits; screening for gestational diabetes; human

papillomavirus testing; counseling for sexually transmitted infections; counseling and

screening for human immune-deficiency virus; contraceptive methods and counseling;

breast-feeding support, supplies, and counseling; and screening and counseling for

interpersonal and domestic violence. Id.
No. 13-1677 Eden Foods, Inc., et al. v. Sebelius, et al. Page 4

1

The regulations define a “religious employer” as an organization that meets each of the following

criteria:

(1) The inculcation of religious values is the purpose of the organization.

(2) The organization primarily employs persons who share the religious tenets of the

organization.

(3) The organization serves primarily persons who share the religious tenets of the

organization.

(4) The 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.

With respect to contraceptive methods and counseling, the guidelines require

non-exempt employers and insurance plans to provide “[a]ll Food and Drug

Administration approved contraceptive methods, sterilization procedures, and patient

education and counseling for all women with reproductive capacity.” Id. Nevertheless,

HRSA explained:

The guidelines concerning contraceptive methods and counseling . . . do

not apply to women who are participants or beneficiaries in group health

plans sponsored by religious employers. Effective August 1, 2013, a

religious employer is defined as an employer that is organized and

operates as a non-profit entity and is referred to in section

6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code. HRSA notes that,

as of August 1, 2013, group health plans established or maintained by

religious employers (and group health insurance coverage provided in

connection with such plans) are exempt from the requirement to cover

contraceptive services under section 2713 of the Public Health Service

Act, as incorporated into the Employee Retirement Income Security Act

and the Internal Revenue Code. HRSA also notes that, as of January 1,

2014, accommodations are available to group health plans established or

maintained by certain eligible organizations (and group health insurance

coverage provided in connection with such plans), as well as student

health insurance coverage arranged by eligible organizations, with

respect to the contraceptive coverage requirement.

Id.

Pursuant to the Act, therefore, exemptions from the contraceptive-coverage

mandate are limited to certain sizes and types of employers. Specifically, the insurance

requirements are not applicable to companies with fewer than 50 employees,

see 26 U.S.C. §§ 4980H(a), (c)(2)(A); companies with health-insurance plans in

existence on March 23, 2010, and unchanged after that date, see 45 C.F.R. § 147.140;

and “religious employers,” see 45 C.F.R. § 147.130(a)(1)(iv)(B).1
No. 13-1677 Eden Foods, Inc., et al. v. Sebelius, et al. Page 5

45 C.F.R. § 147.130(a)(1)(iv)(B) (2012).

2

“The term ‘applicable payment amount’ means, with respect to any month, 1/12 of $2,000.”

U.S.C. § 4980H(c)(1).

3

Interestingly, in a conversation with salon.com’s Irin Carmon, Potter’s “deeply held religious

beliefs,” see Complaint ¶ 83, more resembled a laissez-faire, anti-government screed. Potter stated to

Carmon, “I’ve got more interest in good quality long underwear than I have in birth control pills.” Carmon

then asked the Eden Foods chairman why he didn’t seem to care about birth control when he had taken the

step to file a lawsuit over the contraceptive mandate. Potter responded, “Because I’m a man, number

one[,] and it’s really none of my business what women do.” The article continued:

So, then, why bother suing? “Because I don’t care if the federal government is telling

me to buy my employees Jack Daniel’s or birth control. What gives them the right to

tell me that I have to do that? That’s my issue, that’s what I object to, and that’s the

beginning and end of the story.” He added, “I’m not trying to get birth control out of

Rite Aid or Wal-Mart, but don’t tell me I gotta pay for it.”

Irin Carmon, Eden Foods doubles down in birth control flap, SALON.com (Apr. 15, 2013, 7:45 am),

http://www.salon.com/2013/04/15/eden_foods_ceo_digs_himself_deeper_in_birth_control_ourtrage.

Significant taxes are imposed upon a non-exempt employer who fails to provide

the required insurance coverage. For example, an employer who offers its employees

a health plan but omits items of required coverage shall be taxed “$100 for each day in

the noncompliance period with respect to each individual to whom such failure relates.”

26 U.S.C. § 4980D(b)(1). Complete failure to offer employees any health-insurance

coverage will result in the imposition upon the employer of “an assessable payment

equal to the product of the applicable payment amount and the number of individuals

employed by the employer as full-time employees during such month.” 26 U.S.C.

§ 4980H(a).2

The Plaintiffs

Plaintiff Michael Potter is the founder, chairperson, president, and sole

shareholder of Eden Foods, Inc., a for-profit, natural-foods corporation that employs

128 individuals, more than 50 of whom work full-time for the company. The complaint

in this matter alleges that Potter is a Roman Catholic, follows the teachings of the

Catholic Church, and has “deeply held religious beliefs” “that prevent him from

participating in, paying for, training others to engage in, or otherwise supporting

contraception, abortion, and abortifacients.” In fact, Potter claims that “these procedures

almost always involve immoral and unnatural practices.”3
No. 13-1677 Eden Foods, Inc., et al. v. Sebelius, et al. Page 6

In his capacity as chairman of Eden Foods, Potter has for years negotiated healthinsurance policies for his employees with Blue Cross Blue Shield of Michigan. Those

previous policies “specifically excluded contraception and abortifacients, and exempted

[Potter] from providing, paying, contributing, or supporting contraception or

abortifacients for others.” On March 15, 2013, however, Potter was informed that, in

compliance with the requirements of the Affordable Care Act, Blue Cross Blue Shield

of Michigan would no longer offer such limited medical coverage; consequently, the

corporation’s group plan “had been changed to include abortifacients and contraceptive

coverage.”

Potter concedes that Eden Foods “does not fall under any sort of exemption”

provided in the Affordable Care Act, and thus the corporation is subject to the Act’s

requirement that its health-insurance policy provide no-cost coverage for contraceptives

for women employees. He alleges, however, that adherence to his claimed religious

beliefs would necessitate him and his company violating the Act’s mandate, resulting

in the imposition of significant penalties. For example, were the corporation “to violate

the law by ceasing to offer employee health insurance altogether, [it would] be penalized

with fines of $2,000 per employee per year. The fines [would be] even more

insurmountable [were the corporation to] decide to offer insurance without the

objectionable coverage.” Faced with this prospect, Potter and Eden Foods filed a

complaint in federal district court, challenging the legality of the contraceptive mandate.

The plaintiffs also filed with the court a motion for issuance of a temporary restraining

order and a preliminary injunction.

District Court and Motions Panel Rulings

The district court denied the plaintiffs’ motion for injunctive relief. In doing so,

the court first noted that the plaintiffs failed to satisfy their RFRA burden of showing

that the contraceptive mandate substantially burdened their exercise of their religion.

Quoting from the district court opinion in Hobby Lobby Stores, Inc. v. Sebelius, 870

F. Supp.2d 1278, 1294 (W.D. Okla. 2012), rev’d 723 F.3d 1114 (10th Cir. 2013), the

district judge explained:
No. 13-1677 Eden Foods, Inc., et al. v. Sebelius, et al. Page 7

[T]he particular burden of which plaintiffs complain is that funds, which

plaintiffs will contribute to a group health plan, might, after a series of

independent decisions by health care providers and patients covered by

[the corporate] plan, subsidize someone else’s participation in an activity

that is condemned by plaintiff’s religion. Such an indirect and attenuated

relationship appears unlikely to establish the necessary “substantial

burden.”

(Internal quotation marks and citation omitted.)

The district court further concluded that the plaintiffs established no likelihood

of success on their First Amendment free-exercise claim, noting that free-exercise-ofreligion rights have never been extended to secular, for-profit corporations like Eden

Foods, which are “not the alter ego[s] of [their] owners for purposes of religious belief

and exercise.” Moreover, Potter’s First Amendment rights were not infringed by the

mandate because that regulation does not seek to burden religion, but rather to promote

public health and gender equality.

Both Eden Foods and Potter then appealed to this court, claiming as their sole

issue that “Plaintiffs Michael Potter and Eden Foods are Likely to Succeed on their

RFRA Claims.” Pending resolution of the appeal, the plaintiffs sought issuance of an

injunction restoring Eden Foods and Potter to the positions in which they found

themselves prior to the implementation of the challenged provisions of the Affordable

Care Act. A motions panel of this court unanimously denied that request, noting that the

three judges were “not persuaded, at this stage of the proceedings, that a for-profit

corporation has rights under the RFRA. Moreover, the burden Potter claims is too

attenuated. The contraceptive mandate is imposed on Eden Foods, not Potter.” Eden

Foods, Inc. v. Sebelius, No. 13-1677 (6th Cir. June 28, 2013) (order).

DISCUSSION

In reviewing whether the plaintiffs have demonstrated entitlement to injunctive

relief, we examine four factors: (1) the movants’ likelihood of success on the merits of

their claim; (2) whether the movants would suffer irreparable injury without the

injunction; (3) whether issuance of the injunction would cause substantial harm to
No. 13-1677 Eden Foods, Inc., et al. v. Sebelius, et al. Page 8

others; and (4) whether issuance of the injunction would serve the public interest. See,

e.g., Ne. Ohio Coal. for Homeless v. Husted, 696 F.3d 580, 590-91 (6th Cir. 2012). We

examine the district court’s decision on the likelihood of the movants’ success on the

merits de novo, but we will reverse the district court’s decision to grant or deny an

injunction only for an abuse of discretion. Id. at 591. “Although no one factor is

controlling, a finding that there is simply no likelihood of success on the merits is

usually fatal.” Gonzales v. Nat’l Bd. of Med. Exam’rs, 225 F.3d 620, 625 (6th Cir.

2000).

Given intervening events since the plaintiffs’ filing of this appeal, we conclude

that the plaintiffs in this matter have “simply no likelihood of success on the merits.”

On September 17, 2013, another panel of this court released its opinion in Autocam

Corp. v. Sebelius, __ F.3d ___, 2013 WL 5182544 (6th Cir. Sept. 17, 2013), a case that

resolved a similar challenge to the Affordable Care Act’s contraceptive mandate. Like

the case presently before us, Autocam involved claims by a for-profit, secular,

incorporated business and the owners of that closely-held corporation. Like Eden Foods

and Potter, the plaintiffs in Autocam alleged that the mandate forces practitioners of the

Roman Catholic faith to choose between incurring substantial financial penalties for

disobeying duly-promulgated regulations and ignoring sincerely held religious beliefs

concerning the use of artificial contraceptives. Id. at *1. As in this case, the plaintiffs

in Autocam argued that compliance with the dictates of the contraceptive mandate would

substantially burden their exercise of religion in contravention of the protections

afforded by RFRA. Id.

Claims Raised by Plaintiff Potter

Addressing those concerns and allegations, the Autocam opinion relied on basic,

well-established principles of corporate law to hold that the individual

owners/shareholders of Autocam had no standing to bring their claims against the

government “in their individual capacities under RFRA, nor [could] Autocam assert the

[individual plaintiffs’] claims on their behalf.” Id. at *5. According to the court,

“incorporation’s basic purpose is to create a distinct legal entity, with legal rights,
No. 13-1677 Eden Foods, Inc., et al. v. Sebelius, et al. Page 9

obligations, powers, and privileges different from those of the natural individuals who

created it, who own it, or whom it employs.” Id. (quoting Cedric Kushner Promotions,

Ltd. v. King, 533 U.S. 158, 163 (2001)).

Autocam’s resolution of that standing issue now constitutes the law of this

circuit. Consequently, we may not ignore that published circuit precedent, absent an

intervening Supreme Court decision or an overruling of the prior decision by this court

sitting en banc. See Salmi v. Sec’y of Health & Human Servs., 774 F.2d 685, 689 (6th

Cir. 1985). Moreover, even if the Autocam decision had not been issued, we would not

have ruled differently on Potter’s claims. 

As the Supreme Court held in United States v. Lee, 455 U.S. 252 (1982):

When followers of a particular sect enter into commercial activity as a

matter of choice, the limits they accept on their own conduct as a matter

of conscience and faith are not to be superimposed on the statutory

schemes which are binding on others in that activity. Granting an

exemption from [statutory schemes] to an employer operates to impose

the employer’s religious faith on the employees.

Id. at 261 (declining to grant a Social Security tax exemption under the Free Exercise

Clause to Amish employers). The Affordable Care Act’s contraceptive mandate imposes

duties and potential penalties upon Eden Foods only, not upon Potter, despite his status

as the sole shareholder of the corporation. By incorporating his business, Potter

voluntarily forfeited his rights to bring individual actions for alleged corporate injuries

in exchange for the liability and financial protections otherwise afforded him by

utilization of the corporate form. Adoption of Potter’s argument that he should not be

liable individually for corporate debts and wrongs, but still should be allowed to

challenge, as an individual, duties and restrictions placed upon the corporation would

undermine completely the principles upon which our nation’s corporate laws and

structures are based. We are not inclined to so ignore law, precedent, and reason.

As this court held in Autocam, individual shareholders/owners of a corporation

have no standing to challenge provisions of laws that the corporation must obey under
No. 13-1677 Eden Foods, Inc., et al. v. Sebelius, et al. Page 10

risk of legal penalty. It follows that Potter’s claims must be dismissed for lack of

jurisdiction.

Claims Raised by Eden Foods

In pertinent part, RFRA provides that the “[g]overnment shall not substantially

burden a person’s exercise of religion even if the burden results from a rule of general

applicability.” 42 U.S.C. § 2000bb-1(a). Relying on this statutory prohibition, Eden

Foods claims that the Affordable Care Act’s contraceptive mandate does indeed burden

the corporation’s exercise of religion. Such an assertion necessarily raises a threshold

issue: “whether a for-profit, secular corporation is able to engage in religious exercise

under the Free Exercise Clause of the First Amendment and the RFRA.” Conestoga

Wood Specialties Corp. v. Sec’y of U.S. Dep’t of Health & Human Servs., 724 F.3d 377,

381 (3d Cir. 2013), petition for cert. filed, (U.S. Sept. 19, 2013) (No. 13-356). 

We need not engage in an extensive discussion of the pros and cons of the query

because this court, in Autocam, already has resolved the issue for this circuit. Relying

in large part on the Third Circuit’s analysis in Conestoga Wood Specialties, Autocam

held that a for-profit corporation “is not a ‘person’ capable of ‘religious exercise’ as

intended by RFRA.” Autocam, __ F.3d at ___, 2013 WL 5182544, at *7. Such a

holding necessarily guides our analysis of the identical issue in this case. Thus, as in

Autocam, the corporate plaintiff here has failed to carry its burden of demonstrating that

it has a strong likelihood of succeeding on the merits of its RFRA claims. Because Eden

Foods cannot establish this first and most critical of the four criteria for justifying

issuance of a preliminary injunction, see Gonzales, 225 F.3d at 625, the district court’s

denial of the relief sought by Eden Foods was proper and not an abuse of discretion.

CONCLUSION

Plaintiffs Eden Foods and Michael Potter have attempted to distinguish their

challenges to the applicability of the Affordable Care Act’s contraceptive mandate from

those raised by the plaintiffs in Autocam. They have failed to do so. Thus, in

accordance with the law of the circuit announced in Autocam, we hold that Eden Foods,
No. 13-1677 Eden Foods, Inc., et al. v. Sebelius, et al. Page 11

a secular, for-profit corporation, cannot establish that it can exercise religion, and that

Potter cannot establish his standing to challenge obligations placed only upon the

corporation, not upon him as an individual. Consequently, we AFFIRM the district

court’s denial of Eden Foods’s motion for a preliminary injunction and REMAND the

case to the district court with instructions to DISMISS Potter’s claims for lack of

jurisdiction.