Sotomayor Vocal at ACA Mandate Argument

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By Mary Anne Pazanowski

March 23 — No one sitting in the room at the Supreme Court March 23 left with any doubt over where Justice Sonia Sotomayor stands on whether religious nonprofit organizations must comply with an ACA accommodation (Zubik v. Burwell, U.S., No. 14-1418, oral argument 3/23/16).

Sotomayor was the most vocal justice at the oral argument on whether an accommodation designed to ensure the groups' employees receive no-cost coverage of birth control and related services, which are considered essential health services under the Affordable Care Act, is valid. She peppered attorneys for the religious groups with questions designed to elicit why they believe they shouldn't be required to comply with the accommodation, given the government's stance that it was designed specifically to exempt them from having to directly provide the coverage.

Justices Ruth Bader Ginsburg, Stephen G. Breyer and Elena Kagan joined her by closely questioning the petitioner's attorneys, Paul D. Clement, of Bancroft PLLC in Washington, and Noel J. Francisco, of Jones Day in Washington, in the divided 90-minute argument over whether the so-called contraceptive mandate violates the groups' rights under the Religious Freedom Restoration Act, 42 U.S.C. § 2000bb. RFRA says that the government shall not adopt laws or regulations that substantially burden a person's religious exercise unless the provision furthers a compelling governmental interest and is the least restrictive means of furthering that interest.

Chief Justice John G. Roberts Jr. and Justice Samuel A. Alito Jr. seemed more receptive to the groups' arguments, suggesting women could obtain the coverage elsewhere—through contraceptive coverage-only plans sold on ACA health insurance exchanges, for example. Currently, the ACA doesn't allow for insurers operating on the exchanges to offer such plans, but, as Roberts said, the law may have to be changed.

Justice Anthony M. Kennedy, perennially thought of as the swing justice, asked thoughtful questions of both sides—again, leaving the looming question of whether he will be the justice who casts the deciding—or in this case, tying—vote.

Clear Decision?

Gretchen Borchelt, vice president for reproductive rights and health at the National Women's Law Center in Washington, told Bloomberg BNA March 23 she's “confident” the justices will vote 5-3 to uphold the mandate. Their reasoning in Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751, 2014 BL 180313 (U.S. 2014), where the justices pointed to the accommodation as a least restrictive means of furthering the government's compelling interests, should lead them to that result, she said.

But Roberts, who wrote opinions upholding the ACA's individual mandate and regulations extending tax credits for buying insurance on exchanges to taxpayers who live in states that don't operate their own exchanges, doesn't seem likely to vote in the government's favor this time, she said.

Roberts was “more involved” in the questioning than she expected him to be, Borchelt said. Based on his past opinions, she was surprised he seemed persuaded by the groups' arguments.

Tie?

“Cautiously optimistic” is how Hannah Smith, senior counsel at the Becket Fund for Religious Liberty in Washington, described her feelings following the argument. “The government had lots of hard questions to answer” about why groups like the Little Sisters of the Poor shouldn't be exempt from the mandate and its accommodation, she said. The government didn't adequately answer those questions, in her opinion.

Smith acknowledged the possibility of a 4-4 tie among the justices, though she told Bloomberg BNA she hopes the court is able to fashion an opinion that addresses the groups' concerns and resolves the uncertainty about the law. Smith said she was encouraged by the number and quality of questions Kennedy asked. He showed he understands the essence of the arguments, she said.

If there is a tie, the groups will continue litigating, she said. A circuit split still will exist—eight federal appeals courts have ruled for the government, while one has held the accommodation violates the groups' rights under RFRA. Many of those cases stalled at the preliminary injunction stage, meaning courts never ruled on the on the merits after a full evidentiary hearing.

A tie vote would result in an order affirming the holding in each case in which the court granted review—here, an unusual collection of seven cases from the Third, Fifth, Tenth and District of Columbia federal circuit courts. Additionally, there are several other review petitions that have been put on hold by the Supreme Court pending the outcome of those cases granted review.

Engaged From Start

Sotomayor, Borchelt said, “was engaged from the very beginning of the oral argument.” She immediately brought up the analogy of individuals who conscientiously object from serving in the military, who must inform the government of their objections in order to be excused from service.

Clement told the court the religious groups weren't “objecting to objecting,” i.e., having to inform the government of their objections. They made sure the government knew of their concerns when the contraceptive mandate first was proposed and have repeatedly made their objections known through the many lawsuits they have filed, he said.

But, Kennedy observed, the groups seem to be arguing that they are objecting to objecting. Kagan asked, if what they say is true, what happens when someone does object to objecting? It's only a substantial burden if the objection requirement is enforced with massive penalties, Clement responded.

Kagan pressed on, asking whether that means that anytime a party says his or her religious beliefs will be substantially burdened when the government requires them to give notice of anything, the government must accept that without question. How would the government function in that case, she asked. Clement said his clients had no objection to signing the opt-out form, but Kagan responded that was what they were objecting to.

Sotomayor inserted that sometimes people are forced to do something to which they object in order to ensure society continues to function. No one has questioned the sincerity of the groups' religious beliefs, Ginsburg added, but they “can't have it all”; there has to be an accommodation.

Breyer told the court that he has been struggling with the question of where to draw the line. “Members of society sometimes have to accept things that are terrible,” he said. For example, a person who objects to abortion may be required as part of his job to shovel snow on the sidewalk in front of an abortion clinic. Quakers have been required to pay taxes when part of their taxes goes toward paying for wars. Courts have said they can't get out of that. So where is the line, Breyer asked.

When can it be said, it isn't just a matter of signing a form and opting out, Breyer said. Entities must tell the government that they are opting out so that it can make other arrangements.

Breyer “seemed dissatisfied” with Clement's answer, Borchelt told Bloomberg BNA.

Exemption for All

Francisco told the court that the religious groups should be entitled to the same full exemption from the contraceptive mandate enjoyed by religious employers. Although they don't meet the technical definition of a religious employer, which encompasses mainly houses of worship, the groups provide the same types of services and share the same beliefs, he said.

Ginsburg and Kagan objected to this line of argument, with Kagan saying, “churches are special.” Still, Francisco insisted that, if Congress exempts one type of religious employer, it must exempt them all.

Kennedy questioned that claim. So once Congress gives any exemption, he asked, it must give that exemption to all? That “would be a very difficult opinion to write,” Kennedy said, noting that some of the plaintiffs in the contraceptive mandate cases are universities or hospitals that aren't directly associated with a church. The government has the same obligation with respect to all, Francisco said.

Kagan told Francisco his argument posed a “mortal danger” to all churches. If Congress believes that any exemption it puts into any legislation can be claimed by anyone, it might not grant any exemptions, she said. Francisco said his clients weren't suggesting universal application of the exemption. Rather, they're arguing that when two entities have the same interests—here, the nonprofit religious groups and the churches—they should be treated the same way.

Borchelt told Bloomberg BNA she was surprised Francisco kept pushing the exemption argument. Even Kennedy didn't see how the court could adopt it, she said.

Later, in rebuttal, Clement revisited the religious exemptions, telling the justices that the line drawn between churches and the religious nonprofits was “absurd.” Moreover, the only justification the government gave for distinguishing between the two groups was that the groups were less likely than churches to have employees who shared their religious beliefs. That's not true, since the groups have the same right to hire only co-religionists that churches have, he said.

Evidence of Problem

Francisco argued that the government had no evidence that women who work for the nonprofit groups would be unable to obtain contraceptive coverage unless offered as part of an employer plan. There are alternatives, he said.

In addition to employees of religious employers, employees of groups that fall within what is known as the grandfathering exemption also must find alternatives. Many employers qualify for this exemption, which applies to employers that have plans that haven't been altered since the ACA went into effect.

Solicitor General Donald B. Verrilli Jr., addressing questions about this exemption, later said that the number has gone down significantly and that it is expected there will be very few in the next few years. Even employers who have opted not to change plans in order to retain the exemption have admitted that it's very costly to do so, he said.

Addressing Francisco, Sotomayor and Kagan expressed disbelief. There is evidence there are barriers to all women obtaining contraceptives, Sotomayor said. That's why the government created the contraceptive mandate. But, Kagan added, even laws serving the most compelling interests have exemptions. The grandfathering exemption, in any case, always was intended to be transitional, Ginsburg said. Once an employer changes its plan, it must meet current ACA requirements.

Discussing the issue later with Verrilli, Alito said the government could have required even grandfathered programs to implement the contraceptive mandate, but did not. The ACA, for example, required employers to immediately extend plans to cover their employees' children through age 26. Congress could have done something similar with the contraceptive mandate, he said.

The grandfathering exemption was always meant to be temporary, Verrilli said. Congress knew the number of affected plan would drop over time. Some changes required by laws are just too expensive to go into immediate effect, he said, pointing to the Americans With Disabilities Act's requirement that facilities be retrofitted to allow barrier-free access.

Roberts pointed out that retrofitting is very expensive and that the contraceptive coverage requirement might not be comparable.

Becket's Smith was pleased the justices took notice of this argument. The groups are concerned that, due to the grandfathering exemption, some very large employers are excused from complying with the mandate, while nuns and other religious groups are being forced to do so. Further, she said, the drop-off in the number of employers subject to the grandfathering exemption has plateaued, and the provision has no sunset provision. There is no assurance the exemption will end for those companies, she told Bloomberg BNA.

Hijacking Plans

Roberts raised an argument the groups have been asserting—that, by requiring the groups' insurers to offer contraceptive coverage, the government is essentially hijacking the groups' plans. Verrilli denied that's the case. The government in the accommodation was trying to ensure that employees receive the coverage they need, while making certain employers can't be charged for providing coverage to which they object. The accommodation ensures that the coverage is provided independently of the religious groups, he said.

But is there any way in the current regime for this to work without the use of the employer plans, Roberts asked. Verrilli said that the government has a compelling interest in ensuring that women's access to the covered services is seamless. In other words, everything should be provided through the same plan. He added that the notice the groups are required to send to the Department of Health and Human Services is an objection; it's not an authorization.

Alito wasn't convinced, Smith said. He recognized that once the government steps in and requires the plan to provide the coverage, the plan becomes the government's instrument, she said.

Alito and Roberts also pressed Verrilli on why the coverage couldn't be provided in a different way, for example, through a contraceptive-only plan offered on an exchange. Again, he said, that wouldn't serve the goal of having seamless coverage. It would require women to have two plans, not just one.

Smith told Bloomberg BNA that Verrilli's argument seems to undercut the government's compelling interest claim. Verrilli, she said, defined the government's compelling interest so narrowly—to ensure seamless coverage for women—that there is no way for the court to create an alternative means for providing the coverage. The government is “so tied to using an employer's plan” to provide contraceptive coverage “that it effectively neutered the least restrictive means” aspect of its argument, she said.

Understanding Access Problem

Borchelt told Bloomberg BNA she believes this line of questioning demonstrated that some of the justices don't understand the difficulty some women have obtaining or paying for contraception. Some justices may have seized on the possibility of there being an “Aetna uber-policy” that would offer the coverage, but that's “completely unworkable and unlikely to happen,” she said. Borchelt said she wasn't certain any insurer would be interested in offering such a policy.

Borchelt also discussed the dilemma in terms introduced by Breyer, who noted that the government didn't want women to have to ask for or go elsewhere for this coverage. There is a group of women who have or can afford to buy the coverage, there's a group that can get the coverage through programs for low-income individuals, and then there's a large “inertia-bound” group in the middle, Breyer said. These would be women who feel the barriers are so great that they can't or don't know how to break through them. Borchelt said that, for these women, even a $5 or $10 copay may be an insurmountable barrier.

Smith, however, said there are alternatives. The law can be changed to allow insurers—or a single insurer—to sell contraceptive-only coverage on exchanges. There are least restrictive alternatives that would work, she said. There is no reason to put the burden of providing the coverage on nuns and other religious groups that sincerely object to doing so, she said.

Assuming there is no tie, the court should issue its opinion by the end of June.

To contact the reporter on this story: Mary Anne Pazanowski in Washington at mpazanowski@bna.com

To contact the editor responsible for this story: Janey Cohen at jcohen@bna.com