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Court denies Conestoga request for delay in PPACA contraception fines

By , - Last modified: February 11, 2013 at 10:43 AM

A Lancaster County company's second attempt at a moratorium on penalties totaling $95,000 a day for not providing employees with what it considers abortifacients has been denied.

“We now must go through the entire appeal process before we get any relief,” said Randall Wenger, chief counsel of the Harrisburg-based Independence Law Center, which is representing Conestoga Wood Specialties Corp. and the Hahn family of Mennonites who own it. “Our hope is that as this appeal continues — and similar appeals around the country where business owners are winning 11-3 — the rights of the Hahn family will be vindicated.”

The decision, Wenger said, puts Conestoga “in a bit of a bind because without an injunction the insurance carrier will not even offer insurance coverage without the offending provisions. The insurance carrier itself would also be liable for the fines if we lose and doesn’t want to take the risk. Without court relief, the Hahns are absolutely stuck.”

The U.S. Court of Appeals for the Third Circuit decision to deny the injunction requested by Conestoga was 2-1.

Judge Marjorie Rendell wrote that although the issues in the case have not been definitively settled by the Third Circuit or the Supreme Court, injunctions should be granted only if there is a reasonable likelihood that the case will succeed on its merits, and she agreed with the lower court's finding that Conestoga had not demonstrated that.

"The district court found that plaintiffs' free speech claim had little likelihood of success because the ACA regulations 'affect [] what [plaintiffs] must do . . . not what they may or may not say,' and the regulations do not interfere with plaintiffs' expression of their opinions regarding contraceptives," Rendell wrote.

Judge Leonard Garth penned a concurring opinion, saying that as a corporation "the purpose — and only purpose — of the plaintiff Conestoga is to make money!"

He quoted a similar decision that found owners "are, in both law and fact, separated by multiple steps from both the coverage that the company health plan provides and from the decisions that individual employees make in consultation with their physicians as to what covered services they will use."

"To say that religiously inclined people will have to forego their rights of conscience and focus solely on profit, if they choose to adopt a corporate form to conduct their business, is a controversial position and certainly not one already established in law," Judge Kent Jordan wrote in a dissenting opinion, arguing that an injunction would be appropriate because of the harm threatened and the mixed results in similar pending cases.

The Mennonite owners of Conestoga, Jordan wrote, "Turn to their government and ask, 'Can you rightly make us pay for something poisonous to our religious beliefs or face the destruction of our business?'"

PPACA includes an exception for religious employers, which Conestoga does not qualify as. The penalty for not complying with the requirement is $100 per employee per day, and Jordan wrote that although Conestoga's health insurance renewal date was Jan. 1, "It is unclear from the record whether Conestoga is now risking enforcement or paying for the offending coverage."

Editor's note: This item has been modified from its previous version to include comments from Randall Wenger.

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