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Gilardi v. Sebelius

United States District Court, District of Columbia

March 3, 2013

Francis A. GILARDI, Jr., et al., Plaintiffs,
Kathleen SEBELIUS, et al., Defendants.

Page 274

Edward L. White, III, American Center for Law & Justice, Ann Arbor, MI, Francis J. Manion, Geoffrey R. Surtees, Erik M. Zimmerman, American Center for Law & Justice, New Hope, KY, Colby Mims May, American Center for Law & Justice, Washington, DC, for Plaintiffs.

Benjamin Leon Berwick, U.S. Department of Justice, Washington, DC, for Defendants.


EMMET G. SULLIVAN, District Judge.

Plaintiffs Francis A. Gilardi, Jr., Philip M. Gilardi, Fresh Unlimited, Inc., d/b/a Freshway Foods, and Freshway Logistics, Inc. filed a complaint on January 24, 2013 seeking declaratory and injunctive relief against defendants United States Department of Health and Human Services, Kathleen Sebelius, United States Department of the Treasury, Timothy F. Geithner, United States Department of Labor, Hilda L. Solis, and their successors in office. Plaintiffs allege several causes of action. Count I alleges a violation of the Religious Freedom Restoration Act, 42 U.S.C. §§ 2000bb, et seq. Count II alleges a violation of the First Amendment's free exercise clause. Count III alleges a violation of the First Amendment's free speech clause. Finally, Count IV alleges a violation of the Administrative Procedure Act.

Pending before the Court is plaintiffs' motion for a preliminary injunction. Plaintiffs seek injunctive relief as to Count I and allege that certain federal regulations promulgated under the Patient Protection and Affordable Care Act (" Affordable Care Act" or " ACA" ), Pub. L. No. 111-148, 124 Stat. 119 (2010), violate plaintiffs statutory rights under the Religious Freedom Restoration Act (" RFRA" ), Pub. L. No. 103-141, 107 Stat. 1488 (1993) (codified at 42 U.S.C. § 2000bb-1). Upon consideration of the motion, the opposition and reply thereto, the Amicus Curiae Brief of

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the State of Ohio, the entire record, and for the reasons explained below, plaintiffs' motion is DENIED.


Francis A. Gilardi, Jr. and Philip M. Gilardi (collectively the " Gilardis" ), are Ohio residents and " adherents of the Catholic faith" who " hold to the Catholic Church's teachings regarding the immorality of artificial contraceptives, sterilization, and abortion." Compl. ¶ 3. The Gilardis are the sole owners of plaintiffs Fresh Unlimited, Inc., d/b/a Freshway Foods (" Freshway Foods" ) and Freshway Logistics, Inc. (" Freshway Logistics" ) (collectively the " Freshway Corporations" ), both of which are Subchapter S corporations and are incorporated under the laws of the State of Ohio. The Freshway Corporations are engaged in the processing, packing, and shipping of produce and other refrigerated products, Compl. ¶¶ 16-18, and have a total of about 400 employees between the companies, id. ¶¶ 17-18. The Gilardis each own a 50% share in the Freshway Corporations. They state that " [a]s the two owners with controlling interests in the two corporations, they conduct their businesses in a manner that does not violate their sincerely-held religious beliefs or moral values, and they wish to continue to do so." Compl. ¶ 3. The Freshway Corporations provide their full-time employees with a self-insured employee health benefits plan that provides employees with health insurance and prescription drug coverage through a third-party administrator and stop-loss provider. Compl. ¶ 29. The plan is to be renewed on April 1, 2013. Id.

Plaintiffs' claims arise out of certain regulations promulgated in connection with the Affordable Care Act. The Affordable Care Act requires that all group health plans and health insurance issuers that offer non-grandfathered group or individual health coverage to provide coverage for certain preventive services without cost-sharing, including, for " women, such additional preventive care and screenings ... as provided for in comprehensive guidelines supported by the Health Resources and Services Administration [ (" HSRA" ) ]." 42 U.S.C. § 300gg-13(a)(4). The HSRA, an agency within the Department of Health and Human Services (" HHS" ), commissioned the Institute of Medicine (" IOM" ) to conduct a study on preventive services necessary to women's health. On August 1, 2011, HSRA adopted IOM's recommendation to include " the full range of Food and Drug Administration approved contraceptive methods, sterilization procedures, and patient education and counseling for women with reproductive capacity." See HRSA, Women's Preventive Services: Required Health Plan Coverage Guidelines (" HRSA Guidelines" ), available at http:// www. hrsa. gov/ womens guidelines/ (last visited Mar. 2, 2013).

Several exemptions and safe-harbor provisions excuse certain employers from providing group health plans that cover women's preventive services as defined by HHS regulations. First, the mandate does not apply to certain " grandfathered" health plans in which individuals were enrolled on March 23, 2010, the date the ACA was enacted. 75 Fed. Reg. 34538-01 (June 17, 2010). Second, certain " religious employers" are excluded from the mandate. 76 Fed. Reg. 46,621 (Aug. 3, 2011); 45 C.F.R. § 147.130(a)(1)(iv)(A); see 78 Fed. Reg. 8456, 8459 (Feb. 6, 2013) (proposing to broaden the August 2011 definition of religious employer to ensure that " an otherwise exempt employer plan is not disqualified because the employer's purposes extend beyond the inculcation of religious values or because the employer serves or hires people of different religious faiths" ). Third, a temporary enforcement

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safe-harbor provision applies to certain non-profit organizations not qualifying for any other exemption. 77 Fed. Reg. 8725, 8726-77 (Feb. 15, 2012).

The parties agree that the Freshway Corporations do not qualify for any of these exemptions. As secular, for-profit employers, Freshway Foods and Freshway Logistics do not satisfy the definition of " religious employer" and are not eligible for the protection of the safe-harbor. The grandfathered plans provision also does not protect the corporations because the current health insurance plan has undergone material changes since 2010, including an increase in the cost of doctor visit co-pays. See Decl. of Francis A. Gilardi, Jr., ECF No. 21-2, at ¶ 13.

The Gilardis state that they " have concluded that complying with the Mandate would require them to violate their religious beliefs and moral values because the Mandate requires them and/or the corporations they own and control to arrange for, pay for, provide, and facilitate contraception methods, sterilization procedures, and abortion because certain drugs and devices such as the ‘ morning-after pill,’ ‘ Plan B,’ and ‘ Ella’ come within the Mandate's ... definition of ‘ Food and Drug Administration-approved contraceptive methods' despite their known abortifacient [1] mechanisms of action." Compl. ¶ 5.

On February 8, 2013, plaintiffs moved for a preliminary injunction as to Count I, which alleges a violation of the Religious Freedom Restoration Act (" RFRA" ). Plaintiffs argue that they satisfy the standard for a preliminary injunction because they are likely to succeed on the merits because the RFRA " substantially burdens" plaintiffs' free exercise of religion and defendants cannot establish that the regulations survive strict scrutiny. Furthermore, plaintiffs argue, they will suffer irreparable harm absent a preliminary injunction, the balance of equities tips in plaintiffs' favor, and the public interest favors a preliminary injunction.


A plaintiff seeking a preliminary injunction must establish (1) a substantial likelihood of success on the merits; (2) that it is likely to suffer irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips in its favor; and (4) that an injunction is in the public interest. Chaplaincy of Full Gospel Churches v. England,454 F.3d 290, 297 (D.C.Cir.2006). The purpose of a preliminary injunction " is merely to preserve the relative positions of the parties until a trial on the merits can be held." Univ. of Tex. v. Camenisch, 451 U.S. 390, 395, 101 S.Ct. 1830, 68 L.Ed.2d 175 (1981). It is " an extraordinary and drastic remedy" and " should not be granted unless the movant, by a clear showing, carries the burden of persuasion." Mazurek v. Armstrong, 520 U.S. 968, 972, 117 S.Ct. 1865, 138 L.Ed.2d 162 (1997). In this Circuit, these four factors have typically been evaluated on a " sliding scale," such that if " the movant makes an unusually strong showing on one of the factors, then it does not necessarily have to make as strong a showing on another factor." Dav ...

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