Autocam is a group of for-profit corporations owned and controlled by members of the Kennedy family who are practicing Roman Catholics. Autocam and the Kennedys brought suit against the government claiming that compliance with the contraception mandate under the Affordable Care Act violates the Religious Freedom Restoration Act (“RFRA”) because it forces them to violate the teachings of the church. See Autocam Corporation v. Sebelius Case No. 12-2673 (6th Cir. September 17, 2013).
The Third and Tenth Circuits have already weighed in on the issue, and they are split. See Conestoga Wood Specialties Corp. v. Sec’y of U.S. Dep’t of Health & Human Servs., Case No. 13-1144 (3rd Cir. July 26, 2013) (affirming the district court’s judgment denying a preliminary injunction on both Free Exercise and RFRA grounds); Hobby Lobby Stores, Inc. v. Sebelius, Case No. 12-6294 (10th Cir. June 27, 2013) (en banc) (holding that plaintiffs have demonstrated a likelihood of success on the merits of their RFRA claims and remanding for consideration of the remaining preliminary injunction factors).
The Sixth Circuit, in a unanimous panel decision, held that the Kennedys lack standing as individuals to bring RFRA claims that arose from an obligation of their closely-held corporation. The Sixth Circuit agreed with the government that the shareholder standing rule, under which shareholders of a corporation cannot bring claims intended to redress injuries to a corporation, barred the Kennedys from bringing a RFRA claim stemming from a legal obligation belonging to Autocam. The Sixth Circuit also held that the Kennedys could not bring a RFRA claim in their individual capacities. Once again relying on well-established principles of corporate separateness, the Sixth Circuit stated, “[t]he Kennedys’ actions with respect to Autocam are not actions taken in an individual capacity, but as officers and directors of the corporation.”
The Sixth Circuit then turned to Autocam’s claims. On appeal, the government argued that Autocam’s claims should be dismissed because the company is not a “person” capable of “religious exercise” under RFRA. The Sixth Circuit noted that “[t]his is a matter of first impression in our court and the subject of a recent split among our sister courts.” Compare Hobby Lobby (holding “as a matter of statutory interpretation ... Congress did not exclude for-profit corporations from RFRA’s protections”) with Conestoga (“Since [a for-profit, secular corporation] cannot exercise religion, it cannot assert a RFRA claim.”). The Sixth Circuit, disagreeing with the Tenth Circuit’s en banc decision in Hobby Lobby, sided with the Third Circuit in holding that Autocam was not a “person” capable of “religious exercise” under the RFRA. Accordingly, the panel affirmed the district court’s denial of Autocam’s motion for a preliminary injunction.
Given the existing split among the Circuit courts, it is becoming more and more likely that the Supreme Court will agree to review the constitutionality and enforceability of the contraception mandate.
Contact: Alex Kipp