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Catholic Diocese of Peoria v. Kathleen Sebelius

January 3, 2013

CATHOLIC DIOCESE OF PEORIA, PLAINTIFF,
v.
KATHLEEN SEBELIUS, IN HER OFFICIAL CAPACITY AS SECRETARY OF THE U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES,
HILDA SOLIS, IN HER OFFICIAL CAPACITY AS SECRETARY OF THE U.S. DEPARTMENT OF LABOR, TIMOTHY GEITHNER, IN HIS OFFICIAL CAPACITY AS SECRETARY OF THE U.S. DEPARTMENT OF TREASURY,
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES, U.S. DEPARTMENT OF LABOR, AND
U.S. DEPARTMENT OF TREASURY, DEFENDANTS.



The opinion of the court was delivered by: James E. Shadid Chief United States District Judge

E-FILED Friday, 04 January, 2013 11:45:21 AM Clerk, U.S. District Court, ILCD

ORDER and OPINION

Facts

The Plaintiff , Catholic Diocese of Peoria ("Diocese"), is a community of Roman Catholic parishes, schools, and outreach organizations, guided by Bishop Daniel R. Jenky, that not only provides pastoral care and spiritual guidance for nearly 250,000 Catholics in and around Peoria, Illinois, but also serves individuals without regard to their religion through its schools and charitable programs. The Diocese carries out its mission both on its own and through the work of its affiliated corporations.

Defendants are departments, officials, and executives of the United States. They are the U.S. Department of Health and Human Services ("HHS"), Kathleen Sebelius in her official capacity as Secretary of HHS, the U.S. Department of Labor ("DOL"), Hilda L. Solis in her official capacity as Secretary of DOL, U.S. Department of Treasury, and Timothy F. Geithner in his official capacity as Secretary of Treasury. Collectively, Defendants are the departments and officials responsible for adopting, administering, and enforcing the regulations to which the Diocese objects.

The Diocese claims that, pursuant to the Patient Protection and Affordable Care Act ("ACA"), Defendants have promulgated various rules related to preventive care ("Rules") that force the Diocese to violate its sincerely held religious beliefs by requiring them to provide health plans to their employees that include and/or facilitate coverage for abortion-inducing drugs, sterilization and contraception.

The Diocese operates a self-insured and self-funded health plan. That is, the Diocese does not contract with a separate insurance company that provides health care coverage to its employees. Instead, the Diocese itself functions as the insurance company underwriting its employees' medical costs. Consistent with Church teachings, this plan does not cover abortion-inducing drugs, sterilization, or contraceptives. In limited circumstances, the Diocese's pharmacy carrier can override the exclusion of certain sterilization procedures or drugs commonly used as contraceptives if a physician certifies that they were prescribed with the intent of treating certain medical conditions, not with the intent to prevent pregnancy. The Diocese's plan is administered by a third-party administrator, Humana.

The Diocese acknowledges that they are a "grandfathered" health plan and exempt from the preventive care requirements of ACA, but states that such plans cannot undergo substantial change after March 23, 2010, for fear of losing their grandfathered status.

This case is one of forty (40) lawsuits which challenge the ACA's preventive services regulations regarding their requirements relating to contraception. *fn1

The ACA, signed into law on March 23, 2010, instituted a variety of health care reforms. Relevant to this lawsuit, the ACA requires group health care plans provide no-cost coverage for "preventive care' and screening for women. 42 U.S.C. 300gg-13(a)(4). The ACA did not, however, specifically define "preventive care" and delegated that to the Health Resources and Services Administration ("HRSA"), an agency of HHS. On August 1, 2011, HRSA issued guidelines that defined the scope of women's preventive services. As set forth above, the preventive care coverage requirements do not apply to grandfathered health plans, and certain religious employers are exempt from any requirement to provide coverage for contraceptive services.

On February 10, 2012, and as clarified on August 15, 2012, final regulations concerning religious organizations were posted and HHS established a temporary enforcement "safe-harbor" for group health plans with religious objections to contraceptive coverage that do not qualify for the religious employer exemption. During this safe harbor period, Defendants will not take any enforcement action against any employer or group health care plan with respect to a nongrandfathered plan that fails to cover some or all of the recommended contraceptive services. The safe harbor provides an additional year for these group health plans to comply with HRSA guidelines regarding contraceptive coverage.

On March 21, 2012, Defendants announced their intentions to propose amendments that "would establish alternative ways to fulfill the requirements of the ACA while still protecting religious organizations from having to contract, arrange, or pay for contraceptive coverage. 77 Fed. Reg. 16,501, 16,503. The Defendants now seek dismissal of the complaint pursuant to 12(b)(1) arguing lack of jurisdiction, specifically on the issue of standing and ripeness.

Standard of Review- Motion to Dismiss

Courts have traditionally held that a complaint should not be dismissed unless it appears from the pleadings that the plaintiff could prove no set of facts in support of her claim which would entitle her to relief. See Conley v. Gibson, 355 U.S. 41 (1957); Gould v. Artisoft, Inc., 1 F.3d 544, 548 (7th Cir. 1993). Rather, a complaint should be construed broadly and liberally in conformity with the mandate in Federal Rules of Civil Procedure 8(f). More recently, the Supreme Court has phrased this standard as requiring a showing sufficient "to raise a right to relief beyond a speculative level." Bell Atlantic Corp. v. ...


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