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Ozinga v. Burwell

United States Court of Appeals, Seventh Circuit

December 27, 2016

Timothy Ozinga, et al., Plaintiffs-Appellants,
Sylvia Mathews Burwell, in her official capacity as Secretary, United States Department of Health and Human Services, et al., Defendants-Appellees.

          Argued November 1, 2016

         Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:13-cv-03292 - Thomas M. Durkin, Judge.

          Before Easterbrook, Rovner, and Sykes, Circuit Judges.

          ROVNER, Circuit Judge.

         Ozinga Brothers, Inc., is a family-owned firm supplying ready-mix concrete products and services to builders primarily in the Chicago metropolitan area. The company, along with its owners and senior managers (collectively, "Ozinga") filed this suit in 2013, challenging the so-called contraception mandate embodied in federal regulations implementing a provision of the Patient Protection and Affordable Care Act of 2010 that requires non-exempt and non-grandfathered group health plans to provide specified preventative-health services to plan participants without cost-sharing. See 42 U.S.C. § 300gg-13(a)(4); 45 C.F.R. § 147.130(a)(1)(iv); 29 C.F.R. § 2590.715-2713(a)(1)(iv); 26 C.F.R. § 54.9815-2713(a)(1)(iv); (women's preventative service guidelines). Employers who refuse to provide those services are subject to substantial fines. See 26 U.S.C. § 4980H. Ozinga regards certain of the contraceptives covered by the mandate as potential abortifacients, the use of which is proscribed by the firm owners' and managers' religious tenets. Invoking the Religious Freedom Restoration Act ("RFRA"), 42 U.S.C. § 2000bb, et seq., among other statutory and constitutional provisions, Ozinga sought declaratory and injunctive relief barring the enforcement of the mandate.

         By the time Ozinga filed suit in 2013, the government had established an accommodation for certain religious employers that provided for alternate means of ensuring employee access to the contraceptive services specified by the mandate without payment or direct involvement by an objecting employer. 76 Fed. Reg. 46, 621, at 46, 623 (Aug. 3, 2011); 77 Fed. Reg. 8725 (Feb. 15, 2012); see also 78 Fed. Reg. 39, 870, at 39, 873-882 (July 2, 2013) (simplifying and clarifying criteria identifying employers eligible for exemption); 45 C.F.R. §147.131(a) & b(2)(i). However, the accommodation was not then available to any for-profit employers like Ozinga Brothers. Ozinga's complaint highlighted the discrepancy. R. 111105-08, 112-16, 170-76, 227-28, 245. At the same time, the complaint made no allegation suggesting that an extension of the accommodation to for-profit firms would be insufficient to resolve their religious objections to the mandate.

         Ozinga's suit was part of an initial wave of lawsuits challenging the application of the contraception mandate to for-profit firms. In the first such cases to reach this court, we held that the objecting closely-held firms were entitled to preliminary injunctions barring enforcement of the mandate. We concluded that the firms were likely to prevail on their claims under the RFRA that the mandate substantially burdened the religious rights of both the firms and their owners, see § 2000bb-l(a), and that the government was unlikely to show that it had employed the least restrictive means of furthering its asserted interest in increasing access to contraceptives, see § 2000bb-l(b). Korte v. Sebelius, 528 F.App'x 583 (7th Cir. 2012) (non-precedential decision) ("Korte I") (granting interim relief pending appeal); Grote v. Sebelius, 708 F.3d 850 (7th Cir. 2013) (same); Korte v. Sebelius, 735 F.3d 654 (7th Cir. 2013) ("Korte 11") (holding plaintiff companies were entitled to preliminary injunctive relief).

         Without opposition from the government, and in light of our decisions in Korte I and Grote, the district court granted the Ozingas' motion for a preliminary injunction against enforcement of the mandate against Ozinga Brothers; it also stayed further proceedings pending our resolution of the merits of the Korte and Grote appeals.

         This first wave of litigation culminated in the Supreme Court's decision in Burwell v. Hobby Lobby Stores, Inc., 134 S.Ct. 2751 (2014). The Court concluded that the contraception mandate, as applied to closely-held private firms whose owners objected on religious grounds to one or more forms of contraceptives covered by the mandate, substantially burdened the exercise of religion by those owners-and by extension, their companies-in view of the fines to which they were subject if they did not comply with the mandate. Id. at 2768-79. The Court reasoned that the mandate was not the least restrictive means of furthering the government's interest in making contraceptives widely available, given that the government could (among other alternatives), extend the existing accommodation for religiously-affiliated, not-for-profit employers to closely-held for-profit employers. Id. at 2782-83. The Court left open the question whether that accommodation in its particulars "complies with RFRA for purposes of all religious claims." Id. at 2782; see also id. at 2763 n.9.

         In the wake of the Hobby Lobby decision, the government in July 2015 extended the accommodation to closely held for-profit employers who object to the mandate on religious grounds. 80 Fed. Reg. 41, 318, at 41, 322-328 (July 14, 2015); see 45 C.F.R. § 147.131(b)(2)(ii).

         In the meantime, a second wave of litigation challenging the contraception mandate had commenced in federal courts around the country. This round of litigation was instigated by various not-for-profit employers to whom the accommodation had been available from the start. These employers contested the adequacy of the accommodation, which imposes certain procedural requirements on an objecting employer, to protect their religious interests. This court rejected the challenges brought by these not-for-profit employers in multiple decisions. See Univ. of Notre Dame v. Burwell, 786 F.3d 606 (7th Cir. 2015), cert, granted, ], vacated, & remanded, 136 S.Ct. 2007 (2016); Wheaton Coll. v. Burwell, 791 F.3d 792 (7th Cir. 2015); Grace Schools v. Burwell, 801 F.3d 788 (7th Cir. 2015), cert, granted, j. vacated, & remanded, 136 S.Ct. 2010, 2011 (2016). Ultimately, when the Supreme Court took up this line of challenges in Zubik v. Burwell, 136 S.Ct. 1557 (2016) (per curiam), the Court declined to reach the merits of the issues presented. Instead, the Court remanded these cases to the lower courts in order to afford the parties an opportunity to see if the accommodation could be modified in such a way as to address the religious concerns of the objecting employers while continuing to meet the government's interest in making contraceptive services available to employees. The government solicited public comments on possible modifications, 81 Fed. Reg. 47, 741 (July 22, 2016); the period for such comments has closed, and potential revisions to the accommodation are under advisement.

         This second wave of litigation challenging the sufficiency of the accommodation was in full swing in September 2015 when the district court in this case considered what form of permanent injunctive relief to order in view of the Supreme Court's decision in Hobby Lobby. The parties presented the court with competing proposals: the plaintiffs sought a broad injunction precluding enforcement of any regulation promulgated in furtherance of the mandate, even one which included the accommodation that had been extended to not-for-profit employers. The government, by contrast, asked the court to enter an injunction limited to the original version of the mandate, which of course had made no accommodation available to for-profit employers. The government's proposal would leave open the option of applying the mandate to a closely-held employer like Ozinga Brothers, so long as it provided the company with the type of accommodation it had made available to not-for-profit religious employers. The court decided to adopt the government's proposal and entered a permanent injunction limited to the mandate as it existed prior to the Supreme Court's decision in Hobby Lobby. But the injunction provided that "nothing herein prevents plaintiffs from filing a new civil action to challenge the accommodations or any other post-Hobby Lobby changes in statute or regulation." R. 54 at 2-3. The court's order accompanying the injunction set forth the court's rationale for choosing the injunction proposed by the government over the broader injunction proposed by Ozinga. R. 53.

         Ozinga contends on appeal that the district court abused its discretion and otherwise erred in entering the more limited injunction proposed by the government rather than the injunction that Ozinga itself proposed. Ozinga reasons that the injunction as entered provides no lasting relief to the plaintiffs because it is limited to a state of affairs pre-dating Hobby Lobby-one that no longer exists. Additionally, it contends that the district court's injunction does not comply with Federal Rule of Procedure 65(d)(1)(A), in that it contains an insufficient recitation of the factual and legal bases for the limited relief that the court ordered. Ozinga adds that the court did not meaningfully exercise its discretion in choosing the government's proposed injunction over its own, as evidenced by the lack of findings supporting its decision. None of these objections is meritorious.

         The district court appropriately confined the injunctive relief it ordered to the particular challenge presented by Ozinga's complaint. See J.P. Morgan Chase Bank, N.A. v. McDonald,760 F.3d 646, 653 (7th Cir. 2014). Ozinga's suit was focused on the mandate as it was originally adopted, with no accommodation addressed to closely held f or-prof it employers like Ozinga Brothers who object to the mandate on religious grounds. Once the Supreme Court sustained the objections of Ozinga and similarly-situated employers in Hobby Lobby, the regulations challenged in the complaint were revised to extend the accommodation previously available only to objecting not-for-profit employers to objecting for-profit, closely-held companies like Ozinga Brothers. At that point, the plaintiffs had achieved the goal that their complaint sought: the availability of an accommodation that (ostensibly) removed them from the provision of objectionable contraceptive services to their employees. As the plaintiffs themselves would subsequently assert in their fee petition, they were "wholly successful in obtaining all the relief they sought" in the litigation. R. 82 at 21. Nothing in their complaint presented any question as to the adequacy of the accommodation itself. Nor at any time during the pendency of the suit had the plaintiffs sought to amend their complaint to challenge the accommodation, notwithstanding the second wave of litigation by other employers presenting such challenges. The court thus had no reason to broaden the injunction to address a potential concern about the adequacy of the accommodation when the plaintiffs themselves had not presented such a concern to the court. It was enough that the injunction preserved the ...

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