Ruling: Corporations bound to give contraception coverage

10/25/2013

CINCINNATI — A federal appeals court on Thursday reaffirmed its decision that for-profit corporations can’t avoid a mandate under the Affordable Care Act to provide contraception coverage for female employees, this time in a case involving Lenawee County’s Eden Foods Inc.

Eden and its sole shareholder, Michael Potter, sought to block enforcement of the law, arguing that it conflicts with the Roman Catholic owner’s “deeply held religious beliefs” and that tax penalties for noncompliance would endanger the natural foods company.

The Clinton, Mich., firm has 128 employees, well over the threshold of 50 triggering compliance with President Obama’s signature health-care law. It says it could be taxed at the rate of $2,000 a year per employee for noncompliance.

But the Cincinnati-based U.S. 6th Circuit Court of Appeals, as it did last month in a case involving Autocam Inc., of Kentwood, Mich., ruled that a private, secular, for-profit corporation cannot exercise religious beliefs and must, therefore, comply with the law.

“By incorporating his business, Potter voluntarily forfeited his rights to bring individual actions for alleged corporate injuries in exchange for the liability and financial protections otherwise afforded him by utilization of the corporate form,” wrote Senior Judge Martha Craig Daughtrey, a 1993 appointee of Democratic President Bill Clinton.

“Adoption of Potter’s argument that he should not be liable individually for corporate debts and wrongs, but still should be allowed to challenge, as an individual, duties and restrictions placed upon the corporation would undermine completely the principles upon which our nation’s corporate laws and structures are based,” she wrote. “We are not inclined to so ignore law, precedent, and reason.”

Judge Daughtrey was joined by Judges R. Guy Cole, Jr., a 1995 Clinton appointee, and Judge Helene N. White, a 2008 appointee of Republican President George W. Bush. It was a different three-judge panel from that which decided the Autocam case. The issue, although not necessarily this case or the Autocam case, will ultimately be decided by the U.S. Supreme Court. The high court has been asked to hear an appeal of a similar case involving Oklahoma-based Hobby Lobby.