By Mike Dorf
Yesterday the Supreme Court granted a petition for rehearing in Liberty University v. Geithner, asking the Fourth Circuit--which had previously rejected this challenge to the Affordable Care Act on the ground that it was barred by the Tax Anti Injunction Act--to consider the case again in light of the June ruling upholding the ACA.
Why send the case back rather than just let it die? Well, for one thing, the Supreme Court's ruling in June effectively reverses the Fourth Circuit's holding with respect to the Tax Anti Injunction Act. On remand the Fourth Circuit will initially have to determine whether there is any reason to interpret the challenge to the employer mandate differently from the challenge to the individual mandate when it comes to timing.
On the merits, it is nearly impossible to imagine the Fourth Circuit holding that the ACA exceeded the affirmative powers of Congress. In addition to the taxing power argument that prevailed in the Supreme Court for the individual mandate, the employer mandate can likely also be sustained under the Commerce Clause. The five Justices who voted against sustaining the individual mandate in June did so because they thought the Commerce Clause does not include the power to mandate participation in commerce by people who are not currently engaged in commerce. But of course an employer is already engaged in commerce, or at least in "economic activity," to use the term that the Court's cases favor.
So the Liberty University case does not hold out any promise of a wholesale reconsideration of the ACA decision. Still, there remain two claims on the merits in Liberty University that were not addressed by the Supreme Court's merits decision. LU makes two kinds of religion claims.
First, LU argues that the ACA impermissibly discriminates in favor of some religions and in favor of some grounds for exemption from the individual and employer mandates, but against other religions. This discrimination, LU argues, violates both the Establishment Clause and the Free Exercise Clause of the First Amendment. Although Employment Division v. Smith held that general laws do not trigger any heightened judicial scrutiny merely because they happen to burden religious practice, the ACA is not a general law; it is a law that contains some but not other exceptions. Thus, LU says, it must be measured by the much more demanding test for laws that contain some but not other exceptions.
Second, LU argues that even if deemed a neutral, general law, the ACA must still satisfy strict scrutiny pursuant to the Religious Freedom Restoration Act (RFRA). Readers may recall that in 1997 the Supreme Court held RFRA unconstitutional as applied to the states, but subsequent cases make clear that RFRA remains valid as a limit on the federal government. (I explained how all of this works here.)
So, does that mean that LU will get a judicially crafted religious exemption from the ACA mandates? I think that LU faces two major obstacles. Both were resolved against LU by the district court, which reached the merits.
First, the exceptions that the ACA does contain were copied from the Internal Revenue Code and, as the district court noted, all prior Establishment Clause challenges to these exceptions failed. If these provisions are non-discriminatory under the Establishment Clause, then presumably they are also non-discriminatory under the Free Exercise Clause. Indeed, the whole premise of the Smith case is that legislative accommodations are permitted, just not required. Most such accommodations will be incomplete; that's what makes them exceptions rather than different rules; yet they remain valid.
Second, the RFRA claim is weak on its face. As an initial matter, it's not clear that a university is even protected by RFRA, which talks about burdens on a "person's exercise of religion." It's true that in the O Centro case the Court allowed a church to assert the religious rights of its members, but there the law in question actually burdened the exercise of religion by those members. Here LU's claim appears to be that it itself is having its religion burdened. And that brings us to the core weakness of LU's argument: its difficulty articulating exactly how the ACA burdens religion.
The district court found that LU was not being required to fund abortion. I read a couple of press accounts of the remand yesterday in which the assertion was made that the remand will consider the validity of the mandate to provide contraception coverage, but that issue was not raised in the district court. It's possible that it would be encompassed by the broader argument LU makes, as the Administration's policy regarding contraception coverage was not set when the lawsuit was filed. In any event, in its briefs, LU appears to argue that being required to provide health insurance to employees itself violates religious beliefs--except that LU already provides health insurance to employees. So (putting aside the contraception argument) LU argues that giving employees a government-mandated package of health insurance is a violation of its religious freedom, so long as the package of government-mandated benefits differs from what LU and its employees would agree to in the absence of legislation. But without more, such a claim would potentially unravel just about any law that in any way limits the freedom of a religiously affiliated institution.
Perhaps on remand LU will present a stronger argument, but as things stand I do not foresee this challenge succeeding.