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Brandt v. Burwell

United States District Court, W.D. Pennsylvania

August 20, 2014

MOST REVEREND LAWRENCE E. BRANDT, Bishop of the Roman Catholic Diocese of Greensburg, as Trustee of the Roman Catholic Diocese of Greensburg, a Charitable Trust, ET AL., Plaintiffs,
v.
SYLVIA M. BURWELL, In Her Official Capacity as Secretary of the U.S. Department of Health and Human Services, ET AL., Defendants

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[Copyrighted Material Omitted]

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For MOST REVEREND LAWRENCE E. BRANDT, BISHOP OF THE ROMAN CATHOLIC DIOCESE OF GREENSBURG, as Trustee of the Roman Catholic Diocese of Greensburg, a Charitable Trust, THE ROMAN CATHOLIC DIOCESE OF GREENSBURG, as the Beneficial Owner of the Greensburg series of the Catholic Benefits Trust, CATHOLIC CHARITIES OF THE DIOCESE OF GREENSBURG, an affiliate nonprofit corporation of the Roman Catholic Diocese of Greensburg, ST. JOHN THE EVANGELIST REGIONAL CATHOLIC SCHOOL, an affiliate Charitable Trust of the Roman Catholic Diocese of Greensburg, Plaintiffs: John D. Goetz, LEAD ATTORNEY, Ira M. Karoll, Leon F. DeJulius, Mary Pat Stahler, Paul M. Pohl, Jones Day, Pittsburgh, PA.

For KATHLEEN SEBELIUS, in her official capacity as Secretary of the U.S. Department of Health and Human Services, THOMAS PEREZ, in his official capacity as Secretary of the U.S. Department of Labor, JACOB J. LEW, 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, U.S. DEPARTMENT OF TREASURY, Defendants: Bradley P. Humphreys, LEAD ATTORNEY, U.S. Department of Justice, Civil Division, Federal Programs, Washington, DC.

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MEMORANDUM OPINION RE: PLAINTIFFS' MOTION FOR A PERMANENT INJUNCTION

Arthur J. Schwab, United States District Judge.

I. Introduction

Within the past year, this Court has had the opportunity to consider arguments associated with injunctions filed in two other cases brought by substantially similar Plaintiffs against the same Government Defendants. See Most Reverend David A. Zubik et. al v. Secretary of the U.S. Dept. of Health and Human Services, et. al. 983 F.Supp.2d 576 (" the Zubik case" ), and Most Reverend Lawrence T. Persico et. al v. Secretary of the U.S. Dept. of Health and Human Services, et. al. 983 F.Supp.2d 576 (" the Persico case" ). The instant case, like the Zubik and Persico cases, challenges the application of the Patient Protection and Affordable Care Act (" ACA" ). Specifically, the issue before this Court is whether the Diocese of Greensburg, which is exempt from the provisions of the ACA requiring employers to provide health insurance coverage for contraceptive products, services, and counseling (" the contraceptive mandate" ), is divisible from its nonprofit, religious affiliated/related charitable and educational organizations which, under the current

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provisions, are compelled to facilitate/initiate coverage of contraceptive products, services, and counseling via the " accommodation."

On May 27, 2014, Plaintiffs in this case: Most Reverend Lawrence E. Brandt, Bishop of the Roman Catholic Diocese of Greensburg, as Trustee of the Roman Catholic Diocese of Greensburg, a Charitable Trust, the Roman Catholic Diocese of Greensburg as the Beneficial Owner of the Greensburg series of the Catholic Benefits Trust, Catholic Charities of the Diocese of Greensburg, and St. John the Evangelist Regional Catholic School filed a Complaint, in which they assert eight cases of action against Defendants: United States Departments of Health and Human Services (" HHS" ), Labor, and the Treasury and their respective Secretaries. On May 30, 2014, Plaintiffs filed a Motion for Expedited Preliminary Injunction, which this Court granted, thereby enjoining Defendants from enforcing the contraceptive mandate, as codified in 45 C.F.R. 147.130(a)(1)(iv). See doc. nos. 16, 27. The Court immediately scheduled a permanent injunction hearing.

Plaintiffs contend that the contraceptive mandate, as applied via the " accommodation," requires them to facilitate/initiate the process of providing health insurance coverage for abortion-inducing drugs, sterilization services, contraceptives, and related educational and counseling services (" contraceptive products, services and counseling" ).[1]

Plaintiffs allege that they must comply with the contraceptive mandate by July 1, 2014, or face substantial penalties. See doc. no. 1, ¶ 186. Plaintiffs also allege that their compliance with the contraceptive mandate, via the " accommodation" would require them to facilitate/initiate the process through which contraceptive products, services, and counseling would be provided to their employees and thereby violate their fundamental religious rights and liberties in violation of the Religious Freedom Restoration Act (" RFRA" ) and the First Amendment to the United States Constitution.

Having previously issued a preliminary injunction in this case (as well as preliminary and permanent injunctions in the prior two issue-identical cases, which involved similar facts -- including the same religious tenets -- the same excellent counsel, the same causes of action advanced against the same Defendants, the same legal tests, and having heard the substantially same arguments from the Parties), this Court will endeavor to adopt by reference substantial, relevant portions its prior Zubik and Persico Opinions, when appropriate, for brevity and consistency.

After careful consideration of the Plaintiffs' request for a permanent injunction, the Parties' submissions, the testimony presented during an evidentiary hearing, the hearing exhibits, and the Parties' oral arguments, the Court will issue a permanent injunction for the reasons more fully set forth herein.

II. Findings of Fact[2]

A. Plaintiffs

Plaintiffs in this case are: (1) Reverend Lawrence E. Brandt, Bishop of the Roman Catholic Diocese of Greensburg, as Trustee

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of the Roman Catholic Diocese of Greensburg, a Charitable Trust (" the Bishop" or " Bishop Brandt" ), (2) the Roman Catholic Diocese Of Greensburg as the Beneficial Owner of the Greensburg series of the Catholic Benefits Trust (the " Diocese" or " the Diocese of Greensburg" ), (3) Catholic Charities Of The Diocese Of Greensburg (" Catholic Charities" ), and (4) St. John the Evangelist Regional Catholic School (" St. John's School" ).

Plaintiffs are inter-related through their affiliation with the Roman Catholic Church and their sincerely-held religious beliefs and mission. Bishop Brandt is the spiritual leader of the Diocese of Greensburg and is responsible for the spiritual, charitable, and educational arms of that Diocese. Catholic Charities is a nonprofit corporation affiliated with the Diocese of Greensburg with a principal place of administration in Greensburg, Pennsylvania. St. John's School is a nonprofit corporation affiliated with the Diocese of Greensburg with a principal place of business in Uniontown, Pennsylvania. The Diocese of Greensburg, Catholic Charities, and St. John's School are organized exclusively for the charitable, religious and educational purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code. Doc. no. 1, ¶ ¶ 9-12.

B. Plaintiffs' Irreparable Injury

1. Injury to the Diocese

The Parties filed " Stipulations to Undisputed Fact" and " An Additional Stipulation to Undisputed Fact," all of which the Court accepts as true and incorporates as part of its own factual findings. See doc. nos. 22, 29. The first undisputed and relevant fact is the Diocese of Greensburg provides health insurance coverage to the employees of its nonprofit, religious affiliated/related entities (such as Catholic Charities and St. John's School), which are directed by the Diocese to implement the spiritual, charitable, and education mission of the Diocese.

Based up on the credible testimony of Bishop Brandt, as Trustee for the Plaintiff nonprofit, religious affiliated/related organizations, the practical results of the application of the contraceptive mandate, via the " accommodation," would be that the Diocese would be required to either:

(a) provide its nonprofit, religious affiliated/related organizations with a separate insurance policy that covers contraceptive products, services, and counseling (which the Diocese refuses to do, according to the hearing testimony) (doc. no. 1, ¶ 117-119, 126, 132, 168); or (b) decline to continue offering health coverage to their nonprofit, religious affiliated/related organizations, which would force the nonprofit, religious affiliated/related organizations to enter into their own arrangements with a health insurance provider that would arrange no-cost coverage of contraceptive products, services, and counseling. Hearing Testimony, Bishop Brandt, doc. no. 40, pg. 43-44; Barbara Sabo, doc. no. 40, p. 58-59.

Simply stated, the Court finds that the contraceptive mandate would be unequally applied to Plaintiffs and would result in a division between the Dioceses and their nonprofit, religious affiliated/related spiritual/charitable/educational organizations that fulfill portions of the Diocese's mission.

2. Injury as to Nonprofit, Religious Affiliated/Related Organizations

Based upon the credible testimony of Monsignor Raymond E. Riffle (Managing Director of Catholic Charities of the Diocese of Greensburg) and Christine Roskovensky (Principal of St. John's School), their respective declarations, and the Stipulations of the Parties (doc. nos. 22 and 29), the nonprofit, religious affiliated/related

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organizations expelled from a Diocese's health plan would be forced to choose one of the following courses of action:

(a) purchase health insurance coverage that includes contraceptive products, services, and counseling which would violate Catholic Charities' and St. John's School's sincerely-held religious beliefs, according to the trial testimony. Cardinal Dolan Deposition[3] pg. 25, lines 15-19, 23-25, pg, 26, lines 1-12;

(b) provide a self-certification to their third-party administrator (" TPA" ), thus facilitating/initiating the process by which the TPA will obtain coverage for the contraceptive products, services, and counseling for the organizations' employees (" the accommodation" [4]) which the Bishop would refuse to permit. Plaintiffs' Exhibit 10 " Self- Certification Form" ; doc. no. 1 ¶ 151;

(c) drop health insurance coverage for employees ( i.e., fail to offer " full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan" ) ( i.e., comprehensive coverage)), and be subject to annual fines of $2,000 per full-time employee. See 26 U.S.C. § 4980H(a), (c)(1); or

(d) purchase health insurance coverage for full-time employees without contraceptive products, services, and counseling, and potentially be subject to a tax penalty of $100 per day per affected beneficiary.[5] See 26 U.S.C. § 4980D(b); and Doc. no. 1, ¶ 170.

Any of these courses of action would harm the Diocese and their nonprofit, religious affiliated/related charitable and educational organizations. Potential effects of imposition of fines include: decreased donations, loss of employees to other employers, loss of services, and such fines may " close [the organizations'] doors, denying thousands in the local community its charitable services." Declaration of Monsignor Riffle (Plaintiffs' Exhibit 22), ¶ ¶ 35-36; Declaration of Christine Roskovensky (Plaintiffs' Exhibit 23), ¶ ¶ 26-27. During the Injunction Hearing, credible testimony was presented that fines related to the contraceptive mandate will compel Plaintiff nonprofit, religious affiliated/related organizations to limit services or close. Hearing Testimony, Bishop Brandt, pg. 44; Monsignor Riffle, pg. 85.

Currently, Plaintiffs are experiencing and may continue to experience increased administrative burdens, lost personnel hours, and the fear of increased insurance premiums. Deposition of Cardinal Timothy Michael Dolan (Plaintiff's Exhibit 1), pg. 40, lines 22-25, pg. 41, 1-7.

Failure to comply with the contraceptive mandate would also expose the organizations, and ultimately the Diocese, to civil actions by ERISA-covered plan participants for unpaid benefits, and enforcement

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actions by the Secretary of Labor. See 29 U.S.C. § § 1132(a)(1)(B), 1132(a)(5), and 1132(b)(3). The Secretary of HHS may impose a civil monetary penalty for failure to provide certain required coverage. 42 U.S.C. § 300gg-22(b)(2)(C)(i). Failure to pay levied fines would subject Plaintiffs to additional fines and potential property liens. See 26 U.S.C. § § 6321, 6672.

C. The Organization and Religious Mission of the Diocese

1. Organization of the Diocese

Bishop Brandt, in in his capacity as Bishop and Trustee of the Diocese of Greensburg, manages 78 parishes and their charitable trusts. Doc. no. 1, ¶ 24. The Diocese provides services throughout four counties in Southwestern Pennsylvania -- Armstrong, Fayette, Indiana, and Westmoreland -- including a Catholic population of approximately 153,000 people. Id. Bishop Brandt oversees the " multifaceted" mission of spiritual, educational, and social service to residents of the Diocese and specifically oversees the mission of social service in his role as Chairman of the Membership Board of Catholic Charities. Id.

2. Religious Mission of the Diocese includes Good Works

Plaintiffs sincerely believe that religious worship, faith, and good works are essential and integral components of the Catholic faith and constitute the core mission of the Catholic Church. Hearing testimony of Bishop Brandt, p. 23 (" . . .the service of charity in the [C]hurch is a constitutive element of the [C]hurch's mission." ).

" The Church's deepest nature is expressed in her three-fold responsibility: of proclaiming the word of God (kerygma-martyria), celebrating the sacraments (leitourgia), and exercising the ministry of charity (diakonia). These duties presuppose each other and are inseparable." Plaintiff's Exhibit 4, " Apostolic Letter Issued 'Motu Proprio' on the Supreme Pontiff Benedict XVI on the Service of Charity," pg. 1; and Plaintiff's Exhibit 1, Cardinal Dolan Deposition, pg. 36, lines 1-36, pg. 38, lines 11-13 (" That's your daily life. That's everything we do, dream, believe, breathe, wake, sleep, is our -- is our faith." ).

D. Nonprofit Religious Affiliated/Related Organizations Charitable and Educational Organizations of the Diocese

1. Role of the Bishop in the Organizations

As the head of the Diocese of Greensburg, Bishop Brandt carries out the " good works" of the Catholic Church through: educating children regardless of their religion, promoting spiritual growth (including conducting religious services, operating seminaries, and hosting religious orders), and providing community service to others regardless of the recipient's religion or other factors. Doc. No. 1, ¶ 24-26; Plaintiffs' Exhibit 25, ¶ 2. " [T]he Bishops, as successors of the Apostles, are charged with primary responsibility for carrying out in the particular Churches the service of charity[]; . . . [T]he duty of charity [is] a responsibility incumbent upon the whole Church and upon each Bishop in his Diocese . . . ." Plaintiffs' Exhibit 4, pg. 1. Bishops have a duty to prevent parishes and " diocesan structures" from taking actions at odds with the Church's teachings. Plaintiffs' Exhibit 4, Article 9, § 3 (" It is the duty of the diocesan Bishop and the respective parish priests to see that in this area the faithful are not led into error or misunderstanding; hence they are to prevent publicity being given through parish or diocesan structures to initiatives which, while presenting themselves as charitable, propose choices or methods at odds with

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the Church's teaching." ). Bishops are also responsible for " ensur[ing] that in the activities and management of these activities, the norms of the Church's universal, and particular law are respected, as well as the intentions of the faithful who made donations or bequests for these specific purposes." Plaintiffs' Exhibit 4, Article 4, § 3.

2. Catholic Schools

Education is an integral component of the Catholic faith. Doc. no. 1, ¶ 26. Hearing testimony, Bishop Brandt, pg. 26 (" [The Church operates these Catholic schools] [b]ecause there again, it's part of our mission, our mission to teach." )

The Diocese of Greensburg runs, organizes, and supervises approximately two high schools, two junior high schools, thirteen elementary schools, and various preschool programs. Doc. no. 1, ¶ 26. These schools educate approximately 2,800 students. Id. These schools are open to and serve all children, without regard to the students' religion, race, or financial condition. Doc. no. 1, ¶ 27.

The elementary schools within the Diocese are not exclusive to Catholics, and approximately 60 percent of the students at Holy Trinity School identify themselves as non- Catholic and 40 percent of the students at Conn-Area Catholic School and the Cardinal Madia Academy identify themselves as non-Catholic. Doc. no. 1 ¶ 29. The contraceptive mandate, as applied via the " accommodation" and the " exemption," will result in elementary schools within the Diocese being treated differently -- certain elementary schools within the Diocese will be exempt from compliance with the regulations, while others will not. Doc. no. 1, ¶ 30.

St. John's School is a Catholic elementary school in Uniontown, Pennsylvania that offers education for preschool through eighth grade. Doc. no. 1, ¶ 68. The " primary purpose" of St. John's School is to provide a school environment based on the values of the Catholic faith and " is an extension of the Diocese of Greensburg in educating and reinforcing the Catholic faith." Plaintiffs' Exhibit 23, Declaration of Christine Roskovensky, ¶ 7. Theology classes are held daily and are part of the age-appropriate curriculum in all grades at St. John's School. Id. Students participate in: daily prayer, seasonal devotions, sacramental preparations, Mass, service projects throughout the school year, which are also important parts of the Catholic curriculum provided by St. John's School. Id., ¶ ¶ 8-9.

St. John's School is a charitable trust affiliated with the Diocese of Greensburg and its employees are insured under the Diocesan health plan. Doc. no. 1, ¶ ¶ 75, 77. The Bishop, in his role as trustee of St. John's School, and the Diocese directly oversee the governance of St John's School. Doc. no. 1, ¶ 77. St. John's School is not exempt from the contraceptive mandate because it is not an " integrated auxiliary" under the definition in 26 C.F.R. § 1.6033-2(h), and thus, does not qualify as a " religious employer" under the exemption to the contraceptive mandate. Doc. no. 1, ¶ 76.

3. Social Service Organizations

Providing social services to others is a central tenet of the Catholic faith. Hearing Testimony, Monsignor Riffle, pg. 64-65, lines 24-25, 1-10. These " good works" are integral to the practice of the Catholic faith. Hearing Testimony, Bishop Brandt, pg. 10-11 (" . . . we are charged to have the faith and then to take that faith out of the church and live it by translating it into good works, into service for others; not just for Catholics, but also for everyone." ). Organizations that provide social services must be provided in conformity with the

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Catholic faith. Hearing Testimony, Bishop Brandt, pg. 21-22, lines 19-4 (" These organizations must be administered consistent with the tenets of the Catholic Church." ).

Consistent with the tenet of providing social services to the community at large, Catholic Charities is the primary social service agency of the Diocese of Greensburg and provides social services to the residents of its four-county community. Hearing Testimony, Monsignor Riffle, pg. 65, lines 13-16. These services are provided without regard to national origin, race, color, sex, religion, age, or disability. Id. Catholic Charities provides counseling services, adoption services, foster care services, and material assistance, among other services to the community. Hearing Testimony, Monsignor Riffle, pg. 65, lines 19-23. The material assistance services respond to about 180 telephone calls per day for food, clothing, diapers, shelter, and fuel for both for automobile and home. Hearing Testimony, Monsignor Riffle, pg. 66-67, lines 21-25, 1-3. Catholic Charities assists thousands of people annually. Hearing Testimony, Monsignor Riffle, pg. 67, lines 17-19.

E. Plaintiffs' Employee Health Insurance Coverage

1. Religious Components of Employee Health Care

The sanctity of human life from conception to natural death and the dignity of all persons are central tenets of the Catechism of the Catholic Church. Hearing Testimony, Bishop Brandt, pg. 10, lines 13-17. The Catholic Church believes that health care is a basic right because of the sanctity and dignity of human life. See Cardinal Dolan Deposition (Plaintiffs' Exhibit 1, doc. no. 39-1), pg. 28, lines 19-23; Hearing Testimony, Bishop Brandt, pg. 27, lines 10-18.

The Catholic Church also believes that contraception and abortion are prohibited, and Catholics cannot facilitate/initiate, directly or indirectly, the provision of abortions. Cardinal Dolan Deposition (Plaintiffs' Exhibit 1, doc. no. 39-1), pg. 12, lines 11-16 (Abortion-inducing drugs, sterilization and contraceptives " are intrinsically evil." ); Plaintiffs' Exhibit 3, " Ethical and Religious Directives for Catholic Health Care Services, United States Conference of Catholic Bishops November 17, 2009," ¶ ¶ 45, 52 (" Abortion (that is, the directly intended termination of pregnancy before viability or the directly intended destruction of a viable fetus) is never permitted. Every procedure whose sole immediate effect is the termination of pregnancy before viability is an abortion, which, in its moral context, includes the interval between conception and implementation of the embryo. Catholic health care institutions are not to provide abortion services, even based upon the principle of material cooperation. In this context, Catholic health care institutions need to be concerned about the danger of scandal[6] in any association with abortion providers." ).

This belief necessarily prohibits providing, subsidizing, initiating, or facilitating insurance coverage for abortion-inducing drugs, sterilization services, contraceptives, and related educational and counseling services. Declaration of Monsignor Larry Kulick, doc. no. 17-3, ¶ ¶ 12-16 (" One outgrowth of belief in human life and dignity is Plaintiffs' well-established belief that " [h]uman life must be respected and protected absolutely from the moment

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of conception . . . ." Furthermore, Plaintiffs adhere to Catholic teachings that prohibit any action which " render[s] procreation impossible" and which, more specifically, regard direct sterilization as " unacceptable." ); Plaintiffs' Exhibit 3, doc. no. 39-3, pg. 28, ¶ 52 (" Catholic health institutions may not promote or condone contraceptive practices but should provide, for married couples and the medical staff who counsel them, instruction both about the Church's teaching on responsible parenthood and in the methods of natural family planning." ).

2. Diocese of Greensburg and the Catholic Benefits Trust

The Diocese of Greensburg operates a self-insured health plan through the insurance obtained through the Catholic Benefits Trust (" Trust" ). Complaint, doc. no. 1, ¶ 33; and Stipulation to Undisputed Facts, doc. no. 22, ¶ 1. The Trust was formed in June 2013 by an agreement between the Diocese of Greensburg, the Diocese of Altoona-Johnstown, and the Diocese of Pittsburgh (the " Trust Agreement" ), in an effort to pool resources with regard to health benefits. Id. The Trust was formed by the Diocese of Pittsburgh converting its Catholic Employers Benefits Plan Delaware Trust to a Delaware statutory trust and expanding the Trust to include the Dioceses of Altoona-Johnstown and Greensburg. Id.

The three Dioceses are the Beneficial Owners of the Trust, which is split into three series: the Greensburg series, the Altoona-Johnstown series, and the Pittsburgh series. Complaint, doc. no. 1, ¶ 34; Stipulation to Undisputed Facts, doc. no. 22, ¶ 1. Each Diocese is the sole " Beneficial Owner" and sole beneficiary of its respective series. Id. Thus, Plaintiff Diocese of Greensburg is the sole Beneficial Owner and sole beneficiary of the Greensburg series of the Trust. Id.

The Trust functions as the insurance company underwriting the covered employees' medical costs with all funding coming from each respective Diocese and its covered affiliates. Complaint, doc. no. 1, ¶ 36; Stipulation to Undisputed Facts, doc. no. 22, ¶ 1. Approximately 600 employees at the Diocese of Greensburg and its " various related affiliated entities" are eligible for health coverage through the Trust. Complaint, doc. no. 1, ¶ 39; Stipulation to Undisputed Facts, doc. no. 22, ¶ 1. Of those 600 employees, approximately 400 employees participate and thus, the total number covered by the Trust plan amounts to 800 -- when dependants of covered employees are included in the count. Id.

The health care plan offered through the Catholic Benefits Trust is administered by TPAs. Complaint, doc. no. 1, ¶ 37; Stipulation to Undisputed Facts, doc. no. 22, ¶ 1. The Trust offers two health plan options (" lay basic" and " lay premium" ) for the employees of the Diocese of Greensburg itself, Catholic Charities, and all other Diocesan-affiliated entities within the Diocese such as St. John's School. Complaint, doc. no. 1, ¶ ¶ 38, 41; Declaration of Charles Quiggle[7], doc. no. 17-6, ¶ 6; Stipulation to Undisputed Facts, doc. no. 22, ¶ 1.

Consistent with the teachings of the Catholic Church, all of the Diocesan employee health plan and prescription options offered through the Trust, including those for its nonprofit, religious affiliated/related organizations, such as Catholic Charities, do not include coverage for abortion-inducing drugs, contraceptives, or sterilization, except when medically necessary. Declaration

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of Charles Quiggle, doc. no. 17-6, ¶ 9; Stipulation to Undisputed Facts, doc. no. 22, ¶ 1.

The Diocesan health plans offered to lay employees of the Diocese and lay employees of its affiliates (such as Catholic Charities and St. John's School), are not " grandfathered" and therefore, do not meet the ACA's definition of a " grandfathered" plan.[8] Declaration of Charles Quiggle, doc. no. 17-6, ¶ 10; Stipulation to Undisputed Facts, doc. no. 22, ¶ 1. The next plan year for these health care plans began on July 1, 2014, and if this Court had not entered the Preliminary Injunction, Plaintiffs would have to have been prepared to comply with the regulations including the contraceptive mandate. Complaint, doc. no. 1, ¶ 40; Declaration of Charles Quiggle, doc. no. 17-6, ¶ ¶ 11, 13; Stipulation to Undisputed Facts, doc. no. 22, ¶ 1.

3. Trust Agreement -- See doc. no. 1, ¶ ¶ 46-49 and doc. no. 22, ¶ 1.

The Trust Agreement provides that " each Director" of the Board of Directors of the Trust shall be " appointed by the Bishop of each Diocese that is or becomes a Beneficial Owner" of the Trust. The Board of Directors is then responsible for " [t]he management of the Trust[.]" Thus, the Bishop is required to appoint a Director to the Board of the Trust with the knowledge that, under the contraceptive mandate, the Director must then allow the Trust directly to facilitate provision of the objectionable services for accommodated entities. The Bishop knows that his appointee will be forced to violate the Catholic faith.

While " all powers to manage the business and affairs of the Trust and each Series shall be exclusively vested in the Board and the Board may exercise all powers of the Trust[,]" " a majority of the Beneficial Owners may amend [the Trust] Agreement in writing at any time and thereby broaden or limit the Board's power and authority[.]" Accordingly, while the Board of Directors manages the daily affairs of the Trust, the Dioceses through their respective Bishops have ultimate decision-making authority and ultimately are forced directly to facilitate provision of the objectionable services to the employees of accommodated entities within the Trust.

The Diocese, as operator and sole Beneficial Owner of the Greensburg series of the Trust, decides whether an entity may continue to participate in the Trust. The

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Trust Agreement provides that " [e]ach Beneficial Owner may allow such Diocesan Entities to benefit in such Series in respect of which such Beneficial Owner is the holder of the sole interest in accordance with the terms and conditions established by such Beneficial Owner in consultation with its advisors."

Because accommodated, non-grandfathered entities, like Plaintiff Catholic Charities and Plaintiff St. John School, currently participate in the Trust, the Diocese will directly facilitate coverage of the objectionable services for the employees of these accommodated entities if the Diocese permits these entities to continue to participate in the Trust. Thus, the Diocese now faces the decision of whether to expel these accommodated entities -- i.e., Catholic Charities and St. John's School -- from the Trust.

The Diocese, as sole beneficial owner, also is responsible for any fines incurred by accommodated entities like Catholic Charities and St. John's School as a result of non-compliance with the contraceptive mandate. Under the Trust Agreement, " [a] particular Series shall be charged with the liabilities of that Series, and all expenses, costs, charges ...


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