Bethany Krajelis May 22, 2013, 5:03pm

CHICAGO – The 7th Circuit Court of Appeals heard arguments Wednesday in two cases, including one from the Southern District of Illinois, that challenge Obamacare’s birth-control coverage mandate.

These lawsuits – Cyril B. Korte, et al. v. Kathleen Sebelius, et al. and Grote Industries LLC et al. v. Sebelius, et al. –mark the first of a handful of religious challenges to the Affordable Care Act (ACA) that have been set for arguments over the next month in four different jurisdictions.

In both of the cases before the 7th Circuit on Wednesday, the plaintiffs argued that the ACA mandate, which requires employers to provide employee health benefits that include coverage for contraceptives, violates their rights under the Religious Freedom Restoration Act (RFRA).

They claim the mandate basically makes them choose between complying with something that goes against their religious beliefs as Catholics or paying fines they assert would devastate their businesses.

The federal government, however, has argued that it is in the public’s interest for women to have access to contraceptives and that an employer’s religious beliefs should not get in the way of that.

Edward White, senior counsel at the American Center for Law & Justice (ACLJ) in Michigan, presented arguments Wednesday on behalf of Cyril and Jane Korte and their Highland company, Korte & Luitjohan Contractors (K&L),  the plaintiffs in the Southern District of Illinois suit.

Alisa Klein, an attorney in the civil division of the U.S. Department of Justice, argued on behalf of the federal government in the Korte case, as well as the one brought by Grote Industries in the Southern District of Indiana.

Prior to hearing arguments in these cases, the majority of the 7th Circuit panel– Judges Joel M. Flaum and Diane S. Sykes —granted the plaintiffs’ injunction requests, determining there was a “reasonable likelihood” they would prevail on their religious argument.

The dissenting justice, Judge Ilana Diamond Rovner, argued that the plaintiffs were not entitled to an injunction because they had not shown that requiring their business to comply with the mandate imposed a substantial burden on the exercise of their religious beliefs.

Wednesday’s arguments in these two cases were peppered with questions from all three of the judges and included several back-and-forth discussions between Klein and Sykes, who at one point told the government’s lawyer that her argument “doesn’t hold up.”

On behalf of the Kortes, White told the federal appeals panel that if his clients chose to adhere to their religious beliefs and not provide contraceptive coverage to their employees, they would face an annual penalty of about $730,000, a price tag he dubbed as a substantial burden.

“We’re not dealing here with Ford Motor Co.,” White said, adding that the Kortes are two people who make most of their business decisions “at the kitchen table.”

He said the Kortes own an 88 percent stake in their company, which he said is “an extension of their beliefs,” and as such, should not be penalized for choosing to run their business in a way that adheres to the Catholic doctrine.

Saying that it’s not “far-fetched” for a corporation to have a conscious, White told the judges that the federal government can’t give corporations the right to make judgment calls over certain issues, but then bar them from doing so when it comes to religious matters.

During her arguments before the 7th Circuit, Klein stressed to the panel that Congress could have included an exemption for corporations in the RFRA, but did not do so.

Granting the plaintiffs’ requests for exemptions from the birth-control mandate, she said, would “depart from bedrock principles” that corporations are distinguishable from their owners.

“I understand the temptation to do it, but it’s wrong,” Klein said.

Saying that the purpose of RFRA was to expand free exercise rights, Sykes told Klein “you’re argument doesn’t hold up.”

Klein said that giving exemptions to for-profit corporations  “would be an enormous step to take.”

In the other case argued before the 7th Circuit on Wednesday, plaintiffs’ attorney Matthew S. Bowman told the panel that the Grote family owns 100 percent of Grote Industries and should not be prevented from running its business according to the owners' Catholic beliefs.

Diamond Rovner asked Bowman why he argued in his briefs that it would be illogical to distinguish between not-profit and for-profit corporations. He told her when Congress passed RFRA, it didn’t draw a distinction between the two.

She also asked him if “Wal-Mart, Apple Computer or Juicy Couture” tried to make the same religious argument his client made in seeking an exemption from the ACA mandate, whether courts should take those companies’ religious claims as truth.

Bowman told her courts could certainly inquire about the companies' sincerity.

Following up on that line of questioning, Flaum later presented Bowman a hypothetical question: If Grote Industries was given the exemption and relatives of the Grote family later inherit the company, would the federal government be able to check back later to see if the new owners’ faith remains the same?

“Possibly,” he said, adding that “I think an inquiry would be fair.”

The three other cases challenging the birth-control mandate that have been scheduled for arguments will be heard on Thursday (Hobby Lobby Stores v. Sebelius, 10th Circuit), May 30 (Conestoga Wood Specialties Corp. v. Sebelius, 3rd Circuit) and June 11 (Autocam Corp. v. Sebelius, 6th Circuit.)

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