HVAC Distributor Wins Battle Against Obamacare Mandate
Court Sides with Manufacturer on Contraceptive Coverage Issue
|Hercules Industries’ ownership on the factory floor (left to right): Jim Newland, Paul Newland, Bill Newland, and Christy Ketterhagen (Newland). All are owners, although Christy is not active in the business. (Photo courtesy of Bruce Ellefson, Alliance Defending Freedom)|
A federal district court ruled in favor of Hercules Industries, a Denver-based HVAC manufacturer and distributor owned by a Catholic family, issuing a permanent injunction exempting the company from enforcement of the Affordable Care Act’s contraceptive mandate.
The mandate, which is part of the Patient Protection and Affordable Care Act (also known as the Health Care Law or Obamacare), requires group health plans to include all Food and Drug Administration (FDA)-approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity. This includes the FDA-approved Plan B, also known as the “morning-after pill,” ulipristal acetate, or the “week-after pill,” and various other intrauterine devices (IUDs).
Because these contraceptives utilize artificial means to prevent the implantation of a human embryo or remove an implanted embryo from a uterine wall, the Catholic Church, in some cases, views these preventive options as forms of abortion.
Hercules Industries, as an employer with more than 50 employees, is required under the Health Care Law to make a qualifying group health care plan available to its employees. As reported in The NEWS Aug. 20, 2012, the company’s lawsuit did not challenge the requirement that it provide a qualifying health care plan — just the contraceptive mandate.
Companies that do not provide a qualifying health care plan face financial penalties through the Internal Revenue Service (IRS).
“Like any business owner, we operate our business based on a set of principles, and our principles happen to be rooted in our Catholic faith,” said Andy Newland, president, Hercules Industries. “The government’s plan required coverage of items we feel are contrary to our faith. We felt [a lawsuit] was necessary, and we’re obviously very pleased the court agreed with our contention that this was an invasion of our ability to operate our business in accordance with the principles of our faith.”
In issuing its permanent injunction on March 16, the U.S. District Court for the District of Colorado rejected the Obama administration’s argument that the administration must sign off on the injunction before the court can issue it.
“This proposed arrogation of authority offends the very structure of our government and ignores the exclusive jurisdictional authority of the U.S. District Court to provide such relief,” the court wrote in its opinion in the case, Newland v. Burwell.
“Notwithstanding [the administration’s] suggestion to the contrary, the injunction is entered under the jurisdictional authority of the U.S. District Court and it remains in full force and effect unless and until modified or dissolved by the District Court upon a showing of just cause or by order entered by the Court of Appeals following review.”
The Newland family, owners of Hercules Industries, was represented by Alliance Defending Freedom (ADF) attorneys. ADF describes itself as an alliance-building, nonprofit legal organization that advocates for the right of people to freely live out their faith.
“Americans should be free to live and work according to their faith without fear of punishment by the government,” said Matt Bowman, senior legal counsel, ADF. “In this country, citizens have always had the freedom to believe, the freedom to express those beliefs, and the freedom to operate their businesses in accordance with those beliefs. The Supreme Court upheld that time-honored principle in its Conestoga/Hobby Lobby decision just last year, and the district court has rightly done the same.”
ADF attorneys and allied attorneys represented Conestoga Wood Specialties in its 2014 victory at the U.S. Supreme Court. In that case, the court held that religious owners of closely held corporations can use their religious beliefs to determine what medical treatments will be covered by company health plans.
Some dissenting opinions of that case pointed out that ruling did not take into account the religious beliefs of a corporation’s employees. Newland said, however, that has not been an issue at Hercules.
“Our employees have been overwhelmingly supportive,” he said. “Not everyone may agree with the morality, but, in general, people appreciate standing strong on issues and principles that are important to you, so we’ve heard a lot of support.”
Newland added the company has always provided a very generous health care plan for its employees, long before the Affordable Care Act came along.
“I think many people surmise that we’re just doing this because we don’t like Obamacare in general,” Newland said, “but that’s certainly not the case. We’re willing to comply with everything we need to, it’s just that there was one small provision we felt was worth standing up against.”
Family-owned and operated, Hercules Industries’ board of directors is comprised of siblings Paul, James, and William Newland, and Christine Ketterhagen. The company was founded in Denver in 1962 as a manufacturer and wholesale distributor of HVAC sheet metal products and equipment. Today, the company employs 400 individuals in four manufacturing facilities and 12 sales and distribution centers in the Western U.S.
Publication date: 4/27/2015