Sep 15, 2011

In 1999, California passed a statute obligating employers who provide prescription drug benefits as part of a health insurance plan to include benefits for prescription contraception. The statute provides an exemption for "religious employers," defined as those that have as their purpose the inculcation of religious values and primarily employ and serve persons who share their religious tenets. Catholic Charities ("CC") does not meet this definition because the vast majority of its employees and beneficiaries are not Catholic, but it claimed that it was nonetheless entitled to an exemption from the statute under the Free Exercise and Establishment Clauses of the federal and state constitutions. In March 2002, AU filed an amicus brief with the California Supreme Court arguing that the statute is permissible because it does not intrude into religious autonomy in that it does not require government officials to decide religious questions; the statute should not be deemed to impose a "substantial burden" on the exercise of religion because CC can opt to pay a stipend for contraceptive coverage rather than purchasing the coverage itself and can still issue statements and disclaimers against the use of contraception, and because an employee’s decision to use certain insurance is not attributable to CC; and any burden on CC must be balanced against the burden that would otherwise be placed on innocent third party employees. On March 1, 2004, the Court rejected CC’s claims, finding that the statute does not violate the Establishment Clause because it does not call for government officials to decide religious questions and the exclusion for "religious employers" is a permissible accommodation of religion; the statute does not violate the federal Free Exercise Clause because it is neutral and generally applicable; and even if it does create a substantial burden (which the Court did not decide), it does not violate the state Free Exercise Clause, which calls for strict scrutiny even with respect to neutral laws, because it is narrowly tailored to address the compelling interest of eliminating gender discrimination. CC asked the U.S. Supreme Court to review the decision, but the Court denied review in early October 2004.