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Northwest OH Legal Blog

Tuesday, May 23, 2017

WHAT PLACE WILL NEIL GORSUCH HOLD IN U.S. BENEFITS HISTORY?

Judge Neil Gorsuch was confirmed on April 7, 2017 as the 113th Justice of the Supreme Court.  Coming from the 10th Circuit Court of Appeals, Judge Gorsuch fills the late-Justice Antonin Scalia’s seat.  Since Judge Gorsuch has been labeled a conservative, many employee benefits professionals wonder how he will affect future cases related to retirement and health plans. Gorsuch, age 49, takes a disciplined, cautious approach and rejects expansive views of employment laws and administrative agencies’ authority. He has often ruled to strike down government regulations but has defended religious freedoms consistently.

Gorsuch has ruled twice against the Affordable Care Act’s contraceptive coverage rules. In the Burwell v. Hobby Lobby case at the 10th U.S. Circuit Court of Appeals, he took the part of Hobby Lobby, an employer that sought an exemption to the requirement that they provide contraceptive coverage based on religious grounds. The Supreme Court Justices also favored Hobby Lobby in their final decision and opened the door for privately owned companies to opt out of contraceptive coverage on religious grounds.  In his concurring opinion in the Hobby Lobby case while on the 10th Circuit, he noted that the RFRA, "does perhaps its most important work in protecting unpopular religious beliefs, vindicating the nation’s longstanding aspiration to serve as the refuge of religious tolerance."

Gorsuch dissented from the Tenth Circuit in the Little Sisters of the Poor Home for the Aged v. Burwell.  In that case, the Tenth Circuit judges ruled against the Little Sisters of the Poor and forced them to participate in initially including contraceptive devices and drugs in their health care plan.  In his dissent, Judge Gorsuch noted that The Religious Freedom Restoration Act (RFRA) stressed the importance of religious tolerance and the protection of everyone to freely live out their faith.   When this case reached the Supreme Court, the lower court opinions that went against the religious freedom of the Little Sisters of the Poor were reversed and the lower courts’ reasoning could not be used as precedent in the future. Further, the Court disallowed the government to impose taxes or penalties for failure to provide relevant notices annually that certified an organization’s religious objection to providing contraceptive coverage. Additionally, when supporting religious freedom, the new Justice additionally noted that, since the RFRA does not define what a “person” who deserves religious liberty is, that the religious freedom portions of the RFRA could also apply to corporations. 

Among the pivotal cases concerning retirement plans that Justice Gorsuch may decide is whether church-affiliated retirement plan sponsors are covered by and subject to the Employee Retirement Income Security Act (ERISA).  Lower court rulings determined that ERISA does apply to church-affiliated defined benefit plan sponsors but ERISA Section 4(b)(2) exempts such plans from most ERISA requirements. These lower court rulings came in response to class action lawsuits that were filed against large hospital systems affiliated with the Catholic Church.   However, since Judge Gorsuch was not confirmed in time to hear the oral arguments for this decision (they were heard by the Supreme Court in late March) and new Justices often do not participate in cases that have already been heard but not ruled upon, he may not participate in this decision unless a tie breaker is needed.  If Gorsuch is needed to break a tie, re-arguments for this significant case (dubbed “Dignity Health”) may be held.  However, there is no bright line rule that forbids Judge Gorsuch from participating on any case and espousing a strong work ethic and passion for the legal system, he may be furiously reading transcripts on Oral Arguments and may easily replace Justice Scalia during the most tumultuous period the Supreme Court has faced.

Update: Decisions made by the Supreme Court the week of April 11 included a footnote that Justice Neil Gorsuch didn’t participate. However, he did sit on the bench when the decisions involving stays of execution for two Arkansas death row inmates were made shortly after April 17, 2017.  It appears that his first major case will pertain to a challenge by a school sponsored by a Missouri Church regarding its exclusion from a state program that provides public funds to cushion playgrounds with ground up tires because of a Missouri constitutional provision that prohibits the diversion of public moneys to religious institutions. A decision in the church’s favor might further progress in allowing the use of state moneys to pay for private and religious schooling in many states.   Further, this decision may be a foreshadowing of how the Court will rule on whether church plans will be subject to ERISA. 


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