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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

Case No. 13-cv-11296

Paul D. Borman
United States District Judge

MERSINO MANAGEMENT COMPANY;
KAREN A. MERSINO, Owner and
Shareholder of Mersino Southwest, LLC and
Mersino Enterprises, Inc.,
and RODNEY A. MERSINO, Owner and
Shareholder of Mersino Management
Company, Global Pump Company, LLC and
Mersino Dewatering, Inc.,

Plaintiffs,

v.

KATHLEEN SEBELIUS, Secretary of the
United States Department of Health and
Human Services; UNITED STATES
DEPARTMENT OF HEALTH AND
HUMAN SERVICES; SETH D. HARRIS,
Acting Secretary of the United States
Department of Labor; UNITED STATES
DEPARTMENT OF LABOR; JACK LEW,
Secretary of the United States Department of
the Treasury; and UNITED STATES
DEPARTMENT OF THE TREASURY,

______________________________________/

Defendants.

OPINION AND ORDER DENYING PLAINTIFFS’ MOTION FOR TEMPORARY

RESTRAINING ORDER AND PRELIMINARY INJUNCTION

Before the Court is Plaintiffs Mersino Management Company, Karen Mersino and Rodney

Mersino’s (“Mersino”) Motion for Temporary Restraining Order and Preliminary Injunction. (ECF

No. 10.) Defendants Kathleen Sebelius, United States Department of Health and Human Services

(“HHS”), Seth D. Harris, United States Department of Labor (“DOL”), Jack Lew, and United States

Department of the Treasury (“Treasury”) filed a response (ECF No. 16) and Plaintiffs filed a reply

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(ECF No. 19). On May 23, 2013, the American Civil Liberties Union and the American Civil

Liberties Union Fund of Michigan filed a Motion for Leave to File Amicus Curiae Brief, which the

Court GRANTS. (ECF No. 17.) The Court also GRANTS Plaintiffs’ Motion for Leave to File

Response Brief in Opposition to the ACLU’s Amicus Brief. (ECF No. 24.) The Court held a

hearing on May 29, 2013. Having heard oral argument, and having considered all of the briefs, for

the reasons that follow, the Court DENIES the motion for preliminary injunctive relief.1

I.

BACKGROUND

Plaintiffs, a for-profit, secular corporation and its two shareholders, filed this action on

March 22, 2013, challenging regulations issued under the Patient Protection and Affordable Care

Act (Pub. L. 111-148, March 23, 2010, 124 Stat. 119) and the Health Care and Education

Reconciliation Act (Pub. L. 111-152, March 30, 2010, 124 Stat. 1029) (collectively the “Affordable

Care Act” or the “ACA”). (Compl. ¶ 2.) The regulations at issue here, adopted pursuant to the

ACA, require that a group health plan and a health insurance issuer, with certain exceptions for

grandfathered plans not relevant here, offering group or individual health insurance coverage, must

provide coverage to women, without requiring cost-sharing, that includes “preventive care and

1 The Court notes as an initial matter Plaintiffs’ lack of urgency in filing this action over a year and
a half after the contraceptive coverage regulations were issued and further waiting more than two
months after filing the Complaint in this action to seek injunctive relief. Delays in seeking
injunctive relief indicate to the Court that harm is not imminent and that speedy relief is not
warranted. See, e.g., Huron Mountain Club v. U.S. Army Corps of Eng’rs, No. 12-cv-197, 2012 WL
3060146, at *4 (W.D. Mich. July 25, 2012) (“[A] long delay in seeking relief indicates that speedy
action is not required.”); Fund for Animals v. Frizzell, 530 F.2d 982, 987 (D.C. Cir. 1975) (denying
preliminary injunction where plaintiff waited forty-four days after regulations were issued to seek
injunctive relief). The failure to move forward with urgency in this action is all the more
unexplainable given that Plaintiffs’ counsel filed a nearly identical claim in this court over a year
ago on behalf of other similarly situated plaintiffs. See Legatus v. Sebelius, No. 12-cv-12061 (E.D.
Mich. May 7, 2012).

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screenings . . . as provided for in comprehensive guidelines supported by the Health Resources and

Services Administration [“HRSA”] . . .” 42 U.S.C. § 300gg-13(a)(4). At the time that the ACA was

adopted, there were no existing HRSA guidelines and the HHS commissioned the Institute of

Medicine (“IOM”) to provide recommendations for the HRSA guidelines.2 The IOM published a

report that recommended that plans be required to cover “[a]ll Food and Drug Administration

approved contraceptive methods, sterilization procedures, and patient education and counseling for

all women with reproductive capacity.” Id. FDA approved contraceptive methods include oral

contraceptive pills, diaphragms, injections and implants, emergency contraceptive drugs (“Plan B”

and “ella”) and intrauterine devices.3 On August 1, 2011, HRSA adopted the IOM

recommendations, see 76 Fed. Reg. 46,621, and on February 15, 2012, HHS, DOL and Treasury

published rules finalizing the HRSA guidelines, see 77 Fed. Reg. 8725 (Feb. 15, 2012) (Referred

to herein as “the contraceptive coverage regulations” or the “contraceptive coverage mandate”.)

The contraceptive coverage regulations contain a religious employer exemption, but that

exemption does not cover secular, for-profit companies whose owners have strong religious

objections to birth control. Contraceptive coverage by secular, for-profit employers must be

provided pursuant to the regulations beginning with plan years that start after August 1, 2012.4

2 See http://www.hrsa.gov/womensguidelines; 76 Fed. Reg. 46,621 (Aug. 3, 2011).



See Birth Control Guide, FDA Office of Women’s Health, available at
3
http://www.fda.gov/ForConsumers/ByAudience/ForWomen/FreePublications/ucm313215.htm

4 The Executive Branch subsequently provided certain religiously-affiliated hospitals and non-
profits a moratorium until August 1, 2013 to begin to comply with the rule. On June 28, 2013, HHS,
Labor and Treasury issued final regulations that accommodate these organizations but require the
entities that insure them to pick up the tab for contraceptive coverage, concluding that doing so is
at the very least “cost-neutral” for the issuers. 77 Fed. Reg. 16501, 16502 (March 21, 2012). See
http://www.ofr.gov/OFRUpload/OFRData/2013-15866_PI.pdf

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Plaintiffs plan year began on June 1, 2013.

The contraceptive coverage regulations, and in particular those that mandate coverage for

abortifacients, conflict with the beliefs held by some religious groups, in particular Catholics, who

believe that life begins at conception and, a belief held by a smaller group, that practicing artificial

birth control is intrinsically evil and in conflict with God’s plan to create human life through the

union of a man and a woman. Plaintiffs Karen and Rodney Mersino hold these beliefs and allege

that the contraceptive coverage mandate forces them to pay for contraceptives for their employees,

in violation of these deeply held religious beliefs.

Plaintiff Mersino Management Company (“Mersino Management”) is incorporated under

the laws of the State of Michigan and is treated as a subchapter S Corporation for income tax

purposes.5 Mersino Management has 29 employees. (Compl. ¶¶ 22, 24.) Mersino Management has

60,000 authorized shares of common stock, divided into two classes: (1) 12,000 shares of Class A

voting common stock; and (2) 48,000 shares of Class B nonvoting common stock. (ECF No. 20,

Ex. 3, Mersino Management Articles of Incorporation.) Holders of Class A Voting Common Stock

hold the exclusive power to elect the Board of Directors of Mersino Management and to vote on any

matter which must be submitted to a vote of the shareholders of a corporation or which is submitted

to a vote of the shareholders of the corporation. Together, Plaintiffs Rodney and Karen Mersino

own more than 92% of the Voting Common Stock. (ECF No. 20, Ex. 1, May 23, 2012 Affidavit of

5 The factual allegations are derived from (1) Plaintiffs’ Complaint (ECF No. 1); (2) the
Declarations and Affidavits filed in support of Plaintiffs’ Motion for Temporary Restraining Order
and Preliminary Injunction (ECF No. 10, Exs. 1, 2); (3) the Supplementary Exhibits and from the
Supplementary Exhibits in Support of Plaintiffs’ Motion for Restraining Order and Preliminary
Injunctive Relief filed by Plaintiffs on May 24, 2013 (ECF No. 20, Supplementary Exhibits); (4) the
Supplementary Exhibit filed by Plaintiffs on May 30, 2013 (ECF No. 23); and (5) the Exhibit filed
by Plaintiffs on June 5, 2013 in Response to the Court’s May 29, 2013 Order (ECF No. 26).

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Amy Glenn ¶ 6.) Plaintiffs Karen and Rodney Mersino are responsible for setting all policies

governing the conduct of Mersino Management. (ECF No. 10, Ex. 1 ¶ 9, Ex. 2, ¶¶ 7, 8.). This

includes the implementation and maintenance of Mersino Management’s self-insured, employee

benefits health plan. (ECF No. 20, Ex. 2, May 23, 2013 Declaration of Rodney A. Mersino, Jr. ¶

7.)

Plaintiff Rodney A. Mersino owns 526 shares of Class A Voting Common Stock in Mersino

Management, which represents 52% of the outstanding Class A Voting Common Stock. Plaintiff

Karen A. Mersino owns 412 shares of Class A Voting Common Stock in Mersino Management,

which represents 41% of the outstanding Class A Voting Common Stock in Mersino Management.

(Glen Affidavit ¶¶ 4-5.) Plaintiffs Rodney and Karen Mersino’s son, Rodney A. Mersino, Jr., owns

the remaining 8% of the Class A Voting Common Stock in Mersino Management. Rodney Mersino,

Jr. has consented to his parents bringing this action on behalf of Mersino Management. (ECF No.

20, Ex. 2, Rodney A. Mersino, Jr. Decl. ¶ 8.) Of the 48,000 authorized shares of Class B Nonvoting

Common Stock, Mersino Management has issued only 14,954 shares to Plaintiffs Rodney and Karen

Mersino, Rodney Mersino, Jr., and in nominal amounts to Marcus Mersino (Rodney and Karen’s

son), Christopher Mersino (Rodney and Karen’s son) and David Tersigni, (Rodney Mersino’s

cousin). (ECF No. 26, Ex. 1, June 5, 2013 Declaration of Rodney A. Mersino ¶¶ 8-14.)

Mersino Management is the management company, and provides health insurance under its

self-funded plan, for Mersino Dewatering, Inc. (“Dewatering”) (110 employees), Mersino

Enterprises, Inc. (“Enterprises”), Global Pump, LLC (“Global Pump”) (34 employees) and Mersino

Southwest, LLC (“Southwest”) (11 employees). (Compl. ¶¶ 24-29.) In their decades of leadership

of Mersino Management companies, Karen and Rodney Mersino “have remained unwaveringly

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dedicated to their values of family, hard work and a faith in God and each other.” (Compl. ¶ 39.)

Plaintiffs Karen and Rodney Mersino have dedicated their lives and resources to Catholicism and

furthering Catholic philanthropic causes and are guided in all that they do by their religious faith.

(Compl. ¶¶ 41-43.)

Plaintiffs Karen and Rodney Mersino strive to follow in their business practices the tenets

of their Catholic, which prevent them from participating in, paying for, training others to engage in,

or otherwise supporting contraception, sterilization, abortion, and abortifacients. (Compl. ¶¶ 53-54,

77-78.) Plaintiffs believe that human life is sacred from the moment of conception and therefore

believe that abortion ends a human life and is a grave sin. (Compl. ¶ 71.) Plaintiffs further believe

that human sexuality serves two purposes: to unite husband and wife and to generate new life. Thus,

they believe that “any action which either before, at the moment of, or after sexual intercourse, is

specifically intended to prevent procreation, whether as an end or as a means,” including

contraception and sterilization, is a grave sin. (Compl. ¶¶ 71-72.) According to their religious

beliefs, Plaintiffs cannot provide, fund, or participate in health care insurance which covers artificial

contraception, sterilization, abortion, or abortifacients, or related education and counseling, without

violating their deeply held religious beliefs. (Compl. ¶ 83.)

Prior to the issuance of the contraceptive coverage regulations, Plaintiffs engineered a self-

funded insurance policy with a third party administrator, a non-Mersino entity, Administration

Systems Research Corporation, which specifically excluded contraception, sterilization, abortion,

and abortifacients, and exempts Plaintiffs from paying, contributing, or supporting contraception,

sterilization, abortion and abortifacients for others. Plaintiffs obtained these exclusions due to their

deeply held religious beliefs and have never offered insurance which included coverage for

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contraception, sterilization, abortion, and abortifacients. (Compl. ¶¶ 56-58, 81.) Administration

Systems Research Corporation uses the following medical insurance carriers for Plaintiffs’ plan:

Private Healthcare Systems (PHCS), Health Alliance Plan (HAP), Physicians Care Health Plans.

(Compl. ¶¶ 60, 79.) Employee Health Insurance Management, a non-Mersino entity, is the

Plaintiffs’ plan administrator for prescription drug coverage. (Compl. ¶ 61.) Plaintiffs Karen and

Rodney Mersino and their Plaintiff Mersino Management companies ensured that their insurance

policy contained these exclusions to reflect their deeply held religious beliefs. (Compl. ¶ 62.)

Plaintiffs allege that under the provisions of the ACA, Plaintiff Mersino Management and

its related companies Dewatering, Enterprises, Global Pump and Southwest constitute a “single

employer” and therefore employee more than 50 full time employees, bringing them within the

definition of employers required to provide insurance coverage under the ACA. (Compl. ¶¶ 103-

107.) Plaintiffs do not qualify for any non-profit or religious entity exemptions under the ACA and

do not qualify as a “grandfathered” health care plan. (Compl. ¶¶ 109-116.) Plaintiffs became

subject to the contraceptive coverage mandate when their plan year began on June 1, 2013. (Compl.

¶¶ 180-181.) Accordingly, Plaintiffs are subject to the contraceptive coverage regulations now and

are directly confronted with complying or paying fines/taxes, when they become due, in excess of

$6,716,000 per year. (Compl. ¶¶ 120-123.)

Plaintiffs assert that the contraceptive coverage regulations unconstitutionally coerce

Plaintiffs to violate their deeply-held religious beliefs under threat of directly violating their

consciences, in addition to the threat of monetary fines and penalties. (Compl. ¶ 87.) Complying

with the mandate requires a direct violation of Plaintiffs’ religious beliefs because it would require

Plaintiffs to pay for and assist others in paying for or obtaining not only contraception but also

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abortion because certain drugs and devices, such as the “morning after pill,” “Plan B,” and “ella,”

come within the definition of approved contraceptive devices under the ACA despite their known

abortifacient mechanisms of action. (Compl. ¶ 92, 135.)

On March 22, 2013, Plaintiffs filed their Complaint against Defendants Sebelius, HHS, DOL,

and Treasury asserting twelve separate claims. Plaintiffs assert in their motion for preliminary

injunctive relief that the contraceptive coverage mandate violates their rights under (1) the Religious

Freedom Restoration Act, 42 U.S.C. § 2000bb et seq. (“RFRA”) (Count VIII) and (2) the First

Amendment to the United States Constitution, Free Exercise Clause (Counts I, II, III). Plaintiffs

believe that the mandate forces them to violate a foremost tenet of their Catholic faith which holds

that “any action which either before, at the moment of, or after sexual intercourse, is specifically

intended to prevent procreation, whether as an end or as a means – including contraception,

sterilization, abortion, and abortifacients – is a grave sin.” (Compl. ¶ 3.)

II.

PRELIMINARY INJUNCTION STANDARDS

A preliminary injunction is “an extraordinary remedy that may only be awarded upon a clear

showing that the plaintiff is entitled to such relief.” Winter v. Natural Resources Defense Counsel,

Inc., 555 U.S. 7, 22 (2008) (citation omitted). Plaintiff bears the burden of demonstrating

entitlement to preliminary injunctive relief and the burden is substantial. Leary v. Daeschner, 228

F.3d 729, 739 (6th Cir. 2000). Such relief will only be granted where “the movant carries his or her

burden of proving that the circumstances clearly demand it.” Overstreet v. Lexington-Fayette

Urban County Gov’t, 305 F.3d 566, 573 (6th Cir. 2002). When considering a motion for injunctive

relief, the Court must balance the following factors: (1) whether the movant has a strong likelihood

of success on the merits, (2) whether the movant would suffer irreparable injury absent preliminary

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injunctive relief, (3) whether granting the preliminary injunctive relief would cause substantial harm

to others, and (4) whether the public interest would be served by granting the preliminary injunctive

relief. “These factors are not prerequisites, but are factors that are to be balanced against each other.”

Id. “The proof required for the plaintiff to obtain a preliminary injunction is much more stringent

than the proof required to survive a summary judgment motion.” Leary, 228 F.3d at 739. “Although

no one factor is controlling, a finding that there is simply no likelihood of success on the merits is

usually fatal.” Gonzales v. Nat’l Bd. of Medical Examiners, 225 F.3d 620, 625 (6th Cir. 2000).

III.

ANALYSIS

The issue before the Court, whether to grant preliminary injunctive relief to a closely-held

for-profit secular corporation and its owners who challenge application of the contraceptive

coverage regulations to them under RFRA and/or the Free Exercise Clause, has divided courts across

the country.6 Jurists have weighed in on all sides of the debate and there is little doubt that the

Supreme Court will ultimately decide the issue. Until that time, this Court is bound to follow the

lead of this Circuit, if one can be discerned, and from there to determine whether Plaintiffs are

clearly entitled to the extraordinary relief that they seek in this case.

In Autocam Corp. v. Sebelius, No. 12-2673, 2012 U.S. App. LEXIS 26736 (6th Cir. Dec. 28,

2012), the Sixth Circuit denied a motion for an injunction pending appeal of United States District

6 It merits mentioning that other circuits, principally as relevant here the Seventh Circuit, employ
a different standard than the Sixth Circuit when analyzing claims for injunctive relief. The Seventh
Circuit has adopted a “sliding scale” standard that only requires “some likelihood of success on the
merits,” and a full scale balancing of the other factors. See, e.g., Korte v. Sebelius, No. 12-3841,
2012 WL 6757353, at *2 (7th Cir. Dec. 28, 2012). The Sixth Circuit, unlike the Seventh Circuit,
requires a showing of a clear showing of a likelihood of success on the merits and considers that
factor to be nearly dispositive. “Although no one factor is controlling, a finding that there is simply
no likelihood of success on the merits is usually fatal.” Gonzales v. Nat’l Bd. of Medical Examiners,
225 F.3d 620, 625 (6th Cir. 2000).

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Judge Robert Jonker’s denial of a preliminary injunction in Autocam Corp. v. Sebelius, No. 12-cv-

1096, 2012 WL 6845677 (W.D. Mich. Dec. 24, 2012). Plaintiffs in Autocam, like the Mersinos,

challenged the application of the contraceptive mandate to their closley-held business under RFRA

and the Free Exercise Clause. In denying preliminary injunctive relief, Judge Jonker found that

plaintiffs were unlikely to prevail on their First Amendment Free Exercise claim because the

contraceptive coverage regulations are a neutral law of general applicability and that they were

unlikely to prevail on their RFRA claim because (1) the burden on the corporate plaintiffs, who had

the option to restructure from a self-insured plan to an insured plan, was too indirect to be

“substantial,” and (2) the individual plaintiffs, who were not compelled to do anything under the

contraceptive coverage mandate, accepted limits on their own conduct by choosing the corporate

form and any burden on them individually was too attenuated to be substantial. 2012 WL 6845677,

at *7.

In deciding whether to grant the Autocam plaintiffs an injunction pending appeal, the Sixth

Circuit observed the wide divergence in opinion among the district courts on the constitutionality

of the application of the contraceptive coverage regulations to closely-held for profit entities and

noted that no circuit court had then considered the claims. The Sixth Circuit found it worth noting,

however, that the Supreme Court, in an opinion issued by Justice Sotomayor sitting individually as

Circuit Justice for the Tenth Circuit, denied an injunction pending appeal of the Tenth Circuit’s

denial of an injunction in Hobby Lobby Stores, Inc. v. Sebelius, No. 12-6294, 2012 WL 6930302

(10th Cir. Dec. 20, 2012), pending appeal of the district court decision denying preliminary

injunctive relief in Hobby Lobby Stores, Inc. v. Sebelius, 870 F. Supp. 2d 1278 (W.D. Oklahoma

2012). Hobby Lobby Stores, Inc. v. Sebelius, 133 S.Ct. 641 (2012).

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In Hobby Lobby, Justice Sotomayor, noting the more demanding standard for obtaining an

injunction under the All Writs Act, denied injunctive relief finding that “whatever the ultimate

merits of the applicants’ claims, their entitlement to relief is not ‘indisputably clear.’” 133 S.Ct. at

643 (quoting Lux v. Rodrigues, 561 U.S. __, __, 131 S.Ct. 5, 6, 177 L.Ed.2d 1045 (2010)). Making

reference to the Supreme Court’s decision in United States v. Lee, 455 U.S. 252 (1982), Justice

Sotomayor observed:

This Court has not previously addressed similar RFRA or free exercise claims
brought by closely held for-profit corporations and their controlling shareholders
alleging that the mandatory provision of certain employee benefits substantially
burdens their exercise of religion. Cf. United States v. Lee, 455 U.S. 252, 102 S.Ct.
1051, 71 L.Ed.2d 127 (1982) (rejecting free exercise claim brought by individual
Amish employer who argued that paying Social Security taxes for his employees
interfered with his exercise of religion).


133 S.Ct. at 643. Justice Sotomayor further noted “that lower courts have diverged on whether to

grant temporary injunctive relief to similarly situated plaintiffs raising similar claims . . . and no

court has issued a final decision granting permanent relief with respect to such claims.” Id.7

The Sixth Circuit denied plaintiffs an injunction pending appeal in Autocam, conceding that

the divergence of opinion among the district court “establishes the possibility of success on the

merits,” but concluding that plaintiffs had “not demonstrated more than a possibility” and denying

the injunction “in light of the lower court’s reasoned opinion in this case and the Supreme Court’s

recent denial of an injunction pending appeal in Hobby Lobby [Stores, Inc. v. Sebelius, 133 S.Ct. 641

(2012)].” 2012 U.S. App. LEXIS 26736, at *2. The Sixth Circuit expressly concluded in Autocam

7 Since then, as discussed infra, the Tenth Circuit sitting en banc recently reversed the district court,
finding a likelihood of success on the merits and irreparable harm, and remanding for further
consideration of the two remaining preliminary injunction factors. Hobby Lobby Stores, Inc. v.
Sebelius, __F.3d__, 2013 WL 3216103 (10th Cir. June 27, 2013).

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that “it is not clear that the contraceptive requirement violates the plaintiffs’ constitutional rights.”

Id. at *4. A “possibility” of success falls short of a “likelihood,” and this aspect of Autocam cannot

be ignored in this Court’s analysis of the Plaintiffs’ entitlement to preliminary injunctive relief.

Notably, the Sixth Circuit denied Autocam’s motion to reconsider its opinion denying an

injunction pending appeal. Autocam Corp. v. Sebelius, No. 12-2673 (6th Cir. Dec. 31, 2012). The

motion to reconsider brought to the panel’s attention three supplemental authorities that Autocam

argued supported its request for an injunction: (1) the Seventh Circuit’s opinion in Korte v. Sebelius,

12-3841 (7th Cir. Dec. 28, 2012) (discussed infra); (2) a temporary restraining order issued by the

district court in Conestoga Wood Specialties v. Sebelius, 12-6744 (E.D. Pa. Dec. 28, 2012) (the

district court in Conestoga subsequently denied preliminary injunctive relief to the plaintiffs; see

discussion infra); and (3) United States District Judge Lawrence Zatkoff’s opinion in Monaghan v.

Sebelius, 12-cv-15488 (E.D. Mich. Dec. 30, 2012) granting preliminary injunctive relief to a closely-

held for profit corporation challenging application of the contraceptive coverage regulations. Even

in light of these additional authorities, the Sixth Circuit declined to reconsider its original order

denying an injunction pending appeal in Autocam.

While the legal landscape has changed some since the Sixth Circuit denied injunctive relief

pending appeal in Autocam, the new contours do not dictate the result in this case. At the time that

the Sixth Circuit issued its opinion in Autocam, it noted that no circuit had then addressed similar

claims. That is no longer the case. In Conestoga Wood Specialties Corp. v. Sec’y of U.S. Dep’t of

Health and Human Servs., No. 13-1144, 2013 WL 1277419 (3d Cir. Feb. 8, 2013), the Third Circuit

denied a stay pending appeal of the district court’s denial of injunctive relief to a closely-held for-

profit corporation challenging the contraceptive coverage mandate in Conestoga Wood Specialties

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Corp. v. Sebelius, __F. Supp. 2d__, 2013 WL 140110 (E.D. Pa. Jan. 11, 2013). In denying the stay,

the Third Circuit concluded that plaintiffs had failed to demonstrate a likelihood of success on the

merits and adopted the district court’s reasoning and conclusions that: (1) “as a secular, for-profit

corporation, Conestoga has no free exercise rights under the First Amendment, and is not a ‘person’

under the RFRA;” (2) “the ACA regulations are generally applicable because they are not

specifically targeted at conduct motivated by religious belief, and are neutral because the purpose

of the regulations is to promote public health and gender equality instead of targeting religion” and

therefore “need only be ‘rationally related to a legitimate government objective’ to be upheld;” and

(3) plaintiffs’ “claims under the RFRA were not likely to succeed because the burden imposed by

the regulations does not constitute a ‘substantial burden’ under the RFRA” in so far as “any burden

imposed by the regulations would be too attenuated to be considered substantial and that any burden

on the Hahns' ability to exercise their religion would be indirect.” 2013 WL 1277419, at *2 (internal

citations omitted). Argument on the appeal was heard on May 30, 2013 (Judges Jordan, Vanaskie

and Cowen). No opinion has issued.

Unlike the Third Circuit in Conestoga, the Seventh Circuit in Korte v. Sebelius, No. 12-3841,

2012 WL 6757353 (7th Cir. Dec. 28, 2012) (consolidated with Grote Indus. LLC v. Sebelius, 13-077

(7th Cir.) for purposes of appeal) granted plaintiffs an injunction against HHS Secretary Sebelius

pending appeal of the district court’s denial of their motion for preliminary injunctive relief. The

Seventh Circuit concluded that the plaintiffs “established both a reasonable likelihood of success

on the merits and irreparable harm, and that the balance of harms tips in their favor.” Id. at *2.

Describing the “religious-liberty violation” at issue as “the coerced coverage of contraception,

abortifacients, sterilization, and related services, not—or perhaps more precisely, not only—in the

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later purchase or use of contraception or related services,” the Seventh Circuit concluded that the

contraception mandate imposed a substantial burden on the plaintiffs’ exercise of their rights,

establishing a likelihood of success on their claim under RFRA. Id. at *3 (emphasis in original).

Also finding irreparable harm and the balance of harms tipping in plaintiffs’ favor, the Seventh

Circuit granted the motion for injunction pending appeal. Judge Rovner dissented in Korte, in a

well-reasoned opinion that this Court discusses infra. Argument on the appeal was heard on May

22, 2013 (Judges Flaum, Rovner and Sykes). No opinion has issued.8

In the first issued opinion reaching the merits of a denial of preliminary injunctive relief in

a contraceptive coverage mandate challenge by similarly-situated plaintiffs, the Tenth Circuit sitting

en banc recently reversed the district court, finding a likelihood of success on the merits and

irreparable harm, and remanding for further consideration of the two remaining preliminary

8 Other circuits have addressed the issue and issued orders, but have provided no rationale. The
Eighth Circuit, in a one-sentence split panel decision and in a subsequent order interpreting the split
panel decision, appears to have concluded that for-profit corporations challenging the contraceptive
coverage mandate are deemed to have shown a likelihood of success on the merits, granting an
injunction pending appeal in Annex Medical, Inc. v. Sebelius, No. 13-1118, 2013 WL 1276025 (8th
Cir. Feb. 1, 2013). In Annex, the Eighth Circuit interpreted the one-sentence split panel Order in
O’Brien v. U.S. Dep’t of HHS, No. 12-3357 (8th Cir. Nov. 28, 2012), which granted a temporary
stay in a similar mandate challenge action, as tantamount to issuing a preliminary injunction. The
Eighth Circuit then enjoined enforcement of the mandate against Annex, relief that had been denied
by the district court, which had interpreted O’Brien differently because the O’Brien panel provided
no rationale for its decision. The Eighth Circuit denied motions to consolidate Annex and O’Brien,
and dates for oral argument have not been set in either case.

The D.C. Circuit, in Gilardi v. HHS, No. 13-5069 (D.C. Cir. March 21 and 29, 2013), first
denied an injunction pending appeal of the district court’s denial of preliminary injunctive relief in
a one-sentence order stating only that appellants had not met the stringent requirements for an
injunction pending appeal. Subsequently, after plaintiffs filed an emergency motion for rehearing
en banc of the denial, the D.C. Circuit granted the motion for an injunction pending appeal, also in
a one-sentence order offering no rationale for its decision. Oral argument is set for September 24,
2013 (Brown, Edwards and Randolph).

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injunction factors. Hobby Lobby Stores, Inc. v. Sebelius, __F.3d__, 2013 WL 3216103 (10th Cir.

June 27, 2013). Citing the “fundamental and longstanding principle of judicial restraint [that]

requires courts [to] avoid reaching constitutional questions in advance of the necessity of deciding

them,” the majority opinion reviewed only the corporate plaintiffs’ (Hobby Lobby and Mardel)

claim under RFRA and did not address their claim under the Free Exercise Clause. Id. at *65 n.2.

Nor did the majority reach the issue of whether the individual owners of the corporate plaintiffs (the

Greens) had standing to bring RFRA claims in their own right, because “there [was] no dispute that

relief as to Hobby Lobby and Mardel would satisfy the Greens.” Id. at *65 n.4. The majority did

conclude that Hobby Lobby and Mardel had a likelihood of success on their RFRA claim because

Hobby Lobby and Mardel are “persons” under RFRA and the contraceptive mandate placed

substantial pressure on them to violate their sincere religious beliefs, thus substantially burdening

their exercise of religion within the meaning of RFRA. Id. at *17.

The Tenth Circuit’s opinion in Hobby Lobby, fractured as it is with a majority ruling on two

preliminary injunction factors, a plurality opinion on other factors, four separate concurrences and

two separate dissents, offers cogent proof of the fact that views continue to diverge widely on these

issues. The only rulings that garnered unanimous support were (1) that Hobby Lobby and Mardel

have Article III standing to sue under RFRA and (2) that the Anti-Injunction Act did not apply to

the case. Id. at *1. A majority of five judges agreed that the district court erred in concluding that

Hobby Lobby and Mardel had not demonstrated a likelihood of success on the merits of their RFRA

claim. Id. Three judges disagreed with the majority and would have affirmed the district court on

this issue. Id. The five judge majority that agreed that the district court had erred on likelihood of

success on the merits also agreed that Hobby Lobby and Mardel had satisfied the irreparable harm

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prong of the preliminary injunction standard. Id. A four-judge plurality would have resolved the

remaining two preliminary injunction factors in favor of Hobby Lobby and Mardel and entered a

preliminary injunction, but without a majority on this issue, the case was remanded to the district

court for evaluation of the remaining two factors, i.e. the balance of the harms and the public

interest. Id.

Against this backdrop, this Court analyzes Plaintiffs’ claims, recognizing that the opinions

issued by the Third, Seventh and Tenth Circuits do not bind this Court and noting that the

divergence among the district courts, observed by the Sixth Circuit in Autocam and discussed infra,

persists. In the absence of a resolution of this issue by the Supreme Court, this Court is bound to

take direction from the Sixth Circuit which, to date, at least suggests that Plaintiffs’ claims fail to

demonstrate a likelihood of success on the merits.

A.

Likelihood of Success on the Merits

This Court interprets the Sixth Circuit’s interim opinion in Autocam, refusing to reverse the

District Court’s ruling denying a preliminary injunction, as an indication that the Sixth Circuit would

conclude that the Mersino’s have failed to establish a clear likelihood of success on the merits of

their RFRA and Free Exercise claims that would support the extreme remedy of preliminary

injunctive relief. The Sixth Circuit in Autocam based its denial of an injunction pending appeal on

(1) “the district court’s reasoned opinion,” and (2) “the Supreme Court’s recent denial of an

injunction pending appeal in Hobby Lobby.” Subsequent developments in the jurisprudence

surrounding this issue have not undercut either of these rationales. Although the Tenth Circuit

reversed the district court in Hobby Lobby, this does not undermine the significance of Justice

Sotomayor’s decision to deny an injunction, admittedly applying a much more stringent standard

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than is applicable here, but which was based her own analysis of the district court’s opinion. More

importantly, however, the logic and reasoning of Judge Jonker’s opinion in Autocam, and the

reasoning of the district courts in Gilardi v. Sebelius, __F. Supp. 2d__, 2013 WL 781150 (D.D.C.

March 3, 2013), O’Brien v. HHS, 894 F. Supp. 2d 1149 (E.D. Mo. 2012), Briscoe v. Sebelius, __F.

Supp. 2d__, 2013 WL 755413 (D. Colo. Feb. 27, 2013) and Annex Medical, Inc. v. Sebelius, No. 12-

2804, 2013 WL 101927 (D. Minn. Jan. 8, 2013), and the district court and Third Circuit in

Conestoga, supra, along with Judge Rovner’s thoughtful dissent from the Seventh Circuit’s opinion

in Korte, persuade this Court that the Mersino’s are unlikely ultimately to succeed on their RFRA

and Free Exercise claims.

1.

Plaintiffs’ claims under the Free Exercise Clause have little chance of success
on the merits.

This Court agrees with Judge Jonker that: “Plaintiffs’ claim based on the Free Exercise

Clause of the First Amendment is almost sure to fail [because] [t]he ACA’s contraceptive coverage

requirement is neutral and generally applicable.” Autocam, 2012 WL 6845677, at *5. The right to

freely practice one’s religion “does not relieve an individual of the obligation to comply” with a

“‘valid and neutral law of general applicability on the ground that the law proscribes (or prescribes)

conduct that his religion prescribes (or proscribes).’” Id. at *5 (quoting Employment Division Dept.

of Human Resources of Oregon v. Smith, 494 U.S. 872, 877 (quoting United States v. Lee, 455 U.S.

252, 263 n. 3 (1982)) (Stevens, J. concurring in the judgment). As Justice Scalia’s opinion in

Employment Division makes clear, the Free Exercise Clause of the First Amendment does not

operate to invalidate neutral laws of general applicability. The contraceptive coverage regulations

do not target a particular religious group, nor are they designed to interfere with any particular faith.

Further, they apply equally to all non-exempt, non-grandfathered plans. Autocam, 2012 WL

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6845677, at *5. See also Conestoga, 2013 WL 140110, at *9 (finding that the regulations apply to

all health plans and are not specifically targeted at conduct motivated by religious belief and that

the exemptions indicate an effort by the government to accommodate religious beliefs, not to burden

them); O’Brien, 894 F. Supp. 2d at 1162 (finding no violation of the free exercise clause because

the regulations “apply to all employers not falling under an exemption, regardless of those

employers’ personal religious inclinations”). Because the regulations are neutral and generally

applicable, and are rationally related to the stated government purposes of promoting women’s and

gender equality, Plaintiffs have failed to demonstrate a likelihood of succeeding on the merits of

their claim under the Free Exercise Clause.9

9 The June 28, 2013, final regulations issued by HHS, Labor and Treasury, reiterate the
government’s purpose in requiring contraceptive coverage without cost sharing:

The HRSA Guidelines are based on recommendations of the independent Institute
of Medicine (IOM), which undertook a review of the scientific and medical evidence
on women’s preventive services. As documented in the IOM report, “Clinical
Preventive Services for Women: Closing the Gaps,” women experiencing an
unintended pregnancy may not immediately be aware that they are pregnant, and thus
delay prenatal care. They also may be less motivated to cease behaviors during
pregnancy, such as smoking and consumption of alcohol, that pose pregnancy-related
risks. Studies show a greater risk of preterm birth and low birth weight among
unintended pregnancies. In addition, contraceptive use helps women improve birth
spacing and therefore avoid the increased risk of adverse pregnancy outcomes that
comes with pregnancies that are too closely spaced. Short interpregnancy intervals
in particular have been associated with low birth weight, prematurity, and
small-for-gestational age births. Contraceptives also have medical benefits for
women who are contraindicated for pregnancy, and there are demonstrated
preventive health benefits from contraceptives relating to conditions other than
pregnancy (for example, prevention of certain cancers, menstrual disorders, and
acne). In addition, by reducing the number of unintended pregnancies, contraceptives
reduce the number of women seeking abortions. It is for a woman and her health care
provider in each particular case to weigh any risks against the benefits in deciding
whether to use contraceptive services in general or any particular contraceptive
service.

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2.

Plaintiffs’ claims under RFRA have little likelihood of success on the merits.

Congress enacted RFRA in response to the Supreme Court’s decision in Employment

Division, Department of Human Services of Oregon v. Smith, 494 U.S. 872 (1990), which had

expressly disavowed application of the substantial burden test to free exercise claims and held that

neutral laws of general applicability are subject to rational basis review. 42 U.S.C. § 2000bb(b)(1).

(noting that the purpose of RFRA was “to restore the compelling interest test as set forth in Sherbert

v. Verner, 374 U.S. 398 (1963) and Wisconsin v. Yoder, 406 U.S. 205 (1972) and to guarantee its

application in all cases where the free exercise of religion is substantially burdened”). Pursuant to

RFRA, the government may not “substantially burden a person’s exercise of religion even if the

burden results from a rule of general applicability,” unless the burden, even though substantial, “(1)

is in furtherance of a compelling government interest; and (2) is the least restrictive means of

furthering that compelling governmental interest.” 42 U.S.C. § 2000bb-1(a)-(b). See Gonzales v.

O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 424 (2006). Plaintiff bears “the

burden of establishing the elements of a prima facie case: that application of the offensive law or

policy would substantially burden a sincere, religious exercise.” Conestoga, 2013 WL 140110, at

*9. “Once a prima facie case has been satisfied, the government bears the burden of demonstrating

a compelling interest and that the government employed the least restrictive means of carrying out

that interest.” Id. (citing O Centro, 546 U.S. 418, 428-29).

Although they concede that they do not qualify for any of the exemptions crafted by

Congress in the ACA, and concede further that they are not a “grandfathered” plan under the ACA,

Plaintiffs would have the Court conclude that Congress, in enacting RFRA, meant to create an

http://www.ofr.gov/OFRUpload/OFRData/2013-15866_PI.pdf at p. 10 (footnotes omitted).

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exemption for secular, for-profit corporations like Mersino Management from federal laws, like the

ACA, that otherwise seek to regulate secular for-profit corporate behavior. Plaintiffs invite the

Court to ignore altogether the corporate form of which they have availed themselves, and to ascribe

to Mersino Management, the corporate entity, the religious beliefs of its owners/shareholders.

Alternatively, Plaintiffs ask the Court to conclude that Rodney and Karen Mersino, although

admittedly not subject to the ACA, are nonetheless substantially burdened in the exercise of their

own religious faith by the application of the contraceptive coverage regulations to the company that

they own.

The Court concludes that Plaintiffs have not demonstrated that they are likely to succeed on

their claims because it appears more likely to the Court that Mersino Managment, as a secular for-

profit company, cannot “exercise” religion and cannot act as the alter ego of its owners in

challenging the contraceptive mandate under RFRA. Moreover, even assuming that Rodney and

Karen Mersino have standing to challenge the contraceptive coverage mandate, as individuals, the

Mersinos have not demonstrated a clear likelihood of success because the regulations do not

substantially burden them in the exercise of their individual religious beliefs.

a.

The threshold issue of standing.

Although the parties do not address the threshold issue of standing in their briefs, the Sixth

Circuit in Autocam recently asked the parties in that case for supplemental briefing on the issue of

standing. Thus, the issue seems to merit mention here. It appears to this Court that Mersino

Management, the entity required to comply with the regulations, likely has Article III standing to

challenge the contraceptive coverage mandate. See Hobby Lobby, __F.3d__, 2013 WL 3216103,

at *6 (concluding that both Hobby Lobby and Mardel have Article III standing because both face

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“an imminent loss of money, traceable to the contraceptive-coverage requirement [and] [b]oth would

receive redress if the court holds the contraceptive-coverage requirement unenforceable as to them”).

Mersino Management’s claims fail, however, on the merits, because it cannot exercise religion and

cannot act as the alter ego of its owners for purposes of asserting a RFRA claim. See discussion

infra.

Some courts addressing challenges to the contraceptive coverage mandate have addressed

the standing issue head on, but others have addressed the issue only as a merits-based challenge.

Several courts have concluded that a corporation cannot exercise religion and is not a person under

RFRA and therefore has no standing to assert a RFRA claim. Others have not addressed the

standing issue and simply concluded that a corporation cannot exercise religion and therefore has

little likelihood of succeeding on a claim under RFRA. Compare Gilardi, 2013 WL 781150, at *8

(holding that “the Freshway Corporations do not exercise religion and therefore cannot succeed on

the merits of a claim that the regulation substantially burdens their exercise of religion”) with

Briscoe, 2013 WL 755413, at *5 (holding that a secular, for-profit corporation cannot exercise or

practice religion and therefore “lack[s] standing to assert an RFRA claim that a federal regulation

burdens their “exercise of religion”). Because, as the Tenth Circuit noted in Hobby Lobby, the

corporation is required to comply with the contraceptive coverage mandate and would receive

redress if granted an injunction, it would appear to this Court that the issue is not one of Mersino

Management’s Article III standing to challenge the regulation but rather of the corporation’s ability

to state a claim under RFRA. This Court need not decide this issue because, whether framed as an

issue of standing or as merits-based challenge, the Court concludes that Mersino Management is

unlikely to succeed on its RFRA claim.

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Additionally, it does not appear likely to this Court that Mersino Management would have

Article III standing to assert a RFRA claim on behalf of its shareholders under the doctrine of

associational standing. The Court notes, as the government argues in its briefs to the Sixth Circuit,

that the doctrine of associational standing has been confined to situations where the members of the

association would (1) “otherwise have standing to bring suit on behalf of its members;” (2) “the

interests it seeks to protect are germane to the organization’s purpose;” and (3) “neither the claim

asserted nor the relief requested requires the participation of individual members in the lawsuit.”

Hunt v. Washington State Apple Adver. Comm’n, 432 U.S. 333, 343 (1977). See, e.g. Tony and

Susan Alamo Found. v. Sec’y of Labor, 471 U.S. 290, 292 (1985) (holding that non-profit religious

organization had standing to assert free exercise claim on behalf of its “associates” who were “drug

addicts, derelicts, or criminals”); NAACP v. Alabama ex rel. Patterson, 357 U.S. 449, 458 (1958)

(holding that NAACP, a nonprofit entity, could assert the rights of its members to challenge a

compulsion by the State to disclose their identities).

Karen and Rodney Mersino, who are not required individually to comply with the

regulations, do not suffer actual injury (they incur no out of pocket costs as individuals) from the

contraceptive coverage mandate that would imbue them with Article III standing to challenge the

regulations separate and apart from the corporate entity that is required to comply with the

regulations. Thus, the first prong of the associational standing analysis cannot be met here. Even

if they did have standing, as discussed infra, their claims are not likely to succeed on the merits.



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b.

Mersino Management is not likely to succeed on its claim under RFRA as a
secular, for profit company engaged in purely commercial activity.

Plaintiff Mersino Management is a secular, for-profit company engaged in the business of

water management, designing and installing bypass pumping systems of all types and sizes. See

www.mersino.com. It is not, and does not claim to be, a religious organization entitled to free

exercise protections. Cf. Hosanna-Tabor Evangelical Lutheran Church & School v. EEOC,

__U.S.__, 132 S.Ct. 694, 706 (2012) (finding that “the text of the First Amendment . . . gives special

solicitude to the rights of religious organizations”); O’Centro, 546 U.S. at 420. This Court agrees

with the district court in Conestoga that “the distinction between religious organizations and secular

corporations [is] meaningful, and decline[s] to act as though this difference does not matter.” 2013

WL 140110, at *7.

Mersino Management’s Articles of Incorporation do not mention a religious purpose, it does

not employ persons of only a particular religious faith, it does not purport to conduct religious

services as part of its business model. Indeed, Mersino Management recognizes that it does not

qualify as an exempt religious organization under the ACA, nor does its core business product, i.e.

ground water control systems, reflect in any way a religious purpose. Cf. Tyndale House Publishers,

Inc. v. Sebelius, 904 F. Supp. 2d 106 (D.D.C. 2012) (Christian book publishing company, 95%

owned by a non-profit religious foundation that receives 96.5% of the company’s distributed profits,

whose articles of incorporation declare as its purpose “to minister to the spiritual needs of people,”

and that holds religious services on corporate premises weekly, was indistinguishable from its

owners for purposes of asserting free exercise rights). “So far as it appears, the mission of [Mersino

Management], like that of any other for-profit, secular business, is to make money in the commercial

sphere.” Grote, 708 F.3d at 857 (Rovner, J. dissenting). See also Hobby Lobby, 2013 WL 3216103,

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at *49 (concluding that Hobby Lobby and Mardel “are for-profit corporations focused on selling

merchandise to consumers,” that do not enjoy free exercise rights and further noting that “not a

single case, until now, has extended RFRA’s protections to for-profit corporations”) (Briscoe, C.

J. dissenting); Conestoga, 2013 WL 140110, at *7 (noting that “[g]eneral business corporations . .

. do not pray, worship, observe sacraments or take other religiously-motivated actions separate and

apart from the intention and direction of their individual actors”); Gilardi, 2013 WL 781150, at *7

(finding that “the Freshways Corporations are engaged in purely commercial conduct and do not

exercise religion under the RFRA”). As the Third Circuit observed in affirming the district court’s

refusal to grant an injunction in Conestoga: “Unlike religious non-profit corporations or

organizations, the religious liberty relevant in the context of for-profit corporations is the liberty of

its individuals, not of a profit-seeking corporate entity.” Conestoga, 2013 WL 1277419, at *5

(Garth, J. concurring) (emphasis in original).

Plaintiffs argue that Citizens United v. Federal Election Comm’n, 558 U.S. 310 (2010)

requires this Court to recognize the free exercise rights of a for-profit corporation. In Citizens

United, the Supreme Court held that a corporation has free speech rights under the First Amendment

to the Constitution. However, as Judge Goldberg recognized in Conestoga: “Although [the free

speech and free exercise clauses] reside within the same constitutional amendment, these two

provisions have vastly different purposes and precedents . . . .” 2013 WL 140110, at *7. This Court

agrees that history and precedent teach that religious belief and worship, and the protections

afforded under the free exercise clause, are more “purely personal” in nature and, under the facts of

this case, are “unavailable to a secular, for-profit corporation.” Id. Plaintiffs have failed to convince

the Court that because the Supreme Court recognized free speech rights of corporations it would

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likewise recognize free exercise rights in a secular for-profit entity such as Mersino Management.

Mersino Management is in the business of selling water bypass systems for profit. The fact

that its owners may hold deep religious beliefs, and that the mission statement of the company

includes a statement of fealty to God, does not convert this secular, for profit company into a

religious organization capable of exercising religion. See Gilardi, 2013 WL 781150, at *6-7

(holding that corporate messages and charitable activities with a religious theme do not establish that

the corporations themselves “exercise religion”); Briscoe, 2013 WL 755413, at *5 (holding that

“[s]ecular, for-profit corporations neither exercise nor practice religion” and concluding that they

lacked standing to bring a claim under RFRA). Mersino Management is not a religious organization,

does not appear capable of “exercising religion” and is unlikely to succeed on its claim under RFRA.

c.

Mersino Management is unlikely to succeed on its claim that it can assert a
RFRA claim based on the religious beliefs of its shareholder/owners.

Nor can Karen and Rodney Mersino impute their own religious beliefs to their corporation

so that the corporation can act as their alter ego and assert those rights on behalf of the Mersinos.

“‘[I]ncorporation’s basic purpose is to create a distinct legal entity, with legal rights, obligations,

powers, and privileges different from those of the natural individuals who created it, own it, or

whom it employs.’” Conestoga, 2013 WL 140110, at *8 (quoting Cedric Kushner Promotions, Ltd.

v. King, 533 U.S. 158, 163 (2001)). Having assumed the corporate form, and all of the benefits and

protections that corporate status assures, the Mersinos cannot simply ignore that form when it suits

their needs. “[T]here is a distinction [between a corporation and its owners], and it matters in<