[00:00:00] Speaker 00:
We are now going to hear Alliance of Healthcare Sharing Ministries versus Conway, number 251035.

[00:00:11] Speaker 00:
And we will start with Mr. Murray.

[00:00:15] Speaker 01:
Good morning, your honor, and may it please the court, Michael Murray, for the alliance.

[00:00:19] Speaker 01:
With the court's permission, I'd like to reserve five minutes of my time for rebuttal, if possible.

[00:00:25] Speaker 00:
We'll see how it goes.

[00:00:26] Speaker 00:
Thank you.

[00:00:27] Speaker 01:
This case is about whether Colorado can single out religious groups for burdensome treatment, including subjecting their internal operations, their associates, and their speech to state review.

[00:00:40] Speaker 01:
Colorado started with legislative activity targeting quote-unquote ministries and ended up with a law regarding quote arrangements.

[00:00:49] Speaker 01:
Then Colorado enacted and implemented the law with exceptions for secular groups, including comparable groups such as direct primary care and Masonic fraternal organizations.

[00:01:00] Speaker 01:
As a result, the ministries are subject to differential treatment and burdens.

[00:01:04] Speaker 01:
The First Amendment forbids this regime, and it should be enjoined.

[00:01:09] Speaker 01:
The first claim.

[00:01:11] Speaker 00:
Council, I thank you for that introduction, which was well stated.

[00:01:16] Speaker 00:
You've got lots of claims and I think we're going to have lots of questions.

[00:01:19] Speaker 00:
So if you don't mind, maybe I'll get started and I'm sure the others will jump in as well.

[00:01:27] Speaker 00:
I just wanted to start on your free exercise claim and

[00:01:34] Speaker 00:
I wanted to ask you on the element of general applicability of the law.

[00:01:43] Speaker 00:
I wanted to ask you about the argument you're making about exemptions.

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And first of all, the reference in the Supreme Court's Fulton case to a mechanism for individualized exemptions.

[00:01:58] Speaker 00:
How have you shown that rulemaking under the statute and

[00:02:04] Speaker 00:
I think the Colorado Administrative Procedures Act would apply as well.

[00:02:09] Speaker 00:
How would that be a mechanism for individualized exemptions?

[00:02:15] Speaker 00:
What's your argument on that?

[00:02:18] Speaker 01:
Your honor, we don't read Fulton to require individualized exemptions.

[00:02:22] Speaker 01:
The language of categorical exemptions goes all the way back to Lakumi itself, which actually talks about how select statutes and laws in general are selective.

[00:02:31] Speaker 01:
And there's problems when categories are exempted.

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And we think that principle carries through Fulton.

[00:02:37] Speaker 01:
So I, of course, agree with your honor that Fulton uses the language of individualized exemptions, which was in present in that case involving

[00:02:46] Speaker 01:
Philadelphia itself.

[00:02:48] Speaker 01:
But I think then Judge Alito's opinion in fraternal order is very instructive here.

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He actually pointed out that the language from LeCloomy carried through Fulton makes it the case that it is worse when there are categorical exemptions.

[00:03:02] Speaker 01:
That case involved a beard policy from the police in New Jersey, and they had a categorical exemption for medical reasons, but wouldn't look at any religious reasons.

[00:03:13] Speaker 01:
And so, and what Justice then Judge Alito said was that actually makes it worse.

[00:03:19] Speaker 01:
The same issue is at play, namely that the state is admitting that its policy can have departures.

[00:03:26] Speaker 01:
It can be not universally applied.

[00:03:29] Speaker 01:
It's just a different mechanism for how that is actually happening.

[00:03:32] Speaker 01:
One is individualized.

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One is categorical.

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And I think the opinion from this court in Doze 1 versus 11 is actually instructive in that regard.

[00:03:43] Speaker 01:
It's a little bit of a different context.

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It was a vaccine case involving the pandemic.

[00:03:47] Speaker 01:
But in that case, what the state was doing was distinguishing them on categories of religions.

[00:03:52] Speaker 01:
But it was doing it on an individualized basis because in the law, there's sort of always a tension between rulemaking and administrative adjudication.

[00:04:01] Speaker 01:
And so I think both the Fraternal Order of Police case from the Third Circuit and this court's precedent in Doe's 1 through 11 is instructive as to how there is not simply an exemption from Fulton any time that there's a rulemaking power for a state or local official.

[00:04:21] Speaker 01:
And here, of course, we have evidence in the case that the state has in fact used and or implemented exceptions.

[00:04:29] Speaker 01:
We have the exemption in the statute for direct primary care, of course, which is clearly covered by the text of the statute.

[00:04:36] Speaker 01:
But we also have the state's exercise of exemptions for both certain consumer payment plans and certain types of crowdfunding.

[00:04:46] Speaker 01:
And so we see a regime

[00:04:47] Speaker 01:
where not only are there exemptions and a power to exempt, but that that is exercised.

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And the result is a severely gerrymandered situation where upwards of 85% of the entities and individuals that are subject to the regime are religious.

[00:05:05] Speaker 01:
And so we can see how that actually worked in practice.

[00:05:10] Speaker 00:
How was it exercised, for example, relative to crowdsourcing?

[00:05:16] Speaker 00:
How did the state

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What action did the state take on that front?

[00:05:22] Speaker 01:
The commissioner has rulemaking authority and promulgated a regulation exempting certain types of crowdfunding from the statute.

[00:05:31] Speaker 00:
Okay, so the commissioner has included that in a rule.

[00:05:37] Speaker 01:
Yes, Your Honor, it's in the rule that that is exempted from coverage.

[00:05:42] Speaker 01:
And so the crowdfunding arrangements clearly meet the statutory definition of facilitating payment for healthcare expenses, as do actually a whole host of organizations.

[00:05:53] Speaker 01:
And we can turn to that in a moment if we like.

[00:05:56] Speaker 01:
But what the commissioner did was he said, well, that broad language is not going to apply to certain types of crowdfunding arrangement.

[00:06:03] Speaker 01:
It does apply to other types of crowdfunding arrangements in full disclosure.

[00:06:07] Speaker 01:
So he drew a line the commissioner did in an actual rulemaking.

[00:06:11] Speaker 00:
Do you need to make some kind of showing, though?

[00:06:14] Speaker 00:
If the commissioner did that on the grounds that some of these other

[00:06:19] Speaker 00:
arrangements, if you will, do not pose the level of consumer risk that in the commissioner's judgment, the sharing plans do.

[00:06:32] Speaker 00:
Why isn't that an answer to your argument?

[00:06:36] Speaker 00:
Or is that something that you need to show to get a preliminary injunction?

[00:06:42] Speaker 00:
No.

[00:06:42] Speaker 00:
Oh, I'm sorry.

[00:06:43] Speaker 00:
Well, for example, do

[00:06:46] Speaker 00:
entities like that or fraternal benefits societies pose that they truly are similarly situated, that they're comparable, and one of the comparability elements is risk to consumers.

[00:07:01] Speaker 01:
So I think that takes us into a separate part of the general applicability analysis, the comparability analysis.

[00:07:07] Speaker 00:
I agree.

[00:07:08] Speaker 01:
The interest doesn't really affect the exemption issue.

[00:07:11] Speaker 01:
Fulton itself actually, I think, perhaps we're in agreement, said that even if no exemption had been exercised, it would still be a problem under Fulton's analysis.

[00:07:20] Speaker 01:
But I'm happy to turn to the comparability question, if that's where your honor.

[00:07:23] Speaker 01:
Yeah, that's where I was going.

[00:07:25] Speaker 01:
Great.

[00:07:26] Speaker 01:
So comparability is assessed based on the state's interest.

[00:07:31] Speaker 01:
And that's what Lukumi and Tandon signify.

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And here the state, though it has jumped around a little bit, I think the state pretty clearly states its interest on 29 of its response brief.

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The interest, and very succinctly, it's a big record, but I think they do it well there.

[00:07:50] Speaker 01:
And they say the interest is in consumer confusion over payment arrangements that are adjacent to traditional insurance, regulated insurance.

[00:08:01] Speaker 01:
And that's what they say their interest is.

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And so then the question is, how does what's going on here and the comparable activities relate to that interest?

[00:08:09] Speaker 01:
And I think Tandon and Lukumi are very instructive there.

[00:08:12] Speaker 01:
So in Lukumi, one of the interests that the state asserted was public health.

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And they said, well, public health is more triggered by animal sacrifice than it is by improper garbage disposal by restaurants.

[00:08:24] Speaker 01:
The Supreme Court said, no, both of them are actually triggered by public health.

[00:08:27] Speaker 01:
Both of those could be a problem for public health.

[00:08:30] Speaker 01:
And so that's the sort of way that the Supreme Court analyzed the question at that level of generality, that level of evidence.

[00:08:36] Speaker 01:
And the same was true in Tandon as well.

[00:08:38] Speaker 01:
In Tandon, the state said, well, what we're concerned about is at-home religious services, worship services.

[00:08:44] Speaker 01:
And the Supreme Court said, well, there's all sorts of things that have triggered the same COVID issues.

[00:08:51] Speaker 01:
And those range from indoor restaurants to movie theaters to hair salons to retail facilities.

[00:08:59] Speaker 01:
All of them trigger the same interest.

[00:09:01] Speaker 01:
And it was actually the dissent in Tandon that tried to analyze the precise level of harm, the precise quantification of what is actually a little bit more harmful or even a lot more harmful.

[00:09:10] Speaker 01:
That's what the dissent in Tandon tried to do, but the Supreme Court didn't do that analysis and neither did the majority in Lakumi 30 years ago.

[00:09:18] Speaker 01:
They looked at the type of interest and whether the same interest is triggered.

[00:09:22] Speaker 01:
The best evidence that the same interest is triggered here is actually that the statutory language, the way the state was trying to capture its interest, covers all these arrangements and they have to be in fact exempted.

[00:09:33] Speaker 01:
So direct primary care had to be exempted by statute.

[00:09:35] Speaker 01:
crowdfunding arrangements had to be exempt by statute.

[00:09:38] Speaker 01:
Masonic fraternal organizations are exempted by a different statute, but it's still the same concept.

[00:09:44] Speaker 01:
And it's worth pausing on the Masonic fraternal organization just for a moment.

[00:09:48] Speaker 01:
Colorado's law actually distinguishes between Masonic fraternal organizations, which are exempt from regulation,

[00:09:55] Speaker 01:
and other fraternal organizations, such as religious fraternal organizations, which are in fact covered by the insurance code.

[00:10:02] Speaker 01:
So this is not the first time that Colorado has tried to draw this sort of line in this area.

[00:10:07] Speaker 01:
And Masonic fraternal organizations, of course, actually provide insurance, which is clearly what the state is concerned about, unregulated insurance.

[00:10:17] Speaker 01:
And so I think that's how the comparability analysis works under Tandon and Lakumi

[00:10:23] Speaker 01:
Now, what the state will say, I'm sure, my talented colleague on the other side will say is, well, look at the structure of these organizations.

[00:10:30] Speaker 01:
They're all different structures, and they don't share the same features.

[00:10:35] Speaker 01:
And I'll say two things about that, Your Honor.

[00:10:38] Speaker 01:
The first is, this is a little bit of an ex post situation.

[00:10:42] Speaker 01:
Those structures are not listed in the law.

[00:10:45] Speaker 01:
But many of those structures also do exist in direct primary care, which has monthly fees and access to care that's promised.

[00:10:54] Speaker 01:
And the same, of course, is true of Masonic fraternal organizations, which actually provide insurance.

[00:11:00] Speaker 01:
And so those structures that they've enumerated in their briefing to the district court and this court are actually present in the healthcare sharing ministries and in the things that are exempted.

[00:11:14] Speaker 01:
And so, but I do think it is important to take a step back.

[00:11:18] Speaker 01:
The question is not the precise level of harm, the precise level of risk, but rather the type of interest that is triggered by the statute.

[00:11:26] Speaker 01:
And here, that's the same interest that is triggered by both.

[00:11:30] Speaker 01:
I see that I'm eating into my rebuttal time.

[00:11:33] Speaker 01:
I'm happy to keep going or reserve the time for rebuttal with court's permission.

[00:11:38] Speaker 00:
Other questions?

[00:11:41] Speaker 00:
All right, we'll hold off until rebuttal.

[00:11:46] Speaker 03:
Good morning.

[00:11:47] Speaker 03:
Good morning.

[00:11:48] Speaker 03:
May it please the court.

[00:11:49] Speaker 03:
Reid Morgan for the appellee, Commissioner Conway.

[00:11:52] Speaker 03:
This case is not about regulating religion.

[00:11:55] Speaker 03:
It is about protecting Colorado's consumers.

[00:11:58] Speaker 03:
Healthcare sharing plans are healthcare arrangements that resemble insurance but lack its guarantees.

[00:12:05] Speaker 03:
The law protects consumers by shedding light into sharing plans, religious and secular alike.

[00:12:12] Speaker 03:
Prior to the law, Colorado had virtually no insight into sharing plan operations.

[00:12:16] Speaker 03:
despite evidence that they conflated their products with health insurance, while still others engaged in financial misconduct that resulted in widespread denials of reimbursement.

[00:12:26] Speaker 03:
Because of the law, we know that roughly 60,000 Coloradans are members of sharing plans.

[00:12:30] Speaker 03:
The district court correctly denied the preliminary injunction, and this court should affirm.

[00:12:34] Speaker 03:
I'd like to address why the Alliance is unlikely to succeed on the merits of its claims, and I'll start with the free exercise claim.

[00:12:41] Speaker 03:
The law's text and legislative history show that it was enacted to address documented consumer confusion and harm.

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Its legislative sponsor called it a data reporting bill meant to promote transparency.

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But she also recognized that sharing plans work for people, including for those who hold religious beliefs associated with sharing health expenses.

[00:13:07] Speaker 03:
And the record confirms the consumer protection concerns that prompted the law.

[00:13:12] Speaker 03:
Many Coloradans enrolled in sharing plans believing they had insurance, only to learn, often after a denied claim, that they did not, and that confusion is understandable.

[00:13:23] Speaker 03:
Sharing plans have a similar collection of features to insurance plans.

[00:13:27] Speaker 03:
They use insurance terms like comprehensive coverage, deductible, and premiums, and sharing plans are sold by insurance brokers.

[00:13:36] Speaker 03:
The record also shows serious misconduct by some sharing plans.

[00:13:40] Speaker 03:
Some plans diverted as much as 90% of member contributions to affiliates, leaving little to pay claims.

[00:13:48] Speaker 03:
And these concerns were documented by both consumers and healthcare providers, including Children's Hospital, and are included in the record before the district court.

[00:13:57] Speaker 03:
Religious organizations, including a religious sharing plan, testified in support of the law.

[00:14:03] Speaker 03:
recognizing that it would help protect Coloradans who sought to join in sharing plans, including in furtherance of their religious beliefs.

[00:14:11] Speaker 03:
The alliance, in fact, the appellate here, testified in support of a competing version, which had similar reporting requirements, but the reporting was made to the attorney general's office rather than the Division of Insurance under the aversion of the law that was ultimately enacted.

[00:14:28] Speaker 03:
This legislative history reflects a broad agreement on the law's neutral consumer protective purpose.

[00:14:34] Speaker 03:
Well, counsel, can I just stop here?

[00:14:37] Speaker 04:
Go ahead.

[00:14:38] Speaker 04:
Go ahead.

[00:14:38] Speaker 04:
Oh, sorry.

[00:14:39] Speaker 04:
So can you address the exemptions?

[00:14:44] Speaker 03:
Yes, I'd be happy to, Your Honor.

[00:14:46] Speaker 03:
With regard to the exemptions, the statute that was enacted by the law is titled Health Care Sharing Plans or Arrangements.

[00:14:55] Speaker 03:
By the text of the statute,

[00:14:58] Speaker 03:
as well as what's clear from the legislative history as well, it applies to all sharing plans.

[00:15:05] Speaker 03:
It does not apply to other healthcare arrangements.

[00:15:08] Speaker 03:
Now, the statute also empowered the commission.

[00:15:12] Speaker 02:
Let me stop you for a minute.

[00:15:12] Speaker 02:
So is it your position that the crowdfunding, the fraternal organizations, and the direct payment arrangements aren't even covered by the statute?

[00:15:24] Speaker 02:
That's correct, Your Honor.

[00:15:25] Speaker 02:
And again, why is there an exemption for them?

[00:15:29] Speaker 03:
Your honor, the statute, like I said, it applies specifically by its title to healthcare sharing plans and then the statute authorizes the commissioner to identify by rule other consumer payment arrangements that are not subject to the statute.

[00:15:44] Speaker 03:
And so I think the reason for that provision is to clarify for, you know, to the extent that the commissioner elects to do so.

[00:15:52] Speaker 03:
The commissioner can propagate rules that clarify other entities that are not sharing plans and are therefore not subject to the reporting requirements.

[00:16:01] Speaker 02:
To be clear, your position is that you haven't exempted anyone.

[00:16:07] Speaker 02:
You have just clarified that these certain groups are not covered by the statute.

[00:16:16] Speaker 03:
That's correct, Your Honor.

[00:16:17] Speaker 03:
And again, I would just point to the statutory section title, which makes clear which entities are covered by it, as well as the legislative history, which, you know, exclusively referred to sharing plans.

[00:16:28] Speaker 03:
There was no discussion that this reporting requirement would apply to all of the other alternative arrangements that the Alliance has invoked here.

[00:16:37] Speaker 03:
However, you know, if the court were to disagree with that finding,

[00:16:43] Speaker 03:
And find that the commissioner does have some exemptive authority.

[00:16:48] Speaker 03:
You know, we would also take the position, which is what the district court ruled that the exemptive authority.

[00:16:56] Speaker 03:
That is provided to the commissioner here is not the kind of individualized case by case ad hoc decision making that was discussed in full time.

[00:17:08] Speaker 03:
This is, as Your Honor raised, I think with opposing counsel, this is a categorical style of rulemaking.

[00:17:20] Speaker 03:
And in this court, in Ax and Flynn, confirmed that the Fulton concern about individualized exemptions is focused on systems of ad hoc decision-making.

[00:17:33] Speaker 03:
That's very different from exemptions that are

[00:17:37] Speaker 03:
would be promulgated by rule.

[00:17:40] Speaker 00:
Mr. Morgan, could you respond directly to Mr. Murray's argument that they really aren't relying on the language from Fulton about individualized exemptions, that there's case law that also makes the authority to grant by rule categorical exemptions.

[00:18:06] Speaker 00:
as problematic under a free exercise analysis because it would make the law not generally applicable.

[00:18:17] Speaker 00:
So I'm interested in your giving a direct response to Mr. Murray's argument.

[00:18:22] Speaker 03:
Your honor, I think Axan Flynn explicitly rejects that contention.

[00:18:26] Speaker 03:
And in doing so, it actually cites, and I think if you read Lakumi,

[00:18:35] Speaker 03:
You know, I disagree with opposing counsel interpretation of the Kumi.

[00:18:40] Speaker 03:
The court in the Kumi conducts a general applicability analysis whereby it determines whether the ordinance at issue there was treating comparable secular conduct more favorably than religious conduct.

[00:18:55] Speaker 03:
And it does consider whether there are categories of secular conduct that's being treated more favorably.

[00:19:03] Speaker 03:
But I think that's separate from the Fulton individualized exemption analysis that raises concerns that some government official could on a case-by-case basis potentially exempt favored secular entities.

[00:19:18] Speaker 03:
And so I think the portion of Lakumi that opposing counsel was referencing is really focused more on this question of

[00:19:27] Speaker 03:
Does the law treat comparable secular conduct more favorably than religious conduct?

[00:19:32] Speaker 00:
Well, let's, let's pick up on that then, because, um, in the briefing, there's some back and forth over whether the, um, um, whether you want to call them exempted, excluded, or not covered entities are comparable to the, um, to the sharing, uh, uh, plans the, and, and we're, we're,

[00:19:55] Speaker 00:
We need to remember where the preliminary injunction has Alliance made an adequate showing for preliminary injunction.

[00:20:05] Speaker 00:
What burden does Alliance have in terms of making that showing on this particular issue to meet its preliminary injunction burden?

[00:20:17] Speaker 00:
What's your position on that?

[00:20:19] Speaker 03:
Your honor, our position is that under Kennedy v. Bremerton, and this is also confirmed, I think in the Tandon opinion, it is the Alliance's burden to demonstrate that a law is not generally applicable or is not neutral.

[00:20:35] Speaker 03:
And in order to demonstrate that, it is the Alliance's burden to identify comparable secular activities that implicate the risks that are being regulated by the government.

[00:20:48] Speaker 03:
Because general applicability is concerned, and we know this from Tandon, with the government's asserted interests and the risks that different activities pose to that interest.

[00:20:59] Speaker 00:
Well, are you saying that they have to present, they needed to present to the district court evidence of risk or at least an argument about risk that, for example, the risk of

[00:21:11] Speaker 00:
consumer confusion relative to crowdsourcing is similar to the risk of confusion from these sharing plans.

[00:21:20] Speaker 00:
Did they have to make that showing before the district court?

[00:21:25] Speaker 00:
I think they did.

[00:21:26] Speaker 03:
And I think in some cases that showing is going to be a common sense showing.

[00:21:32] Speaker 03:
So I think in tandem, sorry, I think in tandem where the government's asserted interest was COVID spread.

[00:21:40] Speaker 03:
And the question was, if you have multiple households gathering together, there is this risk of COVID spread.

[00:21:48] Speaker 03:
And I think in Tainan, the court could easily see that in-home religious exercise would gather multiple families together and implicate that risk in the same manner that a hair salon would.

[00:22:02] Speaker 03:
But there are other cases, and I think this is one of them, where it's not

[00:22:08] Speaker 03:
It's not as obvious that that risk presents that different activities present the same risk.

[00:22:14] Speaker 03:
And here, you know, we have provided over 500 pages of documented consumer confusion and harm, more than 20 consumer complaints, multiple complaints from providers, you know, regulatory actions taken by other states.

[00:22:31] Speaker 03:
litigation, bankruptcy filings, documenting that members are not receiving reimbursement.

[00:22:37] Speaker 00:
And so we've provided... Let me ask you about this Fraternal Benefit Society.

[00:22:43] Speaker 00:
I've been kind of grappling with that.

[00:22:47] Speaker 00:
As I understand it, there's actually a part of the insurance code that addresses Fraternal Benefit Societies, and it says,

[00:22:59] Speaker 00:
in part that they may provide the following contractual benefits, hospital, medical or nursing benefits.

[00:23:07] Speaker 00:
And they're also subject, I take it to insurance regulation apart from the reporting law here.

[00:23:19] Speaker 00:
But as Mr. Murray pointed out, not all of them are.

[00:23:22] Speaker 00:
And so aren't there some fraternal benefit societies, he mentioned the Masonic ones, that why don't they come under the reporting law if they're providing what amounts to be a sharing plan?

[00:23:48] Speaker 03:
Your Honor, there's no evidence before the district court or in the record here that fraternal organizations present the same consumer confusion and harms associated with sharing plans that's addressed by the law.

[00:24:00] Speaker 03:
For example, if a person is a member of a fraternal organization and obtains some sort of insurance benefit from them, we think it's not, first of all, there's no evidence that fraternal organizations in Colorado

[00:24:13] Speaker 03:
even offer health benefit plans.

[00:24:15] Speaker 00:
Well, okay, let me just put it this way.

[00:24:18] Speaker 00:
Let's say you did have a fraternal benefit organization, maybe it's a Masonic one, and it actually does do the same thing that the sharing plans do here, that you become a member and they facilitate coverage of health care costs

[00:24:37] Speaker 00:
Would the law apply to them at that point?

[00:24:41] Speaker 00:
In other words, are they actually excluded?

[00:24:44] Speaker 00:
It seems the law is pretty general.

[00:24:46] Speaker 00:
And why wouldn't the reporting law apply to them in that situation?

[00:24:53] Speaker 03:
Your Honor, the reporting law, as I understand it, would not apply to them because, again, looking at the statutory title, it is addressed specifically to healthcare sharing plans and arrangements.

[00:25:02] Speaker 03:
And I think there's good reason for that.

[00:25:04] Speaker 00:
given but what if they're actually running a health care sharing plan well if they're functionally doing that i mean just because they're called a fraternal benefit society that's just a label if if what they're really doing out there is the same thing would they be under would they be subject to regulation i think if there were a fraternal benefit organization that was indeed running a sharing plan under the the definition of the statute um

[00:25:34] Speaker 03:
That might be covered by the regulation.

[00:25:42] Speaker 03:
I'm not aware that there's any evidence in the record that any organization does that.

[00:25:48] Speaker 03:
I understand.

[00:25:48] Speaker 03:
It's hard for me to answer that specifically.

[00:25:55] Speaker 03:
But I think it would depend on the structure of what they are offering and whether it fits the sharing plan features that are defined in that statute.

[00:26:04] Speaker 02:
It sounds to me like you are making the argument though that we have to look at the level that we can distinguish here and that you can distinguish based on the level of risk and not just the type of risk.

[00:26:22] Speaker 03:
You know, Your Honor, respectfully, that's not what I'm trying to characterize.

[00:26:26] Speaker 03:
I'm trying to say that sharing plans present a different type of risk.

[00:26:31] Speaker 02:
So you're saying you don't want that it's unfair to draw the distinction on just a general type of risk, consumer confusion and protection.

[00:26:47] Speaker 02:
You would say, well, that's not defined enough.

[00:26:51] Speaker 03:
That is correct, Your Honor.

[00:26:52] Speaker 03:
I think that this law was responding to a more specific risk identified arising specifically from

[00:27:00] Speaker 03:
sharing plans.

[00:27:01] Speaker 02:
How would you identify the risk?

[00:27:04] Speaker 03:
Your honor, the risk here is that sharing plans, because they share these key features with insurance, and because they are marketed using insurance terms by insurance brokers, they are commonly viewed by Coloradans as providing the same benefits as insurance.

[00:27:25] Speaker 03:
When in fact, there are important differences in what they provide.

[00:27:30] Speaker 03:
And that fundamental misunderstanding leads to consumer harm that flows from that.

[00:27:36] Speaker 02:
OK, so that is a very detailed type of harm.

[00:27:42] Speaker 02:
You want to define the type of harm at a very detailed level.

[00:27:48] Speaker 03:
Well, I was trying to articulate it there specifically, but I think it could be drawn to the general level of consumer confusion and harm associated with insurance plans versus alternative health arrangements.

[00:28:01] Speaker 03:
And I see that I'm out of time.

[00:28:03] Speaker 03:
So if the panel has no further questions, I'd like to just briefly conclude.

[00:28:07] Speaker 03:
Briefly conclude.

[00:28:10] Speaker 03:
Thank you.

[00:28:10] Speaker 03:
Colorado's law doesn't target religion or speech.

[00:28:13] Speaker 03:
It was enacted in response to documented instances of consumer confusion and harm arising from sharing plans, secular and religious.

[00:28:21] Speaker 03:
The reporting requirements are factual and directly tied to Colorado's compelling interest in protecting its citizens from that confusion and harm.

[00:28:30] Speaker 03:
The Constitution permits that, and we respectfully ask that this Court affirm the District Court's denial of a preliminary injunction.

[00:28:36] Speaker 03:
Thank you.

[00:28:37] Speaker 00:
Thank you.

[00:28:41] Speaker 00:
Mr. Murray, you have some rebuttal time.

[00:28:44] Speaker 01:
Thank you, Your Honor.

[00:28:45] Speaker 01:
I'd like to make several points in rebuttal.

[00:28:49] Speaker 01:
The first concern is the exemption issue that was discussed.

[00:28:53] Speaker 01:
I think it's pretty clear here that this statute provides exemption authority.

[00:28:58] Speaker 01:
The district court rejected the argument that it did not.

[00:29:00] Speaker 01:
The definition in the statute of facilitating payment of healthcare expenses is broad.

[00:29:08] Speaker 01:
And then, of course,

[00:29:09] Speaker 01:
Perhaps most importantly, the commissioner did in fact exercise exemption authority, otherwise he would not need to do so.

[00:29:17] Speaker 01:
There also is in the legislative history.

[00:29:20] Speaker 00:
Mr. Murray, how would you respond to Mr. Morgan's argument that what the commissioner was really doing was just clarifying coverage of the statute.

[00:29:31] Speaker 00:
It's not really an exemption if the entity wasn't covered by the statute in the first instance.

[00:29:40] Speaker 01:
I think it's hard to square that argument with the broad statutory language that the statute covers entities or organization.

[00:29:47] Speaker 00:
One person's exemption is another person's exclusion.

[00:29:51] Speaker 00:
Is that kind of what we're dealing with now?

[00:29:54] Speaker 01:
That may be what we're talking about, so it might be a splitting hairs question, Your Honor, or a language question.

[00:30:00] Speaker 01:
But I think it's pretty clear that in this particular situation, the statute says this section does not apply to consumer payment arrangements identified by the commissioner by rule.

[00:30:13] Speaker 01:
And the commissioner himself seemed to be identifying by rule things that were not covered by the broad language of the statute, which is payment arrangements that facilitate or exchange healthcare expenses.

[00:30:26] Speaker 01:
And in the legislative industry itself,

[00:30:28] Speaker 01:
and this is where Mr. Borgen and I do have a disagreement, there is reference to giving the commissioner this actual authority so that he can exempt, quote unquote, the good guys, as opposed so they wouldn't be covered by the statute.

[00:30:42] Speaker 01:
And so I do think even in the legislative history, there's some indication that this is an exemptive authority.

[00:30:48] Speaker 00:
Hey, can I just ask, I think you've split the exemption argument into two parts, tell me if I'm wrong, but one part is just

[00:30:55] Speaker 00:
what exactly is the authority given to the commissioner on the one hand?

[00:31:00] Speaker 00:
And then on the other hand, it's the arguments about how there are entities that are comparable and yet they are in effect exempted.

[00:31:13] Speaker 00:
This is the comparability.

[00:31:15] Speaker 00:
And on that score of the eight entities that the parties are briefing, which one is the most closely comparable in your view?

[00:31:25] Speaker 00:
to the sharing plans.

[00:31:27] Speaker 01:
The most comparable is the direct primary care arrangements, which are exempted by statute.

[00:31:32] Speaker 01:
They're clearly covered by the statutory language.

[00:31:34] Speaker 01:
Otherwise, the legislature wouldn't have felt the need to make clear that they were not covered.

[00:31:40] Speaker 01:
They also involve monthly payments, unlimited access to health care, and that's a quote in the record from the Direct Primary Care Coalition's website.

[00:31:50] Speaker 01:
and a third party, either its employers or another third party.

[00:31:54] Speaker 01:
So they're directly comparable.

[00:31:56] Speaker 01:
I think the second most, I'll give you two, I think you might have only asked for one, but I'll give you two.

[00:31:59] Speaker 01:
The second most is Masonic fraternal organizations, which actually do provide unregulated insurance.

[00:32:06] Speaker 01:
So it's not entirely clear to me at all how those could be distinguished from what is covered by the statute.

[00:32:14] Speaker 01:
I think those are the two best, but we, of course, have discussed others in the briefing.

[00:32:20] Speaker 01:
I see that my time has expired.

[00:32:21] Speaker 01:
With the court's permission, I would love to take a minute to just wrap up.

[00:32:25] Speaker 01:
Why don't you do that?

[00:32:26] Speaker 01:
Thank you, your honor.

[00:32:28] Speaker 01:
So in conclusion, affirming the district court's decision here is contrary to Supreme Court precedent in Fulton and McCooney, Master B's cake shop and others, and other circuits case law.

[00:32:40] Speaker 01:
The ruling rests on a novel reading of Fulton that's inconsistent with Judge Alito's opinion and Fulton itself and McCooney.

[00:32:48] Speaker 01:
And it also requires adopting the dissent's position in tandem with V. Newsom

[00:32:53] Speaker 01:
as well as some other case law that we've cited in the brief.

[00:32:57] Speaker 01:
This case is all about targeting and singling out the ministries that's not permitted by the First Amendment.

[00:33:03] Speaker 01:
That's why we sought a preliminary injunction, an injunction pending appeal, because there's ongoing irreparable harm from this law.

[00:33:10] Speaker 01:
We're happy to renew that if the court is interested.

[00:33:14] Speaker 01:
But in sum, we ask this court to reverse the denial of the preliminary injunction.

[00:33:18] Speaker 01:
Thank you.

[00:33:19] Speaker 00:
All right.

[00:33:20] Speaker 00:
Any further questions from the panel?

[00:33:23] Speaker 00:
All right.

[00:33:23] Speaker 00:
Well, thank you for the argument.

[00:33:25] Speaker 00:
We didn't even get to establishment clause, freedom of association, free speech.

[00:33:32] Speaker 00:
I mean, this case covers more than a semester course on the First Amendment.

[00:33:37] Speaker 00:
But I do appreciate the arguments this morning, at least speaking for myself, hopefully for the panel.

[00:33:45] Speaker 00:
I thought you were both quite helpful to us.

[00:33:47] Speaker 00:
And we will consider the case submitted and counsel are excused.