[00:00:02] Speaker 00:
Case number 14, S5183, Jeffrey Cutler, appellant versus United States Department of Health and Human Services at L. Mr. Muse for the appellant, Ms.

[00:00:11] Speaker 00:
Allen for the appellees.

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May it please the Court, I'm Robert Meuse in the American Freedom Law Center, and it's my honor and privilege to represent the plaintiff-appellant in this case, Mr. Jeffrey Cutler, who was acting pro se below.

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I'd like to reserve two minutes of my time for rebuttal.

[00:01:05] Speaker 04:
The threshold issue presented today is whether Mr. Cutler has standing to advance this legal challenge to provisions of the Affordable Care Act.

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And under established law, the answer is clearly yes.

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The requirements for standing a well-known plaintiff must allege a personal injury that is fairly traceable to the challenge conduct and likely to be redressed by the request of relief.

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Mr. Cutlass satisfies all three of those requirements in this case.

[00:01:32] Speaker 02:
Can you focus in addressing that on standing to raise the equal protection challenge as opposed to the required insurance challenge?

[00:01:41] Speaker 04:
Well, the equal protection is related to that, because it's the disparate enforcement of the Affordable Care Act.

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And it's essentially based on where somebody presently might reside.

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Where do you have this disparate?

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I mean, the Arkansas policy looks exactly the same to me as the Pennsylvania policy.

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I'm sorry, Your Honor.

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The Arkansas policy and the Pennsylvania policy seem to be exactly the same.

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Neither one mandates that an insurance company continue

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So how is it, Ms.

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Barrett?

[00:02:10] Speaker 04:
Well, you certainly, and if you take a broader look at this, the transitional policy certainly permits applicable individuals who would otherwise have to have an Affordable Care Act compliant policy, and if they didn't have that, they'd be subject to penalties.

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Well, in the state of Pennsylvania, particularly for the case of Mr. Cutler, Mr. Cutler does not, he wasn't able to keep the health care plan that he wanted, and as a result it was canceled.

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And because it was canceled, he's now subject to penalties.

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There are other applicable individuals in the United States

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who have, who are able to keep their plan, meaning they have a plan that is not compliant with the Affordable Care Act, but yet they are still being subject to penalties.

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But isn't that, isn't the reason they have a plan and Mr. Cutler doesn't, because of the independent decision making of the insurance company?

[00:03:01] Speaker 04:
The fact is, the, the, what is, the requirement is a federal law requirement to have an, an Affordable Care Act compliant plan.

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The law makes it very clear that the Secretary shall enforce that.

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entertaining legal protection ones out there either, but for purposes at least was raised below.

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So put aside any argument about whether there should or should not have been a transitional policy.

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That's not your case.

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Right.

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So what I really would like you to focus on is

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How is Mr. Cutler being treated differently for equal protection purposes from anyone else in the country in a way that is attributable to governmental action rather than independent choice of insurance companies?

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Right, because the penalties that he is being assessed for not having an Affordable Care Act

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plan, one that is compliant with the plan, don't come from an insurance company, nor do they come from a state agency.

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They come from the federal law.

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And so certainly, in terms of addressability... So you have to find someone else who's similarly situated who isn't being assessed the penalty.

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So somebody else who is in a state that said,

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made it optional for insurance companies, and the insurance company said, we're not doing it, and yet that person is not getting an assessed penalty.

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That's how I would understand an equal protection challenge in this context.

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Have you found somebody who has no insurance because their insurance company said, we're not going to do it, even though state x lets us, and isn't being assessed a penalty?

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But I don't think that's the correct analysis, Your Honor.

[00:04:46] Speaker 02:
I think that's an equal protection challenge.

[00:04:47] Speaker 04:
Well, the equal protection challenge is, right now, you look at it from this perspective.

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You have Mr. Culler is an applicable individual who is required to have an ACA compliant plan, and if he doesn't have that plan, he's subject to penalties under federal law.

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He's required to have either an ACA compliant plan or a non-ACA compliant plan if his insurance company is willing to give it to him, which is an independent decision of the insurance company.

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But the penalties are accruing because he doesn't have an ACA compliant plan.

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The law requires everyone to have an ACA compliant plan and that's why he's having penalties.

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When his insurance plan was canceled, he could not get a non-compliant ACA

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And he's subject to penalties.

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He should not be, at a minimum, he should not be subject to those penalties.

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And that's, the court can redress that injury, certainly.

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Now, whether, you know, and certainly the Secretary of Department of Health and Human Services is established by federal law now, because now since the ACA was passed,

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The legal landscape has changed for insurance.

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Insurance has become nationalized, and the Secretary is one that shall enforce all the provisions of it.

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If Mr. Culler was not able to have an ACA compliant plan, whereas others who are able to keep non-ACA compliant plans without having a penalty, he should not be subject to penalties as a result of his inability to keep the plan that he wanted based on the President's promise, which is what was the basis for this transitional plan.

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There are individuals.

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Now you have a patchwork argument.

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was requiring insurance companies to give non-compliant plans, consisting of the transition policy, and Pennsylvania wasn't.

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I want to make sure, I think you agree, but I don't want to put words in your mouth, that that was his misunderstanding of Arkansas law, and in fact, no state in this country has mandated that insurance companies provide non-compliant plans.

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Is that your understanding of the law?

[00:06:54] Speaker 04:
Well, my – no, I – quite frankly, the – what was raised below was – and it was in a motion for summary judgment and in a response, and obviously the government has argued that it's – that it's been waived, and we – certainly argument that he still has it available – is that the Affordable Care Act is being enforced in a disparate manner.

[00:07:12] Speaker 04:
There weren't specifics below, Your Honor.

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When we filed our opening brief, and quite frankly I read that at Arkansas, when you look at what the Commissioner of Insurance of Pennsylvania said, essentially this transitional policy we think is unconstitutional, the federal government is the one responsible for enforcing this thing, we're just going to get out of the way.

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in Arkansas, and certainly I would need to do more development of this on the factual side.

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But again, we pick this case up pro se, but we certainly, and that's one of the things we've mentioned, is that we could perhaps remand this case so he can amend his complaint as necessary to flesh out this equal protection claim.

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But the argument he raised below in his summary judgment was that, based on this transitional policy, he attached a copy of the March 11th

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description of that policy, that now the Affordable Care Act is being enforced in a disparate manner where some individuals have not complained.

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I think you would agree as a lawyer, which he was not, obviously.

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As a lawyer, he had to show that there was somebody who was similarly situated to him.

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And I would say a person who has a non-compliant plan, they should be subject to penalty, but they're not because of the transitional policy.

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That's the problem that we raised when we mentioned on the reply about the under-inclusive statute.

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Because you can always make that sort of argument for an under-inclusive statute, like the or versus or and the others that we cited.

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But you're not similarly situated because that other person has insurance that's consistent with federal law.

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No, it's a non-compliant plan.

[00:09:00] Speaker 02:
It's only non-compliant if you're challenging the transitional policy, which you are not.

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And so we have to take as given.

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I understand you have other arguments, maybe that's another case.

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But we have to take as given that it's ACCA plus the transitional policy, none of which is challenged.

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That's governing federal law.

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And so if he has an insurance policy that complies with ACCA and or transitional policy,

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That person is in compliance with federal law, and so that person is not similarly situated to your client.

[00:09:28] Speaker 04:
Well, I would disagree in this respect, too, Your Honor, because I think the challenge to the transitional policy is essentially an as-applied challenge to how the individual mandate is being applied.

[00:09:39] Speaker 04:
He's not challenging the underlying authority, whether it violates separation of powers or, you know, the underlying authority to issue the transitional policy, but the application of the transitional policy has the, has a disparate impact on individuals.

[00:09:52] Speaker 02:
The disparate impact is not an equal protection problem.

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Equal protection requires discriminatory intent in similarly situated individuals.

[00:10:00] Speaker 04:
Right, and you have, you have a law that's being enforced unequally.

[00:10:04] Speaker 04:
And it's largely dependent upon the state in which within a person resides.

[00:10:09] Speaker 04:
And we cited that other, you know, the Sons case, that the government can't, you know, affirmatively permit a state or state government to violate legal protection.

[00:10:19] Speaker 04:
And so you have this, again, you have this patchwork of enforcement of the Affordable Care Act

[00:10:25] Speaker 04:
essentially a bond where a person resides.

[00:10:28] Speaker 04:
And I do think in Arkansas, when you read what that press release was, there are individuals with non-compliant plans that are able to keep their plan in the state of Arkansas where Mr. Cutler was not, and he's subject to penalty as a result.

[00:10:40] Speaker 04:
At a minimum, the penalties create an equal protection problem because there's a disparate enforcement, an unequal enforcement of the Affordable Care Act across the board.

[00:10:49] Speaker 02:
I just want to make sure that maybe, so your equal protection argument is that

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The transitional policy violates the equal protection clause or that the Affordable Care Act violates the equal protection clause?

[00:11:05] Speaker 04:
The enforcement of the individual mandate where through the transitional policy which allows it to be enforced

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unequally.

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It's not being enforced across the board to everyone.

[00:11:16] Speaker 04:
That creates an equal protection problem.

[00:11:18] Speaker 02:
So if there were no transitional policy, in your view, the equal protection challenge would go away.

[00:11:22] Speaker 02:
You have other challenges, but the equal protection one is simply a product of the transitional policy?

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Am I understanding this right?

[00:11:28] Speaker 04:
Because it's an unequal enforcement of the law, yes.

[00:11:33] Speaker 04:
I mean, if the Affordable Care Act... Yes, because of the transitional policy.

[00:11:35] Speaker 04:
Yes, because of the transitional policy, how the law is being enforced, it creates an equal protection problem.

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And as a result, Mr. Culler is subject to penalties.

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And that is an injury that's fairly traceable to that.

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And if you look at from standing from an under-inclusive stature perspective, I think he meets that.

[00:11:54] Speaker 04:
We're already out of time.

[00:11:55] Speaker 01:
Any other questions?

[00:11:56] Speaker 01:
We'll give you some time to reply.

[00:11:58] Speaker 01:
Ms.

[00:11:59] Speaker 01:
Allen?

[00:12:09] Speaker 03:
Thank you, Judge Henderson, and may it please the Court.

[00:12:11] Speaker 03:
I would just like to clarify the Equal Protection Challenge that's before the Court and what the transitional policy does.

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plaintiff has claimed that the transitional policy violates equal protection.

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And what the transitional policy does is HHS adopted a policy whereby health insurance issuers could continue coverage that they otherwise would have canceled because it would have been in violation of circuit market reforms under the Affordable Care Act.

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And HHS said that it would not enforce those market reforms against the health insurance issuers, and it encouraged states to adopt the same policy.

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Pennsylvania adopted that policy.

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So that meant that insurers in Pennsylvania that had – would have had to cancel their coverage could instead decide to continue that coverage.

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But plaintiff's health insurance issuer decided not to continue that coverage.

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So the injury that he's claiming, which is that he owes a tax penalty, is due to the health insurance issuer's decision not to allow him to continue that coverage.

[00:13:14] Speaker 03:
It's not attributable to the transitional policy which Pennsylvania adopted.

[00:13:18] Speaker 02:
What about your argument on standing as to put aside the transitional policy, just the requirement to have insurance generally to have to comply with the individual insurance requirement?

[00:13:33] Speaker 02:
Sure.

[00:13:33] Speaker 03:
Your Honor, are you referring to the establishment clause challenge?

[00:13:35] Speaker 03:
Of course.

[00:13:36] Speaker 03:
So again, the injury the plaintiff claims is that he has to pay the tax penalty.

[00:13:40] Speaker 02:
Doesn't that satisfy Article 3?

[00:13:42] Speaker 02:
Sorry?

[00:13:44] Speaker 02:
The injury he claims is having to pay the tax penalty.

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And that injury is not redressable by the relief he seeks, which is declaring the

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the religious conscience exemption invalid.

[00:14:02] Speaker 03:
He asserted in district court that if the religious conscience exemption were invalid, then the individual coverage provision as well as the entire Affordable Care Act would- That's when he got his point about the under-inclusive statutes, right?

[00:14:14] Speaker 02:
Then you're going to be in a position, either a severability analysis or congressional action to decide do we want the statute invalid.

[00:14:21] Speaker 02:
with or without the religious exemption, or do we need to make it a broader conscientious object or exemption would be an option.

[00:14:28] Speaker 02:
We don't know what the remedial response would be, but he's got for Article III standing purposes, he said, I'm injured, I'm having to pay something, and person X over there is not, and we're engaged in the exact same behavior of not having insurance.

[00:14:43] Speaker 02:
Why isn't that standing?

[00:14:45] Speaker 03:
I have two responses to that.

[00:14:47] Speaker 03:
First is that in contrast to the state cases that are referenced in plaintiff's reply brief, in this case we think it's very clear that as a matter of federal law, the remedy for invalidating the religious conscience exemption would not be to also invalidate the individual coverage provision.

[00:15:05] Speaker 03:
Congress specifically said that the individual coverage provision is essential to the reforms of the Affordable Care Act

[00:15:11] Speaker 03:
And the Supreme Court recognized in NFIB that the purpose of the Affordable Care Act was to increase the number of Americans covered by health insurance and decrease the cost.

[00:15:21] Speaker 02:
It sounds like a severability argument, but not an injury argument.

[00:15:25] Speaker 03:
Well, we think because of the clear nature of the fact that the religious conscience exemption would be severable, that that makes clear that the injury, the particular injury he's claiming here is not redressable.

[00:15:37] Speaker 03:
The other response I would have here...

[00:15:40] Speaker 03:
Your Honor, is just to emphasize how different this case is from the other cases in which courts have considered the Social Security tax exemption that was incorporated in the religious conscience exemption.

[00:15:52] Speaker 03:
In those cases, the plaintiff was a member of

[00:15:55] Speaker 03:
a religious group or a person who had a conscientious objection to the tax.

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And so it was essentially arguing that the exemption was too limited and should be extended to include their group.

[00:16:06] Speaker 03:
But here, that's not the situation that we have, because the plaintiff has no religious objection to insurance.

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Indeed, he used to have health insurance.

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And he does not even have a conscientious non-religious objection to health insurance for the same reason.

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And so we think this case is quite different than the other cases in which courts have reached the merits

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of this sort of exemption.

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If the court has no further questions, then we submit the district court's decision should be affirmed for the reasons stated in our brief.

[00:16:38] Speaker 03:
Thank you.

[00:16:39] Speaker 01:
I have one question.

[00:16:40] Speaker 01:
Yes.

[00:16:41] Speaker 01:
If we reach the merits, in Larson, in that footnote that you referenced,

[00:16:53] Speaker 01:
The court is discussing why the statute is facially unconstitutional.

[00:17:03] Speaker 01:
But in describing the statute in this footnote, I just want to know what to do with the footnote.

[00:17:11] Speaker 01:
Because it says the distinction between different religious organizations, well established churches,

[00:17:21] Speaker 01:
and churches which are new.

[00:17:26] Speaker 01:
What do we do with 1950?

[00:17:30] Speaker 01:
cutoff date?

[00:17:32] Speaker 03:
Well, Your Honor, first of all, the 1950 craft date that's in section 1402 G of the Social Security tax that's incorporated by reference, that's really not an issue here because plaintiff is not someone who is a member of a religion that was established in 1951 and that's claiming that that particular restriction.

[00:17:52] Speaker 01:
He doesn't have to be in order for his establishment clause claim, does he?

[00:17:59] Speaker 03:
I think he does, Your Honor, because if any of the other restrictions, even just the fact that he must be a member of a religious group that has a conscientious objection, if that were valid, he still could not claim the religious conscience exemption.

[00:18:12] Speaker 03:
And so he really has... I'm not following that.

[00:18:16] Speaker 03:
Sorry.

[00:18:17] Speaker 01:
So he does not... In other words, what I am understanding his challenge to be is the statute on its face

[00:18:27] Speaker 01:
by incorporating the provision of the Social Security Act, which has a cutoff date, is, he doesn't say it this way, but I'm just looking at the way the circuits in your brief are reading Larson, and I just want to understand whether your position, well your position is that the statute is not facially

[00:18:57] Speaker 01:
on Constitution.

[00:18:59] Speaker 03:
That's correct, Your Honor.

[00:19:00] Speaker 03:
The Supreme Court in Larson stated that the statute made explicit and deliberate distinctions based on religious denomination.

[00:19:07] Speaker 01:
In particular... No, no.

[00:19:09] Speaker 01:
See, that's what I want you to focus on.

[00:19:11] Speaker 01:
You don't have the footnote in front of you, do you?

[00:19:14] Speaker 01:
I can get it.

[00:19:15] Speaker 01:
All right.

[00:19:15] Speaker 01:
This is Larson.

[00:19:26] Speaker 01:
All right.

[00:19:28] Speaker 01:
It's footnote number 23, page 246.

[00:19:39] Speaker 03:
Yes.

[00:19:41] Speaker 01:
Is he where the court is describing the statute?

[00:19:49] Speaker 01:
Yes.

[00:19:50] Speaker 01:
It's not talking about denominations as such.

[00:19:52] Speaker 01:
It's just talking about well-established

[00:19:56] Speaker 01:
versus new.

[00:19:58] Speaker 03:
That's correct.

[00:19:58] Speaker 03:
And the legislative history in Larson showed that the state legislature had passed the 51% requirement in order to... Right.

[00:20:07] Speaker 01:
I understand that.

[00:20:08] Speaker 01:
But what I'm trying to understand is, in Larson, is the court saying we conclude the statute is facially unconstitutional because of the legislative history?

[00:20:23] Speaker 01:
or because the statute is facially a violation?

[00:20:31] Speaker 03:
Well, Your Honor, I think that the court reads the statute in light of the legislative history, which it says makes clear that the legislature implemented the 51%.

[00:20:42] Speaker 01:
So even if the statute has the effect of distinguishing between established and new, there would not be an establishment clause violation?

[00:20:55] Speaker 01:
Well, Your Honor, all the courts of appeals to consider Section 40... I know, and they just parroted the language without much consideration of this description that the Supreme Court has given of what was the problem.

[00:21:07] Speaker 03:
Well, I think, Your Honor, later in the Larson opinion, the Supreme Court makes clear that the

[00:21:14] Speaker 03:
that the reason, let's see.

[00:21:16] Speaker 01:
So we really ought not to worry too much about this footnote since the rest of the opinion is clearly talking about denominational distinctions?

[00:21:29] Speaker 03:
Well, I don't think it's just about denominations, but the point was that they, as on page 254 of the opinion where the court is talking about the fact that the legislature adopted the 51% rule in order to have certain religions

[00:21:43] Speaker 03:
be tax exempt and not have to follow these reporting requirements, but to have newly established churches that solicited donations from non-members to not allow them to take advantage of the same exemption from the reporting requirements.

[00:22:02] Speaker 03:
That deliberate, it was on purpose to allow the Catholic Church to be included, but to not allow other more churches that solicited from non-members to be included.

[00:22:14] Speaker 03:
And so the Supreme Court, looking at that legislative history, determined that the statute was drafted with the, quote, explicit intention of including particular religious denominations and excluding others.

[00:22:26] Speaker 01:
So it was facially invalid.

[00:22:30] Speaker 01:
I just need to be clear how you're reading Larson.

[00:22:33] Speaker 03:
Sorry, you mean facially invalid as opposed to as applied?

[00:22:37] Speaker 03:
I just don't quite understand.

[00:22:40] Speaker 03:
I don't think I'm following the question.

[00:22:42] Speaker 01:
Well, do you see what I'm concerned about in the footnote?

[00:22:45] Speaker 01:
Where the Supreme Court draws the distinction not between the Catholic Church and others, but just between old and new.

[00:23:00] Speaker 03:
Well, I think the legislative history maps right on to that distinction because... In the Larson case, I agree.

[00:23:07] Speaker 01:
Yes.

[00:23:08] Speaker 01:
All right.

[00:23:08] Speaker 01:
But just in my hypothetical, ignore the legislative history for a moment.

[00:23:14] Speaker 01:
If all you have is what the court thought the problem was, as it described in this footnote,

[00:23:20] Speaker 01:
Would we have a problem?

[00:23:22] Speaker 03:
I don't think we have a problem here, because as the courts of appeals have explained, the reason for the specific requirements in section 1402 G are to ensure that people who claim the exemption from social security and Medicare, that those people are members of groups of religious organizations that will care for their members when they become dependent.

[00:23:43] Speaker 01:
So it doesn't cause any change in what standard the court applies?

[00:23:50] Speaker 01:
whether it's strict scrutiny as opposed to the lemon test.

[00:23:53] Speaker 03:
We do not believe so, Your Honor.

[00:23:55] Speaker 03:
As the other courts of appeals have held, the statute serves a secular purpose of ensuring that the people who claim the exemption are cared for, and we think that's just as true here as the Fourth Circuit held.

[00:24:07] Speaker 02:
The problem is that there's a separate part of the statute, apart from the 1950 line, that addresses that concern about the history of supporting the G1D, specifically says somebody has to find it's a practice and has been for a period of time which he deems to be substantial.

[00:24:23] Speaker 02:
for members of such sector division to make provision for their dependent members.

[00:24:28] Speaker 02:
So you have a separate provision of the statute that addresses the evidence that they'll take care of members of the faith so that the Social Security, if they don't become public wards and the Social Security system doesn't work the way it's supposed to.

[00:24:43] Speaker 02:
So I don't see what the 1950 or the cutoff year for ACCA or for Social Security Act is doing, what work it's doing, other than distinguishing between old and new.

[00:24:53] Speaker 03:
Well, again, we think that those two provisions go hand-in-hand and serve the same purpose.

[00:24:58] Speaker 02:
Well, they don't, because B, lets the Secretary decide a period of time which he or she deems to be substantial, which would be very different than 1950.

[00:25:08] Speaker 03:
Congress could have been setting a floor.

[00:25:10] Speaker 03:
This was passed in 1965, and so Congress could have been setting a floor that a religious group needed to have been around and doing that for at least 15 years.

[00:25:21] Speaker 03:
But again, just to get back to this case,

[00:25:26] Speaker 03:
The plaintiff does not have a religious objection to health insurance.

[00:25:31] Speaker 03:
He is not someone who would have standing to challenge this particular requirement, because if any of the requirements are valid, he still cannot claim the religious conscience exemption, because he doesn't meet the fundamental requirement of having a religious

[00:25:47] Speaker 03:
a religious objection to insurance.

[00:25:49] Speaker 02:
Because I thought his argument was different, and that was you can't have a statute that says, I get penalized, and that person doesn't for religious reasons.

[00:25:58] Speaker 02:
Whether, put aside the contours of the religious exemption, you just can't have a statute that makes this differentiation where the, I think, I guess they'll tell me if I'm wrong, where the penalty turns on whether you're religious or not.

[00:26:11] Speaker 03:
Well, Your Honor, the Supreme Court has long recognized that Congress can accommodate religions without violating the Establishment Clause.

[00:26:21] Speaker 03:
And even the plaintiff at page 25 of his brief recognizes that religious accommodations are permissible.

[00:26:28] Speaker 03:
He then goes on to say that this one is not permissible because it

[00:26:35] Speaker 03:
Excuse me, he claims that it plainly rewards certain religious beliefs and the sects over others.

[00:26:40] Speaker 03:
But he is not a member of a group with another religious belief or of a sect that's excluded.

[00:26:45] Speaker 02:
No, he's a member of a person who's getting treated differently because he's not religious.

[00:26:49] Speaker 02:
Whatever the sect or whatever, I'm getting treated differently because I'm not religious.

[00:26:53] Speaker 02:
Isn't that an establishment clause problem?

[00:26:56] Speaker 02:
I think that's what you need to address.

[00:26:57] Speaker 03:
I think that there's a mismatch between the sort of broader argument he seems to be claiming and the legal argument he makes, which is that the exemption distinguishes between religious denominations where he's not a member of one that's excluded in contrast to the other cases addressing 1402G, where the person was a member of a group that they were claiming was excluded.

[00:27:19] Speaker 02:
I understand his argument to be that this is discrimination between religion and irreligion, nonreligion.

[00:27:26] Speaker 02:
And what would the answer be then?

[00:27:28] Speaker 03:
Well, it's the same answer, Your Honor.

[00:27:30] Speaker 03:
All of the courts of appeals to consider this exception, and the Supreme Court has also considered the exception in the context of a free exercise challenge, they've all recognized that Section 1402G and the Fourth Circuit recognized that the religious conscience exemption in the Affordable Care Act, that it was enacted with the, it was enacted to narrowly accommodate religious practices

[00:27:56] Speaker 03:
while at the same time ensuring that the people who claim the exemption are cared for.

[00:28:01] Speaker 03:
And the exemption in the Affordable Care Act serves the same purpose that Section 1402 G has served since 1965 when it was enacted as part of the Social Security Act.

[00:28:11] Speaker 02:
And is it your position that the Social Security Act

[00:28:14] Speaker 02:
exemption sort of function in the same way in that it would, if you didn't, I guess, have your taxes withheld for Social Security, a penalty, although it might be on your employer rather than you.

[00:28:24] Speaker 02:
But if you're self-employed, you'd have to pay a penalty.

[00:28:28] Speaker 02:
You either have to pay the tax, make the payment that the law requires, or pay a penalty, or establish that you fall within this religious exemption.

[00:28:39] Speaker 03:
Your Honor, I'm not sure about the specifics of whether there's a penalty for failing to pay Social Security tax, but it is an exemption from paying Social Security taxes.

[00:28:54] Speaker 01:
Thank you.

[00:28:54] Speaker 01:
Thank you.

[00:28:56] Speaker 01:
Does Mr. Hughes have any time?

[00:28:59] Speaker 01:
Why don't you take two minutes.

[00:29:01] Speaker 04:
Thank you, Your Honor.

[00:29:03] Speaker 04:
Judge Mileta, you're right.

[00:29:04] Speaker 04:
His distinction that he's making for the established class standing is religion versus non-religion.

[00:29:08] Speaker 04:
So if... Everson made that point.

[00:29:12] Speaker 04:
But he also, we've also realized that he conscientiously objects to having to buy insurance pursuant to the Affordable Care Act, subject to penalty, but not based on religious ground.

[00:29:21] Speaker 02:
And so it's religion versus religion.

[00:29:23] Speaker 02:
Can I ask you just a quick question?

[00:29:26] Speaker 02:
If you were right on the establishment clause, would that necessarily invalidate the Social Security exemption, or how would you distinguish?

[00:29:33] Speaker 02:
Do they rise or fall together?

[00:29:34] Speaker 02:
Because Supreme Court has told us the Social Security one meets constitutional standards, and the Affordable Care Act just

[00:29:41] Speaker 02:
Right.

[00:29:41] Speaker 04:
And I think there's a distinction between the Social Security Act and the Affordable Care Act and how they operate.

[00:29:48] Speaker 04:
And the case where the Supreme Court addressed 1402G was in the context of a free exercise clause.

[00:29:55] Speaker 04:
And I want to get to Judge Rogers.

[00:29:57] Speaker 02:
But I just want to make sure I have an answer from you.

[00:29:59] Speaker 02:
I don't think necessarily.

[00:30:02] Speaker 02:
And how would you legally distinguish, and I should get back to Judge Rogers, but how would you legally distinguish for establishment clause purposes, given what the Supreme Court said in the United States versus Lee, the social security mechanism?

[00:30:15] Speaker 04:
Right, and remember in the United States versus Lee, essentially the court concluded that there was a compelling interest, even though they found that there was a burden on the free exercise, that there was a compelling interest, because of the nature of the social security system and how it's very- I know, but we all know now that that's not how

[00:30:29] Speaker 02:
that after the Oregon case, that that's not how character-size claims are analyzed.

[00:30:34] Speaker 02:
But, you know, as I suggested, they've decided to leave since then.

[00:30:38] Speaker 02:
They think it's constitutional.

[00:30:40] Speaker 04:
But I think that the two types of systems are themselves different.

[00:30:44] Speaker 04:
And you made the point about the penalty.

[00:30:45] Speaker 04:
I mean, he's going to have a penalty for not having an Affordable Care Act compliant plan, whereas people with religious beliefs can be exempt from that.

[00:30:55] Speaker 04:
One of the main things in these cases

[00:30:57] Speaker 04:
for the upholding the 1402G under the Establishment Clause is the claim that the person who, if you're going to grant that exemption, you have to waive all benefits to Social Security.

[00:31:08] Speaker 04:
And so the Court has said that shows that it doesn't have the primary effect of advancing or inhibiting religion.

[00:31:13] Speaker 04:
You don't have anything near that to a waiver of all benefits.

[00:31:17] Speaker 02:
The Affordable Care Act incorporates that provision, as I understand it, of the Social Security Act that would require your client to have an opposition to all forms of insurance, whether health,

[00:31:27] Speaker 02:
or social security.

[00:31:28] Speaker 04:
Somebody's injured, they take to the hospital.

[00:31:29] Speaker 04:
The hospital's going to treat them in the hospital.

[00:31:31] Speaker 04:
They're going to have medical care under federal law, no matter what.

[00:31:33] Speaker 02:
Medical care and insurance are not the same thing.

[00:31:36] Speaker 04:
But what's the benefits that year?

[00:31:38] Speaker 04:
It's the federal benefits.

[00:31:40] Speaker 04:
I do think the two systems are different.

[00:31:42] Speaker 04:
And I do want to get to Judge Rogers' point, because I think it's very important.

[00:31:45] Speaker 04:
The only case that, as I recall, that addressed the 14-0-G issue after Larson was DeDro's case.

[00:31:52] Speaker 04:
And they gave short shrift.

[00:31:53] Speaker 04:
Judge, the footnote that you pointed out is exactly right.

[00:31:56] Speaker 04:
The court said this isn't simply a facially neutral statute.

[00:32:00] Speaker 04:
It makes explicit and deliberate distinctions between different religious organizations.

[00:32:04] Speaker 04:
And how to do that?

[00:32:05] Speaker 04:
Based on how they do their charitable donations.

[00:32:08] Speaker 04:
If 50% come from members and affiliated organizations, then they have an exemption.

[00:32:12] Speaker 04:
This provision makes explicit and deliberate distinctions based on religious beliefs and religious tenets.

[00:32:21] Speaker 04:
It is far more

[00:32:22] Speaker 04:
It's far less facially neutral than the statute at issue in Larson versus Valenti.

[00:32:28] Speaker 04:
It is incomprehensible that these two, that they comply.

[00:32:32] Speaker 04:
If you, Drozd just gave it short shrift, Liberty University then just relied on Drozd and gave it short shrift.

[00:32:37] Speaker 04:
If you read

[00:32:38] Speaker 04:
The Larson v. Valenti, it's incomprehensible to conclude that this exemption doesn't make deliberate and express distinctions based on religious beliefs and religious tenets, and that's impermissible.

[00:32:50] Speaker 04:
Even this court's decision in the Priest for Life case, with the religious exemption that was involved with the HHS mandate, the court said made distinctions based on organizational form and purpose, not religious beliefs or denominations.

[00:33:01] Speaker 01:
I know.

[00:33:02] Speaker 01:
I was going to draw your attention to that, but we held in that case as to the regulations

[00:33:08] Speaker 01:
that it drew the distinction based on organizational form and purpose and not religious belief or denomination.

[00:33:17] Speaker 01:
So that cuts against your argument.

[00:33:21] Speaker 04:
What that shows is that it wasn't based specifically, the court said it wasn't based on religious beliefs or denominations, assuming that if it had, it would violate the Establishment Clause.

[00:33:34] Speaker 04:
This exemption expressly states it's based on religious beliefs and religious teachings, specific tenets of religious beliefs.

[00:33:42] Speaker 04:
Not even, it's even, like I said- Where does it say that?

[00:33:47] Speaker 04:
The religious exemption?

[00:33:50] Speaker 04:
It applies to a member of a recognized religious sect or division who is an adherent of established tenets or teachings of sect or division.

[00:33:58] Speaker 05:
Right.

[00:33:59] Speaker 04:
I mean, it's referring specifically to the teachings, the religious teachings, not even to the organization.

[00:34:04] Speaker 01:
So it's largely... It's like the conscientious objector case, you know, in the sense that if you have any religion or anything.

[00:34:11] Speaker 01:
And so your point is that it is an establishment clause violation to base a distinction

[00:34:22] Speaker 01:
on religion versus non-religion.

[00:34:26] Speaker 01:
That's your bottom line.

[00:34:27] Speaker 04:
That's what the Supreme Court has said in Larson versus, again, I don't see how this can stand in light of Larson versus Valenti.

[00:34:33] Speaker 02:
Well, we got Hunter versus Wilkinson, which held that religious land use and institutionalized persons act, precisely differentiation based on religion.

[00:34:42] Speaker 04:
No, see, I think there's a difference between a general religious accommodation, because they apply, you have a penalty,

[00:34:48] Speaker 04:
or you have some provision that will apply across the board, and then somebody can come forward, and not based on any specific religious sect or division, for example, whether you're Catholic, whether you're Amish, whether you're Jewish, you could say there's a specific provision that I believe substantially burdens my religious beliefs, and then there's an analysis that the court applies.

[00:35:06] Speaker 02:
But your argument now takes down the Social Security exemption too.

[00:35:10] Speaker 04:
I don't think it necessarily does, but I think there's a big problem with Larson versus Valenti.

[00:35:20] Speaker 04:
I'm not here to argue for or against 1402G, but I think Larson versus Valenti makes it very difficult to uphold the Affordable Care Act how it's drafted.

[00:35:33] Speaker 04:
Even though it relies on 1402G,

[00:35:35] Speaker 04:
I think how it's drafted and in the context of healthcare, I don't see how it stands in light of Lawson versus Valenti.

[00:35:40] Speaker 05:
All right, thank you.