No. 12-2673 In the UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT AUTOCAM CORPORATION, et al., Plaintiffs-Appellants, v.

KATHLEEN SEBELIUS, Secretary of the United States Department of Health and Human Services, et al., Defendants-Appellees. Appeal from the United States District Court Western District of Michigan, Southern Division Honorable Robert J. Jonker, District Court Case No, 1:12-cv-1096 BRIEF OF STATES OF MICHIGAN AND OHIO AS AMICI CURIAE IN SUPPORT OF PLAINTIFFS-APPELLANTS ASKING THIS COURT TO REVERSE THE DISTRICT COURT MICHAEL DEWINE Attorney General of Ohio Frederick D. Nelson Senior Advisor to Attorney General Co-Counsel of Record 30 East Broad Street 17th Floor Columbus, Ohio 43215 614-728-4947 frederick.nelson @ohioattorneygeneral.gov BILL SCHUETTE Attorney General of Michigan John J. Bursch Solicitor General Co-Counsel of Record B. Eric Restuccia (P49550) Deputy Solicitor General Co-Counsel of Record Department of Attorney General P.O. Box 30212 Lansing, Michigan 48909 517-373-1124 restucciae@michigan.gov

TABLE OF CONTENTS Page Table of Contents ....................................................................................... i Table of Authorities ...................................................................................ii Interests of Amici Michigan and Ohio ...................................................... 1 Argument ................................................................................................... 7 I. The federal Mandate requiring Autocam to cover contraception, sterilization, abortifacients, and related products and services violates religious liberties protected under RFRA...................................................................................... 7 A. B. The federal Mandate as applied to Autocam imposes a substantial burden on the free exercise of religion. ............... 9 The United States does not have a compelling interest in applying this mandate to Autocam, and this coercion is not the least restrictive means. ......................................... 26 RFRA applies to protect the operations of Autocam’s for-profit business as run according to religious principles. .............................................................................. 30

C.

Conclusion ............................................................................................... 36 Certificate of Compliance ........................................................................ 37 Certificate of Service ............................................................................... 38

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TABLE OF AUTHORITIES Cases American Pulverizer Co. v. U.S. Dep’t of HHS, 2012 WL 6951316 (W.D. Mo. Dec. 20) ................................................. 28 Annex Medical, Inc. v. Sebelius, No. 13 1118, 2013 U.S. App. Lexis 2497 (8th Cir., Feb. 1, 2013) ........ 21 Citizens United v. Fed. Election Comm’n, 558 U.S. 310; 130 S. Ct. 876 (2010) ..................................................... 32 Conestoga v. Sebelius, No. 13-1144 (3d Cir. Jan. 29, 2013) ..................................................... 21 Employment Division v. Smith, 494 U.S. 872 (1990) ................................................................................ 7 First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978) .............................................................................. 33 Gonzales v. O Centro Espitita Beneficente Uniao Do Vegetal, 546 U.S. 418 (2006) ...................................................................... passim Grote v. Sebelius, No. 13 1077, 2013 WL 6725905 (7th Cir. Jan. 30, 2013)... 15, 21, 29, 31 Hayes v. Tennessee, 424 Fed. Appx. 546 (6th Cir. 2011) ...................................................... 24 Hobby Lobby Stores v. Sebelius, 870 F. Supp. 2d 1278 (2012)................................................................ 31 Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, 132 S. Ct. 649 (2012) ............................................................................ 33 Humphrey v. Lane, 728 N.E.2d 1039 (Ohio S. Ct. 2000) ....................................................... 2

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Kedroff v. St. Nicholas Cathedral of Russian Orthodox Church in North America, 344 U.S. 94 (1952) ................................................................................ 19 Korte v. Sebelius, No. 10-14944, 2012 WL 6757353 (7th Cir., Dec. 28, 2012) ......... passim Legatus v. Sebelius, No. 12 12061, 2012 WL 5359630 (E.D. MI., Oct. 31, 2012) ........... 20, 27 Monaghan & Domino’s Farm Corp. v. Sebelius, No. 12 15488, 2012 WL 6738476 (E.D. MI., Dec. 30, 2012) .......... 20, 31 Newland v. Sebelius, 2012 WL 3069154 (D. Col., July 27, 2012) ........................ 13, 27, 28, 29 O’Brien v. U.S. Dep’t HHS, No. 12 3357, 2012 U.S. App. Lexis 26633 (8th Cir., Nov. 28 , 2012) ..................................................................................................... 21 Sharpe Holdings, Inc. v. U.S. Dep’t of HHS, No. 2:12-cv-92, 2012 WL 6738489 (E.D. Mo., Dec. 31, 2012) .............. 14 Sherbert v. Verner, 374 U.S. 398 (1963) .............................................................................. 12 State of Nebraska, et al. v. U.S. Dep’t of HHS, et al. (pending in the 8th Circuit in Case No. 12-3238).................................. 3 Stormans, Inc. v. Selecky, 586 F.3d 1109 (9th Cir. 2009) .............................................................. 35 Thomas v. Review Bd. of Indiana Emp’t Sec. Div., 450 U.S. 707 (1981) .................................................................. 19, 22, 24 Tyndale House Publishers v. Sebelius, No. 12 1635, 2012 WL 5817323 (D. D.C., Nov. 16, 2012) ........ 25, 28, 35 United States v. Lee, 455 U.S. 252 (1982) .............................................................................. 21

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Wisconsin v. Yoder, 406 U.S. 205 (1972) ....................................................................... 12, 24 Statutes 26 U.S.C. § 4980 H .................................................................................. 23 42 U.S.C. § 18021; § 18031(d)(2)(B)(i)..................................................... 29 42 U.S.C. § 2000bb(a)(2).......................................................................... 12 42 U.S.C. § 2000bb(a)(5) .......................................................................... 18 42 U.S.C. § 2000bb(b) ................................................................................ 8 42 U.S.C. § 2000bb-1(a) ....................................................................... 7, 18 42 U.S.C. § 2000bb-2 ............................................................................... 20 42 U.S.C. § 2000bb-3 ............................................................................... 13 42 U.S.C. § 2000cc-5 ................................................................................ 20 MICH. COMP. LAW § 14.28........................................................................... 3 OHIO REV. CODE § 109.02 ........................................................................... 3 Other Authorities “Latest Birth-Control Offer ‘Falls Short,’” Wall Street Journal February 8, 2013 ................................................. 10 “March 14 Statement on Religious Freedom and HHS Mandate,” A Statement of the Administrative Committee of the United States Conference of Catholic Bishops. ............................................... 16 “Married Love and the Gift of Life,” approved November 2006 by the United States Conference of Catholic Bishops .............................. 11 78 F.R. 8456 (2013-02-06) ................................................................... 9, 10

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Humanae Vitae, encyclical of Pope Paul VI, released on July 25, 1968 ...................................................................................................... 11 State Constitutional Law, R. Holland S. McAllister, J. Shaman, & J. Sutton (West pub. 2010) ....................................................................................................... 3 Constitutional Provisions MICH. CONST. art I, § 4 ............................................................................... 2 OHIO CONST. art. I, sec. 7 ........................................................................... 2 U.S. CONST. amend. I .................................................................. 31, 32, 33

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INTERESTS OF AMICI MICHIGAN AND OHIO Sixth Circuit amici Michigan and Ohio, through their Attorneys General Bill Schuette and Mike DeWine, respectfully ask this Court to vindicate the rights established by Congress in the Religious Freedom Restoration Act (“RFRA”), 42 U.S.C. § 2000bb et seq., by reversing the denial below of the Plaintiffs/Appellants’ (“Plaintiffs’” or “Autocam”) Motion for Preliminary Injunction. Michigan and Ohio are committed to upholding fundamental principles of religious freedom, tolerance, and pluralism, and the religious liberty issues implicated by this case are of vital importance to individuals and businesses across our two States. Both Michigan and Ohio seek to foster robust business climates in which diverse employers can succeed to the benefit of all their fellow State citizens and to expand the number of good, well-paying jobs with substantial employee benefits. To the extent that the federal mandate is read to pressure employers who are guided by religious principles into taking the “option” of discontinuing employee group health insurance plans, the mandate adds to the financial challenges of the Sixth Circuit amici States and wrongly burdens businesses and employees.

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Even more fundamentally, Michigan and Ohio are committed to preserving for their citizens the traditions of religious liberty and pluralism that have served our nation so well and that have informed the enactment and application of RFRA. The Michigan Constitution protects religious worship and also provides for the religious liberty of Michigan citizens by guaranteeing that “[t]he civil and political rights, privileges and capacities of no person shall be diminished or enlarged on account of his religious belief.” MICH. CONST. art I, § 4. The principle of religious freedom is one of the central values in Michigan law. Ohio, for its part, is guided by its own Constitution that provides even more expansive protections of religious liberties than does the federal charter. See OHIO CONST. art. I, sec. 7 (prohibiting “any interference with the rights of conscience”); see also, e.g., Humphrey v. Lane, 728 N.E.2d 1039, 1045 (Ohio S. Ct. 2000) (“[T]he Ohio Constitution’s free exercise protection is broader …. We adhere to the standard long held in Ohio regarding free exercise claims – that the state enactment must serve a compelling state interest and must be the least restrictive means of furthering that interest. That protection applies to direct and indirect encroachments upon religious freedoms.”);

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State Constitutional Law, R. Holland S. McAllister, J. Shaman, & J. Sutton (West pub. 2010) at 523-24 (noting breadth and specifics of Ohio protections). Ohio’s Constitution thus in this context provides at the state level roughly the same measure of protection of religious liberties that RFRA adopts as a matter of federal statutory law. Indeed, Ohio and the people of Michigan both are parties in litigation in which various claimants have challenged the federal mandate on RFRA grounds. State of Nebraska, et al. v. U.S. Dep’t of HHS, et al. (pending in the 8th Circuit in Case No. 12-3238). The Michigan and Ohio Attorneys General, Bill Schuette and Mike Dewine, are the chief legal officers for their respective States, authorized by law to work to safeguard for the citizens of their States the important interests at stake here. MICH. COMP. LAW § 14.28; OHIO REV. CODE § 109.02. Both understand that the federal Mandate operates as a substantial burden as applied against the religious practice of Plaintiffs and others like them under RFRA, and that the mandated burden on Autocam is not narrowly tailored as the least restrictive means of advancing a compelling federal interest. Michigan and Ohio submit this amicus brief to defend religious liberty.

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INTRODUCTION Autocam and the Kennedy family assert profound religious objections to the new federal mandate that they must provide insurance covering contraceptive, abortifacient, and sterilization products and services for their employees. Despite allowing myriad exceptions for “grandfathered” and smaller businesses, the federal government will not permit John Kennedy and the Kennedy family to operate their businesses in a way consistent with their religious principles. This federal insistence on subjugating religious values to bureaucratic mandate also has extended to other employers within our States, directly contrary to the protections that RFRA was meant to afford. The mandate imposes a substantial burden on Plaintiffs by forcing them to provide the specified insurance products in violation of their guiding religious principles, or incur ruinous multi-million dollar penalties. The coercion into supplying coverage – forcing Plaintiffs to act contrary to sincerely held religious beliefs – itself violates religious freedom. Courts should not become enmeshed in evaluating the interpretive merits or proper doctrinal weight of religious principles. And it is no answer to suggest – as the district court does here – that

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Plaintiffs could elect to drop employee group coverage altogether: the coercion that forces that decision, a loss for all, would itself inflict significant penalties and have other adverse consequences on Autocam and Autocam employees, confound Autocam’s guiding religious principles, and again violate RFRA. The federal government has offered no compelling interest to justify the mandate as applied to those for-profit businesses that have challenged the mandate when so many others are already excluded from the mandate’s reach. And the government could accomplish its ends by less restrictive and less coercive means. The mandate fails RFRA’s strict scrutiny. A majority of courts confronting these issues, including sister circuits, have provided injunctive relief to prevent the mandate from violating free exercise rights in the context of for-profit businesses. The text of RFRA gives no support for distinguishing among businesses on the basis of the products or services they offer, or as between profit and non-profit corporations, and courts should not become entangled in second-guessing the adherent’s understanding of religious doctrine.

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RFRA was designed to protect religious exercise of the exact sort that the mandate substantially burdens in this case. Notably, no fewer than three times, the district court suggests that the mandate does not violate the RFRA in part because an employer seeking to act consistent with religious principles may avoid the penalties that attach to that decision by dropping employee group health coverage altogether and paying less expensive fines. See R. 42 (Opinion) at 16, Pg ID #754 (“[Plaintiffs] do have a third option: namely, drop all group coverage. This would subject them to some financial risk … [and] have obvious labor relations impact, and potential adverse impact for the Autocam employees, but it is still an available pathway.”); see also id. at 5, 20-21, Pg ID #743, 758-59. This is a profound misunderstanding of how our country operates. The charges themselves effectively punish religious exercise, and compelling employers to stop insuring their employees would be a loss for everyone – for Autocam in pursuing its principles and duties to its employees, and for the employees who lose insurance. The district court’s analysis puts into sharp relief some of the important State interests that Michigan and Ohio have in this case.

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ARGUMENT I. The federal Mandate requiring Autocam to cover contraception, sterilization, abortifacients, and related products and services violates religious liberties protected under RFRA. In RFRA, Congress codified constitutional doctrine as understood before Employment Division v. Smith, 494 U.S. 872 (1990), that federal laws even of general application may not substantially burden the free exercise of religion absent a “compelling governmental interest,” and only then through “the least restrictive means of furthering that interest.” Except in those narrowly drawn circumstances: Government shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability[.] 42 U.S.C. § 2000bb-1(a); Gonzales v. O Centro Espitita Beneficente Uniao Do Vegetal, 546 U.S. 418, 424 (2006) (“Under RFRA, the Federal Government may not … substantially burden a person’s exercise of religion, ‘even if the burden results from a rule of general applicability’.”). “It is an exacting standard, and the government bears the burden of satisfying it.” Korte v. Sebelius, No. 10-14944, 2012 WL 6757353 (7th Cir., Dec. 28, 2012), at *5 (staying mandate application pending appeal).

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Thus, as Congress specified in the text of RFRA itself, the Religious Freedom Restoration Act is designed: (1) 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 free exercise of religion is substantially burdened; and (2) to provide a claim or defense to persons whose religious exercise is substantially burdened by government. 42 U.S.C. § 2000bb(b). This is such a case. Here, where the federal mandate clashes with religious liberty, the analysis dictated by RFRA seems plain: the courts must examine whether the government’s interest in subordinating the religious principles that guide Autocam is “compelling,” and if so, whether the mandate is “the least restrictive means” of furthering that compelling interest. Michigan and Ohio believe an injunction against the mandate is warranted for three reasons: (1) the HHS Mandate as applied to Autocam imposes a substantial burden on free exercise (2) there are no compelling reasons to apply the mandate to Autocam and similarly situated persons, particularly where there are less restrictive means by which the United States could accomplish the objective of guaranteeing

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access to reproductive services; and (3) the federal government’s argument that RFRA does not apply to secular businesses – only religious ones – violates RFRA’s plain terms.

A.

The federal Mandate as applied to Autocam imposes a substantial burden on the free exercise of religion.

The district court acknowledges that the federal regulatory Mandate at issue requires non-exempt employers to provide their employees with insurance coverage that includes “without limitation, diaphragms, oral contraceptives, intra-uterine devices, and … the ‘morning after pill’ … and … the ‘week after pill’,” in addition to sterilization procedures and to related counseling. R. 42 at 3, Pg ID #741 (citing 45 C.F.R. § 147.130), 4, Pg ID #742 (“governing regulations therefore require the Autocam Plaintiffs to provide their employees a health care plan that includes contraceptive services coverage”). And although federal authorities now have announced new proposed amendments to their previously published “final rules,” those amendments explicitly would not address or accommodate the religious convictions of for-profit employers such as Autocam. See 78 F.R. 8456 (2013-02-06). Indeed, the federal regulators have published that they

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“believe that this proposal would not expand the universe of employer plans that would qualify for the exemption beyond that which was intended in the 2012 final rules,” and that they intentionally mean to “limit any [purported] accommodation [only] to nonprofit organizations that hold themselves out as religious…. The Departments do not propose that the definition of eligible organization extend to for-profit secular employers.” Id. As the district court opinion recites, the Kennedy Plaintiffs here who “own and control the Autocam Plaintiffs” are Catholics subscribing to the teachings of the Catholic Church that “‘prohibit the Plaintiffs from participating in, paying for, training others to engage in, or otherwise cooperating in the practice of contraception, including abortifacient contraception, and sterilization …. [and who] seek to do business in a manner fully consistent with their religious convictions’.” R. 42 at 2; see also, e.g., “Latest Birth-Control Offer ‘Falls Short,’” Wall Street Journal February 8, 2013 (quoting President of the U.S. Conference of Catholic Bishops, Cardinal Timothy Dolan, in noting teachings that instruct Catholics to “live their lives during the week to reflect the same beliefs that they proclaim on the Sabbath,” and adding,

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“We cannot now abandon them to be forced to violate their morally wellinformed consciences”). The teachings of the Catholic Church against contraception and abortion are set forth, for example, in “Married Love and the Gift of Life,” approved November 2006 by the United States Conference of Catholic Bishops.1 See also Humanae Vitae, encyclical of Pope Paul VI, released on July 25, 1968.2 Consequently, the selfinsured health insurance plan that Autocam provides (with no premium) to full-time employees “is designed ‘to exclude contraception, including abortifacient contraception, sterilization, and counseling relating to the same.’” R. 42 at 2, Pg ID #740. The Mandate and Autocam’s guiding religious principles thus stand in direct conflict: the federal Goliath here brooks no deviation from (non-”grandfathered”) businesses operated based on religious conviction. This is precisely the sort of situation that RFRA was designed to address. This document may be found online on the website of the USCCB at http://usccb.org/beliefs-and-teachings/what-we-believe/love-andsexuality/married-love-and-the-gift-of-life.cfm (last visited on February 15, 2013).
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The encyclical is available on the Vatican’s website at http://www.vatican.va/holy_father/paul_vi/encyclicals/documents/hf_pvi_enc_25071968_humanae-vitae_en.html (last visited February 15, 2013).
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That the federal mandate at issue is a rule of general applicability does not shield it from RFRA’s strict scrutiny. That is why Congress passed RFRA in the first place. “[L]aws ‘neutral’ toward religion may burden religious exercise as surely as laws intended to interfere with religious exercise.” 42 U.S.C. § 2000bb(a)(2). The two cases that RFRA cites in its text, Sherbert, 374 U.S. 398 (1963), and Yoder, 406 U.S. 205 (1972), each examined state laws of general applicability. In Sherbert, the Supreme Court determined that a South Carolina law that disqualified a Seventh Day Adventist, who refused to work on Saturdays, from unemployment benefits had to yield to her free exercise of her religion. Sherbert, 374 U.S. at 410. Even though this was an ‘incidental burden,’ through an unintended effect, the State was required to come forward with a compelling interest to justify it. Id. at 403. So, too, in Yoder, where the obligation of Wisconsin law was for children to have compulsory education through age 16. Yoder, 406 U.S. at 207. This statute was an unconstitutional burden on Amish children and therefore “beyond the power of the State to control, even under regulations of general applicability.” Id. at 220.

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“Of course government is not bound by every religious fine line. But RFRA requires that the government interest be strong before forcing people to cross the line.” Autocam Corp. v. Sebelius, No. 12-2673, 2012 U.S. App. Lexis 26736, at *6 (6th Cir., Dec. 28, 2012), (Rogers, J., dissenting from denial of injunction pending appeal).3 Congress itself made that balance in RFRA, and specified that RFRA applies to all subsequent enactments, unless a RFRA exemption is made explicit. 42 U.S.C. § 2000bb-3. Put another way, Congress decided as a matter of “uniform” policy that “there is a strong public interest in the free exercise of religion even where that interest may conflict with [another statutory scheme],” Newland v. Sebelius, 2012 WL 3069154 (D. Col., July 27, 2012) at *15 (quoting 10th Circuit in O Centro, 389 F.3d 973, 1010 (2004)). The district court engages in a rather tangled ecclesiastical exegesis in assessing the “question whether the sincerely held belief amounts, in fact, to a substantial burden on the exercise of religion within the meaning of RFRA,” and then concludes that such burden here is “unlikely.” R. 42 at 13-14, Pg ID #751-52. The court probably The amici have relied on the Lexis cites where the Westlaw cites were unavailable.
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does not consciously intend to equate the “belief” with the “burden,” but its conclusion that the Mandate is unlikely to impose a substantial burden on free exercise is unfounded. It begins with the ruling that complying would be cheap: “[t]here is certainly no significant financial burden on the Autocam Plaintiffs, as even the Plaintiffs agree the cost of compliance is only about $100,000.” R. 42 at 10, Pg ID #748. But this misses the point. Of course it is not the financial cost of participating in and carrying out a Mandate in violation of sincere religious principles that substantially burdens Autocam, but rather the conduct that the government directs in contravention of those principles and the penalties that the government exacts for non-compliance. See, e.g., Sharpe Holdings, Inc. v. U.S. Dep’t of HHS, No. 2:12-cv-92, 2012 WL 6738489, at *5 (E.D. Mo., Dec. 31, 2012) (“plaintiffs have shown that the enforcement of the … mandate, and its substantial financial penalties, on their health plan would substantially burden their religious beliefs”). Indeed, in Yoder, the Supreme Court held that a $5.00 fine for violating a school-attendance law imposed a substantial burden on “the free exercise of respondent’s religious beliefs. 406 U.S. at 208, 219.

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The teachings that guide the operation of Autocam likely reflect that there are more things in heaven and earth than are dreamt of in the philosophy of the Federal Register. Again, the district court does not question Autocam’s claim that Catholic “‘teachings prohibit the Plaintiffs from participating in’” the conduct required of them by the Mandate. R. 42 at 2, Pg ID #740. To suggest that the financial cost of compliance with the federal strictures is so minimal as to obviate any higher obligations is fundamentally to misunderstand the protections that RFRA seeks to ensure. Here, just as the Seventh Circuit found in January, “the government’s minimalist characterization of the burden continues to obscure the substance of the religious-liberty violation asserted ….” Grote v. Sebelius, No. 13 1077, 2013 WL 6725905 at *3 (7th Cir. Jan. 30, 2013). The district court then reasons that because the business pays its employees’ salaries and chooses to give them money for health savings accounts, the leap to compelling the employer to purchase insurance for abortifacient and contraceptive products and services is of no significant theological moment. “Plaintiffs … want to draw a line between the moral culpability of paying directly for contraceptive services their

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employees choose, and of paying indirectly for the same services through wages or health savings accounts,” the decision says, but there is “virtually no functional difference” between paying salaries and paying for contraceptive insurance and hence no “substantial burden.” R. 42 at 10-11, Pg ID #748-49. In effect, the district court concludes that no one’s religious beliefs should be seriously offended by what it calls the “incremental difference” between paying for salaries or savings accounts and paying for the mandated insurance. Id. Not all theologians would agree. The National Conference of Catholic Bishops, for example, has stated that the regulation affronts Catholic conscience in mandating “sponsoring of, and payment for, insurance as employers ... without even the semblance of an exemption.” “March 14 Statement on Religious Freedom and HHS Mandate,” A Statement of the Administrative Committee of the United States Conference of Catholic Bishops.4 Certainly in other contexts, secular laws recognize a clear distinction between payment of a salary by one party and the
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This document may be found at the following website:

http://www.usccb.org/issues-and-action/religious-liberty/march-14statement-on-religious-freedom-and-hhs-mandate.cfm (last visited on February 19, 2013). 16

subsequent use of that money by another. An employer whose employee uses his paycheck for his own devices is not thereby considered complicit in the later conduct. For example, consider a Quaker-owned business’s commitment to pacifism and its owner’s objections to handguns. A hypothetical mandate requiring a business either to provide handguns to its employees for self-defense or to contract with a weapons supplier to provide the guns could well be seen as qualitatively different from paying wages that would permit such purchases. The Seventh Circuit has addressed this point precisely: the ‘incremental difference’ argument “misunderstands the substance of the claim. The religiousliberty violation at issue here inheres in the coerced coverage of contraception, abortifacients, sterilization, and related services, not—or perhaps more precisely, not only—in the later purchase or use of contraception or related services.” Korte, 2012 WL 6757353, *3 (emphasis in original). The district court’s decision is also not bolstered by its seeming attack on the policy judgments that informed RFRA itself. The district court says that it does not read RFRA to “subject virtually every

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government action to a potential private veto based on a person’s ability to articulate a sincerely held objection tied in some rational way to a particular religious belief,” because “[s]uch a rule would paralyze the normal process of governing, and threaten to replace a generally uniform pattern of economic and social regulation with a patchwork array of theocratic fiefdoms.” R. 42 at 13, Pg ID #751. But RFRA in fact explicitly applies “even if the burden results from a rule of general applicability,” precisely so as to prevent the ‘uniform’ imposition of undifferentiated law in a way that substantially burdens religious free exercise unless strict scrutiny is satisfied. 42 U.S.C. § 2000bb-1(a). That is the whole point of RFRA. Indeed, a unanimous Supreme Court addressed the district court’s concern just seven years ago in no uncertain terms: The Government’s argument echoes the classic rejoinder of bureaucrats throughout history: If I make an exception for you, I’ll have to make one for everybody, so no exceptions. But RFRA operates by mandating consideration, under the compelling interest test, of exceptions to ‘rules of general applicability …. Congress determined that the legislated test ‘is a workable test for striking sensible balances between religious liberty and competing prior governmental interests.’ [42 U.S.C.] § 2000bb(a)(5). O Centro, 546 U.S. at 436.

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Moreover, to enmesh the courts in making religious distinctions as to what matters of doctrine adherents are justified in regarding as significant and what matters the believers see as important but really should not is to embark on a dangerous course that RFRA is designed to deter. Judge Rogers makes this point eloquently. See Autocam, 2012 U.S. App. Lexis 26736 (Rogers, J., dissenting from denial of injunction pending appeal: “If walking this fine line is sincerely accepted as a condition for salvation, it is not up to the government to say that the line is too fine. …. RFRA requires that the government interest be strong before forcing people to cross the line”). The Supreme Court has underscored this fundamental point: “Courts are not arbiters of scriptural interpretation.” Thomas v. Review Bd. of Indiana Emp’t Sec. Div., 450 U.S. 707, 716 (1981); see also Kedroff v. St. Nicholas Cathedral of Russian Orthodox Church in North America, 344 U.S. 94, 113 (1952) (“whenever the questions of discipline, or of faith, or ecclesiastical rule, custom, or law have been decided by the highest of these church judicatories to which the matter has been carried, the legal tribunals must accept such decisions as final, and as binding on them”) (internal quotes omitted). And of course, in RFRA,

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Congress defined the “exercise of religion” as “any exercise of religion, whether or not compelled by, or central to, a system of religious belief.” 42 U.S.C. § 2000bb-2 (referencing 42 U.S.C. § 2000cc-5) (emphasis added). Yet in determining the religious significance of what it weighs and deems “incremental differences” (and in offering suggestions as to other courses that it thinks might make Autocam “more comfortable religiously and morally,” see R. 42 at 11, n. 1, Pg ID #749), the district court engages in just the sort of entangling determination that RFRA and Supreme Court precedent forbid. The better reasoned approach is to accept the sincere statements of the party regarding its religious principles. See, e.g., Legatus v. Sebelius, No. 12 12061, 2012 WL 5359630, at *6 (E.D. MI., Oct. 31, 2012) (following lead of “courts [that] often simply assume that a law substantially burdens a person’s exercise of religion when that person so claims,” citing extensive authority); Monaghan & Domino’s Farm Corp. v. Sebelius, No. 12 15488, 2012 WL 6738476, at *3 (E.D. MI., Dec. 30, 2012) (“[T]he Court is in no position to decide whether and to what extent Monaghan would violate his religious beliefs by complying with the mandate.… Other

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courts have assumed that a law substantially burdens a person’s free exercise of religion based on that person’s assertions…. [Therefore], the Court will assume that abiding by the mandate would substantially burden … adherence to Catholic teachings.”). Both the Seventh Circuit and the Eighth Circuit very recently have found a likelihood of “substantial burden” in this context sufficient to support appeals court issuance of injunctions pending appeal. Annex Medical, Inc. v. Sebelius, No. 13 1118, 2013 U.S. App. Lexis 2497 (8th Cir., Feb. 1, 2013); O’Brien v. U.S. Dep’t HHS, No. 12 3357, 2012 U.S. App. Lexis 26633 (8th Cir., Nov. 28 , 2012); Grote v. Sebelius, No. 13 1077, 2013 WL 362725 (7th Cir. Jan. 30, 2013); Korte, 2012 WL 6757353, *3 (7th Cir. Dec. 28, 2012). But see Conestoga v. Sebelius, No. 13-1144 (3d Cir. Jan. 29, 2013), slip. op., p. 3 (no substantial burden based on court’s view that claim was not advanced by RFRA “person”). The court below cites United States v. Lee, 455 U.S. 252, 257 (1982), for the proposition that it is not “‘within the judicial function and judicial competence’ to determine whether Plaintiffs have a proper interpretation of the Catholic faith,” R. 42 at 13, Pg ID #751. It should not then disregard that prohibition in dismissing the substantial

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burden concerns. See also Thomas, 450 U.S. at 716 (“it is not within the judicial function and judicial competence to inquire” into accuracy of religious conceptions). The district court elsewhere in its opinion also suggests that Autocam does “have a third option: namely, drop all group coverage” and pay a lesser penalty than would be incurred by providing broad group coverage absent the mandated contraception provisions. R. 42 at 16, Pg ID #754. The opinion elaborates: The Court does note an irony: namely, one very real possibility … is that Plaintiffs will choose to terminate their existing coverage and run the risk of a shared responsibility payment obligation under Section 4980H, rather than the more draconian financial consequences under Section 4980D for non-compliant group plans. This would, of course, leave Autocam’s employees without group coverage of any kind …. The net result of this scenario would seem to be a loss for everyone – for the Autocam Plaintiffs, for the Autocam employees, and for the Defendants …. But such a result is traceable directly to the policy decisions of Congress and the Executive Branch in selecting the substance, the timing, and enforcement incentives of the rules at issue. Id. at 20-21, Pg ID #758-59. Well established precedent, however, makes clear that the relevant penalty structures do indeed create a substantial burden under RFRA.

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Autocam with its hundreds of employees would be liable for penalties of $100 per employee per day for failing to include the mandated coverage in its insurance plan, amounting to some $19,000,000 in fines yearly; the district court does not question the verified statement that such penalties would be “ruinous.” Id. at 5, Pg ID #743. The court further says, however – more than once – that should Autocam “alternatively choose not to offer any group plan at all,” it could face penalties for such a choice under 26 U.S.C. § 4980 H (of $2,000 per employee per year), but that “Plaintiffs have not claimed that any such payment obligation would be ruinous.” Id. at 5, 16, Pg ID #743, 754. There should be no mistake that this is a Hobson’s choice of the sort RFRA was designed to prevent. And the RFRA test, of course, is not limited to whether a monetary penalty would be “ruinous.” As this Court has outlined the framework in the related context of RLUIPA, governmental imposition will be classified as a substantial burden when that action forces a choice between “‘following the precepts of … religion and forfeiting benefits’ or when the action in question placed ‘substantial pressure on an adherent to modify his behavior and to violate his beliefs.’” Hayes v. Tennessee, 424 Fed. Appx. 546, 554-55

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(6th Cir. 2011) (citations omitted). Indeed, the Supreme Court itself has made clear this same point: Where the state conditions receipt of an important benefit upon conduct proscribed by a religious faith, or where it denies such a benefit because of conduct mandated by religious belief, thereby putting substantial pressure on an adherent to modify his behavior and to violate his beliefs, a burden upon religion exists. While the compulsion may be indirect, the infringement upon free exercise is nonetheless substantial. Thomas, 450 U.S. at 718-19. Here, the penalties imposed for taking the course outlined by the district court and ending all group insurance (so as to escape other penalties for failing to comply with the mandate) could approach a million dollars or more. And this action would undermine Autocam’s commitment to its employees, and cause what the district court concedes would be an “obvious labor relations impact.” R. 42 at 16, Pg ID #754. Under these circumstances, the prohibited “pressure” is beyond question. Indeed, in the Yoder case cited by RFRA, the Supreme Court found a substantial burden in a $5.00 fine for violation of the compulsory school attendance law at issue there. 406 U.S. at 208, 219. The coercion here far surpasses what the Supreme Court found in Yoder to be an unconstitutional burden. 24

Moreover, this “alternative” would itself cause Autocam to contradict guiding religious beliefs. The verified complaint alleges, and the district court does not gainsay, the significant religious commitments involved: Plaintiffs have earnestly endeavored over the years to provide their employees with high quality employee health coverage. … [T]his is a practical need insofar as they must be able to attract skilled employees in order … to remain in business…. But precisely because Plaintiffs seek to live their Christian vocation as individuals who do not check their religious beliefs at the door of the workplace, they have gone above and beyond the minimal requirements of the market in their treatment of their employees…. [Including through the good benefits of the health plan as detailed,] Autocam seeks to recognize and support the dignity of their employees.” R. 1 at ¶¶ 35-36, Pg ID #7-8. Just like the “ruinous” fines for direct violation of the mandate, the district court’s suggested option of Autocam abandoning employee group insurance, and thereby incurring significant fines while curtailing other aspects of the Kennedy’s family sincerely professed “Christian vocation,” also constitutes a substantial burden under RFRA. See, e.g., Tyndale House Publishers v. Sebelius, No. 12 1635, 2012 WL 5817323, at *11 (D. D.C., Nov. 16, 2012) (“Government action can substantially burden a plaintiff’s religious exercise even if the law only

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results in the plaintiff being forced to forgo a government benefit [citing Sherbert]. … As in Yoder, the contraceptive coverage mandate affirmatively compels the plaintiffs to violate their religious beliefs in order to comply with the law and avoid the sanctions that would be imposed for their noncompliance. Indeed, the pressure on the plaintiffs to violate their religious beliefs is ‘unmistakable.’”). B. The United States does not have a compelling interest in applying this mandate to Autocam, and this coercion is not the least restrictive means.

The federal government is required under RFRA’s strict scrutiny to demonstrate that the mandate’s burden as applied to Autocam furthers a compelling governmental interest through the least restrictive means. The Supreme Court has held both that “the burden is placed squarely on the Government by RFRA,” and that “the burdens at the preliminary injunction stage track the burdens at trial.” O Centro, 546 U.S. at 429. The federal government has not met its strict scrutiny burdens. In O Centro, the Supreme Court explained that “RFRA requires the Government to demonstrate that the compelling interest test is satisfied through application of the challenged law ‘to the person’ – the 26

particular claimant whose sincere exercise of religion is being substantially burdened.” 546 U.S. at 430-31. This is a “more focused inquiry” under which the statute commands that courts look “beyond broadly formulated interests justifying the general applicability of government mandates and scrutinize[ ] the asserted harm of granting specific exemptions to particular religious claimants.” Id. at 432, 431. This sharpened inquiry undercuts the federal government’s compelling interest position that no exception can be made for Autocam. There is no dispute that the HHS Mandate already contains multiple categories of employers to which the mandate does not currently apply: (1) religious organizations, as quite narrowly defined; (2) all employers with fewer than 50 employees; and (3) employers with “grandfathered” plans covering what one court says are more than 190 million plan participants. See Newland, No. 12-cv-1123, 2012 WL 3069154, *7 (“[T]his massive exemption [for grandfathered plans] completely undermines any compelling interest in applying the preventive care coverage mandate to Plaintiffs.”); Legatus, No. 12-12061, 2012 WL 5359630, *9 (“About 193 million health plans were in existence on March 23, 2010, and presumably qualified as grandfathered.”); Tyndale

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House, 2012 WL 5817323, *18 (“The existence of these exemptions significantly undermines the defendants’ interest in applying the contraceptive coverage mandate to the plaintiffs. Thus, [given the lack of proof regarding a harm for exemption of the particular claimants], and considering the myriad of exemptions to the contraceptive coverage mandate already granted by the government, the defendants have not shown a compelling interest in requiring the plaintiffs to provide the specific contraceptives to which they object.”); American Pulverizer Co. v. U.S. Dep’t of HHS, 2012 WL 6951316 (W.D. Mo. Dec. 20), *4 (“[S]ignificant exemptions … exist. Accordingly, these exemptions undermine any compelling interest in applying the preventative coverage mandate to Plaintiffs.”). At least equally important for strict-scrutiny analysis, the federal government has other less restrictive means available by which to accomplish its desired ends. Those alternatives range from direct purchase and distribution to tax incentives. The district court in Newland delineated arguments of various ways in which the Government could directly provide contraception products and services, including: “creation of a [government-provided] contraception

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insurance plan with free enrollment, direct compensation of contraception and sterilization providers, [and] creation of a tax credit or deduction for contraceptive purchases ….” 2012 WL 3069154, *7 (D. Co.). Indeed, tax credits are the mechanism by which the Act attempts to enable employers with fewer than 50 employees to obtain health care, as the United States noted below. See 42 U.S.C. § 18021; § 18031(d)(2)(B)(i). Here, as the Newland court also recognized, the federal government has failed to carry its burden: Defendants have failed to adduce facts establishing that government provision of contraception services will necessarily entail logistical and administrative obstacles defeating the ultimate purpose of providing no-cost preventive health care coverage to women. Once again, the current existence of analogous programs heavily weighs against such an argument. 2012 WL 3069154, *8. Just as the Seventh Circuit twice has held in similar cases, “the government has not … demonstrated that requiring religious objectors to provide cost-free contraception coverage is the least restrictive means of increasing access to contraception.” Grote, 2013 WL 362725, *3; Korte, 2012 WL 6757353, *4. The federal government has not proven

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that its mandate as applied to Autocam is the least restrictive alternative for achieving any compelling end. RFRA does not permit such heavy-handed, undifferentiated impositions.

C.

RFRA applies to protect the operations of Autocam’s for-profit business as run according to religious principles.

In RFRA, “Congress has applied the protection of the act to ‘person[s],’ not simply to individuals.” R. 42 at 7, Pg ID #745. As the district court observed: “This suggests a Congressional intention to apply RFRA’s protection to entities as well as to individuals.” Id. Because of its determination on the question of whether the mandate “substantially burdens” free exercise, however, the decision below does not reach whether RFRA protections extend to Autocam Corporation and Autocam Medical. The majority view of the courts that have examined the issue in this context is correct: Plaintiffs such as those here have standing to invoke the protections that RFRA was meant to provide. See, e.g., Korte, No. 12-3841, 2012 WL 6757353, *3 (7th Circuit rejects “the government’s primary argument … that because K&L Contractors is a secular, for-profit enterprise, no rights under RFRA are implicated at all…. That the Kortes operate their business in the 30

corporate form is not dispositive of their claim. … The contraception mandate applies to K&L Contractors as an employer of more than 50 employees, and the Kortes would have to violate their religious beliefs to operate their company in compliance with it.”); Grote, No. 13-1077, 2013 WL 362725, *2 (Korte “considered the likelihood of success of a claim brought by a secular, for-profit corporation owned and operated by a Catholic family in accordance with the teachings of the Catholic faith…. If anything, the Grote family and Grote Industries have a more compelling case …. [because] the Grote Industries health plan is selfinsured and has never provided contraception coverage.”); Monaghan, No. 12-15488, 2012 WL 6738476, *3 (“For purposes of the instant Motion, it is sufficient for the Court to find that Monaghan may bring a claim under the RFRA based on his argument that the mandate requires him to perform an act that is at odds with his religious beliefs.”). Even for the courts that have determined that for-profit secular businesses are not covered by the First Amendment and RFRA, see, e.g., Hobby Lobby Stores v. Sebelius, 870 F. Supp. 2d 1278, 1291 (2012), the point that a corporation – in contrast to a natural person – does not “pray, worship, observe sacraments” would seem to apply

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equally to non-profit corporations. But there is no dispute that various non-profit corporations are covered, as the United States acknowledged below in its analysis of religious organizations. See R. 17, Response to Preliminary Injunction, pp. 10-11, Pg ID #186-187. This distinction between a secular as against a religious organization is untenable. There is no dispute that First Amendment protection for speech and association applies both to religious and secular organizations. Citizens United v. Fed. Election Comm’n, 558 U.S. 310; 130 S. Ct. 876, 900 (2010) (“The Court has thus rejected the argument that political speech of corporations or other associations should be treated differently under the First Amendment simply because such associations are not ‘natural persons.’”). Indeed, the analysis on which the Supreme Court based its decision in Citizens United appears to exclude the Government’s claim that secular businesses fall outside the purview of the First Amendment’s religious protections: Freedom of speech and the other freedoms encompassed by the First Amendment always have been viewed as fundamental components of the liberty safeguarded by the Due Process Clause, and the Court has not identified a separate source for the right when it has been asserted by corporations.

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First National Bank of Boston v. Bellotti, 435 U.S. 765, 780 (1978) (citations omitted; emphasis added); see also Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, 132 S. Ct. 649 (2012) (vindicating free exercise rights of religious organizations). Consider the frequently posited example of a Jewish deli privately owned by a Jewish family that decides on religious principle that it will not sell pork. The suggestion that RFRA affords this decision no protection because the deli is a commercial business would reflect an impoverished understanding of both the First Amendment and of RFRA. It rests on an assumption that many religions reject – that a person’s life can be divided into component parts, some of which are governed by religious conviction, and some of which are not. A federal mandate to sell pork would offend the religious practice of such a business and its family owners. The claim otherwise would limit the religious practice to only those entities that are owned by religious institutions or sell exclusively religious goods. But the First Amendment and RFRA are for everyone, not just for governmentcertified religious organizations.

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This conclusion that a secular business, particularly one that is family-owned or closely held, is protected under RFRA comports with common sense. On a basic level, a corporation is a group formed to achieve a particular mission and is made up of natural persons. The owners may elect to operate their businesses on religious principles even if their mission is secular in nature. A misguided effort to circumscribe religious liberty so as to protect only organizations that provide explicitly religious products or services would be similar to confining religious practice to houses of worship, as if religious principles may not animate a corporation – or a person – in public and commercial life. It would be akin to an error that suggests that only the clergy should be at liberty freely to express religious views. But that would misunderstand religion, religious freedom, and the protections that RFRA extends to all persons. And such a distinction is nowhere justified in RFRA’s text. Here, “[t]he Kennedy Plaintiffs own and control the Autocam Plaintiffs,” R. 42 at 2, Pg ID #740. Because they “seek to live their Christian vocation” and not “check their religious beliefs at the door …, they have gone above and beyond the minimal requirements of the

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market,” R. 1 Complaint at ¶¶35-36, Pg ID #7. Autocam’s health plan has been structured to accord with the religious principles they recite. Id. In similar circumstances, where the businesses do not “present any free exercise rights … different from or greater than” the rights of the owners, courts have held that they “have standing to assert the free exercise rights of [their] owners.” Stormans, Inc. v. Selecky, 586 F.3d 1109, 1120 (9th Cir. 2009) (state mandate of pharmacy sale of contraceptive drugs); Tyndale House, No. 12-1635, 2012 WL 5817323, *6-8. Further, where there is injury and a “congruence of interests” between company and owner, and where the challenged regulation applies to the company and not directly against the owners, the company has standing to assert any free exercise rights that the government may assert cannot be advanced by the individuals. See, Tyndale House, at **27-33 (noting that federal defendants there had urged that no Tyndale entity would have standing to challenge the mandate). After all, RFRA was not written by Joseph Heller and was not meant to be a Catch 22. It is supposed to be a real protection for all Americans.

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CONCLUSION Amici respectfully request that this Court reverse the ruling below and grant the preliminary injunction sought by Autocam. Respectfully submitted, Bill Schuette Attorney General John J. Bursch Solicitor General Co-Counsel of Record /s/ B. Eric Restuccia (P49550) B. Eric Restuccia Deputy Solicitor General Department of Attorney General P.O. Box 30212 Lansing, MI 48909 517-373-1124 restucciae@michigan.gov Michael Dewine Attorney General of Ohio /s/Frederick D. Nelson Senior Advisor to the Attorney General 30 East Broad Street, 17th Floor Columbus, OH 43215 614-728-4947 frederick.nelson@ohioattorneyge neral.gov Counsel for Amici Curiae States of Michigan and Ohio Dated: February 19, 2013 36

CERTIFICATE OF COMPLIANCE Certificate of Compliance with Type-Volume Limitation, Typeface Requirements, and Type Style Requirements 1. This brief complies with the type-volume limitation of Fed.

R. App. P. 29(d) because it contains no more than 7,000 words, excluding the parts of the brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii). There are a total of 6,825 words. 2. This brief complies with the typeface requirements of Fed. R.

App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because this brief has been prepared in a proportionally spaced typeface using Word 2010 in 14 point Century Schoolbook. /s/ B. Eric Restuccia (P49550) B. Eric Restuccia Deputy Solicitor General Department of Attorney General P.O. Box 30212 Lansing, MI 48909 517-373-1124 restucciae@michigan.gov /s/Frederick D. Nelson Senior Advisor to the Attorney General 30 East Broad Street, 17th Floor Columbus, OH 43215 614-728-4947 frederick.nelson@ohioattorneyge neral.gov

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CERTIFICATE OF SERVICE I certify that on February 19, 2013, the foregoing document was served on all parties or their counsel of record through the CM/ECF system if they are registered users or, if they are not, by placing a true and correct copy in the United States mail, postage prepaid, to their address of record. /s/ B. Eric Restuccia (P49550) B. Eric Restuccia Deputy Solicitor General Department of Attorney General P.O. Box 30212 Lansing, MI 48909 517-373-1124 restucciae@michigan.gov /s/Frederick D. Nelson Senior Advisor to the Attorney General 30 East Broad Street, 17th Floor Columbus, OH 43215 614-728-4947 frederick.nelson@ohioattorneyge neral.gov

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