A federal appeals court panel grilled lawyers from both sides this week over whether Trump-era rules shielding religious employers from the Affordable Care Act's contraception mandate followed proper procedure, the latest chapter in a legal fight that has dragged on for more than a decade and twice reached the Supreme Court.
The oral arguments before the U.S. Court of Appeals for the Third Circuit pit Pennsylvania and New Jersey against the federal government and the Little Sisters of the Poor, a Catholic ministry that has become the most visible face of religious resistance to the ACA's birth-control requirement. The states want the expanded exemptions struck down. The Little Sisters want to be left alone.
At issue is a narrow but consequential question the Supreme Court deliberately left unresolved in 2020: whether the Trump administration's 2017 regulations expanding religious and moral exemptions complied with the Administrative Procedure Act. The high court said the federal government had the authority to craft those exemptions. It did not say the rulemaking process was clean. That gap is what keeps the case alive, and what keeps the Little Sisters in court.
The timeline tells a story of institutional stubbornness. In 2016, the Supreme Court directed the federal government to find a compromise that respected the ministry's religious objections. The following year, the Trump administration responded with regulations broadening the exemptions. Pennsylvania and New Jersey challenged those rules almost immediately.
By 2020, the case had climbed back to the Supreme Court, which ruled that federal agencies possessed what one Justice Department attorney at this week's hearing described as "virtually unbridled discretion" under the ACA to shape the exemptions. But the justices punted on the APA question, sending the dispute back down for more litigation.
Now a three-judge panel, Judge Cheryl Ann Krause, an Obama appointee; Judge Jane Roth, appointed by George H.W. Bush; and Judge Arianna Freeman, a Biden appointee, must decide whether the rulemaking process passes legal muster. A decision is expected in the coming months.
Amy Thompson, counsel for Pennsylvania and New Jersey, argued that the exemptions sweep far beyond small Catholic ministries. She told the panel that agency estimates suggest roughly 126,000 women could lose employer-sponsored contraceptive coverage if the rules remain in place. She also took aim at the premise behind the regulations themselves.
As the Washington Examiner reported, Thompson told the judges:
"The problem that they set out to solve didn't exist."
That claim drew attention, but it also invited a pointed counterargument. Mark Rienzi, president of the Becket Fund for Religious Liberty and lead counsel for the Little Sisters, noted that the states' harm theory rests on speculation. Pennsylvania, he observed, has never enacted its own contraceptive mandate, a step well within its power.
"[Pennsylvania] could have a contraceptive mandate for employers if they wanted. They have not, which is odd."
Rienzi's point lands with some force. If Pennsylvania genuinely believed tens of thousands of its residents were losing coverage, one might expect the state to act on its own rather than spend years trying to force the federal government to compel Catholic nuns to provide it. The fact that Harrisburg has not passed such a mandate raises fair questions about whether the state's concern is practical or ideological.
The broader pattern of federal regulatory battles stretching across administrations is familiar by now. Agencies act, courts review, and the people caught in the middle wait years for resolution.
Judge Krause, who asked the most pointed questions during the hearing, pressed the government on how federal officials could police the sincerity of religious claims under the expanded exemptions.
"How would they be able to possibly determine what an exercise of religion would be?"
The question reflects a real tension in religious liberty law. Courts and agencies have long struggled with sincerity determinations, and for good reason. The government is not supposed to be in the business of grading theology. But Krause's skepticism also cut against the states' position. If federal officials cannot easily determine what qualifies as a sincere religious exercise, that is an argument for deference, not for striking down exemptions that protect objecting organizations.
The unnamed Justice Department attorney defending the regulations argued that little evidence exists to suggest employers without sincere religious objections would exploit the exemptions. The ACA's contraception mandate still applies to the vast majority of employers. The expanded exemptions carve out a narrow space for those with genuine religious or moral objections, organizations like the Little Sisters, who operate nursing homes for the elderly poor and have never wavered in their position.
Rienzi framed the stakes in terms that should resonate with anyone who values pluralism in a diverse republic:
"Religious accommodations are the best of our traditions. They allow live and let live solutions."
Beyond the merits, Rienzi urged the court to dismiss the case on standing grounds. He argued that Pennsylvania could not identify specific employers that dropped contraceptive coverage because of the exemptions, nor demonstrate actual financial harm to the state. If the states cannot show concrete injury, the case arguably does not belong in court at all.
This is not a minor procedural objection. Standing doctrine exists to prevent courts from becoming forums for political grievances dressed up as legal disputes. Pennsylvania and New Jersey have spent years litigating against rules that protect a small number of religious employers, while declining to pass their own coverage requirements. The disconnect is hard to ignore.
The political dynamics surrounding religious liberty cases have grown more complicated in recent years, with high-profile tensions between political and religious leaders playing out on the national stage. But the legal question here is older and more fundamental: whether the federal government can protect the conscience rights of religious organizations without running afoul of administrative law.
The Third Circuit panel is expected to issue a ruling in the coming months. Whatever the outcome, the losing side will almost certainly seek further review, potentially sending the case back to the Supreme Court for a third time.
For the Little Sisters of the Poor, the stakes have not changed in a decade. They run homes for the elderly poor. They object, on sincere religious grounds, to facilitating contraceptive coverage. They have won at the Supreme Court and still find themselves in court. The legal system that is supposed to protect their rights keeps dragging them back in.
The ongoing clashes between progressive policy goals and constitutional limits show no sign of cooling. And the administrative state's appetite for mandating compliance, even from nuns, remains strong regardless of which party holds the White House.
Meanwhile, the political landscape continues to shift around these fights. Fractures within the Republican coalition and personnel changes across the executive branch add uncertainty to how aggressively the current administration will defend the exemptions going forward.
The 126,000-women figure cited by the states deserves scrutiny as well. It comes from agency estimates, not from documented cases of women actually losing coverage. Thompson presented it as a projection of potential harm, not a body count of real casualties. In a case built on speculative injury, that distinction matters.
Strip away the procedural layers, and the case comes down to a straightforward proposition. The federal government said religious employers don't have to provide contraceptive coverage that violates their beliefs. Two states that have never required such coverage themselves say the federal government can't allow that choice.
Rienzi's observation about Pennsylvania's failure to enact its own mandate is the sharpest fact in the record. It suggests the states are less interested in ensuring women have contraceptive coverage than in ensuring religious organizations cannot opt out of providing it. Those are very different goals, and only one of them requires dragging elderly-care nuns through a decade of federal litigation.
When the government spends more energy forcing compliance from Catholic sisters than solving the problem it claims to care about, the problem was never really the point.