published May 16th 2016, 6:02 pm, by Greg Stohr

(Bloomberg) —

The U.S. Supreme Court backed out of a divisive clash involving religious groups that object to contraceptive coverage under Obamacare, issuing a compromise decision that said the two sides might be able to work out their differences.

Releasing an unsigned, seven-paragraph opinion in one of its most closely watched disputes, the court said Monday it “expresses no view on the merits of the cases” and sent them back to federal appeals courts around the country. The opinion pointed the Obama administration and suing religious groups to an unusual proposal the justices floated in March after arguments suggested a possible 4-4 deadlock.

The decision underscored the difficulties posed to the court by the vacancy created by Justice Antonin Scalia’s Feb. 13 death. With Senate Republicans refusing to consider President Barack Obama’s nomination of Judge Merrick Garland, the vacancy may extend at least through the November election.

Options Offered

At issue was the Obama administration’s plan for accommodating religious groups that don’t want to provide birth control coverage for employees or students. The administration offered objecting groups two options: They could shift responsibility onto their insurer by providing it with a “self-certification” form, or they could notify the U.S. Department of Health and Human Services of their objection and provide contact information for their insurer.

The religious groups, which consider some forms of contraception to be the same as abortion, say they shouldn’t have to play even the limited role envisioned by the administration. The groups sued claiming violation of a federal religious-rights law.

In the court’s March 29 proposal, the justices asked the two sides to consider an alternative approach under which the objecting groups wouldn’t have to provide any notice at all.

Although neither side fully embraced that proposal, the court’s decision Monday said the justices saw reason for optimism.

“Both petitioners and the government now confirm that such an option is feasible,” the court said.

Obama Reacts

The court said that, in the interim, the government was free to take steps — presumably by contacting insurance companies — to ensure that people working for the suing groups can receive contraceptives at no cost.

“The practical effect is right now that women will still continue to be able to get contraception if they are getting health insurance,” Obama said in an interview with BuzzFeed. “We are properly accommodating religious institutions who have objections to contraception.”

The court, however, also said that the government can’t impose penalties on the groups involved in the case for failing to provide additional notice of their objections.

Mark Rienzi, a lawyer at the Becket Fund for Religious Liberty, called the ruling “an important win” for his client, the Little Sisters of the Poor, an order of Catholic nuns.

“It is crucial that the justices unanimously ordered the government not to impose these fines and indicated that the government doesn’t need any notice to figure out what should now be obvious — the Little Sisters respectfully object,” Rienzi said in a statement.

“The Supreme Court could have ruled against us, but evidently the Obama administration did not succeed in persuading them to do so,” said Frank Pavone, a priest and the director of Priests for Life, another objecting group.

Advocates for women’s rights disagreed. “This order is not a victory for them,” said Gretchen Borchelt, vice president of the National Women’s Law Center. “This court makes it clear that this is not a ruling on the merits.”

Still, the ruling produced at least as much confusion as clarity. “Not many pages and a lot of questions coming from it,” said Louise Melling, deputy legal director of the American Civil Liberties Union, which supports the administration in the case.

The ultimate resolution of the issue almost certainly will have to wait for the presidential election in November. The probable race between presumptive Republican nominee Donald Trump and leading Democratic contender Hillary Clinton may determine both the identity of the next justice and the fate of the contraceptive policy itself.

The lead case is Zubik v. Burwell, 14-1418.

Updates with Obama reaction in 10th paragraph.
To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net To contact the editors responsible for this story: Craig Gordon at cgordon39@bloomberg.net Laurie Asseo, Justin Blum
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