Hobby Lobby wins before the Supreme Court

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1. Business corporations are potentially covered by RFRA: Hobby Lobby is a 5-to-4 decision on the bottom line, but only 5-to-2 on whether for-profit corporations may bring RFRA claims, or whether owners of those corporations may sue based on restrictions imposed on those corporations. Justices Breyer and Kagan expressly say that they do not express an opinion on the issue; they think Hobby Lobby should lose regardless of how the issue is decided. Here’s part of the majority’s explanation of why it concluded that for-profit corporations are covered (paragraph breaks added):

As we will show, Congress provided protection for people like the Hahns and Greens by employing a familiar legal fiction: It included corporations within RFRA’s definition of “persons.”

But it is important to keep in mind that the purpose of this fiction is to provide protection for human beings. A corporation is simply a form of organization used by human beings to achieve desired ends. An established body of law specifies the rights and obligations of the people (including shareholders, officers, and employees) who are associated with a corporation in one way or another.

When rights, whether constitutional or statutory, are extended to corporations, the purpose is to protect the rights of these people. For example, extending Fourth Amendment protection to corporations protects the privacy interests of employees and others associated with the company. Protecting corporations from government seizure of their property without just compensation protects all those who have a stake in the corporations’ financial well-being. And protecting the free-exercise rights of corporations like Hobby Lobby, Conestoga, and Mardel protects the religious liberty of the humans who own and control those companies.

And here’s part of the Justice Ginsburg’s and Sotomayor’s explanation of their contrary view:

The Dictionary Act’s definition, [which defines “person” to usually include corporations], controls only where “context” does not “indicat[e] otherwise.” Here, context does so indicate. RFRA speaks of “a person’s exercise of religion.” Whether a corporation qualifies as a “person” capable of exercising religion is an inquiry one cannot answer without reference to the “full body” of pre-Smith “free-exercise caselaw.” There is in that case law no support for the notion that free exercise rights pertain to for-profit corporations….

Reading RFRA, as the Court does, to require extension of religion-based exemptions to for-profit corporations surely is not grounded in the pre-Smith precedent Congress sought to preserve. Had Congress intended RFRA to initiate a change so huge, a clarion statement to that effect likely would have been made in the legislation. The text of RFRA makes no such statement and the legislative history does not so much as mention for-profit corporations.

2. The Affordable Care Act substantially burdens these particular claimants’ practice of religion (as to the requirement that they provide insurance plans that pay for contraceptives that they view as abortion-producing): Here’s a key excerpt from the majority; note that both Hobby Lobby (owned by the Greens) and Conestoga Wood (owned by the Hahns) claimed religious exemptions in this case:

Because RFRA applies in these cases, we must next ask whether the HHS contraceptive mandate “substantially burden[s]” the exercise of religion. 42 U.S.C. §2000bb– 1(a). We have little trouble concluding that it does….

As we have noted, the Hahns and Greens have a sincere religious belief that life begins at conception. They therefore object on religious grounds to providing health insurance that covers methods of birth control that, as HHS acknowledges, may result in the destruction of an embryo. By requiring the Hahns and Greens and their companies to arrange for such coverage [on pain of severe financial levies; details omitted -EV], the HHS mandate demands that they engage in conduct that seriously violates their religious beliefs….

HHS’s main [contrary] argument (echoed by the principal dissent) is basically that the connection between what the objecting parties must do (provide health-insurance coverage for four methods of contraception that may operate after the fertilization of an egg) and the end that they find to be morally wrong (destruction of an embryo) is simply too attenuated. HHS and the dissent note that providing the coverage would not itself result in the destruction of an embryo; that would occur only if an employee chose to take advantage of the coverage and to use one of the four methods at issue. [Footnote: This argument is not easy to square with the position taken by HHS in providing exemptions from the contraceptive mandate for religious employers, such as churches, that have the very same religious objections as the Hahns and Greens and their companies.]

This argument dodges the question that RFRA presents (whether the HHS mandate imposes a substantial burden on the ability of the objecting parties to conduct business in accordance with their religious beliefs) and instead addresses a very different question that the federal courts have no business addressing (whether the religious belief asserted in a RFRA case is reasonable). The Hahns and Greens believe that providing the coverage demanded by the HHS regulations is connected to the destruction of an embryo in a way that is sufficient to make it immoral for them to provide the coverage. This belief implicates a difficult and important question of religion and moral philosophy, namely, the circumstances under which it is wrong for a person to perform an act that is innocent in itself but that has the effect of enabling or facilitating the commission of an immoral act by another.

Arrogating the authority to provide a binding national answer to this religious and philosophical question, HHS and the principal dissent in effect tell the plaintiffs that their beliefs are flawed. For good reason, we have repeatedly refused to take such a step…. “Repeatedly and in many different contexts, we have warned that courts must not presume to determine … the plausibility of a religious claim[.]” …

Moreover, in Thomas v. Review Bd. of Indiana Employment Security Div. (1981), we considered and rejected an argument that is nearly identical to the one now urged by HHS and the dissent. In Thomas, a Jehovah’s Witness was initially employed making sheet steel for a variety of industrial uses, but he was later transferred to a job making turrets for tanks. Because he objected on religious grounds to participating in the manufacture of weapons, he lost his job and sought unemployment compensation.

Ruling against the employee, the state court had difficulty with the line that the employee drew between work that he found to be consistent with his religious beliefs (helping to manufacture steel that was used in making weapons) and work that he found morally objectionable (helping to make the weapons themselves). This Court, however, held that “it is not for us to say that the line he drew was an unreasonable one.”

Similarly, in these cases, the Hahns and Greens and their companies sincerely believe that providing the insurance coverage demanded by the HHS regulations lies on the forbidden side of the line, and it is not for us to say that their religious beliefs are mistaken or insubstantial. Instead, our “narrow function … in this context is to determine” whether the line drawn reflects “an honest conviction,” and there is no dispute that it does.

Here’s an excerpt from the dissent’s response:

[T]he connection between the families’ religious objections and the contraceptive coverage requirement is too attenuated to rank as substantial. The requirement carries no command that Hobby Lobby or Conestoga purchase or provide the contraceptives they find objectionable. Instead, it calls on the companies covered by the requirement to direct money into undifferentiated funds that finance a wide variety of benefits under comprehensive health plans. Those plans, in order to comply with the ACA, must offer contraceptive coverage without cost sharing, just as they must cover an array of other preventive services.

Importantly, the decisions whether to claim benefits under the plans are made not by Hobby Lobby or Conestoga, but by the covered employees and dependents, in consultation with their health care providers. Should an employee of Hobby Lobby or Conestoga share the religious beliefs of the Greens and Hahns, she is of course under no compulsion to use the contraceptives in question. But “[n]o individual decision by an employee and her physician — be it to use contraception, treat an infection, or have a hip replaced — is in any meaningful sense [her employer’s] decision or action.”

It is doubtful that Congress, when it specified that burdens must be “substantia[l],” had in mind a linkage thus interrupted by independent decisionmakers (the woman and her health counselor) standing between the challenged government action and the religious exercise claimed to be infringed. Any decision to use contraceptives made by a woman covered under Hobby Lobby’s or Conestoga’s plan will not be propelled by the Government, it will be the woman’s autonomous choice, informed by the physician she consults.

3. Applying the ACA’s requirement is not the least restrictive means of serving a compelling government interest: The Court concludes that granting the requested exemption will not materially undermine the government interest in providing cost-free contraceptives (including the ones that claimant employers don’t want to have to cover under their insurance plans) — the government can both make sure all such contraceptives are provided and avoid substantially burdening the claimants’ religious freedom. Under RFRA, when such a reconciliation is possible, the government must grant the exemption. Here’s the key excerpt from the majority opinion (some paragraph breaks and bold emphasis added):

Since the HHS contraceptive mandate imposes a substantial burden on the exercise of religion, we must move on and decide whether HHS has shown that the mandate both “(1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest” [quoting RFRA].

HHS asserts that the contraceptive mandate serves a variety of important interests, but many of these are couched in very broad terms, such as promoting “public health” and “gender equality.” RFRA, however, contemplates a “more focused” inquiry: It “requires the Government to demonstrate that the compelling interest test is satisfied through application of the challenged law ‘to the person’ — the particular claimant whose sincere exercise of religion is being substantially burdened.” This requires us to “loo[k] beyond broadly formulated interests” and to “scrutiniz[e] the asserted harm of granting specific exemptions to particular religious claimants” — in other words, to look to the marginal interest in enforcing the contraceptive mandate in these cases.

In addition to asserting these very broadly framed interests, HHS maintains that the mandate serves a compelling interest in ensuring that all women have access to all FDA-approved contraceptives without cost sharing. Under our cases, women (and men) have a constitutional right to obtain contraceptives, and HHS tells us that “[s]tudies have demonstrated that even moderate copayments for preventive services can deter patients from receiving those services.” …

We will assume that the interest in guaranteeing cost-free access to the four challenged contraceptive methods is compelling within the meaning of RFRA [despite the fact that employers with grandfathered plans and employers with fewer than 50 employees are exempted from the Affordable Care Act], and we will proceed to consider the final prong of the RFRA test, i.e., whether HHS has shown that the contraceptive mandate is “the least restrictive means of furthering that compelling governmental interest.” …

The least-restrictive-means standard is exceptionally demanding, and it is not satisfied here. HHS has not shown that it lacks other means of achieving its desired goal without imposing a substantial burden on the exercise of religion by the objecting parties in these cases. See §§2000bb–1(a), (b) (requiring the Government to “demonstrat[e] that application of [a substantial] burden to the person … is the least restrictive means of furthering [a] compelling governmental interest” (emphasis added)).

The most straightforward way of doing this would be for the Government to assume the cost of providing the four contraceptives at issue to any women who are unable to obtain them under their health-insurance policies due to their employers’ religious objections. This would certainly be less restrictive of the plaintiffs’ religious liberty, and HHS has not shown that this is not a viable alternative.

HHS has not provided any estimate of the average cost per employee of providing access to these contraceptives, two of which, according to the FDA, are designed primarily for emergency use. Nor has HHS provided any statistics regarding the number of employees who might be affected because they work for corporations like Hobby Lobby, Conestoga, and Mardel. Nor has HHS told us that it is unable to provide such statistics.

It seems likely, however, that the cost of providing the forms of contraceptives at issue in these cases (if not all FDA-approved contraceptives) would be minor when compared with the overall cost of ACA. According to one of the Congressional Budget Office’s most recent forecasts, ACA’s insurance coverage provisions will cost the Federal Government more than $1.3 trillion through the next decade. If, as HHS tells us, providing all women with cost-free access to all FDA-approved methods of contraception is a Government interest of the highest order, it is hard to understand HHS’s argument that it cannot be required under RFRA to pay anything in order to achieve this important goal.

HHS contends that RFRA does not permit us to take this option into account because “RFRA cannot be used to require creation of entirely new programs.” But we see nothing in RFRA that supports this argument, and drawing the line between the “creation of an entirely new program” and the modification of an existing program (which RFRA surely allows) would be fraught with problems. We do not doubt that cost may be an important factor in the least-restrictive-means analysis, but both RFRA and its sister statute, RLUIPA, may in some circumstances require the Government to expend additional funds to accommodate citizens’ religious beliefs. Cf. §2000cc–3(c) (RLUIPA: “[T]his chapter may require a government to incur expenses in its own operations to avoid imposing a substantial burden on religious exercise.”). HHS’s view that RFRA can never require the Government to spend even a small amount reflects a judgment about the importance of religious liberty that was not shared by the Congress that enacted that law.

In the end, however, we need not rely on the option of a new, government-funded program in order to conclude that the HHS regulations fail the least-restrictive-means test. HHS itself has demonstrated that it has at its disposal an approach that is less restrictive than requiring employers to fund contraceptive methods that violate their religious beliefs. As we explained above, HHS has already established an accommodation for nonprofit organizations with religious objections. Under that accommodation, the organization can self-certify that it opposes providing coverage for particular contraceptive services. If the organization makes such a certification, the organization’s insurance issuer or third-party administrator must “[e]xpressly exclude contraceptive coverage from the group health insurance coverage provided in connection with the group health plan” and “[p]rovide separate payments for any contraceptive services required to be covered” without imposing “any cost-sharing requirements … on the eligible organization, the group health plan, or plan participants or beneficiaries.” …

[Such an approach] does not impinge on the plaintiffs’ religious belief that providing insurance coverage for the contraceptives at issue here violates their religion, and it serves HHS’s stated interests equally well. Under the accommodation, the plaintiffs’ female employees would continue to receive contraceptive coverage without cost sharing for all FDA-approved contraceptives, and they would continue to “face minimal logistical and administrative obstacles,” because their employers’ insurers would be responsible for providing information and coverage.

Here is an excerpt from the principal dissent:

Then let the government pay (rather than the employees who do not share their employer’s faith), the Court suggests…. The ACA, however, requires coverage of preventive services through the existing employer-based system of health insurance “so that [employees] face minimal logistical and administrative obstacles.” Impeding women’s receipt of benefits “by requiring them to take steps to learn about, and to sign up for, a new [government funded and administered] health benefit” was scarcely what Congress contemplated.

Moreover, Title X of the Public Health Service Act, “is the nation’s only dedicated source of federal funding for safety net family planning services.” “Safety net programs like Title X are not designed to absorb the unmet needs of … insured individuals.” Note, too, that Congress declined to write into law the preferential treatment Hobby Lobby and Conestoga describe as a less restrictive alternative.

And where is the stopping point to the “let the government pay” alternative? Suppose an employer’s sincerely held religious belief is offended by health coverage of vaccines, or paying the minimum wage, or according women equal pay for substantially similar work? Does it rank as a less restrictive alternative to require the government to provide the money or benefit to which the employer has a religion-based objection?

Because the Court cannot easily answer that question, it proposes something else: Extension to commercial enterprises of the accommodation already afforded to nonprofit religion-based organizations. “At a minimum,” according to the Court, such an approach would not “impinge on [Hobby Lobby’s and Conestoga’s] religious belief.” … [But] the “special solicitude” generally accorded nonprofit religion-based organizations that exist to serve a community of believers … [has] never before [been] accorded to commercial enterprises comprising employees of diverse faiths….

4. What about other exemption claims? The majority stresses that, under RFRA, each exemption claim is to be treated on its own terms. One could argue that courts shouldn’t be in the business of carving out such religious exemptions, and that any religious exemptions must be created directly by Congress, or not at all. Indeed, the Court in Employment Division v. Smith generally held that courts shouldn’t be in the business of carving out religious exemptions under the Free Exercise Clause. But Congress, in RFRA, mandated that courts indeed carve out such exemptions as a matter of statutory right (under the RFRA statute itself); and that, the majority said, is what it was doing here. From the majority opinion:

The dissent worries about forcing the federal courts to apply RFRA to a host of claims made by litigants seeking a religious exemption from generally applicable laws, and the dissent expresses a desire to keep the courts out of this business. In making this plea, the dissent reiterates a point made forcefully by the Court in Smith[, which argued that] … applying the Sherbert test to all free-exercise claims “would open the prospect of constitutionally required religious exemptions from civic obligations of almost every conceivable kind[.]” …

But Congress, in enacting RFRA, took the position that “the compelling interest test as set forth in prior Federal court rulings is a workable test for striking sensible balances between religious liberty and competing prior governmental interests.” The wisdom of Congress’s judgment on this matter is not our concern. Our responsibility is to enforce RFRA as written, and under the standard that RFRA prescribes, the HHS contraceptive mandate is unlawful.

From earlier in the majority opinion,

HHS and the principal dissent argue that a ruling in favor of the objecting parties in these cases will lead to a flood of religious objections regarding a wide variety of medical procedures and drugs, such as vaccinations and blood transfusions, but HHS has made no effort to substantiate this prediction. HHS points to no evidence that insurance plans in existence prior to the enactment of ACA excluded coverage for such items. Nor has HHS provided evidence that any significant number of employers sought exemption, on religious grounds, from any of ACA’s coverage requirements other than the contraceptive mandate….

In any event, our decision in these cases is concerned solely with the contraceptive mandate. Our decision should not be understood to hold that an insurance-coverage mandate must necessarily fall if it conflicts with an employer’s religious beliefs. Other coverage requirements, such as immunizations, may be supported by different interests (for example, the need to combat the spread of infectious diseases) and may involve different arguments about the least restrictive means of providing them.

The principal dissent raises the possibility that discrimination in hiring, for example on the basis of race, might be cloaked as religious practice to escape legal sanction. Our decision today provides no such shield. The Government has a compelling interest in providing an equal opportunity to participate in the workforce without regard to race, and prohibitions on racial discrimination are precisely tailored to achieve that critical goal.

And from the main dissent:

Hobby Lobby and Conestoga surely do not stand alone as commercial enterprises seeking exemptions from generally applicable laws on the basis of their religious beliefs. [The dissent cited cases claiming religious exemptions from bans on race discrimination, marital status discrimination, sex discrimination, and sexual orientation discrimination. -EV] Would RFRA require exemptions in cases of this ilk? And if not, how does the Court divine which religious beliefs are worthy of accommodation, and which are not? Isn’t the Court disarmed from making such a judgment given its recognition that “courts must not presume to determine … the plausibility of a religious claim”?

Would the exemption the Court holds RFRA demands for employers with religiously grounded objections to the use of certain contraceptives extend to employers with religiously grounded objections to blood transfusions (Jehovah’s Witnesses); antidepressants (Scientologists); medications derived from pigs, including anesthesia, intravenous fluids, and pills coated with gelatin (certain Muslims, Jews, and Hindus); and vaccinations (Christian Scientists, among others)? According to counsel for Hobby Lobby, “each one of these cases … would have to be evaluated on its own … apply[ing] the compelling interest-least restrictive alternative test.” Not much help there for the lower courts bound by today’s decision.

The Court, however, sees nothing to worry about. Today’s cases, the Court concludes, are “concerned solely with the contraceptive mandate. Our decision should note understood to hold that an insurance-coverage mandate must necessarily fall if it conflicts with an employer’s religious beliefs. Other coverage requirements, such as immunizations, may be supported by different interests (for example, the need to combat the spread of infectious diseases) and may involve different arguments about the least restrictive means of providing them.” But the Court has assumed, for RFRA purposes, that the interest in women’s health and well being is compelling and has come up with no means adequate to serve that interest, the one motivating Congress to adopt the Women’s Health Amendment.

There is an overriding interest, I believe, in keeping the courts “out of the business of evaluating the relative merits of differing religious claims,” United States v. Lee (Stevens, J., concurring in judgment), or the sincerity with which an asserted religious belief is held. Indeed, approving some religious claims while deeming others unworthy of accommodation could be “perceived as favoring one religion over another,” the very “risk the Establishment Clause was designed to preclude.” The Court, I fear, has ventured into a minefield, by its immoderate reading of RFRA. I would confine religious exemptions under that Act to organizations formed “for a religious purpose,” “engage[d] primarily in carrying out that religious purpose,” and not “engaged … substantially in the exchange of goods or services for money beyond nominal amounts.”

Still working on the lead dissenting opinion; I plan to have more excerpts from it up shortly.

 

Eugene Volokh teaches free speech law, religious freedom law, church-state relations law, a First Amendment Amicus Brief Clinic, and tort law, at UCLA School of Law, where he has also often taught copyright law, criminal law, and a seminar on firearms regulation policy.
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