Hobby Lobby -- Part 1

INTRODUCTION

The Supreme Court issued its decision in Burwell, et al. v. Hobby Lobby, Inc., et al. on June 30, 2014. As it seems to be a win for conservatives, most of the backlash has come from liberal media. (I'm not trying to single out liberals; it's just that the dissent is usually the most vocal. If the decision had gone the other way, I'm sure I would be quoting conservative sources here.) Some sources condemn the decision as one that grants corporations more rights than individuals and pushes the struggle for women's reproductive rights back over 60 years. Perhaps most egregiously, other sources, including The Huffington Post, claim that the decision will allow for religion-based exemptions on a whole array of laws, including nudity laws, tax laws, drug laws, and laws against violent acts like stoning.

All of those statements are misleading, if not outright wrong.

Let's get down to what the majority opinion really says. First, we need a little bit of background.

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(Update: Part 2 of this analysis, covering Justice Ginsburg's dissent, has been posted.)

THE LAW
SECTION I A, PARAGRAPH 4 OF THE OPINION OF THE COURT

The Religious Freedom Restoration Act of 1993 (RFRA) is an act, signed by President Bill Clinton after the House of Representatives unanimously passed it and the Senate passed it with three dissenting votes, that recognized that "laws 'neutral' toward religion may burden may burden religious exercise as surely as laws intended to interfere with religious exercise." It therefore prohibited the government from "substantially burden[ing] a person's exercise of religion even if the burden results from a rule of general applicability," unless the burden is the "least restrictive means" ("restrictive" as in restricting or burdening free religious exercise) of furthering a "compelling" government interest. This level of judicial review is called the strict scrutiny test. So far in our legal jurisprudence, few types of laws are subject to strict scrutiny; some examples are laws that burden a fundamental right, laws that make classifications based on race, and laws that make classifications based on nationality. Very few laws subject to strict scrutiny pass the test, leading legal scholars to call the test "strict in theory, fatal in fact."

CASE BACKGROUND
SECTION II B AND SECTION IV A OF THE OPINION OF THE COURT

Hobby Lobby, et al., made a religion-based objection to the Affordable Care Act's (ACA) contraceptive mandate as it applies to them. While they agreed to provide health coverage for 16 of the 20 forms of contraceptives mandated by the Department of Health and Human Services (HHS) acting under the ACA, they argued that the HHS' requirement that they provide health coverage for four specific types of contraceptives (the types that prevent an already fertilized egg from developing further) violated their sincerely held religious belief that life begins at conception. Moreover, this requirement substantially burdened the religious exercise of Hobby Lobby, et al., because they had to either act contrary to their sincerely held religious beliefs or pay millions of dollars in fines per year. (I don't think the amount they would be fined was seriously challenged.) Therefore, the case fell under the RFRA.

THE "BURDEN OF PROOF"
SECTION V INTRODUCTION OF THE OPINION OF THE COURT

The federal government, then, had to prove to the Supreme Court that the contraceptive mandate as applied to Hobby Lobby, et al., was the least restrictive means of furthering a compelling government interest. Note that there are two separate points to prove here. The court doesn't even really get to the point about a compelling interest; it "assume[s] that the interest in guaranteeing cost-free access to the four challenged contraceptive methods is compelling," focusing entirely on the government's burden of proving that requiring Hobby Lobby, et al., to provide coverage for those four types of contraceptives was the least restrictive means of furthering that compelling interest.

FAILING THE TEST
SECTION V B OF THE OPINION OF THE COURT

Unfortunately for the federal government and supporters of the contraceptive mandate, this proved to be a difficult task. Remember how the strict scrutiny test is considered "fatal?" That's because when it says "LEAST restrictive," it really means "LEAST restrictive." There can't be any other viable alternative that infringes less on people's religious exercise, but in this case, there was. In fact, it was already being used to accommodate the religion-based objections of nonprofit corporations. Under this alternative, the corporation can essentially opt out of providing health coverage for contraceptives to its employees, shifting the costs to the insurance provider, which can apply for a government subsidy. The Supreme Court didn't say that the government must use this alternative -- another option that the majority suggested was to have the federal government just assume the costs of providing coverage for those contraceptives -- but it did say that the government failed to prove that such alternatives, which are less restrictive to the free exercise of religion than its current mandate, are not viable. Note also that this does not mean that the Supreme Court considers religious beliefs to be more important than cost-free access to those four types of contraceptives. The court recognizes that ensuring cost-free access is a compelling government interest that could overrule religious beliefs if necessary -- but in this case, the government failed to prove that it was necessary to overrule Hobby Lobby's religious beliefs in order to ensure that access. The government failed to prove that there are no less restrictive means.

THE IMPACT
FINAL CONCLUSION OF THE OPINION OF THE COURT

Therefore, the HHS' requirement as applied to Hobby Lobby, et al., and other closely held, for-profit corporations violated the RFRA and was struck down. (A "closely held" corporation is defined by the IRS as a corporation with its majority share controlled by five or fewer individuals. I'm not clear on this, but it seems that from 1998 to 2004, closely held corporations employed about 52 percent of the labor force, according to the introduction of this academic paper, citing U.S. Census and U.S. Small Business Administration data.) The decision effectively means that Hobby Lobby, et al., and other closely held, for-profit corporations are not required to provide health coverage for those four types of contraceptives. It respects Hobby Lobby, et al., and other closely held, for-profit corporations' religious beliefs without shutting the door on their employees' access to the four types of contraceptives. Once the executive implements a less restrictive alternative -- and there are less restrictive alternatives, or the court would very likely have ruled against Hobby Lobby, et al. (although some corporations and organizations might have religious objections to certain alternatives as well that would have to be heard in the courts, such as Wheaton College, which objected to signing self-certification forms as part of the accommodation already in place for nonprofits and obtained a temporary exemption) -- these employees will have access to those four types of contraceptives in addition to the 16 already provided by Hobby Lobby, et al. Yes, the process of implementing an alternative may take time, but it doesn't seem like the decision is pushing reproductive rights back 60 years.

MISLEADING MEDIA -- PANDORA'S BOX
SECTION V C, PARAGRAPHS 3 AND 4 OF THE OPINION OF THE COURT

What the decision did not do, contrary to the insistence of protestors, is open a Pandora's box of religion-based exemptions on every law imaginable. Religion-based objections to laws are accepted and accommodated for only if the federal government fails to prove that such laws are the least restrictive means to furthering a compelling government interest. Will the decision allow for religion-based exemptions from laws against murder by stoning, as The Huffington Post suggested? Probably not, because such laws are the least restrictive means to achieving the compelling government interest of public safety. Will the decision allow for religion-based exemption from paying taxes? The court already essentially settled that question in the 1982 case United States v. Lee, ruling that while Amish employers may have sincerely held religious beliefs against paying Social Security taxes, the government has a compelling interest in maintaining a consistent tax system to operate, and requiring Amish employers to pay taxes is the least restrictive means to maintaining that consistency. And the decision almost certainly won't accommodate for religious objections to government spending on vital national security in whatever way this meme seems to think such accommodations would be made.

In fact, the majority predicted that dissenters would make such a slippery slope objection and addressed the issue in its opinion, written by Justice Alito. The court emphasized that the decision did not even extend far enough to necessarily accept all religion-based objections to the ACA's insurance mandate, stating that its "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." Moreover, the majority elaborated further, "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 court's decision simply held that the HHS' requirement that Hobby Lobby, et al., and other closely held, for-profit corporations provide health coverage for those four specific types of contraceptives is not the least restrictive means to achieving the government interest. (Remember, the IRS defines a closely held corporation as one with its majority share controlled by five or fewer individuals.) However, it is worth noting that the Supreme Court has vacated lower courts' decisions regarding corporations with religious objections to other forms of contraceptives, meaning that the lower courts must reconsider those cases in light of the Hobby Lobby decision. This is to be expected. Remember how the court mentioned several less restrictive alternatives, one of which included an already implemented program that allows nonprofit corporations to opt out of the entire contraceptive mandate? (Refer back to "Failing the Test" if you don't.) That implies that the contraceptive mandate in general is not the least restrictive means of furthering the government interest. The ruling, then, may be broad enough to tip the scales in favor of corporations opposed to providing coverage for any form of contraceptive -- we'll have to wait and see what the lower courts, and perhaps the Supreme Court, decide -- but, according to the majority, it has few implications for any other part of the ACA's insurance mandate, and even fewer implications for laws in general.

MISLEADING MEDIA -- PLAYING FAVORITES
SECTION V INTRODUCTION OF THE OPINION OF THE COURT

Another misleading accusation of court's decision is that the court is or will be favoring some religions over others by accepting only some religious objections while denying others. While it may be true that the court may SEEM like it is favoring some religions over others, I think there's a pretty simple explanation for why it isn't actually doing so. The court, and the federal government, doesn't question the sincerity or validity of anyone's religious beliefs. If a religious objection is denied, it is because there is no less restrictive means of furthering the "compelling" interest that the government is trying to achieve other than by overruling the religious objection. For example, if I have a sincere religious belief that I should murder everyone in my neighborhood, the government isn't disfavoring my religion over others in denying my religious objection to its law against murder; it recognizes that I may have a sincere and, for all it knows, valid religious belief, but it has a compelling interest in public safety, and outlawing murder is the least restrictive means to achieving that interest. But the interest must be "compelling," and the means to achieve that interest must be the "least restrictive." The source of the belief does not matter.

ASSUMPTION OF THE CASE -- PERSONHOOD
SECTION III A, PARAGRAPHS 2-5 AND SECTION III B 1 OF THE OPINION OF THE COURT

But wait -- why did Hobby Lobby, et al., and other closely held, for-profit corporations fall under the RFRA at all? Why are they persons?

This is probably actually the most important part of the Hobby Lobby decision, primarily because it is much broader in scope than the rest of the decision. The Dictionary Act establishes that "in determining the meaning of any Act of Congress, unless the context indicates otherwise ... the words 'person' and 'whoever' include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals ..." Thus, the RFRA's protection of a "person's exercise of religion" is assumed to include corporations unless the context indicates otherwise.

There's nothing in the text of the RFRA to imply that it indicates otherwise. Indeed, the majority writes that suggesting that the RFRA does not protect corporations would lead to the absurd conclusion that five merchants who raise a religious objection to some law -- say, a law that required businesses to close on Sundays, as was the case in Braunfeld v. Brown -- could be heard in court, but if they chose to incorporate their businesses without otherwise altering them, they could not be heard in court at all. Excluding closely held, for-profit corporations and their owners, acting in their capacity as owners, from the right to free religious exercise "would put ... merchants to a difficult choice: either give up the right to seek judicial protection of their religious liberty or forgo the benefits, available to their competitors, of operating as corporations." After analyzing the Congress' legislative record and examining the context and text of the RFRA, a sweeping piece of legislation, the court found that the RFRA does not do so; it does not exclude closely held, for-profit corporations and force such a scenario as described.

The court also acknowledged that corporations are separate legal entities from individuals, but argued that "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."

This will be discussed in more detail in the next section as well, but another argument the court finds convincing is that for-profit individuals count as persons, and nonprofit corporations count as persons, so why not for-profit corporations? There seems to be no consistent, principled definition of personhood that would include money-seeking individuals and nonprofit corporations, but not for-profit corporations. (If you have one, please comment! I'd love to hear some ideas because this argument really got me.)

ASSUMPTION OF THE CASE -- EXERCISING RELIGION
SECTION III B 2, PARAGRAPHS 1-6, AND SECTION III B 3, PARAGRAPH 3 OF THE OPINION OF THE COURT

But can corporations exercise religion? The answer, the majority asserts, is yes.

First, it was already established in Braunfeld v. Brown and other precedents that individuals seeking to make a profit -- a for-profit individual -- can have and exercise religious beliefs Second, the HHS itself concedes that nonprofit corporations can have and exercise religious beliefs. (Remember how the government was already employing a less restrictive means to accommodate the religious beliefs of nonprofit corporations?) So why can't a for-profit corporation have and exercise religious beliefs? Because it's a group of people seeking to make money? How does that make it different from an individual seeking to make money?

Furthermore, it is already accepted that for-profit corporations can have nonprofit motives. "Not all corporations that decline to organize as nonprofits do so in order to maximize profit," Justice Alito writes for the majority. "For example, organizations with religious and charitable aims might organize as for-profit corporations because of the potential advantages of that corporate form, such as the freedom to participate in lobbying for legislation or campaigning for political candidates who promote their religious or charitable goals. In fact, recognizing the inherent compatibility between establishing a for-profit corporation and pursuing nonprofit goals, States have increasingly adopted laws formally recognizing hybrid corporate forms."

Finally, Justice Alito writes that the Religious Land Use and Institutionalized Persons Act of 2000 [see section (g)], unanimously passed by both houses of Congress to fix the problems of the RFRA, "provid[ed] that the exercise of religion 'shall be construed in favor of a broad protection of religious exercise, to the maximum extent permitted by the terms of this chapter and the Constitution.'"

That doesn't seem so absurd, does it? It certainly isn't as unintelligible as some dissenters scorn it to be. It's the court's job to interpret existing law, and it made a pretty reasonable interpretation of the law as it's written. (Of course, there are other reasonable interpretations as well -- just look to the dissenting opinion.) And it certainly did not grant corporations more rights than individuals, as individuals can also assert religious objections under the RFRA. But why specify closely held, for-profit corporations? These corporations are the most likely to have agreed-upon religious beliefs, whereas huge publicly traded corporations probably won't come to any agreement about the corporation's religious beliefs. In any case, the respondents to the case are all closely held for-profit corporations, so the ruling need only apply to that category of corporation.

CONCLUSION

In the end, the Hobby Lobby decision is probably not the radical, disastrous ruling that many make it out to be. The broadest implication of the decision is that closely held, for-profit corporations are persons that can have and exercise religious beliefs under the RFRA and can therefore go to court if a law substantially burdens its exercise of religion. Whether the court agrees with a corporation or not, however, depends on whether the law passes the strict scrutiny test, and it just so happens that in this instance, with regard to providing four specific types of contraceptives, it doesn't. But it's not a death knell for the contraceptive mandate as applied to closely held, for-profit corporations, even if the ruling is applied to grant religious exemptions to providing any form of contraceptive coverage; there are alternatives. Indeed, the law didn't pass the strict scrutiny test precisely because there are alternatives.

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Disclaimer: This is only intended to be an explanation of the majority opinion. I do not take a stance on whether the opinion is right or wrong, but I do think that a lot of comments circulating about it are misdirected or mischaracterize it. I chose to limit this post to the majority opinion only because I think there is a lot of misinformation about it, and throwing in the main dissenting opinion (Justice Ginsburg's) would make this post too long and potentially confusing.