Sylvia Burwell, Secretary of HHS v. Hobby Lobby

Plenty has been written about the United States Supreme Court ruling in Burwell v. Hobby Lobby, from defending religious freedom to free speech. Instead of repeating those angles, I’d like to look at the raw text of the June 30 decision.

First, the Court was not considering the constitutionality of the contraception mandate of the Affordable Care Act (ACA), but, rather, whether the provision violated established law:

We must decide in these cases whether the Religious Freedom Restoration Act of 1993 (RFRA) . . . permits the United States Department of Health and Human Services (HHS) to demand that three closely held corporations provide health-insurance coverage for methods of contraception that violate the sincerely held religious beliefs of the companies’ owners. We hold that the regulations that impose this obligation violate RFRA, which prohibits the Federal Government from taking any action that substantially burdens the exercise of religion unless that action constitutes the least restrictive means of serving a compelling government interest.

The foundation of the RFRA stems from a Supreme Court ruling in Employ­ment Div., Dept. of Human Resources of Oregon. v. Smith in which the Court limited religious freedom, because they felt that religious freedom claims against laws “would open the prospect of constitutionally required religious exemptions from civic obligations of almost every conceivable kind.” In essence, the Court rejected an individual’s definition of religious freedom in favor of a government definition, followed by Congress turning a “natural right” into a government “granted privilege” by way of the RFRA. Oddly, in this ruling, the Court rebuked Congress for passing the RFRA:

As we have seen, RFRA was designed to provide very broad protection for religious liberty. By enacting RFRA, Congress went far beyond what this Court has held is constitutionally required.

The Court recognizes that HHS, the government department responsible for regulating the guidelines for the ACA, does offer religious exceptions:

In addition to these exemptions for religious organizations [government-certified nonprofit organizations that oppose certain ACA provisions based on religious objections], ACA exempts a great many employers from most of its coverage requirements. Employers providing “grandfathered health plans”—those that existed prior to March 23, 2010, and that have not made specified changes after that date—need not comply with many of the Act’s requirements, including the contraceptive mandate.

The majority opinion goes out of its way to define businesses engaged in religious activity. Consider:

Though [the corporations] have expanded over the years, they remain closely held . . . Hobby Lobby’s statement of purpose commits the Greens to “[h]onoring the Lord in all [they] do by operating the company in a manner consistent with Biblical principles.” . . . Each family member has signed a pledge to run the businesses in accordance with the family’s religious beliefs and to use the family assets to support Christian ministries. . . . In accordance with those commitments, Hobby Lobby and Mardel stores close on Sundays . . . refuse to engage in profitable transactions that facilitate or promote alcohol use; they contribute profits to Christian missionaries and ministries; and they buy hundreds of full-page newspaper ads inviting people to “know Jesus as Lord and Savior.”

The RFRA protects “persons” as defined by the Dictionary Act:

As we noted above, RFRA applies to “a person’s” exercise of religion . . . and RFRA itself does not define the term “person.” We therefore look to the Dictionary Act, which we must consult “[i]n determining the meaning of any Act of Congress, unless the context indicates otherwise.” Under the Dictionary Act, “the wor[d] ‘person’ . . . include[s] corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals.”

HHS argued that for-profit corporations cannot be engaged in the exercise of religion. The Court rejected that position:

Is it because of the corporate form? The corporate form alone cannot provide the explanation because, as we have pointed out, HHS concedes that nonprofit corporations can be protected by RFRA. The dissent suggests that nonprofit corporations are special because furthering their religious “autonomy . . . often furthers individual religious freedom as well.” . . . But this principle applies equally to for-profit corporations: Furthering their religious freedom also “furthers individual religious freedom.”

Business practices that are compelled or limited by the tenets of a religious doctrine fall comfortably within that definition [of exercising religion]. Thus, a law that “operates so as to make the practice of . . . religious beliefs more expensive” in the context of business activities imposes a burden on the exercise of religion.

HHS would draw a sharp line between nonprofit corporations (which, HHS concedes, are protected by RFRA) and for-profit corporations (which HHS would leave unprotected), but the actual picture is less clear-cut. Not all corporations that decline to organize as nonprofits do so in order to maximize profit. 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. Over half of the States, for instance, now recognize the “benefit corporation,” a dual-purpose entity that seeks to achieve both a benefit for the public and a profit for its owners.

HHS raised the possibility of a large corporation claiming religious exemption, and the inherent difficulty of validating such a claim. The Court leaves the question unanswered, further complicating the ruling, but they ultimately assert that federal courts have the final say in granting religious exemption:

These cases, however, do not involve publicly traded corporations, and it seems unlikely that the sort of corporate giants to which HHS refers will often assert RFRA claims. HHS has not pointed to any example of a publicly traded corporation asserting RFRA rights, and numerous practical restraints would likely prevent that from occurring. For example, the idea that unrelated shareholders—including institutional investors with their own set of stakeholders—would agree to run a corporation under the same religious beliefs seems improbable. In any event, we have no occasion in these cases to consider RFRA’s applicability to such companies. The companies in the cases before us are closely held corporations, each owned and controlled by members of a single family, and no one has disputed the sincerity of their religious beliefs.

HHS has also provided no evidence that the purported problem of determining the sincerity of an asserted religious belief moved Congress to exclude for-profit corporations from RFRA’s protection. On the contrary, the scope of RLUIPA shows that Congress was confident of the ability of the federal courts to weed out insincere claims.

The question of substantial burden is addressed:

By requiring [the companies] to arrange for such coverage, the HHS mandate demands that they engage in conduct that seriously violates their religious beliefs. If [they] do not yield to this demand, the economic consequences will be severe.

HHS had argued that the companies could have dropped their employee insurance, and paying the per-employee penalty would have been less expensive than continuing with the insurance plans. The point of this argument was to demonstrate that the law offered an “out” to corporations. The Court rejected that claim, stating that HHS failed to provide any numbers to buttress it. Additionally, the Court found that argument irrelevant:

Even if we were to reach this argument, we would find it unpersuasive. As an initial matter, it entirely ignores the fact that [the companies] have religious reasons for providing health-insurance coverage for their employees. Before the advent of ACA, they were not legally compelled to provide insurance, but they nevertheless did so—in part, no doubt, for conventional business reasons, but also in part because their religious beliefs govern their relations with their employees.

Hence, forcing companies to discontinue employee insurance coverage may also violate their exercise of religion.

Surprisingly, the Court also addressed the non-religious economic aspects of forcing employers to drop employee insurance as an alternative to religious opposition:

Putting aside the religious dimension of the decision to provide insurance, moreover, it is far from clear that the net cost to the companies of providing insurance is more than the cost of dropping their insurance plans and paying the ACA penalty. Health insurance is a benefit that employees value. If the companies simply eliminated that benefit and forced employees to purchase their own insurance on the exchanges, without offering additional compensation, it is predictable that the companies would face a competitive disadvantage in retaining and attracting skilled workers.

Within the entirety of this 95-page ruling, the matter of private property rights was mentioned but once.

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.

Unfortunately, this Court leaves me more confused. If rights, whether constitutional or statutory, are extended to corporations, why does the ACA mandate exemption only apply to those corporations actively engage in religious activity? If a person possesses private property rights, why can’t a corporation exercise its private property rights to reject the ACA in its entirety? In any case, the Court stresses that this ruling applies solely to the contraception mandate, and that government still has a constitutional interest in managing other aspects of the economy:

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 work force without regard to race, and prohibitions on racial discrimination are precisely tailored to achieve that critical goal.