Obamacare Battle 2.0: Hobby Lobby and Freedom of Religion for Corporations

By: Julia Elmaleh-Sachs

This Tuesday March 25th, the Supreme Court will hear oral arguments on two highly controversial appeals: Sebelius v. Hobby Lobby Stores, Inc. and Conestoga Wood Specialties Corp. v. Sebelius.  In both cases, the Court will review provisions of the Affordable Care Act that require for-profit employers of a certain size to offer insurance benefits for birth control and other reproductive health services without a co-pay.[1]  The central issue is whether companies like Hobby Lobby and Conestoga Wood can refuse to provide their employees with birth control pills and Plan B contraception by claiming that it would violate the company owners’ long-established religious beliefs.[2]  If the companies refuse to do so, the ACA could impose financial penalties of up to $100 per day, per employee.[3]

The justices will have to interpret a 1993 federal law called the Religious Freedom Restoration Act (“RFRA”) which requires the government to seek the “least burdensome and narrowly tailored means” for any law that interferes with religious convictions.[4]  Essentially, it prohibits the federal government from “substantially burdening a person’s exercise of religion” unless the government demonstrates that the burden is justified by a compelling interest and is the least restrictive means of furthering that interest.[5]

In an Amicus Brief to the 10th Circuit in June of 2013, the American Civil Liberties Union argued that the Federal Contraceptive Rule does not substantially burden the companies’ free exercise of religion under the RFRA.[6]  In Abdulhaseeb v. Calbone,[7] the Tenth Circuit had clarified that the party claiming a RFRA violation must first establish that the government policy at issue substantially burdens his or her sincerely held religious beliefs.[8]  Only after the plaintiff has established this does the burden shift to the government to prove that the challenged policy is the least restrictive means of furthering a compelling government interest.[9]

In June however, an all-male majority of the 10th Circuit ruled in favor of Hobby Lobby.[10]  Meanwhile the Third Circuit was not as easily swayed in Conestoga Wood and ruled for the government.  That court decided that neither the company, Conestoga Wood Specialties, nor its owners could claim First Amendment religious rights — because, it found, the corporation is incapable of doing so, and because the owners had chosen the corporate form for their business and it stands apart from their personal interests.[11]

In both its briefs, the government made the same points: profit-making businesses do not “exercise” religion at all, for purposes of either federal law or the Constitution; the mandate only applies to corporations and not to their owners and, corporations law treats the business separate from the owner; and, even if the mandate did have to satisfy a compelling government interest, it does so by assuring that female workers have access to an important health benefit as part of a comprehensive health insurance scheme.[12]

In passing the RFRA, the government argues, Congress did not intend to “uniquely disable the government by working a dramatic expansion” of the claims for exemption based on religious liberty.[13]  In addition, there has not been a single decision by the Supreme Court that struck down a federal law — or required an exemption to it — on the theory of protecting “the rights of a for-profit corporation or of the owners, managers, or directors of the corporation.”[14]

Adam Winkler, Professor of Constitutional Law at UCLA writes that “by asking the Supreme Court to let [the owners of Hobby Lobby] enjoy all the protections of this corporate form, but not all of its duties, Hobby Lobby’s owners want to have their corporate cake and eat it, too.”[15]  If the owners of Hobby Lobby, Conestoga Wood Specialties, and other corporations wanted to claim religious exemptions due to their strong religious beliefs they could have easily formed nonprofit organizations. “They wouldn’t be able to make the same kind of money, but they’d have a corporation with an explicitly religious mission.  And under the Affordable Care Act, they’d be exempted from the birth control requirement.  Hobby Lobby’s owners, however, formed a business corporation.”[16]

The oral arguments for each side will be presented on Tuesday by two familiar faces who are well acquainted with the intricacies of the Affordable Care Act since debating NFIB v. Sebelius two years ago: Washington attorney Paul D. Clement, a former U.S. Solicitor General, and the current Solicitor General, Donald B. Verrilli, Jr.  It will be interesting to see how they frame their respective arguments in their second Obamacare battle before the Supreme Court.

[1] Bill Mears, Justices to hear ‘Hobby Lobby’ case on Obamacare birth control rule, CNN, (March 21, 2014), http://www.cnn.com/2014/03/21/politics/scotus-obamacare-contraception-mandate/

[2] Id.

[3] Id.

[4] Id.

[5] 42 U.S.C. § 2000bb-1.

[6] Brief for the American Civil Liberties Union, et al. as Amici Curiae Supporting Appellees, Hobby Lobby Stores Inc., v. Sebelius, 723 F. 3d. 1114 (2013) (No. 12-6294), 2013 WL 1291180.

[7] 600 F.3d 1301, 1315 (10th Cir. 2010).

[8] Id. at 1318.

[9] Id.

[10] Julia Mirabella and Sandhya Bathija, Hobby Lobby v. Sebelius: Crafting a Dangerous Precedent, Center for American Progress, (October 1, 2013), http://www.americanprogress.org/issues/civil-liberties/report/2013/10/01/76033/hobby-lobby-v-sebelius-crafting-a-dangerous-precedent/

[11] Lyle Denniston, Argument preview: Religion, rights, and the workplace, SCOTUSblog, (March 20, 2014), http://www.scotusblog.com/2014/03/argument-preview-religion-rights-and-the-workplace/

[12] Id.

[13] Id.

[14] Id.

[16] Id.


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