Holy Hobby Lobby? More Than Just a Feeling...

Today's oral argument in Sebelius v. Hobby Lobby and Conestoga Wood Specialties Corp. v. Sebelius(full transcript) is being dissected everywhere, of course--from the informed to the, um, less so. (The NYT round up falls somewhere in the middle.)

Briefly, the case involves the double barreled question as to whether corporations formed under state law to engage in commercial transactions may claim exemptions from laws of general applicability that impose affirmative duties upon them that are at variance with their religious beliefs, whether under the First Amendment to the United States Constitution, or under the 1993 statute, The Religious Freedom Restoration Act, commonly known as "RFRA". The specific context in which the case arose--whether small, closely-held corporations may claim immunity from the Affordable Care Act's requirement that contraceptive coverage be included among insurance plans provided by employers--is important enough, but (unlike the oral argument, as demonstrated by the linked transcript) I want to focus on what seems to me to be the even more important core question.

So, can corporations formed under state law to engage in commercial transactions may claim exemptions from laws of general applicability that impose affirmative duties upon them that are at variance with their religious beliefs?

Under present First Amendment law, in an opinion written by Justice Scalia, the answer is clearly no:

We have never held that an individual's religious beliefs [p879] excuse him from compliance with an otherwise valid law prohibiting conduct that the State is free to regulate. On the contrary, the record of more than a century of our free exercise jurisprudence contradicts that proposition. As described succinctly by Justice Frankfurter in Minersville School Dist. Bd. of Educ. v. Gobitis, 310 U.S. 586, 594-595 (1940):

Conscientious scruples have not, in the course of the long struggle for religious toleration, relieved the individual from obedience to a general law not aimed at the promotion or restriction of religious beliefs. The mere possession of religious convictions which contradict the relevant concerns of a political society does not relieve the citizen from the discharge of political responsibilities.

***

Our most recent decision involving a neutral, generally applicable regulatory law that compelled activity forbidden by an individual's religion was United States v. Lee, 455 U.S. at 258-261. There, an Amish employer, on behalf of himself and his employees, sought exemption from collection and payment of Social Security taxes on the ground that the Amish faith prohibited participation in governmental support programs. We rejected the claim that an exemption was constitutionally required. There would be no way, we observed, to distinguish the Amish believer's objection to Social Security taxes from the religious objections that others might have to the collection or use of other taxes.

If, for example, a religious adherent believes war is a sin, and if a certain percentage of the federal budget can be identified as devoted to war-related activities, such individuals would have a similarly valid claim to be exempt from paying that percentage of the income tax. The tax system could not function if denominations were allowed to challenge the tax system because tax payments were spent in a manner that violates their religious belief.

The Court backed its analysis in that case, Employment Division v. Smith, with citations dating to 1879, involving cases in which the statute at issue prohibited conduct (such as polygamy, or the use of peyote in Native American worship at issue in Smith itself) and required action, such as the payment of monies.

So, under Smith, case closed. Individuals don't have the right to these exemptions under Smith, let alone corporations. Of course, Scalia could just scrap his prior opinion, as he did in 2012's Natl. Fedn. of Ind. Businesses v. Sebelius, in which he rejected his own 2005 opinion in Gonzales v. Raich, broadly construing the Commerce Clause. Scalia's deference to Congress tends to be, unfortunately, accordion-like--it expands (as in Gonzales) when he likes the regulation at issue, and then contracts to nil when he doesn't--as witness not only NFIB v. Sebelius, but even more so last year's egregious evisceration of the Voting Rights Act of 1965 in Shelby Co. v. Holder. (In that case, a statute passed pursuant to an express provision of the Constitution, entrusting enforcement of the right to vote to Congress, was held to strict scrutiny because it violated an imaginary doctrine that all states must be treated equally in all legislation. Good luck finding that in the text!) And Roberts, Alito, Thomas, and even Kennedy might go along with him. Of course, if that did happen, we would have the intriguing political spectacle of five Catholic men reversing a precedent that one of them wrote and another (Kennedy) joined, in order to grant secular corporations an exemption that the US Conference of Catholic Bishops have been vehemently arguing for, and one that impacts the health care choices of women (three of the remaining justices). It will, frankly, look like special justice--that the provision of insurance by secular corporations whose owners share the beliefs of the majority warrant exemptions from the law, while the actual means and modalities of worship used by minority religions do not. I just don't know that Chief Justice Roberts likes those optics, though his heart seemed to be with the corporations today.

RFRA doesn't really solve the problem, either. As all the Justices acknowledged, the broad reading of RFRA required to support Hobby Lobby's position would create huge disruptions in the law, the very disruptions, Justice Kagan noted, that animated Smith:

"Your understanding of this law, your interpretation of it, would essentially subject the entire U.S. Code to the highest test in constitutional law, to a compelling interest standard," she told Paul Clement, the lawyer arguing against the mandate for Hobby Lobby and Conestoga Wood. "So another employer comes in and that employer says, I have a religious objection to sex discrimination laws; and then another employer comes in, I have a religious objection to minimum wage laws; and then another, family leave; and then another, child labor laws. And all of that is subject to the exact same test which you say is this unbelievably high test, the compelling interest standard with the least restrictive alternative."

Kagan's remarks might sound familiar to the legally-trained ear. In a 1990 majority opinion in Employment Division v. Smith, Scalia alluded to the same examples of what might happen if religious entities are permitted to claim exemptions from generally applicable laws. He warned that "[a]ny society adopting such a system would be courting anarchy."

"The rule respondents favor would open the prospect of constitutionally required religious exemptions from civic obligations of almost every conceivable kind," Scalia wrote in the 6-3 opinion, "ranging from compulsory military service, to the payment of taxes, to health and safety regulation such as manslaughter and child neglect laws, compulsory vaccination laws, drug laws, and traffic laws; to social welfare legislation such as minimum wage laws, child labor laws, animal cruelty laws, environmental protection laws, and laws providing for equality of opportunity for the races."

The ultimate question, though, under the First Amendment or RFRA, is whether a corporation, an artificial entity created by the state to shield its owners from liability for debts contracted by the business, to enjoy perpetual life (and thus avert the problems businesses face when a principal dies), and to enjoy special tax privileges, can properly be treated as being the same entity as its owners for the purposes of religious expression rights. In other words, is this legal fiction to be treated as separate from its owners to their benefit in commercial transactions but as being one with them for religious purposes? And what of the well-rooted doctrine that the purpose of business corporations is to maximize return to shareholders, not to allow management to serve its own vision of the good with the shareholders' investment? (I'm not a fan of this rather bleak doctrine, but as Professor Bainbridge at the link notes, cultivating goodwill through socially responsible behavior may fall within the remit of the corporation). The point is, for-profit business corporations are separate from their owners, and not organized for religious purposes. If they are treated as vehicles for their owners' religious expressions, you are giving the owners a double advantage--shielding them from the worst risks of doing business while multiplying their ability to enforce their religious views on employees, clients and others.

I do not think that this is what the Framers or the Congress that enacted RFRA (itself of dubious constitutionality as applied here, as many of the problems that led to its invalidation vis a vis the states apply to prescribing how federal courts will apply claimed religious rights claims comes awfully close to an establishment of religion; the Court's 2006 opinion applying RFRA did not have such an issue before it, but it also had a much more limited, focused application of the statute before it.)

How will this come out? Anybody's guess, and I don't handicap. I suspect that if it tips in favor of the employers, it'll be a narrow opinion on RFRA grounds, possibly limited to closely held corporations, with very strong dissents either way.