Tuesday, March 25, 2014

Hobby Lobby Corporate Argument Recap

I had the distinct honor and privilege of attending oral argument in the Hobby Lobby/Conestoga case at the Supreme Court today. I will be writing a substantive post on the experience in the future, but for now I wanted to share with you the highlights of the corporate-focused arguments.  It will be quick because the issues of whether corporations are persons and therefore have standing under RFRA and whether corporations can have religious identies got relatively little attention during the 90 minute argument.

Justice Sotomayor lead the charge on the corporate issues challenging Paul Clement (arguing for Hobby Lobby/Conestoga) to identify where the law protects corporate religion and how can a corporation have religious beliefs.  Justice Sotomayor also asked how courts will decide the religion of the corporation-- is it 51% of shareholders' beliefs?  dependent upon officers? the board?  (This line of quesitoning tracks with an argument that I made here in an Op-ed).  Clements, pointing to the scienter doctrine, suggested that the law has already decided that corporations have beliefs and intent. Clement also suggested that the nature of a corporation's belief could be judged by looking at corporate governance documents and that it would become a question of sincerity.  

The sincerity of the corporate religious belief is a thread that Chief Justice Roberts picked up in his questioning of Soliciter General Donald Verrilli, arguing for the Government.  Chief Justice Roberts suggested that he was willing to leave for another day questions about the extention of the exception sought by Hobby Lobby to large, public companies, noting that it would turn, in part, on the sincerity of the corporate belief.

The absence of legal precedent for corporate religious rights advanced by Verrilli was quickly countered by Justice Scalia that corporate religious rights had never been denied.

U.S. v. Lee was raised several times during the oral argument.  This case was signifcant in the oral argument, and I think will be a major part of the final opinion.  At issue in Lee was a religious exemption claim brought by an Amish employer to avoid paying social security taxes. The Lee opinion recognized that religious interests were infringed upon, but found that the countervailing interests in the social security system and the rights of the other employees tipped the balance against the exemption.  The Lee opinion discussed the choice and consequences of entering the marketplace, a theme that was returned to in oral argument today.  Drawing on Lee, both Justices Alito and Breyer questioned whether using the corporate form required the forfeiture of free exercise and religious freedoms.

The issue of whether a corporation is a "person" for purposes of RFRA was largely left to the Dictionary Act, which includes corporations.  Soliciter General Verrilli argued that "free exercise" however was not defined and left open quesitons of applicability to corporations.  No one was distracted by the corporate personhood debate today.

UPDATED:  I am participating in a Huffington Post Live recap on Hobby Lobby oral argument at 2:00 today (March 26th)--access it here.

-Anne Tucker

http://lawprofessors.typepad.com/business_law/2014/03/hobby-lobby-oral-argument-recap.html

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