Tuesday, March 25, 2014

Supreme Court Hears Oral Arguments in Hobby Lobby and Conestoga Wood Specialties on RFRA and the "Contraceptive Mandate"

Should corporations (or their owner/shareholders) be able to interpose a religious objection to a federal requirement that employers provide health insurance to employees that includes contraceptive coverage? 

Simplified, that's the question at the heart of the oral arguments today in the consolidated cases of Hobby Lobby v. Sebelius and Conestoga Wood Specialties Corp. v. Sebelius in which the Court granted certiorari in November.  The legal issues are complex (our primer is here and another here), but given the basic conflict, it's no wonder the case has attracted so much attention. Another good overview is Lyle Denniston's preview of the arguments for SCOTUSblog.

Recall that the Tenth Circuit's divided en banc opinion in Hobby Lobby essentially split 5-3 over the issue of whether a for-profit secular corporation has a right to free exercise of religion under the Religious Freedom Restoration Act (RFRA) and the First Amendment's Free Exercise Clause.  The majority essentially concluded there was such a right and that the right was substantially burdened by the requirement of the PPACA that employer insurance plans include contraception coverage for employees.

Recall also that the Third Circuit's divided panel opinion in Conestoga Woods rejected the contention that the corporation could raise a claim under RFRA, either as a corporation possessing free exercise of religion rights or under a "pass through" theory allowing the beliefs of the owners to pass to the corporate form.

Moreover, Hobby Lobby and Conestoga Woods are not the only two opinions on these issues.  A digest of some previous circuit court cases and some discussion of the controversy is here; the divided Seventh Circuit opinion is discussed here; and the ACLU has a helpful running tab on all the cases here. So, the Court's ultimate conclusion will impact a number of cases.

Today's 90 minute oral argument {transcript} in the consolidated cases began with Paul Clement representing the "private parties," Hobby Lobby and Conestoga Wood and then Solicitor General Donald Verrilli  representing the federal government, including Kathleen Sebelius as Secretary of Health and Human Services.  Not surprisingly, the questions to Clement largely came from Justices Kagan, Sotomayor, and Ginsburg, and the questions to Verrilli came from Justices Alito and Scalia, as well as Chief Justice Roberts.   Also not surprisingly, the arguments were peppered with slippery slopes, other analogies, questions of Congressional intent in passing RFRA, RFRA's relationship with First Amendment doctrine, and the relevance of the corporate form. 

The question as to the cost of not complying with the mandate (part of the substantial burden on the corporations under RFRA) was the subject of this rather interesting exchange during Paul Clement's argument:

JUSTICE KAGAN:  . . . .

And so the question is, why is there a substantial burden at all?

MR. CLEMENT: Well, just to be clear, we were talking about the same thing. So the option, the choice, is between paying a $475 million a year penalty and a $26 million a year penalty.  That's what Hobby Lobby faces.  So $2,000 per person - - -  ­­

JUSTICE KAGAN: No, between paying $2,000 per employee per year if Hobby Lobby does not provide ­­- - -

MR. CLEMENT: That's $26 million.

JUSTICE KAGAN: You know, Hobby Lobby is paying something right now for the - - -­­ for the coverage. It's less than what Hobby Lobby is paying for the coverage. There are employers all over the United States that are doing this voluntarily because they think that it's less.

CHIEF JUSTICE ROBERTS: I thought - - -­­ I thought that part of the religious commitment of the owners was to provide health care for its employees.

MR. CLEMENT: That is true, Mr. Chief Justice. It is also true that this ­­- - -

JUSTICE SOTOMAYOR: Well, if they want to do that, they can just pay a greater salary and let the employees go in on the exchange.

MR. CLEMENT: Exactly, which is, by the way, why comparing the $2,000 penalty to the cost of the health care is a false - - - ­­ it's a false comparison.

JUSTICE SOTOMAYOR: It's not called a penalty. It's called a tax. And it's calibrated ­­ - - - and it's calibrated ­­

CHIEF JUSTICE ROBERTS: She's right about that.

 (Laughter.)

 The laughter arises from Chief Justice Roberts' decision in NFIB v. Sebelius that the ACA was constitutional under Congress' power to tax, but it is worth noting that Roberts jumped in to assert the corporation's exercise of religion as including the provision of health insurance.  Justices Ginsburg and Kagan later come back to this point:

JUSTICE GINSBURG: There was a point made earlier, and I think you didn't mean to say this, that provision of health care is not part of their religious belief. Covering their employees for health care, that is not a religious tenet, right?

MR. CLEMENT: No, it actually is.  Again, it hasn't been the principal theory been litigated. But see, if you complaints and you go back to our briefs, you know, it's part of the religious beliefs that both the Hahns and the Greens have. They think it's actually important ­­- - -

JUSTICE KAGAN: But, Mr. Clement, you're not saying, are you, that their religious beliefs mandate them to provide health care? I thought that you were never making that claim.

MR. CLEMENT: I didn't have to make that claim in the course of this litigation. What I'm pointing out, though, is for purposes of the substantial burden analysis, it is perfectly appropriate to take into account that the 2,000 ­­ the $26 million in fines they would pay would not be the only thing that they would lose out if they are on that horn of the dilemma. They would also lose out all the additional wages they would have to pay, and they would be in this position of not offering health care, which is something they believe is important for their religion as well.

JUSTICE KAGAN: You know, I'm sure they seem like very good employers. And I'm sure they want to be good employers. But again, that's a different thing than saying that their religious beliefs mandate them to provide health insurance . . . .

If the "substantial burden" under RFRA is the most difficult element that the corporations to meet, then the strict scrutiny test applicable to any substantial burden is surely the government's most difficult task.  The questioning noted that the "least restrictive means" test in RFRA was clearly more difficult to meet than even the pre-Smith cases that RFRA explicitly sought to restore - - - and there did not seem to be even a glimmer that RFRA should be held unconstitutional (which would, of course, require a departure from O Centro Espirita Beneficiente Uniao Do Vegetal v. Gonzales). 

 Justice Breyer, asking his first question of the argument, requested that Verrilli provide a "precise answer" to the "least restrictive" argument that the government should simply pay for the contraceptive coverage.  Verrilli's argued that this suggestion by the corporations was not properly before the Court, but even if it was, that even the accommodation would be subject to a RFRA challenge.   Justice Alito suggested that Clement be asked about whether this would hapen, and indeed Clement was asked (by Justice Sotomayor).  Clement's reply:

We haven't been offered that accommodation, so we haven't had to decide what kind of objection, if any, we would make to that. But it's important to recognize that as I understand that litigation, the objection is not to the fact that the insurance or the provider pays for the contraception coverage. The whole debate is about how much complicity there has to be from the employer in order to trigger that coverage. And whatever the answer is for Little Sisters of the Poor, presumably you can extend the same thing to my clients and there wouldn't be a problem with that.

 Whether Justice Kennedy will be the deciding vote in this case is certain to be subject to much speculation and his questions will be closely read; our extended discussion is here.  But without question, the Justices seem sharply divided.

 

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Courts and Judging, Current Affairs, First Amendment, Gender, Oral Argument Analysis, Religion, Reproductive Rights, Supreme Court (US) | Permalink

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