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Tuesday, July 1, 2014

Guest Blogger Professor Wendy Mariner: Hobby Lobby – Part 1: Five Supreme Court Justices Write Corporate Fiction

MarinerAs everyone now knows, the U.S. Supreme Court decided for the first time on June 30, 2014, that for-profit corporations can claim a religious exemption from federal laws that conflict with the personal religious beliefs of people who own the corporation. The majority opinion, by Justice Alito (joined by Roberts, Scalia, Thomas, and Kennedy), says “Congress provided protection for people like the Hahns and Greens by employing a familiar legal fiction: It included corporations within RFRA’s definition of “persons.” But, it is the majority, not Congress, that writes fiction here.

First, the text of RFRA (the Religious Freedom Restoration Act) does not define “person” at all. All RFRA says is: “Government may substantially burden a person's exercise of religion only if it demonstrates that application of the burden to the person – (1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.” (Italics mine.) The majority ignores the “legal fiction” that a corporation is separate from its owners and adopts its own fiction that corporations can “exercise” the religion of their owners. The majority’s reasoning is highly literal and abstract. It goes as follows:

  • RFRA does not define “person.”
  • The federal Dictionary Act offers definitions for use in federal laws that do not specify their own definitions; and its definition of person includes “corporations, associations, firms, partnerships, and joint stock companies, as well as individuals.”
  • Since a nonprofit incorporated religion can bring RFRA claims (Gonzales v. O Centro Espírita), and individuals who own for-profit proprietorships can bring individual Free Exercise claims (Braunfeld v. Brown; but they lost), for-profit corporations should be able to do the same thing.
  • There is no relevant difference between for-profit and nonprofit corporations.
  • Therefore, closely held, for-profit corporations can “exercise” their owners’ religion.

 

With that conclusion, the die is cast.[1] Alito’s opinion treats the corporations’ claims as though they were claims by individuals who only incidentally created corporations. It repeatedly conflates individuals with corporations, describing the duties imposed on the corporations as obligations of the individual owners and attributing the owners’ beliefs to the corporation. (More on those beliefs in Part 2 of this blog.)

The majority concludes that “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.” Alito’s proclamation that this principle can be confined to closely held corporations is a fantasy. His opinion describes the Green family as having exclusive control over their companies, without mentioning that they are not shareholders, but beneficiaries of a trust that owns the company’s shares. How many degrees of separation still link a corporation and a believer? How about the companies that Warren Buffet’s Berkshire Hathaway, Inc. owns? Do they exercise his religion? Size or revenue apparently does not matter. Koch Industries, Cargill, Bechtel and other large, profitable corporations are closely held.

The opinion also blithely assumes that state corporate law can easily determine who speaks for a corporation. [For a contrary view, see the corporate law scholars’ amicus brief.]  Does this mean that a 51% controlling shareholder could insist, on personal religious grounds, that the corporation refuse compliance with the title VII prohibition on sex discrimination because the shareholder believes that his religion forbids women from employment outside the home? What if management disagrees? What other circumstances might justify disregarding the much older legal fiction that a corporation is a separate legal entity from its owners? Can the owners impose their religious views on the corporation and still avoid liability for corporate misdeeds? As Justice Ginsberg notes in her dissent, "The court, I fear, as ventured into a minefield."

The majority waves such questions away, asserting that the government has a compelling interest in preventing discrimination in employment. But it also assumes that the government has a compelling interest in women’s health and equality here, too. And it nonetheless concludes that the regulations impose a substantial burden on the owners’ religious beliefs and that the government could find a less restrictive alternative to achieve its purpose. As in the clinic buffer zone case last week, five male Justices can always hypothesize a less restrictive alternative.

Another fiction Alito offers is that the principle should not be extended to religious beliefs opposing blood transfusions or vaccinations. But, logically, it certainly can. As Justice Ginsburg, dissenting, asks:  “Would the exemption the Court holds RFRA demands for employers with religiously grounded objections to the use of certain contraceptives extend to employers with religiously grounded objections to blood transfusions (Jehovah’s Witnesses); antidepressants (Scientologists); medications derived from pigs, including anesthesia, intravenous fluids, and pills coated with gelatin (certain Muslims, Jews, and Hindus); and vaccinations (Christian Scientists, among others)?”  If there is no less restrictive alternative to requiring employers to include insurance coverage for a religiously suspect therapy, then all these may be vulnerable to exclusion on the same principle, despite the majority’s disclaimer.

The Hobby Lobby decision may or may not have a dramatic effect on ACA implementation. However, its interpretation of RFRA opens the door to a wide range of claims by employers that disadvantage employees – especially women.

 

-Professor Wendy Mariner

[1] Justice Ginsburg, dissenting, vigorously disagreed with this conclusion, but Justices Breyer and Kagan did not join her dissent on this point. 

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