ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Tuesday, October 11, 2022

Guest Post from Hila Keren Responding to Yesterday's Post on 303 Creative

Freedom of Contract and Market Citizenship at SCOTUS
Hila Keren

Hila Keren websiteI am very grateful for Jeremy Telman's recent contribution to this blog, which explains how 303 Creative v Elenis—soon to be heard by SCOTUS—is related to the world of contracts and contract law. I have studied the case and its context and written about it to general and legal audiences. All in all, my work offers much support to the fine points Jeremy makes. However, I write here today because there is one point about which I am afraid I have to disagree with Jeremy, and it is a significant one.

I believe it is a mistake—and a contractual mistake—to distinguish between refusals to sell cakes and refusals to design websites. The difference that Jeremy highlights is based on the question of whether interested clients have easy access to other providers. If one cannot get a cake from the best cake shop in a small town, "that's genuine hardship," the argument goes. But, the case is different, and the harm is smaller—the reasoning continues—when there are enough web designers on the globe willing to serve LGBTQ people, "even if dozens or even hundreds" reject them. 

AlitoOf course, this logic is not new. Since we are talking about the commercial sphere, it is tempting to think about the issue in economic terms and to think that as long as the free market can supply the demand for goods and services, there is little to no problem. Conservatives have been making this argument for decades. Indeed, in a speech to the Federalist Society, Justice Alito (left) went as far as to say that the same-sex couple rejected by the Colorado bakery that brought us the decision in Masterpiece Cakeshop got lucky. According to Alito, the religious baker did not harm anyone because "[t]he couple that came to his shop was given a free cake by another bakery . . . .".

But, the critical point missed by this economic rationality is that those refusal-to-deal cases are never about the denied products or services. Instead, they are about freedom of contract: the freedom of all of us to participate in the marketplace as equals without experiencing humiliation. When a business open to the public (even if operating online) declares that certain clients are undesirable and will not be served, the business is intentionally targeting these clients' identities, publicly claiming that they deserve fewer market choices than other members of society. This is, therefore, an act of humiliation. It expresses hostility towards some people and marks them as inferior to most people, those who can freely contract with all the businesses they can afford to pay to. To those so humiliated, access to similar goods or services elsewhere does not offer any comfort at all. Such is the case because the problem was never a matter of supply and demand.

Instead, as the dissent in a similar case in Arizona noted, "if businesses can selectively treat some customers as second-class citizens," then "humiliation and stigma" follow. Such humiliation and stigma are inflicted by the offensive signs that businesses like 303 Creative seek to put out, declaring "no same-sex couples." How hard is it to see the similarity of such signs to those used by businesses in the dark past against other groups? It is this humiliation that we now need to focus on and refuse to take lightly.

If you need scientific support for this last point, please allow me to share that outside of the legal arena, humiliation studies empirically show that acts of intentional and public rejection induce a particularly intense and painful emotion that is also long-lasting. Plus, this emotion does not stop at specific individuals; it further spreads through a process known as "collective humiliation" to other members and allies of the targeted group. Moreover, many studies also teach us that humiliation is not merely a long-lasting emotional scar. It also leads to mental health complications, depression, and even suicide. So, before anyone considers "that dignitary harms could bow to Free Exercise rights," we must pause. Are we really ready to allow businesses to inflict such colossal harm on others?

In this debate, and to contract law people like the readers of this blog, the fact that businesses like 303 Creative are routinely profiting from using contracts and relying on their enforcement in courts should lead the analysis. Why should they be allowed to impede the contractual choices of those they see as objectionable while they are free to use the contractual system and benefit from it? I have argued elsewhere and want to repeat here that the right to dignified participation in the marketplace is an important aspect of our citizenship. I have called it "market citizenship." What it means is that 303 Creative, and any other business benefitting from contracts, cannot use the rights that come with market citizenship without accepting the duties it entails. Contract law, and not only nondiscrimination laws, should be operated to guarantee dignified contracting. It has no business telling LGBTQ people that as long as they can get what they need elsewhere, contract law will stay silent.

If we do not protect market citizenship for all and insist that everyone hold the exact scope of contractual rights, we will open the door to more business refusals presented as "speech." Before we know it, too many people will have to search the market for quite a long time to find someone who doesn't hate them for who they are. It is not enough to say that "gay couples don't have to and shouldn't want to patronize businesses that hate them." Similarly, insisting on a market fully open for all is far from being "a fight over a right that nobody would want to exercise." Instead, defending market citizenship should be a cause supported by contract law lovers. If we will not insist on people's ability to contract with others (as long as they can keep their promises), who will?

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