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Symposium: How to understand Hobby Lobby

The following contribution to our contraceptive mandate symposium comes from Marty Lederman, professor of law at Georgetown University Law Center.

It is hard to recall a Supreme Court case that has been so commonly misunderstood, in so many respects, as the “contraception coverage” cases that the Court will consider on March 25, Sebelius v. Hobby Lobby Stores, Inc. and Conestoga Wood Specialties Corp. v. Sebelius.

For example, many of the lower court opinions concerning the contraception regulations, as well as a majority of the more than eighty briefs filed in the Supreme Court, have been devoted to a question – about whether corporations have consciences, and can exercise religion in a way protected by the Religious Freedom Restoration Act (RFRA) – that is, at best, a distraction from the central issues in the cases.  Those opinions and briefs also repeatedly mischaracterize the relevant statute and regulations in fundamental ways (some of which I discuss below).  They have failed to critically examine the facts the plaintiffs have – and more importantly, have not – alleged in support of their assertions that federal law compels them to violate their religious obligations.  And, contrary to what the plaintiffs and many lower courts have argued, it is untrue that the government’s compelling interests are undermined by an alleged vast network of exemptions that will leave “millions” of women unprotected.  In fact, there is almost no underinclusiveness in the law.    

In a series of posts on Balkinization, I have tried to untangle many of these and other mischaracterizations and misunderstandings.  My focus here, however, is on two critical, and related, aspects of the cases that have largely been obscured or misrepresented.

1.  The plaintiffs in these cases are seeking a type of religious exemption that has virtually no precedent in the history of free exercise and RFRA adjudication.

In their scores of briefs, the plaintiffs and their many amici fail to cite a single case, apart from the current contraception coverage litigation, in which a court has held that either the Free Exercise Clause or RFRA entitled a for-profit commercial enterprise to an exemption from a generally applicable law by virtue of a burden on the religious exercise of the employer or its owners, managers, or directors.  And whenever such a case has reached the Supreme Court – including Braunfeld v. Brown (1961), Newman v. Piggie Park Enterprises, Inc. (1968), and United States v. Lee (1982) – the Court has overwhelmingly or unanimously rejected it.   (Moreover, even apart from RFRA and the Free Exercise Clause, Congress has rarely, if ever, extended specifically religious exemptions to for-profit enterprises.)

This unbroken history is hardly surprising, given that in virtually every such case – and even in cases where nonprofit commercial enterprises seek religious exemptions, such as Tony & Susan Alamo Foundation v. Secretary of Labor (1985), another unanimous decision – a religious exemption would require customers, employees, or competitors to bear a heavy cost in the service of another’s religion, something the Court has understandably been loath to sanction.

Contrary to the views of some, I think it overstates matters to say that such a significant third-party burden invariably renders a permissive religious accommodation unconstitutional.  The Court’s jurisprudence in the area of permissive accommodations is not so unequivocal.  But this much is clear:  Such a significant third-party burden at a minimum raises profound constitutional concerns.  For that reason, as Chip Lupu and Bob Tuttle explain, the Court has regularly construed permissive accommodation statutes – using the avoidance canon either expressly or implicitly – to recognize a compelling government interest in avoiding the imposition of significant third-party harms.  And in Lee, the Court unanimously held, not that commercial enterprises could not raise religious exemption claims, but that such claims would almost certainly be turned aside:  “When followers of a particular sect enter into commercial activity as a matter of choice, the limits they accept on their own conduct as a matter of conscience and faith are not to be superimposed on the statutory schemes which are binding on others in that activity,” at least where “[g]ranting an exemption . . . to an employer operates to impose the employer’s religious faith on the employees.”

Of course, the fact that no court has ever afforded a for-profit employer a religious exemption at the expense of its employees does not necessarily mean that there should never be such a case.  But if the Court were to do so here, it would surely be a groundbreaking departure from the judiciary’s (and Congress’s) historical practice, one that could pave the way for religious exemption claims by large commercial enterprises with respect to many other statutes, including nondiscrimination requirements, zoning regulations, taxes, and so on.

In light of this unbroken history of denying religious exemptions to commercial enterprises that would result in significant third-party harms, the plaintiffs endeavor to minimize the extent or nature of those harms in these cases.  The Conestoga Wood plaintiffs, for instance, question whether the law “will actually cause women who do not use contraception to do so” or “reduce the number of unintended pregnancies.”  After all, they note, “89% of women seeking to avoid pregnancy already use contraception.”

But as the amicus brief of the Guttmacher Institute explains, “[e]xtensive empirical evidence demonstrates what common sense would predict: eliminating the fees for contraception leads to more effective and continuous use of contraception.”  Such a guarantee enables many women who would not otherwise do so to use contraception.  Perhaps more importantly, the cost of contraception is a major factor in determining which contraceptives women use.  In particular, it is almost certain that cost-free access to all of the FDA-approved methods will result in much more frequent use of IUDs, which the plaintiffs here single out as among those contraceptive methods that they would exclude from their employees’ insurance coverage.  IUDs are among the most effective of contraceptive methods . . . but also among the most cost-prohibitive, because they require a substantial upfront investment.  Excluding them from an insurance plan that offers cost-free coverage of other methods, therefore, might well result in less effective use of contraceptives by the employees of objecting employers, thereby directly undermining the law’s objectives.

As the Guttmacher brief also discusses, more frequent use of more effective contraceptive methods leads to fewer unintended pregnancies, which results in extensive benefits for women and public health, not least of which is a reduction in the need for and incidence of abortion.  According to Guttmacher, approximately half of all pregnancies in the nation, over three million a year, are unintended, and forty percent of those result in abortions.  Access to the full gamut of cost-free contraceptives, including especially IUDs, is likely to make a significant dent in those figures.

The Hobby Lobby plaintiffs, for their part, do not take direct issue with the fact that exemptions to the law would result in more unintended pregnancies.  They argue, however, that “that kind of impact on third parties should be irrelevant to the RFRA analysis” here, because of the way in which the benefit is to be realized:  “a mandate that party A must do something for party B.”  “[T]here is no reason whatsoever to treat exemptions from such Peter-to-Paul mandates as uniquely disfavored under RFRA.”

This argument is misguided in at least two important respects.  First, it is a category error to view the regulations at issue here as some form of simple employer-to-employee wealth redistribution, as Hobby Lobby insinuates:  Employee health insurance is part of the compensation an employer offers to its employees in exchange for the value of their labor; it is not tendered gratuitously, but instead as a substitute for earned wages.  In this respect it is no different from an employer’s (federally required) payment of minimum wages, or Social Security.  Hobby Lobby’s rhetoric notwithstanding, there is no robbery going on here, any more than in either of those analogous contexts.  And in such situations, the Court has already unanimously rejected claims for religious exemptions, in cases such as Lee and Tony & Susan Alamo Foundation.

Moreover, it is also an error to view the contraception rule as a regulation of employers, in particular.  The requirement at issue is that health insurance plans include coverage of certain contraceptive services.  That requirement is not unique to plans offered by large employers, or even to employer plans generally:  It will apply to virtually all health insurance plans in the United States, whether sponsored by a large employer or a smaller employer, or by no employer at all.  In this sense it is merely one of many requirements that federal law has now established as a baseline for all such plans, including, for example, that plans not discriminate against pre-existing conditions; that plans protect beneficiaries’ children through age twenty-six; and that plans provide “cost-free” coverage (i.e., not subject to any co-payment) for many essential services, including preventive services such as colorectal cancer screening, preventive infant care, and certain immunizations.  Unless the Court affords employers the requested RFRA exemptions, virtually all women in the United States will be entitled to cost-free contraceptive coverage, just as all U.S. residents will be entitled to cost-free coverage for colorectal cancer screening and immunizations.

The exemptions that Hobby Lobby and its fellow commercial enterprises are seeking, therefore, would deny to their female employees a benefit that is not only a basic, virtually universal entitlement for all women in the United States, but also one of great significance:  Not only will it save women significant wages that their male counterparts do not typically have to spend on preventive care, but also, and much more significantly, it will almost surely result in a significant decrease in the incidence of unintended pregnancies . . . and therefore a decrease in the rate of abortions, to the enormous benefit of women, their families, and the nation.

2.  This ties into my second principal point about how the law has been widely mischaracterized:  There is no “contraception mandate.”

Yes, the law does impose a legal requirement – many of them, in fact – on all health insurance plans.  Nevertheless, contrary to common wisdom and popular rhetoric, there is no “employer mandate” to offer employee health plans, no matter how large the employer.  Employers, both large and small, may lawfully decline to offer such plans.  Indeed, the direct effect of doing so ordinarily would be a cost savings to the employer, which is why many employers will choose this option.  And in such a case the employees will hardly be out of luck:  They will then be able to purchase affordable health insurance on an exchange – with generous government subsidies, if necessary – and the insurance plans they purchase will meet all the applicable federal standards, including contraception coverage.

To be sure, many other employers will choose to continue offering employee plans, for a complex array of reasons, most of which are not a function of federal law.  And I have argued (see my Balkinization Hobby Lobby posts III, III-A, III-B, and IX) that the Hobby Lobby and Conestoga Wood employers, in particular, have failed to plead facts sufficient to demonstrate that federal law imposes substantial pressure on them to decline that option – a pleading inadequacy that may be fatal to their RFRA claims.  But whether I am right about that or not, it is still the case that if an employer does not wish to include all the incidents of insurance that federal law requires be included in all plans, its option is not nearly as draconian as having to reduce its workforce to fewer than fifty employees (a response that would not have the desired effect, in any event, because small employer plans must also include contraception coverage) or face bankrupting fines:  It has the much less draconian legal option of increasing its employees’ wages in lieu of such insurance coverage . . . in which case the employees will be able to purchase an insurance plan that includes the same federally mandated minimum protections to which everyone else is entitled.


Recommended Citation: Marty Lederman, Symposium: How to understand Hobby Lobby, SCOTUSblog (Feb. 23, 2014, 7:20 PM),