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Court rules in favor of for-profit corporations, but how broadly? In Plain English

It was déjà vu all over again.  On the last day before its summer recess, we expected the Court to rule on a challenge to the Affordable Care Act, the president’s signature legislative achievement.  Lines to get into the courtroom formed early, and crowds gathered outside.  Would we get another late June surprise, with the Chief Justice joining the four more liberal Justices to save the mandate – this year, the requirement that employers provide their female employees with health insurance that includes free access to birth control?  But this time, the answer was no:  the Court’s five more conservative Justices banded together to strike down the mandate as it applies to family-owned companies like Hobby Lobby and Conestoga Wood Specialties Corporation, the plaintiffs in this case.  The only real surprise (and, to be sure, not a momentous one) was that the author of the opinion was Justice Samuel Alito, the most junior Justice in the Court’s conservative wing.  Let’s talk about the decision in Plain English.

Justice Ginsburg with dissent in Hobby Lobby. (Art Lien)

Justice Ginsburg with dissent in Hobby Lobby. (Art Lien)

First, a bit of background.  As I explained in my earlier Plain English coverage of the case, regulations issued under the Affordable Care Act require employers to provide their female employees with health insurance that includes no-cost access to twenty different kinds of contraceptives.  The families that own Hobby Lobby and Conestoga Wood Specialties are deeply religious and do not want to make four of those twenty kinds of birth control – IUDs and the “morning after” pill — available to their female employees because they believe that it would make them complicit in abortion.  Today the Court agreed that they don’t have to.

The Religious Freedom Restoration Act (RFRA) is a federal law that prohibits the government from imposing a substantial burden on someone’s ability to practice his religion unless that burden advances an important government interest and does so in the least restrictive way possible.  The Court started by considering and rejecting the federal government’s argument that, because they are for-profit corporations, Hobby Lobby and Conestoga could not even rely on RFRA to challenge the mandate.  That contention, the Court observed, would require the companies to choose between two unpalatable options:  “either give up the right to seek judicial protection of their religious liberty or forgo the benefits, available to their competitors, of operating as corporations.”

Such a choice was not necessary, in the Court’s view, for several reasons.  First, RFRA was intended to apply very broadly, and the purpose of protecting corporations is to protect the rights of the people associated with the corporation.  Second, another federal law – the Dictionary Act – specifically includes “corporations” in its definition of “person,” and there is no reason to think that Congress intended anything else for RFRA.  Third, and the government’s suggestion notwithstanding, for-profit corporations can indeed exercise religion:  the government concedes that non-profit corporations do so, and for-profit corporations aren’t all that different – they can have goals other than making money and in fact do “support a wide variety of charitable causes.”  Here the Court dismissed the government’s argument that Congress wouldn’t have wanted RFRA to apply to for-profit corporations because it would be too hard for courts to figure out exactly what the religious beliefs of a corporation with lots of shareholders are.  It would be relatively rare, the Court posited, for a large publicly traded company like IBM to rely on RFRA in the first place, but – in any event – that is not a problem for the companies in this case, which are “each owned and controlled by members of a single family” whose sincere religious beliefs have never been questioned.

Next up in the Court’s analysis was whether the contraception mandate imposes a “substantial burden” on the corporations’ ability to exercise their religion.  Here the Court had “little trouble concluding that it does” given the cost to the corporations – as much as $475 million for Hobby Lobby — if they fail to provide the birth control at issue.  The Court was unmoved by the suggestion that Hobby Lobby and Conestoga could cut their losses by not providing any health insurance at all, in which case they would pay much smaller penalties.  It pointed out that the companies not only have religious reasons for providing their employees with health insurance, but they could also find themselves at a “competitive disadvantage” in recruiting good employees if their business rivals provided insurance and they did not.

The Court was equally unmoved by the government’s argument that the mandate doesn’t in fact impose a burden on Hobby Lobby and Conestoga because they wouldn’t be required to do anything beyond providing the insurance; it would be the companies’ female employees who would actually use the insurance coverage and might choose to use one of the four kinds of birth control to which the companies object.  That line of thinking, the Court reasoned, goes to the question whether the companies’ religious beliefs are actually reasonable, rather than whether the mandate imposes a burden on those beliefs.  But, the Court emphasized, its only job is to figure out whether the companies’ convictions are sincere – not whether their beliefs are “mistaken or insubstantial” – and in the Court’s view they clearly are.

Because the Court agreed with Hobby Lobby and Conestoga that the contraception mandate imposes a substantial burden on their ability to exercise their religious beliefs, RFRA then required it to assess whether the mandate furthered an important government interest and does so in the least restrictive way possible.  However, the Court skipped over the first half of that test.  Instead, it assumed – without actually deciding – that the government has good reasons for requiring employers to provide their female employees with no-cost access to the four kinds of birth control to which Hobby Lobby and Conestoga object.

But even if that’s the case, the Court continued, the mandate still can’t survive because it is not the narrowest way of promoting the government’s interest.  If the government really cares about providing women with free birth control, the Court explained, it could do so itself, at a cost that would probably pale in comparison with what the Affordable Care Act will ultimately cost the government.  But, the Court pointed out, further evidence that there is an easier and less burdensome (for the companies) way to do this can been seen in the exemption that the government has created for religious non-profits that object to providing birth control.  Those religious non-profits can opt out of providing the coverage without paying for it, but their female employees can still receive the coverage, with either the insurers or the government paying for it.

The Court’s opinion made clear that today’s decision was a relatively narrow one.  It does not mean, the Court clarified, that an employer can automatically avoid paying for a particular kind of insurance coverage just because it has religious objections to it.  Thus, for example, the Court explained, employers might still be required to provide coverage for vaccinations – an example that came up at oral argument – even if their religious beliefs might dictate otherwise, because of the need to prevent the spread of contagious and deadly diseases.  Nor, the Court took pains to add, does the decision provide cover for employers to rely on religion to discriminate on the basis of race.

Justice Ruth Bader Ginsburg, the senior Justice in what we often think of as the Court’s more liberal wing, wrote the primary dissent on behalf of that group, which also includes Justices Stephen Breyer, Sonia Sotomayor, and Elena Kagan.  Despite the Court’s efforts to portray its decision as a narrow one, Ginsburg characterized the majority’s opinion as one of “startling breadth” that would allow corporations “to opt out of any law . . . they judge incompatible with their sincerely held religious beliefs.”  And she paints a very different picture of the scope of RFRA than the majority; in her view, Congress enacted the law with the much more limited purpose of restoring the state of play as it existed before the 1990 decision that prompted Congress to pass RFRA in the first place.  Congress did not mean to provide corporations with a religious exemption from laws that apply to everyone, which the Court had never done before RFRA.  That would have been a huge change from the Court’s earlier cases, Ginsburg emphasized, so there is no chance that Congress would have made that change without explicitly saying so.   With its decision today, Ginsburg warns ominously, the Court has “ventured into a minefield.”

Today’s decision is an unqualified victory for Hobby Lobby, Conestoga, and the families that own them.  The companies can provide their female employees with health insurance, and that health insurance can include access to some forms of birth control, but they are not required to violate their religious beliefs by subsidizing forms of birth control that they believe would make them complicit in abortions.

But, of course, the Supreme Court doesn’t exist to issue opinions that will only apply to future cases presenting the exact same facts and issues.  (Unless, maybe, you are talking about Bush v. Gore.)  Or does it?  Justice Anthony Kennedy, whom we often think of as the pivotal vote in high-profile decisions, agreed with both the majority’s reasoning and its result, but he also wrote a separate concurring opinion in which he seemed to be emphasizing that this decision is indeed “a ticket for one day only.”  Thus, although the Court held that the contraception mandate does not apply to Hobby Lobby or Conestoga, he made clear that it was able to do so primarily because the government was already accommodating other employers who did not want to cover birth control, proving that there was an easier way to balance the companies’ interests and those of its female employees.

Will the impact of today’s decision be as limited as Alito and Kennedy suggested, or will the Court instead be heading toward a minefield, as Ginsburg prophesied?  Notwithstanding the Court’s repeated caveats, it seems likely that other religiously based challenges to various insurance mandates are inevitable, by for-profit corporations of all stripes – although whether such challenges will succeed remains to be seen.  And supporters of equal rights for gays and lesbians were anxiously awaiting today’s decision to see what it might portend for laws (or lawsuits) that might allow business owners to rely on their religious opposition to same-sex marriage to decline to (for example) photograph the wedding of a same-sex couple.  The Court’s decision doesn’t address that issue at all, but look for it nonetheless to provide ammunition to foes of same-sex marriage.  And even at its most limited, today’s decision showed once again that at least five Justices on the Court have views about the role of religion in public life that are very different from those of their four colleagues – a debate that is likely to continue in the years to come.

Recommended Citation: Amy Howe, Court rules in favor of for-profit corporations, but how broadly? In Plain English, SCOTUSblog (Jun. 30, 2014, 5:17 PM),