Understanding the Hobby Lobby ruling

This morning, on the last day of the Supreme Court’s 2013-2014 term, the Court handed down its 5-4 ruling on the much-anticipated Hobby Lobby case. Hobby Lobby, a corporation privately held by a devoutly religious family, took exception to a provision of the Affordable Care Act (ACA) which required companies with 50 or more employees to provide health insurance for their employees that covered all of the FDA-approved forms of contraception. They consider four of those forms to be abortifacients, and against with their religious views. Thus they believe that it would violate their religious freedom to be forced to provide them to their employees.

This raises two important questions, with which the courts needed to wrestle:

  1. Can a corporation practice a religion, and if so, are those practices protected by the constitution in the same way that an individual’s religious practices are protected?
  2. If yes, does the Affordable Care Act’s mandate to provide contraceptives violate the protections put in place by the Religious Freedom Restoration Act of 1993 by forcing employers to act in contradiction with their religious beliefs?

A bit of a history lesson is required here to fully understand the context. In 1990, the Supreme Court heard Employment Div., Dept. of Human Resources of Oregon vs. Smith in which two members of the Native American Church were fired and denied unemployment benefits for consuming peyote (which is illegal under Oregon law) as part of a religious ceremony. The Court ruled that it doesn’t violate First Amendment protections when “prohibiting the exercise of religion… is not the object of [governmental regulation] but merely the incidental effect of a generally applicable and otherwise valid provision.”

In response to this, Congress passed in 1993 the Religious Freedom Restoration Act (RFRA), whose purpose was to re-establish the strong protection for religious freedom that existed before Smith. The RFRA states:

 (a) In general

Government shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability, except as provided in subsection (b) of this section.

(b) Exception

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.

That sets up the questions in the Hobby Lobby case: first, does this apply to corporations as well as individuals, and if yes, does the Affordable Care Act:

  • Substantially burden Hobby Lobby’s exercise of religion?
  • If yes, does it meet the two criteria for a permitted exception (furthering a compelling interest, and employing the least restrictive means to further that interest)?

So let’s take these in turn. To begin, we start with one of the hot topics of recent case law: is a corporation a person for the purposes of the RFRA? The RFRA doesn’t explicitly define “person” in its own context, which means that the definition defaults to the one in the aptly named “Dictionary Act of 1871.” The Dictionary Act states:

 and the word “person” may extend and be applied to bodies politic and corporate

This is if course the same definition that the Court invoked in Citizens United to claim that corporations are people and thus have the right to make political contributions as an expression of their right to freedom of expression. If the applicable law doesn’t define “person” otherwise, this is the definition we are stuck with — unless one can make the case that it makes no sense to read the law in that manner.

Today the majority — Alito (writing), Roberts, Kennedy, Scalia and Thomas — ruled that within the context of the RFRA “closely held” corporations, ones in which ownership is entirely in the private hands of a small number of people, are within the scope of “person” and can in fact exercise religion — the religion of their owners. They dodged the larger issue of whether a publicly held corporation can hold religious views, since none of the companies involved in the case before it are publicly held, but they expressed skepticism that a public corporation could make such a case. In doing so, they repeatedly conflated “closely held” and “small,” which as Justice Ginsberg pointed out in her dissent (joined by Breyer, Sotomayor and Kagan) is a big mistake: the “closely held” Mars Corp. has 72,000 employees, and likewise Cargill Corp. has 140,000.

Between the majority opinion and the dissent, there is considerable arguing back and forth in both the main text and the footnotes on whether the RFRA extends to corporations. Generally speaking, they both agree that the RFRA doesn’t explicitly define “person” so to properly imply a definition we need to look at prior case law on corporations’ exercise of religion as well as whether there are any “bright line” divisions to be made within the realm of corporations that serve to make a reasonable distinction. Both sides cherry-pick precedents that support their side (Alito that corporations should be included, and Ginsburg that they shouldn’t). But they both choose different approaches to dividing up the landscape; Alito’s is “humans, closely-held corporations and all other corporations” and Ginsburg’s is “humans, religious organizations (where the organization represents a “community of believers” and acts to forward their religious beliefs), and all other organizations.” Both find fault with the other’s taxonomy. Ginsburg would rule that humans and religious organizations can express religious beliefs but not any other organizations. But today the majority won, and their rule was that humans and closely-held corporations can definitely express religious beliefs; they refrained from ruling on all other corporations, which leaves plenty of space for future litigation.

With that resolved, we move on to actually applying the RFRA to the dispute. First up: does the ACA substantially burden Hobby Lobby’s exercise of religion? The majority answered “yes” very quickly, by simply tallying up the financial penalty assessed for non-compliance with the ACA. There are arguments to be made that Hobby Lobby had other options that would result in lesser penalties, but the majority was having none of that.

So then we need to consider whether the ACA meets the criteria for an exception under the RFRA.

The first criteria is whether there is a compelling government interest, and here something really interesting happened: the majority pulled a calculated maneuver to avoid answering the question. They simply said “We assume there is a compelling government interest” without evaluating any of the details. In contrast, Ginsberg’s dissent — speaking for all of the women justices — gives a full-throated argument for the importance of women’s healthcare, especially reproductive healthcare. She points out that women’s healthcare has long been inferior to men’s for a variety of not-very-good reasons. She also explains that women’s healthcare is more expensive to deliver than men’s which creates a significant health, social and economic impediment to women in our society if women are forced to shoulder the cost of it themselves. The majority opinion is completely silent on this, which alone speaks volumes for how Roberts, Alito, Scalia and Thomas view women: they are shrewdly refusing to write into a majority opinion text that could be used in the future to justify not only a compelling government interest in women’s healthcare but potentially anti-discrimination actions. Tellingly, Justice Kennedy steps away from the majority to write a concurring opinion in which he does what the rest of the majority would not do: he explicitly states that, on the merits, providing women’s healthcare is a compelling government interest. Are Alito, Scalia, Thomas and Roberts misogynists? You be the judge.

The second criteria is whether the ACA, and the Department of Health and Human Services, implemented the “least restrictive means” to further the government interest. The majority’s answer is “no,” with two reasons. First — and this is a good point — the ACA and HHS already exempt religious organizations from compliance with the contraceptive mandate by requiring insurance companies to cover the contraceptives without cost sharing, and they could have extended that same exemption to closely-held corporations that express religious beliefs. This works because the cost of contraception is actually less than the average healthcare costs accrued by women not using contraception, so it represents a net savings for the insurance companies. Second, they argue that the government could simply create a new program to pay for the four disputed forms of contraception directly to healthcare providers in cases where corporations refuse to pay for them on religious grounds.

And this is where the debate truly gets furious, because “let the government pay” might open up the floodgates for all sorts of religious objections to individual provisions of the healthcare mandate. What about those who object to vaccinations? Blood transfusions? Antidepressants? Medicines derived from pigs such as anesthesia and gelatin-coated pills? It also opens up cases beyond the healthcare law for religious objections, many of which are already settled case law: equal pay for women; hiring someone cohabitating with, but not married to, a person of the opposite sex; a young, single woman working without her father’s consent or a married woman working without her husband’s consent; or “anyone antagonistic to the Bible.” Ginsburg includes a litany of examples. And this forms the heart of the last big issue: the majority claim that their ruling is very narrow, while the dissent claim that it is radically broad and sweeping and opens up a minefield of issues.

There is settled case law, a 1982 case United States vs. Lee, in which an Amish employer objected to paying social security taxes. The case did two things: first it set a precedent for overcoming religious objections (though it predates the RFRA). Second, it dealt with the issue of the difficulty with religious objections to tax issues where the objection might be to one part of what the taxes are used to pay for, but the tax collection as a whole goes into an undifferentiated pot rather than separate collections for each program. There is great similarity to this case, where the objection is with a specific provision of the healthcare mandate, but subdividing it is not practical. Nevertheless, the majority was not swayed — though it did say that its ruling today explicitly doesn’t apply to taxes, or to racial discrimination. Curiously, they didn’t explain where they drew the line as to where it applies — again, there will be much litigation here in the future.

The two sides argue over one last point:  in the cases such as Hobby Lobby where the religious views of the owners are not shared by the employees, where the balance is struck between their rights. The majority comes down strongly in favor of the owners, and the dissent in favor of the employees.

It’s worth noting one more sneaky thing that the majority did in their opinion: despite the fact that they specifically suggest the “let the government pay” approach as a less restrictive means, they explicitly say that they are not ruling on whether that would actually pass muster as an official less restrictive means for providing contraception. I suspect they did that in anticipation of the next big case on its way to them on this topic: Little Sisters of the Poor Home for the Aged vs. Sebelius, in which the Little Sisters object to having a contraception mandate in the health insurance plan provided to their employees even when they are not paying for it. They want to ensure that their employees do not receive coverage for contraception, and the majority today cleared the path for them to make that case.

There’s one more issue I want to raise, which the majority discuss early in their opinion as they lay out the foundation for their “corporations are people and have religious expression” argument: if you are of the belief that companies — the entire spectrum from sole proprietorships to multinational corporations — should have strong senses of business ethics, then you must find some sympathy for Hobby Lobby’s owners in this case. For them, as with billions of people on the planet, their ethics derive from their religious views, and are for all practical purposes inseparable. You may object to their particular ethical stance on contraception — I certainly do — but at least they have a clear ethical foundation for how they run their company and are transparent about it. And as the majority argues, from the point of view of someone trying to start a new company, there’s a certain wrongness to forcing people to choose between keeping to their religion or starting a company; it’s akin to excluding religious people from full participation in the economy of our country. Granted, that’s somewhat of a simplification, but it points to exactly how complicated this space is. There are no easy, obvious answers. I’ll return to this topic in a future post, which is about half-composed in my head right now but requires me to write another piece first to fill out the picture.

I tend to side with Justice Ginsberg on today’s ruling in her belief that it opens up far more issues than it closes, and likely portends a much broader deference to religious views. It is truly unfortunate, but in retrospect not unexpected, that it comes from five Catholic men. And you can be assured that this is not the last we’ve heard from these particular five Catholic men.


  1. Luke Mastalli-Kelly says:

    One subject which, to the best of my knowledge, was not addressed in the case was whether or not Hobby Lobby’s beliefs are sincerely held, and what the legal threshold for such sincerity is. Several sources around the web have called that sincerity into question, either by reason of Hobby Lobby allowing vasectomies (and other procedures/treatments) or the company’s investments in the very treatments that it purports a religious objection to paying for.

    The vasectomy/other treatment argument is vacuous. Hobby Lobby was clear about its reasons for objecting to four specific treatments, and those objections have been consistent. More compelling is the idea that they should not also be allowed to invest in those same treatments. To apply this to the case, however, we would need a threshold for ‘sincere belief’ and the level of due diligence required to back it up. After all, Hobby Lobby is only investing in those drugs via 401k plans, in mutual funds, which include shares of the companies that provide those treatments.

    Of course, such a threshold would be irrelevant to the core tenets, and most troubling aspects, of the ruling.

    • kevinsch says:

      Thanks for your comments Luke. The government was willing to stipulate that Hobby Lobby’s beliefs are sincerely held. The information about their investments might not have been available when the case was being tried at the lowest level, and new evidence is not allowed to be introduced during any of the appeals. So that would probably have to be a separate case.

  2. Susan says:

    Why must their factually incorrect beliefs be upheld just because they are sincere?

    All 3 of the specific forms of contraception Hobby Lobby objected to prevent fertilization, not the attachment of a fertilized egg to the uterine wall:

    The Plan B morning after pill doesn’t eliminate a fertilized egg, it prevents pregnancy.
    The second morning after pill – Ella – prevents ovulation.
    The IUD prevents fertilization by acting as a spermicide.

    That these judges ignored these facts is shameful.

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