We reacted with skepticism in an earlier post about a case reported last November 2nd questioning whether an owner’s religion can be imputed to a corporation, or that the “Patient Protection and Affordable Care Act (“ACA,” or “Obamacare”) violates either the Religious Freedom Restoration Act (known as “RFRA”) or the First Amendment.
There has been a split in court decisions, and we “anticipate[d] an ultimate decision from the Supreme Court.” We are now a step closer to that day. A federal appeals court in Philadelphia has just answered in the negative the important question: “Whether a for-profit, secular corporation is able to engage in religious exercise under the Free Exercise Clause of the First Amendment and the RFRA?”
Can The Sincerely Held Religious Belief Of A Business Owner Be Imputed To The Business?
Since the passage of Obamacare, employers who claim that their religious beliefs prevent them from using, paying for, or supporting the use of contraception, have claimed that this religious claim should be imputed to their wholly-owned companies such that these companies should be exempt from having to provide or participate in health insurance that includes providing contraceptives (or else incur a penalty).
The Law Until Now
There has been a serious split of authority — on November 2nd, we reported that a second federal court (in Michigan) had enjoined the application of the ACA rule tat would have required a “secular, for-profit, family owned and operated corporation” owned by a practicing Catholic to provide employee health insurance that covers contraception. And we also reported that an Oklahoma federal court issued a decision directly at odds with the Michigan one, and denied a similar injunction to for-profit, secular corporations owned by a family management trust whose trustees are practicing Christians.
The First Appellate Decision
In this first appellate decision on the issue, the Court dealt with a family which owns 100% of the voting shares of a for-profit corporation that manufactures wood cabinets and has 950 employees. “The Hahns practice the Mennonite religion. According to their Amended Complaint, the Mennonite Church ‘teaches that taking of life which includes anything that terminates a fertilized embryo is intrinsic evil and a sin against God to which they are held accountable.’ … the Hahns object to two drugs that must be provided by group health plans under the [ACA] Mandate that ‘may cause the demise of an already conceived but not yet attached human embryo.’ (… These are ‘emergency contraception’ drugs such as Plan B (the ‘morning after pill’) and ella (the ‘week after pill’).”
Does Citizens United Afford A Corporation Religious Rights?
The Court, dealing with the (in?)famous Citizens United case, where the Supreme Court held that “the Government may not suppress political speech on the basis of the speaker‘s corporate identity,” found that “whether Citizens United is applicable to the Free Exercise Clause is a question of first impression” and “we must consider whether the Free Exercise Clause has historically protected corporations, or whether the ‘guarantee is ‘purely personal’ or is unavailable to Corporations’ based on the ‘nature, history, and purpose of [this] particular constitutional provision.’”
The Court held that “We will not draw the conclusion that, just because courts have recognized the free exercise rights of churches and other religious entities, it necessarily follows that for-profit, secular corporations can exercise religion.” The Court stated that “we are not aware of any case preceding the commencement of litigation about the Mandate, in which a for-profit, secular corporation was itself found to have free exercise rights. Such a total absence of caselaw takes on even greater significance when compared to the extensive list of Supreme Court cases addressing the free speech rights of corporations.”
In a 66-page dissent which called the ruling “deeply disappointing,” and “tragic,” the dissenting judge claimed that “one need not have looked past the first row of the gallery during the oral argument of this appeal, where the Hahns were seated and listening intently, to see the real human suffering occasioned by the government’s determination to either make the Hahns bury their religious scruples or watch while their business gets buried.”
Intending to soften the blow, especially in the face of the lengthy dissent, the majority stated that:
“our decision here is in no way intended to marginalize the Hahns’ commitment to the Mennonite faith. We accept that the Hahns sincerely believe that the termination of a fertilized embryo constitutes an ‘intrinsic evil and a sin against God to which they are held accountable’ … and that it would be a sin to pay for or contribute to the use of contraceptives which may have such a result. We simply conclude that the law has long recognized the distinction between the owners of a corporation and the corporation itself. A holding to the contrary—that a for-profit corporation can engage in religious exercise—would eviscerate the fundamental principle that a corporation is a legally distinct entity from its owners (emphasis added).”
This is an extremely important decision and one that may be the basis of either the majority or minority opinion when the Supreme Court ultimately weighs in.