“More than 100 people — activists, court enthusiasts and reporters — gathered outside the Supreme Court building early Monday, awaiting the last day of the court’s term, when the justices were expected to rule on whether President Obama’s health care law can require corporations to pay for insurance coverage for contraception.” Thus spake the New York Times this morning before this historic decision was announced.
“The Supreme Court says corporations can hold religious objections that allow them to opt out of the new health law requirement that they cover contraceptives for women. The justices’ 5-4 decision Monday is the first time that the high court has ruled that profit-seeking businesses can hold religious views under federal law. And it means the Obama administration must search for a different way of providing free contraception to women who are covered under objecting companies’ health insurance plans.
The court stressed that its ruling applies only to corporations that are under the control of just a few people in which there is no essential difference between the business and its owners. Alito also said the decision is limited to contraceptives under the health care law. “Our decision should not be understood to hold that an insurance-coverage mandate must necessarily fall if it conflicts with an employer’s religious beliefs,” Alito said (emphasis aded).
Can The Sincerely Held Religious Belief Of Hobby Lobby’s Owner Be Imputed To The Business? The Supreme Court Says “Yes”
Since the passage of the “Patient Protection and Affordable Care Act (“ACA,” or “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).
Can an owner’s religion be imputed to a corporation such that the corporation can claim that Obamacare violates either the Religious Freedom Restoration Act (known as “RFRA”) or the First Amendment?
Last year an Oklahoma federal court issued a decision which denied an injunction sought by Hobby Lobby Stores, a for-profit, secular corporation owned by a family management trust whose trustees are practicing Christians, which challenged the validity of the ACA’s women’s preventive care services mandate. The Court held that Hobby Lobby, as a secular, for-profit company, does not satisfy the ACA’s definition of a “religious employer,” and concluded that plaintiffs had no likelihood of succeeding on the merits of their claims.
A federal appeals court in Philadelphia agreed with the Oklahoma court.
An Earlier Ruling In Favor Of Hobby Lobby’s Position
But on November 2, 2012, we reported that a federal court in Michigan enjoined the application of the ACA rule. The Michigan 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).”