Burwell v. Hobby Lobby

''Burwell v. Hobby Lobby Stores, Inc.'', 573 U.S. 682 (2014), is a landmark decision in United States corporate law by the United States Supreme Court allowing privately held for-profit corporations to be exempt from a regulation its owners religiously object to, if there is a less restrictive means of furthering the law's interest, according to the provisions of the Religious Freedom Restoration Act of 1993. It is the first time that the Court has recognized a for-profit corporation's claim of religious belief, but it is limited to privately held corporations. The decision does not address whether such corporations are protected by the free exercise of religion clause of the First Amendment of the Constitution.

For such companies, the Court's majority directly struck down the contraceptive mandate, a regulation adopted by the United States Department of Health and Human Services (HHS) under the Affordable Care Act (ACA) requiring employers to cover certain contraceptives for their female employees, by a 5–4 vote. The court said that the mandate was not the least restrictive way to ensure access to contraceptive care, noting that a less restrictive alternative was being provided for religious non-profits, until the Court issued an injunction 3 days later, effectively ending said alternative, replacing it with a government-sponsored alternative for any female employees of privately held corporations that do not wish to provide birth control. The ruling is considered to be part of the political controversy regarding the Affordable Care Act in the United States.

Background

Federal law

Religious Freedom Restoration Act

The United States Supreme Court ruled in ''Employment Division v. Smith'' (1990) that a person may not defy ''neutral laws of general applicability'' even as an expression of religious belief. "To permit this," wrote Justice Scalia, citing the 1878 ''Reynolds v. United States'' decision, "would make the professed doctrines of religious belief superior to the law of the land, and in effect to permit every citizen to become a law unto himself. " He wrote that generally applicable laws do not have to meet the standard of strict scrutiny, because such a requirement would create "a private right to ignore generally applicable laws". Strict scrutiny would require a law to be the least restrictive means of furthering a compelling government interest.

In 1993, the US Congress responded by passing the Religious Freedom Restoration Act (RFRA), requiring strict scrutiny when a neutral law of general applicability "substantially burden a person's exercise of religion". The RFRA was amended in 2000 by the Religious Land Use and Institutionalized Persons Act (RLUIPA) to redefine ''exercise of religion'' as any exercise of religion, "whether or not compelled by, or central to, a system of religious belief", which is to be "construed in favor of a broad protection of religious exercise, to the maximum extent permitted by the terms of this chapter and the Constitution". The Supreme Court upheld the constitutionality of the RFRA as applied to federal statutes in '' Gonzales v. O Centro Espirita'' in 2006.

Affordable Care Act

Of those Americans who have health insurance, most are covered by employer-sponsored health insurance. In 2010, Congress passed the Affordable Care Act (ACA), which relies on the Health Resources and Services Administration (HRSA), part of the Department of Health and Human Services (HHS), to specify what kinds of preventive care for women should be covered in certain employer-based health plans. HHS exempted religious employers (churches and their integrated auxiliaries, associations of churches, and any religious order), non-profit organizations that object to any required contraception, employers providing grandfathered plans (that have not had specific changes before March 23, 2010), and employers with fewer than 50 employees. The HRSA decided that all twenty contraceptives approved by the U.S. Food and Drug Administration (FDA) should be covered. Companies that refuse are fined $100 per individual per day, or they can replace their health coverage with higher wages and a calibrated tax.

Hobby Lobby Stores and Conestoga Wood Specialties

Hobby Lobby is an arts and crafts company founded by billionaire David Green and owned by the Evangelical Christian Green family with about 21,000 employees. It provided health insurance covering the contraceptives Plan-B and Ella until it dropped its coverage in 2012, the year it filed its lawsuit. The Hobby Lobby case also involved Mardel Christian and Educational Supply, which is owned by Mart Green, one of David's sons.

Hobby Lobby's case was consolidated with another case by Conestoga Wood Specialties, a furniture company owned by the Mennonite Hahn family that has about 1,000 employees, represented by the Alliance Defending Freedom.

Specific contraceptives contested by plaintiffs

The plaintiffs believed that life began at conception which they equated to fertilization, and objected to their businesses providing health insurance coverage to their female employees of four FDA-approved contraceptives that the plaintiffs believed prevented implantation of a fertilized egg. The plaintiffs believed the following forms of birth control constituted an abortion:
* Emergency contraceptive pills
** levonorgestrel (sold under the brand name Plan B among others)
** ulipristal acetate (sold under the brand name Ella among others)
* Intrauterine devices (IUDs)
** copper IUDs (sold under the brand name ParaGard among others)
** Hormonal IUDs (sold under the brand names Mirena and Skyla among others)

Lower court history

In September 2012, Hobby Lobby filed a lawsuit in the United States District Court for the Western District of Oklahoma against enforcement of the contraception rule based on the RFRA and the Free Exercise Clause of the First Amendment. On November 19, 2012, U.S. District Judge Joe L. Heaton denied Hobby Lobby's request for a preliminary injunction. On December 26, 2012, Justice Sonia Sotomayor issued an in-chambers opinion denying an injunction pending appeal. In March 2013, the United States Court of Appeals for the Tenth Circuit granted a hearing of the case. In June, the appeals court ruled that Hobby Lobby Stores, Inc. is a person who has religious freedom. Circuit Judge Timothy Tymkovich wrote for the five-judge en banc majority, over a three-judge dissent. Neil Gorsuch voted with the majority and also wrote an opinion on the case. The court ordered the government to stop enforcement of the contraception rule on Hobby Lobby and sent the case back to the district court, which granted preliminary injunction in July. In September, the government appealed to the U.S. Supreme Court.

Two other federal appeals courts ruled against the contraception coverage rule, while another two upheld it.

The case was previously titled ''Sebelius v. Hobby Lobby''. Sylvia Burwell was automatically substituted as petitioner when she was approved by the United States Senate as the Secretary of Health and Human Services after being nominated by President Barack Obama to replace Kathleen Sebelius following Sebelius' resignation on April 10, 2014.

U.S. Supreme Court consideration

Acceptance and briefs

On November 26, the Supreme Court accepted and consolidated the case with ''Conestoga Wood Specialties v. Sebelius.'' Two dozen amicus briefs support the government, and five dozen support the companies. American Freedom Law Center's brief argues that birth control harms women because men will only want them "for the satisfaction of heirown desires." Another brief argues that the contraception rule leads to "the maximization of sexual activity". Two of the briefs oppose each other on the constitutionality of the RFRA. Two briefs that do not formally take sides oppose each other on whether the right to religion applies to corporations. One of those briefs argues that if shareholders are separated by the corporate veil from corporate liabilities, then their religious values are also separate from the corporation. It mentions the ruling in '' Domino's Pizza, Inc. v. McDonald'' made against the African American owner of JWM Investments whose contracts were breached due to racial discrimination. The brief argues that if JWM Investments could not suffer discrimination through its owner, then Hobby Lobby could not suffer religious burden through its owner. Two briefs were filed by LGBT groups concerned that future anti-discrimination laws would be pre-emptively harmed if employers could claim to be religiously exempt.

Argument and deliberation

Oral arguments were held on March 25, 2014 for 30 minutes more than the usual one hour.
The three women in the court focused their questioning on Hobby Lobby's lawyer, Paul Clement, while the men focused on the administration's lawyer, Solicitor General Donald B. Verrilli Jr. Justice Sotomayor quoted the ruling from ''United States v. Lee'' (1982) saying that an employer can't deprive employees of a statutory right because of religious beliefs. Clement replied that ''Lee'' does not apply because it was a challenge against a tax rather than against a significant burden. Sotomayor said that instead of paying the burden of the penalty, Hobby Lobby could replace its health care with the equivalent expense of higher wages and a calibrated tax, which the government would use to pay for the employees' health care. Near the end of Clement's argument, Justice Kennedy expressed concern for the rights of the employees who may not agree with the religious beliefs of their employers. When Verrilli argued that the ruling in ''Cutter v. Wilkinson'' requires the court to weigh the impact on third parties in every RFRA case, Justice Scalia said that the RFRA does not require the court to balance the interest of the religious objector to the interest of other individuals. Verilli returned to ''Lee,'' saying that granting an exemption to an employer should not impose the employer's religious faith on the employees.

Opinion of the Court

Majority opinion

On June 30, 2014, Associate Justice Samuel Alito delivered the judgment of the court. Four justices (Roberts, Scalia, Kennedy, and Thomas) joined him to strike down the HHS mandate, as applied to closely held corporations with religious objections, and to prevent the plaintiffs from being compelled to provide contraception under their healthcare plans. The ruling was reached on statutory grounds, citing the RFRA, because the mandate was not the "least restrictive" method of implementing the government's interest. The ruling did not address Hobby Lobby's claims under the Free Exercise Clause of the First Amendment.

The court argued that the purpose of extending rights to corporations is to protect the rights of shareholders, officers, and employees. It said that "allowing Hobby Lobby, Conestoga, and Mardel to assert RFRA claims protects the religious liberty of the Greens and the Hahns." The court found that for-profit corporations could be considered ''persons'' under the RFRA. It noted that the HHS treats ''nonprofit'' corporations as ''persons'' within the meaning of RFRA. The court stated, "no conceivable definition of the term includes natural persons and nonprofit corporations, but not for-profit corporations." Responding to lower court judges' suggestion that the purpose of for-profit corporations "is simply to make money," the court said, "For-profit corporations, with ownership approval, support a wide variety of charitable causes, and it is not at all uncommon for such corporations to further humanitarian and other altruistic objectives." The court rejected the contention that "the Nation lacks a tradition of exempting for-profit corporations from generally applicable laws," pointing to a federal statute from 1993 that exempted any covered health care entity from engaging in "certain activities related to abortion".

The court held that the HHS contraception mandate substantially burdens the exercise of religion, rejecting an argument that the $2,000-per-employee penalty for dropping insurance coverage is less than the average cost of health insurance. Responding to HHS's argument that the provision of coverage does not itself result in destruction of embryos, the Court asserted that the argument dodges the substantial burden question that the Court is supposed to address. The Court added, citing Jesuit moral manuals, that the argument is also the religious question of the morality of enabling the immoral acts of others, to which HHS had provided "a binding national answer". The Court argued that federal courts should not answer religious questions because they would in effect be deciding whether certain beliefs are flawed. The court argued that "companies would face a competitive disadvantage in retaining and attracting skilled workers," that increased wages for employees to buy individual coverage would be more costly than group health insurance, that any raise in wages would have to take income taxes into account, and that employers cannot deduct the penalty.

The court found it unnecessary to adjudicate on whether the HHS contraceptive mandate furthers a compelling government interest and held that HHS has not shown that the mandate is "the least restrictive means of furthering that compelling interest". The court argued that the most straightforward alternative would be "for the Government to assume the cost ..." and that HHS has not shown that it is not "a viable alternative". The court said that the RFRA can "require creation of entirely new programs". The court also pointed out that HHS already exempts any nonprofit organization from paying for any required contraception by allowing it to certify its religious objection to its insurance issuer, which must " ovide separate payments for any contraceptive services required to be covered". However, the court said the approach might not necessarily be the least restrictive alternative for all religious claims.

The court concluded by addressing "the possibility that discrimination in hiring, for example on the basis of race, might be cloaked as religious practice to escape legal sanction". The court said that their decision "provides no such shield", and that "prohibitions on racial discrimination are precisely tailored to achieve that critical goal." The court also said that the requirement to pay taxes despite any religious objection is different from the contraceptive mandate because "there simply is no less restrictive alternative to the categorical requirement to pay taxes." The court acknowledged the dissent's "worries about forcing the federal courts to apply RFRA to a host of claims made by litigants seeking a religious exemption from generally applicable laws ...", noting that this point was "made forcefully by the Court in ''Smith.''" The court responded by saying, "Congress, in enacting RFRA, took the position that 'the compelling interest test as set forth in prior Federal court rulings is a workable test for striking sensible balances between religious liberty and competing prior governmental interests' ... The wisdom of Congress's judgment on this matter is not our concern. Our responsibility is to enforce RFRA as written, and under the standard that RFRA prescribes, the HHS contraceptive mandate is unlawful."

Concurring opinion

Justice Anthony Kennedy wrote a concurring opinion, responding to the "respectful and powerful dissent", by emphasizing the limited nature of the ruling and saying that the government "makes the case that the mandate serves the Government's compelling interest in providing insurance coverage that is necessary to protect the health of female employees", but that the RFRA's least-restrictive way requirement is not met because "there is an existing, recognized, workable, and already-implemented framework to provide coverage," the one that HHS has devised for non-profit corporations with religious objections. "RFRA requires the Government to use this less restrictive means. As the Court explains, this existing model, designed precisely for this problem, might well suffice to distinguish the instant cases from many others in which it is more difficult and expensive to accommodate a governmental program to countless religious claims based on an alleged statutory right of free exercise." (Kennedy, J., concurring, pp. 3, 4)

Dissenting opinions

Justice Ruth Bader Ginsburg delivered the primary dissent, which was joined by Justice Sotomayor in full and by Justices Breyer and Kagan as to all but Part III–C–1 on "whether a corporation qualifies as a 'person' capable of exercising religion". Ginsburg began, "In a decision of startling breadth, the Court holds that commercial enterprises, including corporations, along with partnerships and sole proprietorships, can opt out of any law (saving only tax laws) they judge incompatible with their sincerely held religious beliefs. ... Compelling governmental interests in uniform compliance with the law, and disadvantages that religion-based opt-outs impose on others, hold no sway, the Court decides, at least when there is a 'less restrictive alternative.' And such an alternative, the Court suggests, there always will be whenever, in lieu of tolling an enterprise claiming a religion-based exemption, the government, i.e., the general public, can pick up the tab."

She challenged the majority's unprecedented view of for-profit religion saying "Until this litigation, no decision of this Court recognized a for-profit corporation's qualification for a religious exemption from a generally applicable law, whether under the Free Exercise Clause or RFRA. The absence of such precedent is just what one would expect, for the exercise of religion is characteristic of natural persons, not artificial legal entities... Religious organizations exist to foster the interests of persons subscribing to the same religious faith. Not so of for-profit corporations. Workers who sustain the operations of those corporations commonly are not drawn from one religious community." Responding to the majority's argument that the government should "assume the cost" of contraceptives, Ginsburg said that "the nation's only dedicated source of federal funding for safety net family planning services ..." is not designed to absorb the unmet needs of those already insured. She noted that "a less restrictive alternative" has not been written into law by Congress. Ginsburg warns, "The Court, I fear, has ventured into a minefield ..."

Justices Breyer and Kagan wrote a one-paragraph dissenting opinion, saying that "the plaintiffs' challenge to the contraceptive coverage requirement fails on the merits" and that they "need not and do not decide whether either for-profit corporations or their owners may bring claims under the Religious Freedom Restoration Act of 1993."

Reactions

Barbara Green, co-founder of Hobby Lobby, said "Today, the nation's highest court has reaffirmed the vital importance of religious liberty as one of our country's founding principles. The court's decision is a victory, not just for our family business, but for all who seek to live out their faith."

Conestoga CEO Anthony Hahn said, "Americans don't have to surrender their freedom when they open a family business."

Organizations

Conservative and pro-life groups praised the ruling. ''National Review'' said that the Supreme Court ruling " edAlliance Defending Freedom attorney Matt Bowman to call ''Hobby Lobby'' an 'inclusive decision' that advances everyone's freedom." Susan B. Anthony List President Marjorie Dannenfelser said, "This is a great victory for religious liberty – the bedrock of our founding. In living out our religious convictions, there are certain things we must not do. This is why we are at a watershed moment. Religious people will no longer be ordered to take action that our religion says we must not take." Family Research Council President Tony Perkins said, "The Supreme Court has delivered one of the most significant victories for religious freedom in our generation. We are thankful the Supreme Court agreed that the government went too far by mandating that family businesses owners must violate their consciences under threat of crippling fines." The U.S. Conference of Catholic Bishops said, "We welcome the Supreme Court's decision to recognize that Americans can continue to follow their faith when they run a family business ... Now is the time to redouble our efforts to build a culture that fully respects religious freedom."

Pro-choice and civil-liberties groups criticized the ruling. Cecile Richards, president of the Planned Parenthood Action Fund, said, "Today, the Supreme Court ruled against American women and families, giving bosses the right to discriminate against women and deny their employees access to birth control coverage. This is a deeply disappointing and troubling ruling that will prevent some women, especially those working hourly-wage jobs and struggling to make ends meet, from getting birth control." Deputy legal director of the American Civil Liberties Union Louise Melling said, "This is a deeply troubling decision. For the first time, the highest court in the country has said that business owners can use their religious beliefs to deny their employees a benefit that they are guaranteed by law."

In an editorial, the ''New England Journal of Medicine'' called the decision "a setback for both the ACA's foundational goal of access to universal health care and for women's health care specifically", voicing concern that "in assessing the competing claims about abortion and birth control, the Court's majority focused on the religious claims of the corporations without discussing scientific or medical opinions." In ''JAMA Internal Medicine'', Alta Charo wrote that "consistent with a disturbing trend among courts and legislatures to misstate or misuse scientific information in the context of women's reproductive rights and health, the Supreme Court's decision ignored the well-accepted distinction between contraception and abortion." The American Congress of Obstetricians and Gynecologists, representing 90% of U.S. board-certified gynecologists, supported a bill to overturn the ''Hobby Lobby'' ruling.

Government

White House spokesman Josh Earnest