Guest Columnist Big Brother might defeat Hobby Lobby, but should beware Little Sister

Jan 31, 2014

“Risky Business” could well have been an apt title for a film about someone engaged in speculating on U.S. Supreme Court decisions; but it probably would not have performed as well commercially as the Tom Cruise movie of the same name – at least, up until recently. This summer the Court will decide on the applicability of the U.S. Department of Health and Human Services (HHS) contraception coverage mandate to for-profit corporations whose owners have religious objections to the law. For the third straight year, late June Court-watching will not just be the playoffs for spectating lawyers but may draw a broader audience seeking instant coverage of highly controversial decisions. In the coming months, much will be written to forecast what the nine justices will do, with many such forecasts colored by the policy biases of their respective authors. As the whiplash of the 2012 decision that upheld the bulk of the Affordable Care Act reminds us, however, even the most seasoned analysts can be caught off-guard by a knuckleball. With due regard thus given to uncertainty, there is reason to be wary of what the future holds for the for-profit objectors to the HHS mandate. At the same time, there is cause for optimism for religiously-affiliated non-profits, such as the Little Sisters of the Poor, whose cases are working their way through the court system.

Much might be gleaned from the fact that the Court, in its discretion, chose to take-up two HHS mandate cases from among the four that were readily available for review this term. The decision to hear a case is made in secret and requires the assent of only four justices. Which cases are selected, however, can sometimes provide more of a clue into the strategic thinking of the justices than doing one’s own exposition of the relevant precedents.

It is not surprising that the Court agreed to take-up an HHS mandate case, as lower courts are split on the issue and uniform resolution is needed. Nor is it surprising that one of the cases selected was Hobby Lobby, because it is the only one that the U.S. government wanted reviewed (which customarily receives some deference), it has the largest potential workforce impact, and it stands out as the only one of the four contenders (which also included Conestoga Wood, Autocam, and Liberty University) in which the plaintiffs had thus far prevailed. What is of interest, then, is that a second for-profit corporation’s case, Conestoga Wood, was also chosen and the two were consolidated.

Conestoga offers the Court two things that Hobby Lobby does not easily provide – an opportunity to address constitutional religious liberty rights (as opposed to only statutory rights under the Religious Freedom Restoration Act (RFRA) of 1993), and an opportunity to address the rights of corporations’ owners (as opposed to just corporations themselves).

In one possible and hopeful scenario, the Court may be looking to expand its understanding of religious liberty under the First Amendment’s free exercise clause. The conservative Justice Scalia authored Employment Division v. Smith in 1990, which made it very difficult for religious minorities to challenge generally applicable laws. Congress passed RFRA to try to undo Smith, but most of RFRA itself (excluding the provisions relevant here) was then struck down by the Court. Smith has few fans and the justices could untangle webs by reopening its constitutional holding. To do that, they would first have to find RFRA insufficient to resolve the cases at hand. The most plausible route would be to decide that for-profit corporations are not “persons” with regard to RFRA but are “persons” with regard to the Constitution’s free exercise clause. This would take some acrobatics but, after Citizens United enshrined corporations’ free speech rights and 2012’s “Obamacare” case declared the individual mandate a “tax” for constitutional purposes but not statutory purposes, it would not be an impossible stretch.

Though this Court could thus conceivably be looking to expand constitutional religious liberty and use semantics to get there, it does not like to make rulings on grounds that are any bigger than required. Recent examples include Hollingsworth v. Perry (Proposition 8 same-sex marriage case) and NFIB v. Sebelius (the “Obamacare” case). Constitutional issues are normally not reached unless necessary. Thus, because RFRA provides robust protections, Conestoga was probably not consolidated with Hobby Lobby for its constitutional angle, but rather for its addressing the rights of corporations’ owners.

There is cause for concern here. The Court would have no reason to reach the question of owners’ rights if it wanted to affirm Hobby Lobby and recognize corporations’ RFRA rights. The only reason to address the owners’ rights would be if the Court, at the threshold before reaching the substance of the mandate, denies that corporations have rights of religious liberty, because then owners’ rights would remain at issue. In that scenario, if Hobby Lobby alone had been chosen, it would have to be sent back to the lower court for consideration of owners’ rights and other HHS mandate cases that address those rights would still need review. Consolidating Hobby Lobby and Conestoga allows the Court to efficiently resolve owners’ rights in the event that it denies corporations’ rights, but offers no extra benefit if corporate rights are to be recognized.

If a for-profit corporation’s right to religious liberty is then not recognized, the next question is how the Court will rule upon Conestoga’s claims that the corporation’s owners themselves are unconstitutionally burdened by the HHS mandate. Before the substance of the owners’ religious liberties can come into play, however, the Court will have to decide the threshold issue of whether a closely-held corporation’s owners are legally burdened by the mandate or if the burden falls only on the corporation itself. If the latter, then we are back to the corporation that, at this point in the scenario, has no religious liberty rights and the case is finished. If the former, then the burdened owners have a solid chance to argue the substance of their claims. But if the Court decided the threshold question in that way, it would have to overcome the legal separation that normally exists between a corporation and its owners. That is doable but would require crafting legal contours for future cases and rock the boat of corporate law more than declaring that corporations have a right to free exercise of religion (they already have free speech rights under Citizens United). Thus, since the Court prefers to not make bigger waves than it has to, it is unlikely that it would deny corporations’ religious rights only to then recognize the same rights for the owners in this case. Ultimately then, while revisiting the constitutional law of Smith is possible, the most probable indication from the Court’s taking-up Conestoga alongside Hobby Lobby is that it will uphold the HHS mandate while ensuring that all necessary angles are addressed.

Yet the U.S. government asked the Court to take-up only Hobby Lobby and promised to address individual owners’ rights anyway. Why? Partially because it was the only case that the government lost below, but perhaps also because Conestoga opens thin avenues that can only hurt or leave unaffected the government’s case. The government gains nothing from addressing the owners’ rights but would prefer to do so on its own terms and without the added constitutional angle, rather than have the Court allow a fuller and fairer exposition from both cases. This does not mean that selecting Hobby Lobby alone would have boded worse for religious liberty advocates than consolidating it with Conestoga. Despite the notion that the Court predominantly chooses cases that it intends to reverse, reviewing Hobby Lobby alone would have made the most sense from the Court’s housekeeping perspective only if it had anticipated holding in favor of the corporations. Addressing the other cases without it would have indicated even greater prospects for the for-profit objectors.

Fortunately the religiously-affiliated non-profits’ cases will be entirely different because their rights’ existence is undisputed and they therefore do not face the threshold questions that snag for-profit corporations. Groups such as the Little Sisters have a viable case under RFRA. While critics claim that the Sisters do not suffer a requisite “substantial burden” from the HHS mandate and are effectively exempt, the Administration itself unwittingly disproves this by deliberately treating such groups with an “accommodation” that is distinct from the exemption given to strictly religious organizations (e.g. houses of worship). Even under Smith, the “accommodation” for the non-profits is suspect and vulnerable because, although better than the generally applicable mandate, it amounts to thought-out targeting of religiously-affiliated groups distinct from houses of worship. Lastly, Justice Sotomayor denied an emergency injunction to Hobby Lobby in December, 2012, but temporarily gave [then referred to the Court which granted] one to the Little Sisters one year later. While those actions do not officially signal a final result, they might suggest where the Court is leaning. But looking too much into anything would be risky business.

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