Court Rules Hobby Lobby Can Be Considered a Religious ‘Person’

In ruling Hobby Lobby can be considered a "person" with religious rights, the Tenth Circuit Court of Appeals is heading down a dangerous path.

hobby lobby storefront
In late March, the Roberts Court will consider whether corporations are people under the Religious Freedom Restoration Act and whether the First Amendment recognizes corporate religious rights. DerekTGreen/flickr

Religious conservatives are one step closer to convincing the federal judiciary to shield corporations by granting them religious rights, thanks to new reasoning in a decision handed down Thursday in the Hobby Lobby case.

Hobby Lobby is challenging the part of the Affordable Care Act (ACA) that requires all insurance plans to offer coverage of contraception without a co-pay. At the heart of the case is whether a for-profit company must comply with this provision of the ACA, otherwise known as Obamacare. Hobby Lobby is a national craft supply chain headquartered in Oklahoma and has 525 locations and more than 13,000 employees across the country. The company’s owners have objected to providing coverage for emergency contraception and IUDs.

In a long and complicated decision a divided Tenth Circuit Court of Appeals ruled that even though arts and crafts chain Hobby Lobby and its smaller sister operation Mardel, a Christian-oriented bookstore and educational supply company, are secular, for-profit companies, they have a right to religious freedom under the law and therefore are likely exempt from the contraception mandate in Obamacare.

The decision, which was a combination of six separate opinions totaling 165 pages could be considered a coming attraction of how the lower court will rule when it considers the merits of the question of whether or not the contraception mandate is unconstitutional. On the issue of whether for-profit corporations are religious persons, the Court split five to three with the majority finding that, if they are owned by religiously devout individuals who control the company’s affairs, such corporations are protected by the federal Religious Freedom Restoration Act, a law designed to shield individuals from laws that “substantially burden” the free exercise of religion.

According to the majority, it is possible for corporations to absorb, as their own, the religious beliefs of their owners. Once the court signed on to that assumption it was an easy leap for the majority to conclude that having absorbed the religious beliefs of its owners, such corporations then naturally conduct their businesses in such a way that realizes, or expresses those convictions.

And it didn’t stop there. When considering how other statutes like Title VII of the Civil Rights Act deal with the issue of religious exemptions in the workplace that depend on a distinction between whether or not those businesses are profit or non-profit, the court said it considered it an “open question” as to whether such exemptions violate the Establishment Clause. Great. Just what Justice Alito was hoping to hear, I’m sure.

The decision came four days before Hobby Lobby and Mardel said they would be required to start providing the full range of mandated coverage, or face federal fines they claim could run to a total of at least $1.3 million a day, or almost $475 million a year. Those financial concerns were a key part of the reasoning used by the majority to conclude that, as religious persons under RFRA, the corporations would suffer “irreparable harm.” As the dissent pointed out, there was not the same consideration paid to the cost and harm of each individual employee denied benefits as a result of the decision.

Thankfully the court didn’t go so far as to say that corporations are religious persons under the Constitution, just under the RFRA, but only because Congress never decided to exclude them in the definition of who was a person under the Act. So yes, if there’s a silver lining in that conclusion it is that the court didn’t go so far as to affirmatively give status or suggest a broader First Amendment right here. But it might have done something worse. Instead, it cherry-picked reasoning from First Amendment religious theory to justify its reading of the RFRA, in a sense presuming from the start that the analysis should begin with a religious, rather than secular inquiry.

The immediate effect of the decision is to return the case back to the district court in Oklahoma to consider several additional factors that Hobby Lobby must prove in order to get a temporary reprieve from the mandate, including whether granting the injunction to permanently block it would serve the public interest. The National Women’s Law Center (NWLC) filed an amicus brief in the case, focusing on the compelling public interests promoted by the contraceptive coverage benefit and NWLC Co-President Marcia D. Greenberger reacted to the decision in a statement:

We are deeply disappointed with this decision by the 10th Circuit Court. As noted in the dissent, a woman’s decision about birth control is a personal decision, not her boss’s. Nothing in the health care law constrains an individual’s exercise of religion. The law protects an employee’s ability to get the contraceptives that she needs without co-pays or unnecessary obstacles.

It’s critically important to note that the decision was only at the preliminary injunction stage, and is therefore not a ruling on the merits. But in many ways it can be considered a sneak peek at the analysis the lower court will perform when it re-considers whether or not a secular, for-profit arts and crafts chain is entitled to religious freedom and the right to exercise that freedom by discriminating against its employees. If the lower court rules as the Tenth Circuit believes it should and uses the reasoning suggested by the Tenth Circuit, what for-profit business wouldn’t want to consider itself a “religious person” to avoid the costs of coverage and the penalties for non-compliance? Of course, that’s exactly the point.