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What Hobby Lobby's case could have in store for religious freedom and ACA

In this May 22, 2013, file photo, customers enter and exit a Hobby Lobby store in Denver. The Supreme Court of the United States is expected to hear arguments March 25 in the case of Sebelius vs. Hobby Lobby. The final ruling will have implications not ju
In this May 22, 2013, file photo, customers enter and exit a Hobby Lobby store in Denver. The Supreme Court of the United States is expected to hear arguments March 25 in the case of Sebelius vs. Hobby Lobby. The final ruling will have implications not just for Obamacare, but also for the free exercise of religion in commerce.
Ed Andrieski, Associated Press

WASHINGTON — A legal battle over the Affordable Care Act's contraception mandate comes before the U.S. Supreme Court this week to determine whether a for-profit corporation has the same conscience rights as its individual owners do.

Justices will hear oral arguments Tuesday in cases involving the Hobby Lobby craft stores and a smaller business, Conestoga Wood Specialties. The owners of both companies claim complying with the ACA mandate would violate their religious beliefs that prohibit certain contraceptives.

And legal experts say the ruling, expected some time in June, will have implications not just for President Obama's embattled health care reform law, but also for the free exercise of religion in commerce.

There could be "dramatic consequences for the reach of this, because there are a number of places where there are small businesses that could claim … their religion requires them not to do certain things that regulatory claims would otherwise demand or vice-versa," said Robert W. Tuttle, a George Washington University Law School professor.

An indication of how far reaching the high court's ruling will be is the number of lawsuits the ACA's contraception mandate has generated. The Hobby Lobby and Conestoga cases are two of 47 lawsuits against the government brought by for-profit companies. Another 47 nonprofit groups, including religious affiliated schools and charities, have also sued making similar claims, according to the Becket Fund for Religious Liberty, a Washington, D.C.-based law firm representing Hobby Lobby and several of the nonprofit groups.

Government mandate challenged

Under the Affordable Care Act, the Department of Health and Human Services mandated what employee health insurance plans must cover. The contraception mandate is designed to address women's health care needs and HHS Secretary Kathleen Sebelius said the final rules mean "women will not have to forego these services because of expensive co-pays or deductibles, or because an insurance plan doesn’t include contraceptive services."

Just three months after the rules were announced in August 2011, the legal challenges began from faith-based nonprofit organizations and for-profit employers who claimed the rules violated their religious freedom.

Hobby Lobby, an Oklahoma City-based craft store giant launched in founder David Green's garage, sued the government in September 2012. The Greens, who belong to Church of God of Prophecy and Southern Baptist congregations, said they offer certain types of birth control to their more than 13,000 employees. But the ACA mandates four other forms, including the "morning after pill," that the Greens contend abort the fetus, which conflicts with their religious beliefs.

Conestoga Wood Specialties Corp., a privately held kitchen cabinetry manufacturer that employs approximately 2,100 workers in seven locations, including Tooele, Utah, is owned by "a family of five Mennonites … (who) object as a matter of conscience to facilitating contraception that may prevent the implantation of a human embryo in the womb," according to the petition asking the U.S. Supreme Court to hear their appeal of a ruling denying an exemption from this ACA provision.

Both companies claimed the government's birth control mandate violated the 1993 Religious Freedom Restoration Act, which is designed to prevent government from substantially burdening religious exercise without first showing a compelling justification.

The owners of both Conestoga Wood Specialties and Hobby Lobby each maintain that the hefty fines for not complying with the ACA's contraceptive mandate constitutes a substantial burden. For Hobby Lobby, the penalties total $475 million per year, while Conestoga faces fines of $35 million per year.

Having to decide between a violation of conscience or crippling fines and penalties is what RFRA was intended to avoid, claim advocates for Hobby Lobby and Conestoga. But the federal courts have been split on whether RFRA applies to a business, with 32 district and circuit court judges ruling in favor of for-profit companies, including Hobby Lobby, and another six court finding against Conestoga and five other companies.

The conflicting decisions prompted the government, Hobby Lobby and Conestoga to ask the Supreme Court to weigh in on the matter.

Those lower court rulings set up "the first time that the (Supreme) Court has had to squarely consider the meaning of 'substantial burden' since Employment Division of Oregon v. Smith (in 1990), and there it rejected the test altogether," Tuttle said.

In the Oregon case, justices ruled that the state could deny unemployment benefits to a worker who was fired for using an illegal drug (peyote) for religious purposes. Congress responded to the ruling by passing RFRA.

Conscience rights questioned

The new question posed in the Hobby Lobby case and others like it is whether corporations can claim the same conscience rights and protections under RFRA as an individual can.

Kenneth Starr, a former U.S. solicitor general who is now president of Baylor University in Waco, Texas, supports the notion of extending religious freedom protections to corporations. "The short legal answer is that, in my view, the law is clear that filing the appropriate papers to create a corporation does not suddenly divest the owners of their rights," he said.

Starr agreed that, for example, the law protects a kosher butcher serving observant Jews or a halal meat market catering to Muslims, from being mandated to sell pork products, which are prohibited in both religions.

But Ira C. Lupu, a professor at George Washington University's law school, said Hobby Lobby's objections to certain contraception methods are not the same as a kosher butcher refusing to sell religiously prohibited food products.

"In the Hobby Lobby case, it's their relationship with their employees" that's at issue, he said. It's "not because the employer can't have religious attitudes … (but) when they impose detriments on their employees, in conflict with regulation, now we have a different situation."

A Supreme Court decision granting corporations wide "personhood" protections under RFRA could create numerous opportunities for businesses to challenge a range of government regulations, including equal employment laws, according to a "legal backgrounder" on the case by the Pew Research Religion & Public Life Project.

"A decision in favor of Hobby Lobby and Conestoga might give for-profit employers a strong foundation to raise religious objections to hiring gays and lesbians or to providing the same-sex spouses of employees with the same benefits extended to opposite-sex spouses," wrote Pew researcher David Masci and Tuttle.

Starr won't speculate on whether the Hobby Lobby case could influence state cases involving small business owners who refuse to serve same-sex nuptials for religious reasons. But he said for some businesses, such as wedding photographers and bakers, "it may well be that their (business) activity is not protected by federal law."

Protecting belief

But experts on both sides of the contraception mandate cases acknowledge that laws have often treated corporations as "persons," as University of Chicago law professor Eric Posner wrote recently in the online publication Slate.

"At other times, the statute does not define 'persons,' but courts interpret the word to include corporations because they believe that is what Congress intended," he wrote. "There is even a general interpretive rule in the law that when Congress says 'persons,' it means corporations as well, unless the context of the statute provides otherwise."

But the Justice Department argued in its brief filed with the Supreme Court, "there is no reason to think that Congress intended RFRA to grant for-profit corporations rights that previously have been reserved to individuals and religious nonprofit institutions."

The government also contends the ACA doesn't create a burden on the Greens' ability to practice their religious beliefs.

"Federal law does not require the Greens to provide health insurance, particular health benefits, or any other form of compensation to the corporation's employees. The Greens do not personally employ the 13,000 individuals who work for Hobby Lobby; the corporation does," Justice's brief stated.

However, the 10th Circuit Court, which sided with Hobby Lobby, disagreed, concluding that "the plain language of the (RFRA) text encompasses corporations, including ones like Hobby Lobby …," according to a response filed by lawyers representing Hobby Lobby.

Lori Widham, a Becket Fund attorney who is part of the Hobby Lobby legal defense team, said the religious beliefs of Hobby Lobby's owners are inseparable from how they operate their company. She said their Christian faith influences the decisions to close its stores on Sundays, play Christian music over the in-store audio system, and pay its workers at least 80 percent more than the federal minimum wage.

But the issue before the Supreme Court is whether the government can force Hobby Lobby's owners to go against their religious views on abortion, which prohibit them from paying for contraceptive devices and medicines that they believe would effectively abort a fetus.

Noting that Hobby Lobby's health plan covers the costs of 16 of the 20 mandated forms of birth control, Widham said, "Women have the right to access all forms of contraception. We're talking about who has to provide it for you. So that's the question here: is Hobby Lobby required to provide all forms of contraception, including (drugs that enable) the termination of human life, or is that left between the employee and their doctor?"

Social media outreach

Another unique wrinkle in the current case has been an active social media effort by Hobby Lobby to engage the public, largely to educate supporters about the firm's position and how it treats employees. A company-sponsored Twitter feed, @HobbyLobbyCase, offers messages supporters can share, such as a quote from former Texas Congressman Ron Paul supporting the Greens' position, or worker testimonials: "The Green family offers industry-leading wages and benefits because they deeply care for their employees." A Facebook page is dedicated to the case and offers similar messages and has scored over 32,000 "likes" and 12,630 followers.

Widham said the company "had a social media presence before this case, and will have one after this case." She added, "We're not trying to win this case via Facebook, but they are getting a lot of questions from people, (and they're) trying to respond and tell their story."

Asked how she thought the Supreme Court might rule, Widham said, "I never like to predict what a court I'm in front of is going to do, but I am hopeful we will get a strong ruling in favor of religious liberty."

Regardless of the outcome, law professor Lupu predicted an interesting hearing. "Just as a scholar, I think these cases are spectacularly fascinating," he said. "Not only do they involve this culture war, but the legal intricacies are spectacularly rich."


Twitter: @Mark_Kellner