The Problem With The Supreme Court’s Hobby Lobby Decision

Ron Fein Legal Director, Free Speech For People
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On June 30, the Supreme Court announced its decision in the Hobby Lobby and Conestoga Wood Specialties cases. The Court ruled that for-profit corporations have the right to a religious exemption from federal Affordable Care Act rules requiring insurance plans to cover birth control. The media coverage, like the demonstrations in front of the courthouse steps, has focused on the hot-button issues of birth control and abortion. But the decision goes much further.

The Court based its decision on the federal Religious Freedom Restoration Act, which sets a strict test for any federal law that burdens a “person’s” exercise of religion. But is a corporation a “person”?

Federal judges have held in recent decisions that corporations have free speech rights. In the infamous 2010 Citizens United v. Federal Election Commission decision, the Supreme Court said that corporations have the same freedom of speech right to spend money in political elections that flesh-and-blood people do. In a less-publicized 2011 decision, Sorrell v. IMS Health, the Court said that data-mining companies have a freedom of speech right to sell drug prescription records to drug companies for marketing purposes.

Now the Court claims that corporations exercise religion. But corporations are not people. They’re artificial legal entities. They were not “endowed by their Creator with certain unalienable Rights,” as Thomas Jefferson put it in the Declaration of Independence. Rather, they’re useful economic structures created and controlled by state law.

This latest Supreme Court ruling is not about freedom, but power. The Supreme Court’s decision allows for-profit business corporations to impose their stockholders’ religious views on employees who may follow entirely different religions.

One of the Court’s problems is a failure of imagination. The justices look at the current landscape of corporate ownership, and the fact that no one ever thought to raise claims for corporate religious exemptions before, and conclude that the issue is narrow. But reduced employee insurance costs will give a slight market edge in a low-margin business. If a small group of evangelical investors, or Saudi princes, can buy a company and then cut costs on health insurance by raising religious objections to rules that their competitors must follow, they will. And if a Saudi billionaire objects to paying any health insurance costs for women who work outside the home, then he can really cut costs.

And it’s not just about insurance. Most religions object to something, and the Court’s ruling provides a new avenue for corporate challenges to any federal law whatsoever. The Fatima Center, a radical Catholic traditionalist group, holds that climate change is a vast Satanic hoax. Corporate investors who follow its teachings might not want their companies to comply with greenhouse gas emissions rules — and based on Monday’s Supreme Court ruling, they might have a claim for a religious exemption.

Those who agree with Hobby Lobby claim that the Court has granted religious exemptions to incorporated congregations before, and the difference between for-profit and nonprofit corporations isn’t important. But that’s silly. The truth is, nonprofit corporations don’t themselves have religious rights either. Rather, a religious organization (like a church, synagogue, or mosque) can come into court to represent the religious rights of its members. And we assume that a congregation or religious nonprofit organization doesn’t have a financial motive for creatively inflating its claims for exemptions, precisely because it’s a nonprofit.

But business corporations aren’t congregations, and now that millions or billions in saved costs are potentially at stake, the number and scope of potential corporate religious claims is limited only by the creativity of business in finding a slight market edge. This doesn’t mean that corporate investors will raise insincere claims (though that will happen too). Rather, entirely sincere religious corporate investors will gain a business advantage, courtesy of the Supreme Court, by claiming religious exemptions that they never thought of before.

All this illustrates the folly of “corporate religion.” Some business corporations will use this ruling to squeeze employees and competitors. Others will use it as license to discriminate. And some will do neither. But one thing is certain: allowing business corporations to claim religious exemptions means less freedom for ordinary Americans.

Since this ruling is based on a law that Congress passed, Congress can fix the problem by closing this corporate loophole. Corporations aren’t people, but real people will suffer until this is fixed.

Ron Fein is the Legal Director for Free Speech For People. He submitted an amicus brief to the Supreme Court in the Conestoga Wood Specialties Corporation case.