__ U.S. __ (2014), 13-354, Burwell v. Hobby Lobby Stores, Inc.

Docket Nº:13-354, 13-356
Citation:__ U.S. __, 134 S.Ct. 2751, 189 L.Ed.2d 675, 82 U.S.L.W. 4636
Opinion Judge:ALITO, JUSTICE.
Party Name:SYLVIA BURWELL, SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL., PETITIONERS v. HOBBY LOBBY STORES, INC., ET AL. AND CONESTOGA WOOD SPECIALTIES CORPORATION ET AL., PETITIONERS v. SYLVIA BURWELL, SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL
Attorney:Paul D. Clement argued the cause for private parties. Donald B. Verrilli, Jr. argued the cause for the federal government.
Judge Panel:ALITO, J., delivered the opinion of the Court, in which ROBERTS, C. J., and SCALIA, KENNEDY, and THOMAS, JJ., joined. KENNEDY, J., filed a concurring opinion. GINSBURG, J., filed a dissenting opinion, in which SOTOMAYOR, J., joined, and in which BREYER and KAGAN, JJ., joined as to all but Part II...
Case Date:June 30, 2014
Court:United States Supreme Court
 
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Page __

__ U.S. __ (2014)

134 S.Ct. 2751, 189 L.Ed.2d 675, 82 U.S.L.W. 4636

SYLVIA BURWELL, SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL., PETITIONERS

v.

HOBBY LOBBY STORES, INC., ET AL. AND CONESTOGA WOOD SPECIALTIES CORPORATION ET AL., PETITIONERS

v.

SYLVIA BURWELL, SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL

Nos. 13-354, 13-356

United States Supreme Court

June 30, 2014

Argued: March 25, 2014. [*]

[134 S.Ct. 2758] ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

SYLLABUS

The Religious Freedom Restoration Act of 1993 (RFRA) prohibits the " Government [from] substantially burden[ing] a person's exercise of religion even if the burden results from a rule of general applicability" unless the Government " demonstrates that application of the burden to the person--(1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest." 42 U.S.C. § § 2000bb-1(a), (b). As amended by the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA), RFRA covers " any exercise of religion, whether or not compelled by, or central to, a system of religious belief." § 2000cc-5(7)(A).

At issue here are regulations promulgated by the Department of Health and Human Services (HHS) under the Patient Protection and Affordable Care Act of 2010 (ACA), which, as relevant here, requires specified employers' group health plans to furnish " preventive care and screenings" for women without " any cost sharing requirements," 42 U.S.C. § 300gg-13(a)(4). Congress did not specify what types of preventive care must be covered; it authorized the Health Resources and Services Administration, a component of HHS, to decide. Ibid . Nonexempt employers are generally required to provide coverage for the 20 contraceptive methods approved by the Food and Drug Administration, including the 4 that may have the effect of preventing an already fertilized egg from developing any further by inhibiting its attachment to the uterus. Religious employers, such as churches, are exempt from this contraceptive mandate. HHS has also effectively exempted religious nonprofit organizations with religious objections to providing coverage for contraceptive services. Under this accommodation, the insurance issuer must exclude contraceptive coverage from the employer's plan and provide plan participants with separate payments for contraceptive services without imposing any cost-sharing requirements on the employer, its insurance plan, or its employee beneficiaries.

In these cases, the owners of three closely held for-profit corporations have sincere Christian beliefs that life begins at conception and that it would violate their religion to facilitate access to contraceptive drugs or devices that operate after that point. In separate actions, they sued HHS and other federal officials and agencies (collectively HHS) under RFRA and the Free Exercise Clause, seeking to enjoin application of the contraceptive mandate insofar as it requires them to provide health coverage for the four objectionable contraceptives. In No. 13-356, the District Court denied the Hahns and their company--Conestoga Wood Specialties--a preliminary injunction. Affirming, the Third Circuit held that a for-profit corporation could not " engage in religious exercise" under RFRA or the First Amendment, and that the mandate imposed no requirements on the Hahns in their personal capacity. In No. 13-354, the Greens, their children, and their companies--Hobby Lobby Stores and Mardel--were also denied a preliminary injunction, but the Tenth Circuit reversed. It held that the Greens' businesses are " persons" under RFRA, and that the corporations had established a likelihood of success on their RFRA claim because the contraceptive mandate substantially burdened their exercise of religion and HHS had not demonstrated a compelling interest in enforcing the mandate against them; in the alternative, the court held that HHS had not proved that the mandate was the " least restrictive means" of furthering a compelling governmental interest.

Held :

As applied to closely held corporations, the HHS regulations imposing the contraceptive mandate violate RFRA. Pp. 16-49.

(a) RFRA applies to regulations that govern the activities of closely held for-profit corporations like Conestoga, Hobby Lobby, and Mardel. Pp. 16-31.

(1) HHS argues that the companies cannot sue because they are for-profit corporations, and that the owners cannot sue because the regulations apply only to the companies, but that would leave merchants with a difficult choice: give up the right to seek judicial protection of their religious liberty or forgo the benefits of operating as corporations. RFRA's text shows that Congress designed the statute to provide very broad protection for religious liberty and did not intend to put merchants to such a choice. It employed the familiar legal fiction of including corporations within RFRA's definition of " persons," but the purpose of extending rights to corporations is to protect the rights of people associated with the corporation, including shareholders, officers, and employees. Protecting the free-exercise rights of closely held corporations thus protects the religious liberty of the humans who own and control them. Pp. 16-19.

(2) HHS and the dissent make several unpersuasive arguments. Pp. 19-31.

(i) Nothing in RFRA suggests a congressional intent to depart from the Dictionary Act definition of " person," which " include[s] corporations, . . . as well as individuals." 1 U.S.C. § 1. The Court has entertained RFRA and free-exercise claims brought by nonprofit corporations. See, e.g., Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 126 S.Ct. 1211, 163 L.Ed.2d 1017. And HHS's concession that a nonprofit corporation can be a " person" under RFRA effectively dispatches any argument that the term does not reach for-profit corporations; no conceivable definition of " person" includes natural persons and nonprofit corporations, but not for-profit corporations. Pp. 19-20.

(ii) HHS and the dissent nonetheless argue that RFRA does not cover Conestoga, Hobby Lobby, and Mardel because they cannot " exercise . . . religion." They offer no persuasive explanation for this conclusion. The corporate form alone cannot explain it because RFRA indisputably protects nonprofit corporations. And the profit-making objective of the corporations cannot explain it because the Court has entertained the free-exercise claims of individuals who were attempting to make a profit as retail merchants. Braunfeld

v. Brown, 366 U.S. 599, 81 S.Ct. 1144, 6 L.Ed.2d 563. Business practices compelled or limited by the tenets of a religious doctrine fall comfortably within the understanding of the " exercise of religion" that this Court set out in Employment Div., Dept. of Human Resources of Ore.

v. Smith, 494 U.S. 872, 877, 110 S.Ct. 1595, 108 L.Ed.2d 876. Any suggestion that for-profit corporations are incapable of exercising religion because their purpose is simply to make money flies in the face of modern corporate law. States, including those in which the plaintiff corporations were incorporated, authorize corporations to pursue any lawful purpose or business, including the pursuit of profit in conformity with the owners' religious principles. Pp. 20-25.

(iii) Also flawed is the claim that RFRA offers no protection because it only codified pre- Smith Free Exercise Clause precedents, none of which squarely recognized free-exercise rights for for-profit corporations. First, nothing in RFRA as originally enacted suggested that its definition of " exercise of religion" was meant to be tied to pre- Smith interpretations of the First Amendment. Second, if RFRA's original text were not clear enough, the RLUIPA amendment surely dispels any doubt that Congress intended to separate the definition of the phrase from that in First Amendment case law. Third, the pre- Smith case of Gallagher

v. Crown Kosher Super Market of Mass., Inc., 366 U.S. 617, 81 S.Ct. 1122, 6 L.Ed.2d 536, suggests, if anything, that for-profit corporations can exercise religion. Finally, the results would be absurd if RFRA, a law enacted to provide very broad protection for religious liberty, merely restored this Court's pre- Smith decisions in ossified form and restricted RFRA claims to plaintiffs who fell within a category of plaintiffs whose claims the Court had recognized before Smith . Pp. 25-28.

(3) Finally, HHS contends that Congress could not have wanted RFRA to apply to for-profit corporations because of the difficulty of ascertaining the " beliefs" of large, publicly traded corporations, but HHS has not pointed to any example of a publicly traded corporation asserting RFRA rights, and numerous practical restraints would likely prevent that from occurring. HHS has also provided no evidence that the purported problem of determining the sincerity of an asserted religious belief moved Congress to exclude for-profit corporations from RFRA's protection. That disputes among the owners of corporations might arise is not a problem unique to this context. State corporate law provides a ready means for resolving any conflicts by, for example, dictating how a corporation can establish its governing structure. Courts will turn to that structure and the underlying state law in resolving disputes. Pp. 29-31.

(b) HHS's contraceptive mandate substantially burdens the exercise of religion. Pp. 31-38.

(1) It requires the Hahns and Greens to engage in conduct that seriously violates their sincere religious belief that life begins at conception. If they and their companies refuse to provide contraceptive coverage, they face...

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