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Sebelius v. Hobby Lobby Stores, Part I: Background and Standards of Law

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Likko, C.J. delivered the opinion of the Ordinary Court as to this Part I.

A

Petitioner Kathleen Sebelius is the Secretary of Health and Human Services of the United States. She is charged by law with implementation of portions of the Patient Protection and Affordable Care Act and regulations promulgated thereunder, including 42 U.S.C. § 300gg-13(a)(4) and 78 Fed. Reg. 39870, which requires that corporations above a certain size provide medical insurance benefits to their employees that includes coverage for certain contraceptive methods (the “Contraception Mandate”), which are named in the regulations.

Respondents Hobby Lobby Stores and Mardel (collectively, “Hobby Lobby”) are privately-held Oklahoma corporations which are subject to the Contraception Mandate.  Respondents David Green, Barbara Green, Steve Green, Mart Green, and Darsee Lett (collectively, “the Greens”) are natural persons, and they are also the stockholders, officers, and directors of Hobby Lobby. (Hereinafter, the term “Respondents” shall refer to all of the corporations and individuals collectively.)

Hobby Lobby Stores’ principal business activity is the retail sale of consumer products, specifically crafting and hobby supplies such as paint, yarn, and paper. Mardel’s principal business activity is the retail sale of books and other products with explicitly Christian content.

Respondents cite, and Petitioner does not dispute the existence of, a multiplicity of factual indicia of religious beliefs. Hobby Lobby’s statements of purpose, authored by the Greens, provide that the companies are committed to “Honoring the Lord in all we do by operating the company in a manner consistent with Biblical principles.” The Greens have each signed a “Statement of Faith” and a “Trustee Commitment” which appear to be extra-legal documents but are nevertheless treated by the Greens in the discharge of their duties as directors and officers of Hobby Lobby as binding. Under the direction of the Greens, Hobby Lobby voluntarily does not operate businesses on Sundays, Christmas, or Easter; purchases religiously-themed advertisements on Christmas and Easter; provides access to various kinds of religious guidance and education to their employees; refrains from selling alcohol or alcohol-related products like shot glasses; and provides financial support to Christian charities and missionaries.

Hobby Lobby provides employee health insurance benefits (Hobby Lobby employs over 13,000 people; Mardel employs roughly 500) but do not include coverage for what Respondents consider to be abortifacients. Respondents claim a sincere religious belief that dispensation and use of abortifacients are a form of murder. Further, Respondents claim that four contraceptive methods listed in the Contraception Mandate are abortifacients. (This opinion does not address the veracity of that claim.) And finally, Respondents claim that should they fail to comply with the Contraception Mandate in its current form, or should they discontinue offering health insurance altogether to avoid compliance with the Contraception Mandate, they will be subject to very substantial monetary penalties, which they estimate range from $26,000,000 per year to $475,000,000 per year.

 

B

Therefore, Respondents filed suit against Petitioner in September of 2012, in the United States District Court for the Western District of Oklahoma. They alleged that the Contraception Mandate imposed an unreasonable burden on their rights to free exercise of religion and therefore violated the Religious Freedom Restoration Act of 1993 (“RFRA”), the First Amendment and specifically the Free Exercise Clause thereof, and the Administrative Procedures Act. All three of these claims are predicated upon functionally the same legal analysis.

RFRA was passed by Congress in response to the Supreme Court’s decision in Employment Division v. Smith, 494 U.S. 872 (1990). RFRA codified the two-step burden-shifting test expounded by the Supreme Court in Sherbert v. Verner, 374 U.S. 398 (1963) and Wisconsin v. Yoder, 406 U.S. 205 (1972). Under this test, the plaintiff must prove two things: first, that the plaintiff has a claim implicating a sincere religious belief, and second, that the government’s action imposes a substantial burden upon that religious belief. If the plaintiff can prove these things, the burden then shifts to the government to show that its actions are both in furtherance of a compelling governmental interest, and that the government’s action is narrowly-tailored to restrict the free exercise of religion in the most minimal manner possible.

The District Court found that Hobby Lobby and Mardel were not “persons” within the meaning of RFRA, because as for-profit corporations, they do not enjoy the right of free exercise of religion. Then, the District Court found that the Greens were not able to show a “substantial burden” on their Free Exercise Rights because the Contraception Mandate imposed a burden on them which, if any, was only “indirect and attenuated.”

The Respondents then appealed to the Tenth Circuit Court of Appeals. The Tenth Circuit found that Hobby Lobby and Marden were “persons” for RFRA purposes and that they were capable of exercising religion. As to the Greens, the Tenth Circuit directly reversed the District Court’s ruling that the Contraception Mandate imposed only an “indirect and attenuated” burden, and instead found that the proffered justification for the Contraception Mandate, “public health and gender equality” were not “compelling” governmental interests and that the Contraception Mandate was not sufficiently narrowly-tailored so as to minimize the impact on free exercise rights. Thus, the Tenth Circuit reversed the District Court, and enjoined enforcement of the Contraception Mandate on Respondents.

Petitioner timely appealed to the Supreme Court, which granted certiorari.

C

Importantly, the Supreme Court determined in Employment Division v. Smith, supra at 879, that the Free Exercise Clause “does not relieve an individual of the obligation to comply with a valid and neutral law of general applicability.” This remains the Supreme Court’s interpretation of the Free Exercise Clause to this day. RFRA is a statute, not an amendment to the Constitution.

It is a “fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.” Davis v. Michigan Dept. of Treasury, 489 U.S. 803, 809 (1989). A court must therefore interpret the statute “as a symmetrical and coherent regulatory scheme,” Gustafson v. Alloyd Co., 513 U.S. 561, 569 (1995), and “fit, if possible, all parts into an harmonious whole,” FTC v. Mandel Brothers, Inc., 359 U.S. 385, 389 (1959). Similarly, the meaning of one statute may be affected by other Acts, particularly where Congress has spoken subsequently and more specifically to the topic at hand. See United States v. Estate of Romani, 523 U.S. 517, 530–531 (1998). In addition, we must be guided to a degree by common sense as to the manner in which Congress is likely to delegate a policy decision of such economic and political magnitude to an administrative agency. Cf. MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U.S. 218, 231, (1994). FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000). Thus, courts are guided to seek reconciliation and harmonization of the Contraception Mandate with RFRA to the maximum extent possible, and only to find a conflict when it absolutely cannot be avoided.

 

Likko, C.J., was joined in this part I of the opinion of the Ordinary Court by Thompson, J., Kowal, J., Togut, J., and Dave, J..

 

Burt LikkoBurt Likko is the pseudonym of an attorney in Southern California. His interests include Constitutional law with a special interest in law relating to the concept of separation of church and state, cooking, good wine, and bad science fiction movies. Follow his sporadic Tweets at @burtlikko, and his Flipboard at Burt Likko.

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28 thoughts on “Sebelius v. Hobby Lobby Stores, Part I: Background and Standards of Law

  1. Fuck ’em.

    The corporation is a grant from the state that provides very specific benefits (like liability limitation, separate taxing, and, now, rights heretofore reserved for natural “persons.”)

    In return, they are asked to conform to several aspects of public policy. If they want to assert religious rights, they can become a sole proprietorship.

    (Who knew that I was capable of such sophisticated legal reasoning?)

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    • However this gets resolved, I don’t think it really needs to involve an attitude of Fuck ’em toward anyone. I don’t really feel like we can grant nearly any of Hobby’s Lobby’s claims here, but that’s not at all because my attitude toward them is Fuck ’em. I understand why they’re making just about every one of their requests, I just think that in nearly each case the line has to be drawn well in front of granting them.

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  2. Okay, the clouds have rolled in, and with it, the obligatory drop in my cognitive abilities. So I need some plain English here.

    The third portion of the opinion (after the C) these are the precedents shaping the decision?

    My interpretations:

    1. The Free Exercise Clause interpreted to mean that it does not allow an individual to subvert other law (so no human sacrifice, sorry gang);

    2. Davis v. Michigan suggests the contraceptive mandate must be read within context of the nation’s overall regulatory;

    3. Gustafson v. Alloyd suggests the mandate should be considered within contest of PPACA;

    4. United States v. Estate of Romani, points 2 and 3 may affect one another, particularly when Congress has recently acted on a point;

    5. Cf. MCI Telecommunications Corp. v. American Telephone & Telegraph Co. and FDA v. Brown & Williamson Tobacco Corp — The opinion should reflect Congresses intent on administering the law;

    Do my plain English approximations get close? The RFRA question would get settled along the standards of these precedents?

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    • I have a question about the previous SCOTUS decision on PPACA that springs from Gustafson v. Alloyd.

      The overall regulatory goal of ACA was universal coverage — no free riders on the system, because free riders ultimately drive costs up. ACA included a mandate that all states expand Medicaid expansion to include people otherwise unable to purchase insurance, the the court overruled this; yet it seems to have upset the applecart with regards to Gustafson v. Alloyd.

      (I ask because yesterday, I volunteered at the local food pantry. We have several people who are still uninsured because our governor continues to veto any expansion of Medicaid.)

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  3. You speak of HL as a privately held corporation. That’s true, of course, but it’s also been identified as a closely held corporation. Does the choice of privately held over closely held provide a hint as to where this decision is going, or am I reading too much into the choice of terms?

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  4. I am now trying to read the tea leaves of this post to see what the phrasing of the summary of facts indicates about how the non-real court will rule on the issue. I think it’s time to go to bed.

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    • Get your predictions in fast. I just gave the remaining posts a final spit polish (fixing some trivial grammar issues, mainly) and they’re teed up to publish tomorrow. I’ll be asleep when Part II is announced, and in court when Part III is. Fortunately, or maybe unfortunately, when sitting on the bench, judges generally let their opinions do the talking, as to substantive issues.

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  5. Your last paragraph addressed a question I had about the potential conflict between the ACA and the RFRA, but I’m still not totally clear. At the end, you note that the judges must “seek reconciliation and harmonization of the Contraception Mandate with RFRA to the maximum extent possible, and only to find a conflict when it absolutely cannot be avoided.”

    This makes total sense, but what happens if they cannot avoid finding a conflict?

    In Canada’s tradition (IIRC), there is the principle of Supremacy of Parliament (or something like that). It means that if a law is passed that contradicts a previous law, the new law is upheld and the old law is, essentially, null and void (roughly speaking). It’s just common sense, of course. A new session of Parliament can’t be held hostage by the laws of a previous session of Parliament; that wouldn’t actually be democracy.

    So in this case, HL is claiming that the ACA (or the “contraception mandate” part of the ACA) violates the RFRA. But if it does, so what? The RFRA is just another piece of legislation passed by a previous congress/administration, is it not? Can’t a new congress/administration enact new laws? Would they have to make a little asterisk at the end of the ACA saying, “this law also modifies the RFRA such that the RFRA is totes cool with the contraception mandate”?

    Clarification on what happens if a conflict is found between the RFRA and the ACA would be much appreciated.

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      • Hey Burt, so I’ve read all the opinions, and I’m still not totally clear on the application of US law when two pieces of legislation conflict. So, I’m going to try to break this down to find out where I’m misunderstanding:

        1. RFRA is just legislation that was passed and signed into law, correct? By that I mean, it’s not a constitutional amendment and it doesn’t carry any special weight that other laws don’t possess.

        2. The ACA (and the contraception mandate part of it) is also just regular legislation, correct? (I’m not judging the merits of it or the significance, just its status as legislation.)

        3. The Greens allege that the ACA (the contraception mandate part) violates the RFRA, correct?

        4. If both the ACA and the RFRA are “just” legislation (not constitutional amendments or any special type of legislation), why would the RFRA overrule the ACA?

        As mentioned, I’m used to the Canadian system where more recent legislation is assumed to overrule older legislation when there’s a conflict. To me, this is logical, since (theoretically) the legislators know what they’re doing and know that the new legislation they’re passing alters established legislation.

        5. If it is determined that the ACA violates the RFRA and the RFRA is given more weight, couldn’t congress just have included a modification to the RFRA in the ACA (political concerns aside)?

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      • As you know now, I would find they do not conflict at all.

        To the extent the majority found otherwise, the wording of RFRA was that it was intended to create an exception to laws of general applicability when doing so conflicts with an exercise of a genuinely-felt religious belief. That the law of general applicability post-dates RFRA isn’t important.

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