Balkinization: <i>Hobby Lobby</i> Part V: Whose Religious Exercise? Of corporations, for-profit employers, and individual plaintiffs acting in their various corporate capacities

Hobby Lobby Part V: Whose Religious Exercise? Of corporations, for-profit employers, and individual plaintiffs acting in their various corporate capacities

Marty Lederman

As I write these words, the Supreme Court is being inundated with amicus briefs on both sides of the Hobby Lobby and Conestoga Wood cases (more than four dozen, as of 6:00 p.m., with many more to come). As a quick perusal confirms, most of those amicus briefs are devoted to the question of whether for-profit corporations have “consciences,” or can exercise religion--which is also the first question discussed in the government’s opening brief in Hobby Lobby.

I am dubious about this focus on the “corporate religious exercise” question; it is, I think, something of a diversion from what’s truly at stake in these cases, and the Court has no need to issue any broad pronouncements about corporate free exercise.

In this post, I’d like to briefly suggest what I consider to be a more useful way of thinking about the question of whose religious exercise is potentially burdened, and how, in these cases. Here’s the basic outline:

1. These cases do not require the Court to decide broad questions about what sorts of corporations can ever practice religion, advance religious objectives, or have religious “beliefs” or “consciences,” nor whether a for-profit corporation can ever be a “person” under the Religious Freedom Restoration Act (RFRA).

2. On the question of corporate exercise of religion, it suffices for purposes of the present cases for the Court simply to recognize that these corporate plaintiffs do not have a RFRA claim because of the particular nature of the burden on religious exercise alleged in these cases.

HOWEVER . . .

3. A holding that the three corporations at issue here--Hobby Lobby Stores, Inc., Mardel, Inc., and Conestoga Wood Specialties Corp.--have not alleged valid RFRA burdens on their own "religious exercise" hardly ends the case, because the religious exercise of the individuals who wholly own and operate those companies can be substantially burdened by laws that are imposed upon the companies . . . and those individuals are also plaintiffs in the cases.

4. Those individual plaintiffs appear to sue in at least three distinct capacities: (i) as shareholders (at least in the case of Conestoga Wood); (ii) as managers, or administrators, of the companies; and (iii) in their capacities as directors, or decision-makers, of the companies. It helps, I think, to consider separately their RFRA claims in each of those distinct capacities. And in considering those claims, the fact that the companies are for-profit enterprises, or corporations, may well be relevant, whether or not they are determinative threshold considerations.

5. It’s not clear that the individual plaintiffs as shareholders can sue for injuries based on the way in which their financial contributions would be used by the companies or by the insurance plans (e.g., to pay insurance premiums, or to provide reimbursements for contraceptive purchases). Indeed, it’s not even clear that that is a federal question; it would appear to turn, instead, on matters of state corporation law--here, the laws of Pennsylvania (Conestoga Wood) and, perhaps, of Oklahoma (Hobby Lobby).

6. In the individuals’ capacity as managers or administrators (or employees) of the companies, it is difficult to see how federal law substantially burdens their religious exercise, because it would be other persons (such as third-party plan administrators) who would engage in the relevant actions (e.g., reimbursements) that are said to facilitate the use of contraception, and nothing in federal law requires the Greens or the Hahns to perform any such role.

7. The focus of the case, therefore, ought to be on whether federal law substantially burdens the owners’ exercise of religion in their capacity as decision-makers—i.e., as directors—of the plaintiff companies. And that turns out to be a very complex question, one that might well turn on whether federal law imposes substantial pressure on the company directors to choose to retain their employee health insurance plans.

I'll try to break this all down below the fold . . . [slightly updated for clarification]

RFRA prohibits the federal government from “substantially burden[ing] a person’s exercise of religion” unless the government demonstrates that the application of the burden to the person in question (that is, denying an exemption) “(1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.”

As I explained in an earlier post, Congress intended RFRA to incorporate by reference the Supreme Court’s Free Exercise Clause jurisprudence from the era preceding Employment Division v. Smith (1990). Therefore, it is necessary to determine what constituted a “person’s exercise of religion” under that Free Exercise doctrine.

1. Corporate Exercise of Religion?

Is a for-profit corporation a “person” that can “exercise . . . religion” for purposes of the Free Exercise Clause (and therefore for purposes of RFRA, too)?

The Supreme Court has, over time, concluded that corporations enjoy some constitutional rights, but not others. There is no one test that applies to each and every constitutional provision; it largely depends upon the values the constitutional right in question is designed to serve. (See Mark Tushnet’s essay here, and Jonathan Massey's very informative historical account in his amicus brief.) The Court has held, for example, that corporations have free speech rights . . . not because corporations have “ideas” or a fundamental right to express themselves, but largely because of the value of corporate speech to listeners: the worth of speech, the Court explained in Citizens United and other cases, does not depend upon the identity of its source, whether corporation, association, union, or individual; and therefore a limit on corporate speech prevents certain “voices and viewpoints from reaching the public and advising voters on which persons or entities are hostile to their interests.” By contrast, a corporation does not enjoy a Fifth Amendment right against self-incrimination.

Can a corporation engage in the “free exercise” of religion protected by the First Amendment? The parties in the current cases, including the government, agree that, at a minimum, religious, nonprofit organizations can exercise religion—think of a church, for example, which in many religious traditions has an important role, as an entity, in propegating the faith, and may also have certain religious responsibilities or duties, as an entity. Such an organization exercises religion, and presumably could continue to do so even after it incorporates . . . and even though organizations, as such, do not have “beliefs” or “consciences.” (For a prominent example of an incorporated religious, nonprofit entity that brought a successful Free Exercise claim, see Church of Lukumi Babalu Aye, Inc. v City of Hialeah.)

What about if the organization incorporates and does so in order to realize profits? Can it still exercise religion under those circumstances? To be sure, in its previous cases the Supreme Court has only recognized that individuals--including individuals operating a business for profit (see United States v. Lee)--and nonprofit religious organizations might exercise religion. But it has not ruled out the possibility that for-profit corporations might do so, as well; it has simply never had the occasion to opine, one way or the others, on whether, and under what circumstances, for-profit corporations have such rights. The Court has not, in other words, decided the question one way or the other.

What’s the right answer? I'm not sure there is a simple "yes" or "no" answer. If a nonprofit corporation can exercise religion, and a for-profit non-corporate employer can do so, as well--and the government properly concedes that both things are true--it's not obvious why a for-profit corporation could not, at least in some circumstances, exercise religion in a manner that would at least trigger free exercise or RFRA analysis. (Think, for example, of the operations of a for-profit religious publishers and bookstore, such as some of those represented by Michael McConnell in his amicus brief.)

Even so, I think it would be a mistake for the Court to try to answer the question categorically, or in the abstract: The Court should instead examine the nature of the religious exercise in the particular case before it, and assess who, exactly, is said to be exercising religion, and how.

The Hobby Lobby and Conestoga Wood cases do not require the Court to decide, once and for all, whether and under what circumstances for-profit corporations can ever have religious beliefs or consciences; whether they can exercise religion; or whether they can be “persons” under RFRA.
Those formulations pitch the question at far too broad a level of generality, and one untethered from the facts of these particular cases. The issue in these cases is much narrower than that.

This is not a case about whether a particular corporation can "advance" a religious agenda, take steps to further a religious mission (such as by selling religious books), or promulgate religious doctrine; indeed, it's not a case in which the state is alleged to be preventing a corporation from doing anything at all. Therefore it bears no resemblance to, say, a law restricting for-profit religious bookstores from selling certain books. The particular burden being alleged here is that the HHS Preventive Services Rule allegedly coerces a violation of religious duties--that is to say, rather than restricting a religious practice, HHS is alleged to be focring someone to act in a manner contrary to religiously inspired limitations. The federal government allegedly is putting someone to a choice between compliance with a civil obligation and adherence to a restrictive religious injunction (roughly speaking: “Thou Shalt Not Cooperate With Evil”).

If there is such a burden on religious exercise here, it is not one that is imposed on the corporations—on Hobby Lobby Stores, Inc., Mardel, Inc. (in the Hobby Lobby litigation) or on Conestoga Wood Specialties Corp. That's not because those corporations don’t have “consciences”—neither do churches—or because they cannot advance religious objectives (perhaps they can), but because they don’t have religious obligations. I’m not aware of any religion that imposes duties or injunctions on for-profit corporations. And, more to the point, the complaints in these cases make countless allegations about religious duties and how the government allegedly is compelling certain parties to violate those duties, but they nowhere allege that any of the three corporations here are subject to any religious obligations.

The type of “exercise of religion” that is said to be substantially burdened here, then—compliance with a restrictive religious duty not to act in a particular manner—is not one that is apposite to Hobby Lobby, Mardel or Conestoga Wood. And that is all the Court needs to say about corporate religious exercise for purposes of this case: Any different or broader questions can await another case and another day.

2. Religious Exercise of the Individual Plaintiffs

A conclusion that the HHS Rule does not substantially burden any religious exercise of these corporate plaintiffs, however, hardly resolves the cases.

As you will immediately see if you begin to peruse the two complaints here, as well as Conestoga Wood’s opening brief, the crux of the alleged burden in these cases is not on the corporations’ alleged exercise of religion, but instead on the purported religious exercise of the individual plaintiffs—five members of the Green family in Hobby Lobby, and five members of the Hahn family in Conestoga Wood. For example:

“The Green family's religious beliefs forbid them from participating in, providing access to, paying for, training others to engage in, or otherwise supporting abortion-causing drugs and devices.”

“The Mandate [sic] illegally and unconstitutionally coerces the Green family to violate their deeply-held religious beliefs under threat of heavy fines, penalties, and lawsuits.”

“The Green family's religious beliefs prohibit them from deliberately providing insurance coverage for prescription drugs or devices inconsistent with their faith, in particular abortion-causing drugs and devices.”

“[T]he Hahns have concluded that it would be sinful and immoral for them to intentionally participate in, pay for, facilitate, or otherwise support any contraception with an abortifacient effect through health insurance coverage they offer at Conestoga.”

“[T]he Hahns believe that compliance with Defendants' Mandate would require them to violate their deeply held religious beliefs as exemplified by the moral teachings of the Mennonite Church.”

“The Hahns sincerely believe that the Mennonite faith does not allow them to violate Mennonite religious and moral teachings in their decisions operating Conestoga. They believe that according to the Mennonite faith their operation of Conestoga must be guided by ethical social principles and Mennonite religious and moral teachings, that the adherence of their business practice according to such Mennonite ethics and religious and moral teachings is a genuine calling from God, that their Mennonite faith prohibits them from separating their religious beliefs from their daily business practice, and that their Mennonite faith requires them to integrate the gifts of the spiritual life, the virtues, morals, and ethical and social principles of Mennonite teaching into their life and work.”

And so on, and so on. These are merely examples: There is an endless string of such allegations in the complaints and briefs . . . and, by contrast, no allegation of any similar obligations that any religious tradition imposes upon the for-profit companies, as such.

The government argues (see p.26 of its Hobby Lobby brief) that because federal law imposes obligations, conditions, assessments and penalties only against the employers—that is, against the companies—rather than against the Greens and Hahns as individuals, such regulation “as a matter of law” does not burden the individuals’ exercise of religion. (Note that this argument is not an argument about corporations, as such: It appears, instead, to be an argument that the religious exercise of owners and/or managers and/or directors of a company cannot be burdened by laws that apply to the company directly, regardless of incorporation.)

But I don’t understand why there would be any such categorical legal restriction. To be sure, any burden on the religious exercise of the Greens and the Hahns would be indirect, i.e., caused by the law’s treatment of Hobby Lobby and Conestoga Wood. And perhaps that fact may be relevant to the question of whether the burden is “substantial” in a particular case. But why would indirect burdens on religious exercise in such cases never be cognizable? If, under their religion, the Greens or the Woods would be prohibited from performing certain functions as as shareholders, or as managers, or as directors, of their companies, and if they are, in effect, coerced to perform such functions in one or more of those capacities as a result of laws and sanctions that apply to those companies qua companies, why couldn’t those laws impose substantial burdens on the Greens’ and Hahns’ religious exercise, at least in theory?

The Court’s Free Exercise Clause analysis in cases such as Braunfeld v. Brown (1961) and Tony & Susan Alamo Foundation v. Secretary of Labor (1985) assumes that such individuals' religious exercise could be meaningfully burdened by laws governing for-profit organizations in which they play a part. In both of those cases the Court recognized that laws applying to employers might burden the religious exercise of company owners and employees, respectively (although in both cases the Court ultimately ruled for the government).

I think it is therefore very unlikely that the Court will hold that individuals’ exercise of religion simply cannot be indirectly burdened by laws that apply to the companies that they own, manage and direct.

* * * *

On the other hand, the complaints in these two cases are maddeningly imprecise on exactly how federal law is said to implicate or undermine the individual plaintiffs’ religious obligations. In particular, the complaints (and briefs) are not at all clear on what, exactly, federal law requires or induces the individual plaintiffs to do that would implicate them in their employees’ use of contraception. Are they burdened in their capacity as shareholders, as managers, or as directors of the companies? The complaints never specify. Instead, as the quotations from the complaints and briefs above illustrate, the allegations in these cases toggle back and forth among describing these three distinct roles of the individual plaintiffs, and do so rather indiscriminately and without specification.

So let’s separately consider each potential plaintiff role within the companies, with a focus on how the nature of the businesses in question might affect whether the individuals’ religious exercise is burdened if and when they act in each capacity.

3. The Individual Plaintiffs as Shareholders

A few of the allegations in plaintiffs’ complaints suggest, in passing, that it would violate the Greens’ and the Hahns’ religion if they were to “pay for” the use of certain contraceptives. Of course, the Greens and the Hahns themselves would not do any such thing, even if the companies’ employee health insurance plans covered those contraceptive methods: The individuals are subject to no obligation to pay for anything. (Nor would they pay the assessment under section 4980H(a) if the company were to decline to offer employee health insurance.)

However, because the Hobby Lobby and Mardel plans are “self-insured,” reimbursements for the purchase of such contraceptives would be remitted from the companies’ own coffers. That may be true for Conestoga Wood, as well, although its complaint does not specify whether it has a self-insured plan or a plan issued through an independent insurer. If it is a self-insured plan, then Conestoga Wood would also pay reimbursement for any contraceptive purchases. If it is not, then Conestoga Wood presumably would pay for part of the overall premiums to the insurance carrier. Either way, Conestoga, like Hobby Lobby and Mardel, would spend some money that could be tied to the purchase of the disputed contraceptives, if the company continues to offer employee health insurance. (This is not to say that employee contraceptive use will actually cost the employers any money. HHS has concluded that contraceptive coverage actually results in plan savings in the long run, since the costs of unplanned pregnancies are much greater than the costs of contraceptives. Even so, company dollars will at some point be used to subsidize the contraceptive purchases, even if indirectly.)

Does this mean that the individual plaintiffs will, in any legal sense, “pay for” contraceptive purchases? The answer to that question might turn on the legal nature of the companies and the sense, if any, in which the individual plaintiffs are “owners.”

In the case of Hobby Lobby and Mardel, the Greens are not shareholders of the two companies; they are, instead, trustees of a management trust that owns the companies. So it is not alleged that they even own the companies; and unless I've missed something, the complain does not allege any way in which their funds would be used to "pay for" contraception.

The Hahns, on the other hand, collectively are the “principal[]” owners of the shares of Conestoga Wood, according to paragraph 11 of the complaint. So let’s use Conestoga Wood as the relevant case for a shareholder burden theory of religious burden; and let’s assume that the Hahns are the sole owners of Conestoga stock. (Paragraph 11 of the complaint is unclear: It states both that Conestoga is owned and operated “principally” by the Hahns, and also that the Hahns “exercise sole ownership” of Conestoga. Further proceedings might confirm or refute whether they are the sole owners.)

Under state law--Pennsylvania law, in this case--a corporation is an entity distinct from its shareholders. Indeed, shareholders typically form a corporation so that they will not be individually liable for any claims against the corporation.

Does this benefit of adopting the corporate form bring with it a parallel cost? In particular, by accepting the “sweet” (limited liability), must shareholders also accept the “bitter,” in the form of abandoning any rights they might have had to recover for injuries they suffer by virtue of their ownership of the corporate shares? As Judge Matheson put it in his separate concurrence in Hobby Lobby, should “[t]he structural barriers of corporate law give [one] pause about whether the plaintiffs can have their corporate veil and pierce it too”?

Quite frankly, I’m not even sure how the Court should begin thinking about how to answer this question. What is the relevant source of law? I assume it is a matter of state corporations law (Pennsylvania law in the case of Conestoga Wood; Oklahoma law would be relevant if the Greens were shareholders of Hobby Lobby or Mardel). But does federal law (RFRA itself) have any bearing? Some form of federal common law? Moreover, Conestoga Wood is an “S” corporation, which has some effect on the scope and nature of its shareholders' liability. How might that affect the shareholders’ ability to sue for burdens that are imposed upon them indirectly when the state regulates the corporation? I don’t have any idea what the answers to such questions might be. But I suspect that the Court will need a tutorial in Pennsylvania corporations law in order to make sense of them. (Steve Bainbridge suggests that corporate law would recognize “reverse veil-piercing” in these cases, allowing the owners to assert their RFRA claims despite their general immunity from liability -- and for all I know he might be right. The only case law he invokes, however, is a single Minnesota case that is miles removed from the present context. He does not cite any Pennsylvania (or Oklahoma) case law, or indicate how federal law might intersect with state corporate law in such cases.)

* * * *

The Court will also need to consider one further argument with regard to any RFRA claim based on the Hahns’ ownership of Conestoga Wood—an argument based upon Part III of the Court’s 1982 opinion in United States v. Lee. (This argument would apply, as well, if the Greens owned Hobby Lobby or Mardel.) As Eugene Volokh has explained, in Lee the Court rejected a Free Exercise claim raised by Amish employers seeking an exemption from a federal obligation to contribute money to the social security system. First, the Court held that the government had a compelling interest in not granting any religious objections beyond those that Congress had specified. But then the Court added a separate Part “III” of its opinion, in which it appeared to announce a more categorical, alternative basis for its judgment:

Congress and the courts have been sensitive to the needs flowing from the Free Exercise Clause, but every person cannot be shielded from all the burdens incident to exercising every aspect of the right to practice religious beliefs. When followers of a particular sect enter into commercial activity as a matter of choice, the limits they accept on their own conduct as a matter of conscience and faith are not to be superimposed on the statutory schemes which are binding on others in that activity. Granting an exemption from social security taxes to an employer operates to impose the employer’s religious faith on the employees. Congress drew a line in § 1402(g) [a limited statutory exemption, which Lee could not take advantage of], exempting the self-employed Amish but not all persons working for an Amish employer. The tax imposed on employers to support the social security system must be uniformly applicable to all, except as Congress provides explicitly otherwise.

Part III of Lee might be read as holding categorically what an unbroken pattern of the Court’s judgments in Free Exercise cases had suggested—namely, that when individuals choose to go into commercial business for profit, they assume the risk that their companies may be subject to a complex and ever-changing array of governmental regulations, some of which might require treatment of employees, or other employer conduct, that is inconsistent with the owners’ religious tenets; and that for-profit employers must be understood to have “accepted” the likelihood of such regulations when they chose to enter the commercial sphere, and therefore are not entitled to religious exemptions to such regulations.

It is arguable that Congress, by incorporating the pre-Smith Free Exericse jurisprudence as an interpretive guide to RFRA, intended to adopt this apparent alternative holding in Lee—or at least act with an expectation that for-profit employers would be unable to prevail under RFRA because of their implied assumption of the requirements of complex business regulation. The Court will likely be asked to address that question in Hobby Lobby/Conestoga Wood. Note, however, that this is not a question unique to corporations. (The employer in Lee was not a corporation.) It is, instead, a question about RFRA as applied to ownership of for-profit enterprises writ large.

4. The Individual Shareholders as Corporate Managers

There is some suggestion in the Hobby Lobby and Conestoga Wood complaints that the individual plaintiffs would be complicit in their employees’ contraception use by virtue of their implementation, or administration, of the companies’ insurance plans. But the suggestion is a vague one—the complaints do not specify how the Greens or Hahns would “participate in” the use or purchase of contraceptives, or how they would “provide” such contraceptives to their employees. The Conestoga Wood opening brief likewise states (pp. 13, 40) that the Hahns are the “only” people who can “implement” the so-called HHS “Mandate”; but it does not explain how, or why, that is so.

In fact, it is the employees of the plans themselves—not the companies, let alone the individual plaintiffs—who “administrer” the plans (e.g., file relevant plan documents; offer employees information on what services are and are not covered), and who will provide reimbursement in cases where employees purchase contraception. There is no allegation that the Hahns or Greens are the individuals who administer the plans. (Self-insured group health plans generally are administered directly not by corporate managers but by third-party administrators, hired by plan sponsors to process claims and administer other administrative aspects of the plans.) More importantly, nothing in federal law requires that the Greens or Hahns perform such a role, any more than the law, for example, requires particular objecting doctors to perform abortions within a hospital, or requires particular objecting pharmacists within a business to dispense religiously proscribed drugs.

Therefore, the allegations of a governmentally-imposed burden on the individual plaintiffs in their capacities as administrators of insurance benefits appears to be very weak.

5. The Individual Plaintiffs as Directors, or Employer Decision-makers

In his concurring opinion in the Hobby Lobby case, Judge Bacharach of the Tenth Circuit put his finger on what I think is the central issue here—namely, whether the individual plaintiffs’ religious exercise is substantially burdened in their capacities as company directors. “The Greens must subordinate their own religious beliefs,” he wrote, “to fulfill their fiduciary duties under Oklahoma law as officers and directors of Hobby Lobby and Mardel,” because “[a]s fiduciaries, the Greens must implement corporate decisions by setting aside their own religious beliefs and advancing the best interests of the corporations.” (The individual Hahn plaintiffs are each members of the Conestoga Board of Directors, and Anthony Hahn is the President and CEO. Four of the five individual plaintiffs in Hobby Lobby are the CEO, President, Vice-CEO and Vice President of Hobby Lobby; and one of those four is also the CEO of Mardel.)

The complaints in these cases might (generously) be read to hint at this theory of the individuals’ alleged complicity in their employees’ contraceptive use by virtue of their role as corporate directors—in their role as decision-makers. For example, the Hobby Lobby complaint states that “[t]he Green family’s religious beliefs prohibit them from deliberately providing insurance coverage for prescription drugs or devices inconsistent with their faith.” Likewise, the Conestoga Wood complaint states that the Hahns “sincerely believe that the Mennonite faith does not allow them to violate Mennonite religious and moral teachings in their decisions operating Conestoga.” The Conestoga Wood opening brief includes more to this effect: “The Hahns do not merely own Conestoga directly. They also control its board of directors and run its daily operations. Consequently, the Hahns are thoroughly engaged in implementing Conestoga’s activities, including the coverage choices made for its healthcare plan. All of Conestoga’s activities happen as a direct result of the Hahns’ moral agency.” “Conestoga acts only as a result of the activity and direction of the Hahns.”

This particular emphasis on the individual plaintiffs' role as company decision-makers (as opposed to shareholders or employees or administrators) makes intuitive sense. Imagine, for example, that there were no federal law in the picture, and the Hahns, acting in their capacity as Conestoga directors, affirmatively chose to offer employees an insurance plan that included contraceptive coverage, and chose not to offer a competing plan that excluded such coverage. Of course, in that case, most observers (and the Hahns themselves) would conclude that the Hahns were morally responsible for the choice that they had made, just as many people concluded that corporate directors and CEOs were responsible for corporate decisions to invest in apartheid South Africa.

If this is the strongest or most coherent version of the plaintiffs’ theory of complicity, and thus religious burden, in these cases—and I think it is—it is subject to at least two obvious counterarguments.

First, nothing in federal law requires, or induces, the Greens or the Hahns to direct the companies—to take on the roles (e.g., CEO or members of the Board of Directors) that they have chosen to play. If they come to believe that the decisions such directors must make, against the backdrop of a welter of legal regulations, implicate their religious commitments, well, in that case . . . they can cede those decision-making roles to other individuals who do not share their religious beliefs. (Or so the argument would go.)

Such a response would have particular force, I think, if these cases arose just as the Greens and the Hahns were starting out, choosing for the first time how to structure the companies that they were establishing. I am not sure, however, that it has such strength in these particular cases, since the Greens and Hahns have already spent many years building these companies and endeavoring to operate them in accord with their religious commitments. The “choice” at this late date to abandon all directory control over the fate of the companies would likely itself result in a huge cost to the plaintiffs, who have invested so much of their lives and labors in building these enterprises. I’m not sure whether that cost would be sufficiently momentous to satisfy the “substantial burden” threshold in these particular circumstances; but I think it probably would.

The second, and more effective, response to this version of the “burden on the individual plaintiffs” argument is that it is based on an inaccurate premise: To be sure, and as noted above, in the absence of federal law, the choice of whether a employee insurance plan will or will not cover contraception is ordinarily the responsibility of the sponsor’s Board of Directors or CEO, or other decision-makers. But once the HHS Rule goes into effect, it will not be the individual company directors who “choose,” in any practical sense, to cover contraception in their employee benefit plans: That will be a legal requirement imposed by the government that will apply to any and all such plans. In other words it would be Kathleen Sebelius, rather than the Greens or the Hahns, who would be the relevant decision-maker.

Of course, in virtually every free exercise or RFRA case, it is a government decision that (allegedly) results in a burden on religious exercise. It is not my argument that the fact of governmental rather than private choice automatically eliminates any burden on religious exercise in all such cases--that would be absurd. To take only the most obvious example: If a religion requires a person to perform a particular act, and the law prohibits that act, the law imposes a burden, notwithstanding the fact that the individual would not "freely" choose to abstain from performing her religious obligation. Or if a religion prohibits certain conduct--say, the performance of an abortion by a doctor--and civil law requires the individual to do just that, there is a burden, even though the religious doctor would not have freely chosen to perform the procedure.

But where, as here, federal law does not require the individual plaintiffs to do anything in particular--not to purchase contraception, nor to reimburse employees, nor to file any plan documents involving contraception, etc.--and where the only plausible claim for the individuals' possible complicity in the use of contraception is attributable to their decision, as officers-directors of the companies, to choose one benefit plan rather than another, then, in that case (which, I have argued, is this case), the fact that the government has eliminated the option of for-profit employer plans that don't include contraception coverage--just as it has eliminated such plans under Medicaid, Medicare, and on the state and federal exchanges--means that the individuals have no choice to make at all in their capacity as directors, and thus none for which they can be morally culpable. (Think about it in terms of the apartheid example above: If federal law required all companies to invest in South African stocks, as a condition of doing business, then many people might conclude that the federal government itself was morally complicit in evil. And perhaps some would conclude that certain corporate officers were morally complicit to the extent they took steps to benefit from the required South African investments. But very few people would conclude that a particular corporation's CEO, or Board of Directors, was culpable merely for "choosing" to have the company comply with federal law.)

I think this is potentially a powerful counterargument to the claim that the HHS Rule coerces the individual plaintiffs to make a decision in their capacity of company directors that would violate their religious obligations. It might not, however, be completely responsive, since—as I have explained in previous posts—federal law does continue to leave the employers’ decision-makers with one important choice: The directors of a company are on knowledge that if the company offers its employee a health insurance plan, that plan must include contraception coverage; therefore, the directors must decide whether or not to offer such an employee plan in the first instance. If, as Judge Bacharach suggested, they decide that their fiduciary duties to the company supersede their religious commitments, and that those duties require them to affirmatively choose to continue offering such a plan, despite its inclusion of contraception coverage, they might fairly be thought to be responsible for that choice . . . and, perhaps, their religion would then consider them complicit in any subsequent purchase or use of contraceptives (a conclusion that I will assume for present purposes).

[UPDATE: A couple of readers have helpfully and correctly told me that the point in this final paragraph was not clear. I've tried to make it more precise and understandable at the end of this later post.] But here’s the catch, and what makes the case a hard one: If, as I have previously argued, federal law does not impose substantial pressure upon the company directors to retain the employee benefit plan, then the federal government cannot be said to have substantially burdened the directors’ religious exercise—even if they decide to retain the plan for other reasons—and the RFRA claims thus should be rejected at the outset. The critical question in the case, therefore, is whether federal law does impose such substantial pressure on the directors of the companies to choose to retain those plans. If it does, then the choice offered by the government might meet the threshold test for whether it imposes a substantial burden on the individual plaintiffs' exercise of religion in their capacity as directors of Hobby Lobby, Mardel and Conestoga Wood. But if it does not, then even the individual plaintiffs' claim in their capacity as company directors would be subject to serious challenge.

Posted 6:36 PM by Marty Lederman [link]