Tuesday, March 25, 2014

Today's Oral Argument in Hobby Lobby

Guest Blogger

Nelson Tebbe

The oral argument in Hobby Lobby and Conestoga Wood, which I attended today, provided some slight cause for optimism for those of us who have been arguing that accommodating the companies would raise serious concerns because it would mean shifting the cost of that accommodation onto third parties (the affected women employees). Not only did Solicitor General Verrilli open and close with the argument, but Justice Kennedy arguably displayed some sympathy for the point. First, Justice Kennedy asked Paul Clement (who was arguing for the companies) whether there are rules of statutory construction that should guide the Court in this case, such as the canon of constitutional avoidance. Later, Justice Kennedy asked directly what should happen when granting an accommodation for the companies would shift costs onto employees. Justice Kennedy asked whether the employer's interests should simply trump in such situations.

Of course, Justice Kennedy also had questions for the government. Several of these concerned the government's claim that for-profit corporations cannot bring religious freedom claims, either as a threshold matter or as a consequence of the compelling interest analysis. Especially after Justice Kagan expressed doubt about the contention that for-profit corporations are barred from making such claims as a threshold matter, the government's argument against the ability of for-profit corporations to ever bring or prevail in religious liberty cases seemed to face serious opposition. Near the end of the argument, Justice Kennedy also asked the government whether its position would mean that a for-profit corporation could be forced to pay for abortions. Other commentators have highlighted that question, but it seems to me at least possible (though not certain) that Justice Kennedy was addressing the issue of whether for-profit corporations could bring a claim at all -- suggesting that they could -- and that he was not offering a slippery-slope reason to think that Hobby Lobby's claim should prevail on the merits.

Justice Breyer asked the government why the answer to the concern with third-party employees was simply for the insurance providers or the government to carry the costs. Why wouldn't this be a less-restrictive means of pursuing the government's ends? I don't believe Justice Breyer was expressing sympathy with this argument -- he explicitly disclaimed betraying a point of view -- but instead he was ensuring that the concern was addressed. Solicitor General Verrilli responded that religious objectors would simply raise a challenge to that arrangement too. He seemed to have in mind other situations where religiously-affiliated nonprofits have balked at signing a form or even just asking for an exemption, on the ground that such an action would then trigger coverage for contraception by a provider or by the government. (In his rebuttal, Paul Clement replied that he did not know whether these particular companies would object to that accommodation, which they have not been offered.) Solicitor General Verrilli also argued that such an arrangement for all religiously-objecting for-profit companies could expose the government to significant costs.

There were other notable moments as well. Several of the justices took seriously the argument, which I first saw here in a post by Marty Lederman, that the contraception rule does not impose a burden at all, because it would be as cheap or cheaper for employers to simply stop providing health insurance altogether. The resulting tax -- Justice Sotomayor specified that it is not a penalty, recalling the health care cases -- would be about two thousand dollars per employee per year, which is less than the roughly four thousand dollar per-employee per-year cost of providing health insurance, she said. Even assuming employers must raise salaries somewhat to compensate for the loss in benefits, that could be as cheap or cheaper than providing health insurance. Employees could then purchase coverage on the exchanges. Justice Kennedy (twice) asked Paul Clement to assume the cost of eliminating health insurance coverage was equivalent to providing it, a "wash" as he put it, and then asked what would be the result for his argument. Paul Clement (twice) responded that the cases had not been litigated that way, and also pointed out that providing health insurance was also seen to be a religious good, if not a religious mandate, by the companies.

So although it would be foolish to predict the outcome of the case, people concerned with shifting burdens to women employees have some small reason to be more optimistic than before the argument.

Nelson Tebbe is Professor of Law at Brooklyn Law School. You can reach him by e-mail at nelson.tebbe at