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Balkinization Symposiums: A Continuing List E-mail: Jack Balkin: jackbalkin at yahoo.com Bruce Ackerman bruce.ackerman at yale.edu Ian Ayres ian.ayres at yale.edu Corey Brettschneider corey_brettschneider at brown.edu Mary Dudziak mary.l.dudziak at emory.edu Joey Fishkin joey.fishkin at gmail.com Heather Gerken heather.gerken at yale.edu Abbe Gluck abbe.gluck at yale.edu Mark Graber mgraber at law.umaryland.edu Stephen Griffin sgriffin at tulane.edu Jonathan Hafetz jonathan.hafetz at shu.edu Jeremy Kessler jkessler at law.columbia.edu Andrew Koppelman akoppelman at law.northwestern.edu Marty Lederman msl46 at law.georgetown.edu Sanford Levinson slevinson at law.utexas.edu David Luban david.luban at gmail.com Gerard Magliocca gmaglioc at iupui.edu Jason Mazzone mazzonej at illinois.edu Linda McClain lmcclain at bu.edu John Mikhail mikhail at law.georgetown.edu Frank Pasquale pasquale.frank at gmail.com Nate Persily npersily at gmail.com Michael Stokes Paulsen michaelstokespaulsen at gmail.com Deborah Pearlstein dpearlst at yu.edu Rick Pildes rick.pildes at nyu.edu David Pozen dpozen at law.columbia.edu Richard Primus raprimus at umich.edu K. Sabeel Rahman sabeel.rahman at brooklaw.edu Alice Ristroph alice.ristroph at shu.edu Neil Siegel siegel at law.duke.edu David Super david.super at law.georgetown.edu Brian Tamanaha btamanaha at wulaw.wustl.edu Nelson Tebbe nelson.tebbe at brooklaw.edu Mark Tushnet mtushnet at law.harvard.edu Adam Winkler winkler at ucla.edu Compendium of posts on Hobby Lobby and related cases The Anti-Torture Memos: Balkinization Posts on Torture, Interrogation, Detention, War Powers, and OLC The Anti-Torture Memos (arranged by topic) Recent Posts Hobby Lobby Part XIV -- How this week’s Sixth Circuit decision in a nonprofit case can inform the Supreme Court's "substantial burden" analysis in Hobby Lobby
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Saturday, June 14, 2014
Hobby Lobby Part XIV -- How this week’s Sixth Circuit decision in a nonprofit case can inform the Supreme Court's "substantial burden" analysis in Hobby Lobby
Marty Lederman
On Wednesday, the
U.S. Court of Appeals for the Sixth Circuit became the second appellate court
to rule
that the HHS secondary “accommodation” for preventive services coverage does
not substantially burden the religious exercise of nonprofit religious
organizations that would invoke that accommodation. The Seventh Circuit issued a similar
ruling in the Notre Dame case back in February. (There are similar appeals pending in at least five circuit
courts; the only one that has been argued and is awaiting decision is the D.C. Catholic
Archdiocese case, argued last month before the Court of Appeals for the D.C.
Circuit (Rogers, Pillard and Wilkins, JJ.).).
Judge Moore’s
rationale for the court of appeals in Michigan Catholic Conference v. Burwell is important for the many nonprofit cases
now making their way through the courts.
But I think it may also inform the Hobby Lobby case now pending before the Supreme Court. Here’s why:
What the
Court of Appeals Held in Michigan
Catholic Conference
The Sixth
Circuit decision involved nine different nonprofit entities associated with the
Catholic Church. Three of them are
entirely exempt from the contraception component of the HHS preventive services
rule, and therefore the court summarily dismissed their appeals. Of the other six, five have contracted
with regulated private insurers (such as Blue Cross Blue Shield) to offer a health insurance
plan to their employees, while the sixth offers its employees access to
“self-insured” plans that are administered by private parties such as Blue
Cross Blue Shield of Michigan and Express
Scripts. In this post I’ll focus
on the five plaintiffs that contract for plans with private insurers—Aquinas
College, Camp Marymount, Inc., Catholic Charities of Tennessee, Inc., Mary,
Queen of Angels, Inc., and St. Mary Villa, Inc.—and I'll use Aquinas College as a
representative example.
Under the HHS
Rule, if these five employers have a religious objection to including contraception
coverage in their employee plans, they can simply provide their insurance
companies a “certification” that they are nonprofit entities with religious
objections, and that simple act will relieve them from any obligation to
subsidize payments for contraceptive services, or to include such services in
their sponsored employee plans.
Upon receipt of such a certification from the employers, the insurers themselves must reimburse
employees for the costs of contraception, without any payment by, or involvement
of, the employers: The regulation
(45
CFR § 147.131(c)(2))
expressly prohibits the insurer from imposing any cost-sharing requirements
(such as a copayment, coinsurance, or a deductible), or imposing any premium,
fee, or other charge, or any portion thereof, directly or indirectly, on the
eligible organization, the group health plan, or plan participants or
beneficiaries. Moreover, the
issuer must segregate premium revenue collected from the eligible organization
from the monies it uses to make payments for contraceptive services.
Judge Moore
correctly makes short shrift of these employers’ arguments that if they invoke
this accommodation they would still be providing, or paying for, their employees'
contraception coverage—plainly, they would not.
She then proceeds
to address the argument at the heart of all these nonprofit cases, including Notre Dame—namely, the assertion that by
invoking the accommodation itself, a religious employer such as Aquinas College would nevertheless “facilitate”
the contraception coverage, and thus be impermissibly complicit in its employees’
use of contraception, because the very act of opting out would itself “trigger”
the legal obligation of someone else—the insurer—to pay for the cost of contraception. As Judge Moore notes, this
“trigger” argument “rests on
two assumptions that are, perhaps, two sides of the same coin: first, that the
insurance issuer . . . could not provide the coverage until
they receive a self-certification form and second, that the insurance
issuer . . . [will] then provide the coverage because they
received the self-certification form.”
The argument, in other words, depends upon the notion that the
nonprofit organization’s choice to invoke the HHS accommodation—to opt out of the rule that applies to all other employers—is a but-for cause of the insurer’s provision of
contraceptive coverage to the organization's employees.
Judge Moore then
concludes, correctly, that these assumptions are simply mistaken as a matter of
law: “Submitting the
self-certification form to the insurance issuer,”
she writes, “does not ‘trigger’ contraceptive coverage; it is federal law that
requires the insurance issuer . . . to provide this coverage.” Quoting Judge Tatel’s dissent from an
injunction pending appeal on New Year’s Eve in the D.C. Archdiocese case, Judge
Moore explains:
“Because
Congress has imposed an independent obligation on insurers to provide
contraceptive coverage to Appellants’ employees, those employees will receive
contraceptive coverage from their insurers even if Appellants
self-certify—but not because Appellants self-certify.” The obligation to cover contraception
will not be triggered by the act of self-certification—it already was triggered
by the enactment of the ACA.
This is the key
point: Under the ACA, the insurer
(such as Blue Cross Blue Shield of Tennessee, which is the issuer of the the
Aquinas College employee plan) “must provide contraceptive coverage without
cost-sharing, whether or not the
appellants decide to self-certify.”
That is to say, Aquinas College's act of opting out would have no effect whatsoever on whether college employees will receive cost-free reimbursement for their purchase of contraceptives—they
will be entitled to that statutory benefit regardless. Indeed, they’ll get reimbursement from
the same entity—Blue Cross Blue Shield of Tennessee (BCBSoT)—for their purchase of contraception, whether or not Aquinas invokes the accommodation.
Of course, the
employer’s opt-out would have some legal and practical effect—that’s
why HHS offers the choice to religious nonprofits in the first place. For one
thing, if Aquinas invoked the accommodation, BCBSoT would no longer make payments from Aquinas College’s sponsored
health insurance plan. As the
preamble to the regulations explains, once the employer opts out, the issuer
(such as BCBSoT) “would be required to assume sole responsibility, independent
of the eligible organization and its plan,
for providing contraceptive coverage to plan participants and beneficiaries.” Indeed, upon receipt of the employer’s
opt-out certification, the insurer must expressly
exclude contraceptive coverage from the employer’s group health insurance
plan coverage. 45 CFR § 147.131(c)(2)(i)(A). (This is one detail that Judge Moore
gets wrong: She writes that
“whether or not the appellants decide to self-certify,” “under the ACA, the appellants’
health plans and insurance issuers must
provide contraceptive coverage without cost-sharing.” It’s correct that the insurance issuer must reimburse
employees for the costs of contraception; but it’s not correct that the
employer health plan must continue coverage of those services.) After an employer opts out, the
insurance issuer itself will simply make payments to the employees, independent
of the employer’s plan. (Indeed,
it can do so without issuing a separate insurance policy for contraceptive
services: the regulations
prescribe what the agency describes as “a simpler method of [the insurer] providing
direct payments for contraceptive services.”) And more importantly, perhaps, once the opt-out occurs, the
insurer may not use the employer’s funds
to make such payments, as explained above.
The only effects
of the employer’s opt-out, then, are not to change the fact or source of the
employees’ reimbursement for contraception, but instead to further distance the employer (and its money and its plan) from the employees’
use of contraception.
All of which is
to say that in no way can the act of
invoking the accommodation be a trigger for, or but-for cause of, the insurer’s reimbursement
of the costs of contraception to the
employees. And once that much is
clear, any possible argument that the employer’s invocation of the HHS
accommodation “causes” the reimbursement to be paid to its employees vanishes
into air. The accommodation
itself, then, cannot be the source of any conceivable complicity by the
exempted nonprofit organization.
That’s basically
the gist of the court of appeals’ decision. For purposes of this post, however, it’s important to add
two further two points, before explaining the relevance of this decision to Hobby Lobby. Both points involve other
decisions by the employer, independent of the decision whether to invoke the
HHS accommodation.
First, it is of
course true that the employer’s earlier decision to contract with a particular
insurer—in the case of Aquinas College, that would be Blue Cross Blue Shield
instead of, say, Aetna—is what causes that
insurer, rather than all the other insurers throughout the land, to make
payments to these particular employees. But it’s very hard to see how this
could possibly be relevant to any question of employer complicity. Regardless of which plan insurance
issuer Aquinas College originally contracted with, that issuer would make
payments for contraception to those employees, whether or not the employer opted out. The fact that it is, say, BSBCoT, rather than Aetna, can’t
be germane to Aquinas College’s ultimate responsibility for its employees’ use
of contraception: The insurer had
to be someone.
Second, there is
yet another choice an organization could
make that would also determine who (i.e.,
which insurance issuer) reimburses its employees for contraceptive purchases,
and with which funds. Any
employer, nonprofit or otherwise, could choose not to offer an employee health insurance plan at all. If Aquinas
College made that choice, other insurance
issuers (those participating in the exchanges) would reimburse Aquinas’s employees
for contraception. And they would
do so with the use of significant government subsidies—subsidies that are
funded by tax dollars, including (but not limited to) the assessments that are
required of large employers that do not offer employee health plans.
The important thing
for present purposes, however, is that this choice, too, would not affect
whether Aquinas’s employees are reimbursed for contraception. They will be reimbursed, no matter what choices Aquinas makes, because such
reimbursement is now a virtually universal social entitlement. That is to say, under the current law, there is no choice Aquinas College could
make that would affect whether its employees are reimbursed for their purchase
of contraception. Therefore,
it is very difficult to see how any choice by the employer—be it whether to invoke the
accommodation; which insurer to contract with; or whether to offer an employee
insurance plan in the first instance—could possibly make Aquinas College any
more or less morally responsible for its employees’ use of contraception, since
by virtue of federal law the result
will be the same regardless of any such employer choice. (Contrary to what
some critics of Judge Moore’s opinion would have you believe, the women who
work for Aquinas College do not receive reimbursement for their contraceptive
purchases “by virtue of their employment” at the College. They receive such a benefit by virtue of the fact that they live in the
United States, and they would receive that benefit no matter who their
employer was (other than if they worked for a church or its auxiliary) or,
indeed, even if they were not employed at all.)
The Relevance
of Michigan Catholic Conference for
the Supreme Court's consideration of Hobby Lobby
So what does all
this have to do with Hobby Lobby? Well, the Sixth Circuit decision
illustrates why the individual plaintiffs in Hobby Lobby—the members of the Green family—cannot demonstrate that
federal law substantially burdens their religious exercise when they are acting
in their capacity as corporate directors, or decision-makers of Hobby Lobby Stores, Inc. and of Mardel, Inc. And without such a showing, their RFRA claim cannot succeed. To recap
what I’ve explained previously (see especially this
post and this
one, from which I derive much of what appears below):
-- Contrary to popular belief, Hobby Lobby is not a case about religious exercise of corporations, as such. Even assuming arguendo that for-profit corporations could exercise religion in some sorts of cases, the corporations here cannot plausibly sustain the sort of religious burden claim at issue in this case, namely, that federal law requires them to violate a religious injunction. It's implausible that any religion imposes such obligations upon for-profit corporations such as Hobby Lobby Stores, Inc. or Mardel, Inc.; and, in any event, there are no such allegations in the Hobby Lobby complaint. The plaintiffs’ brief confirms this: It makes no effort to argue that any religion imposes obligations or injunctions upon those corporations. The question of whether and when for-profit corporations can "exercise religion" or have religious beliefs has exerted an inexorable grip on the public imagination, and countless pages in briefs and law review articles have already been devoted to musing about it.* As the Hobby Lobby brief makes clear, however, the real issue in the case is about the Greens' "religious commitments"--not Hobby Lobby's--and whether federal law imposes a substantial burden on the Greens' religious exercise by requiring (or substantially pressuring) them to violate those commitments. -- Nor is the case about whether the government has required or coerced the Greens to pay for contraception, or about the Greens' religious exercise in their capacity as shareholders. There's no allegation that the Greens are shareholders of the two companies, or that "their" funds would be indirectly used to make the reimbursement payments: Hobby Lobby and Martel are operated by trusts. (Moreover, even if the case were about possible RFRA claims of shareholders—and again, it is not—those claims would be on very thin ice, as I explain in this post.) -- What the Hobby Lobby brief confirms is that this case is, instead, about whether federal law coerces the Greens to violate a religious obligation in their capacities as corporate directors, i.e., as decision-makers on behalf of the corporations. (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.) This is the key paragraph from the brief (pp. 30-31, with emphasis added), which by its terms describes "the precise religious exercise at issue here": It is undisputed that the Greens have committed themselves to conducting their business activities according to their religious beliefs. See, e.g., Pet.App.8a. Hobby Lobby and Mardel are closely-held corporations controlled entirely by the Greens. JA129-30, 134; Pet.App.7a-8a. Thus, Hobby Lobby and Mardel act only through the Greens. The record amply demonstrates how the Greens have pursued their religious commitments through their business activities, Pet.App.8a, and there is no dispute about the precise religious exercise at issue here: the Greens cannot in good conscience direct their corporations to provide insurance coverage for the four drugs and devices at issue because doing so would “facilitat[e] harms against human beings.” Pet.App.14a.
In other words,
the basic claim in Hobby Lobby, just like
the claim of Aquinas College and other nonprofit employers, is that the
government is requiring (or substantially pressuring) the plaintiffs to make
choices—to issue “direct[ives]”—that would facilitate employees' use of
contraception.
As I’ve
explained in my earlier posts, this emphasis on the individual plaintiffs' role
as company decision-makers makes
sense, in light of how most people would treat analogous questions of moral
culpability in other corporate contexts. Imagine, for example, that there
were no federal law in the picture, and the Greens, acting in their capacity as
Hobby Lobby 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
would conclude that the Greens 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.
But that analogy breaks down in Hobby Lobby, and the court of appeals’ decision in Michigan Catholic Conference helps to show why: Once the HHS Rule goes into effect, it would not be the Greens who “directed” the Hobby Lobby and Mardel insurance plans, in any real sense, to cover contraception: That would, instead, be a legal requirement imposed by the government—and it's a requirement that applies to any and all such plans throughout the nation, whether sponsored by an employer or not. It would be HHS Secretary Burwell, in other words, rather than the Greens, who would be the relevant decision-maker—it is she who would "direct" the employee benefit plans to provide reimbursement for contraceptive services.
Again, the claim for the Greens'
possible complicity in the employees’ use of contraception is said to be attributable to
their decision, as officers-directors
of the companies, to choose one type of benefit plan rather than another (to
"direct" the plans to cover certain services or not). But the fact
that the government has eliminated the
option of operating a for-profit employer plan that doesn't include
contraception coverage means that the Greens have no relevant choice to
make 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 had required all companies to invest in
South African stocks, as a condition of doing business, then many people might
have concluded 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 have concluded that a particular corporation's CEO, or Board
of Directors, was culpable merely for "choosing" to have the company
comply with federal law.
Now, this does not mean that the Greens have no choice whatsoever to make in their capacity as directors of Hobby Lobby and Mardel. To be sure, they have one fewer option than do the directors of Aquinas College: Unlike the Aquinas directors, the Greens cannot choose to have Hobby Lobby opt out of the contraception coverage and have payments be made by an insurer such as Blue Cross or by a third-party administrator. However, like the Aquinas directors, the Greens do have the option of discontinuing the Hobby Lobby and/or Mardel employee health plans altogether. And therefore if the Greens, acting in their capacity as corporate directors of Hobby Lobby and Martel, were to decide (as they have) that it would be best for the companies to continue offering such a plan, despite the necessary inclusion of contraception coverage, they might fairly be thought to be responsible for that choice. It is difficult to see, however, why that particular choice could possibly make the Greens complicit in Hobby Lobby or Mardel employees' eventual use of contraceptives, because either way, the Hobby Lobby/Mardel employees would have access to a health-insurance plan that offers cost-free contraception coverage. Just as the lawful choices of the directors of Aquinas College could not have an effect on the college employees’ access to contraceptive services, as Judge Moore explained in her opinion, so, too, the Greens’ decision whether or not to retain the employee plans would not alter whether or not the Hobby Lobby and Mardel employees have access to reimbursement for their purchase of contraceptives. Therefore, no matter which option they elected, the Greens' decision in their directorial capacity could hardly be something that makes them morally complicit in the employees' use of such contraceptives. Seen in that light, it is difficult to understand how federal law could possibly impose a substantial burden on the Greens’ exercise of religion. ________ * In a recent article in the Harvard Law Review Forum, for example, Professors Alan Meese and Nathan Oman explain that shareholders of for-profit corporations "impose religiously motivated policies on corporations all the time," and that "a straightforward application of garden-variety corporate law empowers shareholders to employ the corporation as a tool for furthering their religious beliefs." That is true; but the government does not claim otherwise, and it’s not obvious how these points--to which Meese and Oman devote dozens of pages--should bear on the Court's analysis in Hobby Lobby. Meese and Oman apparently believe that because shareholders often use corporations "as a tool for furthering their religious beliefs," that the corporations themselves must, in such cases, be persons engaged in the "exercise of religion," and therefore be entitled to sue under RFRA. But that does not follow at all. To the contrary, what Meese and Oman's examples show is that shareholders are often religiously motivated, and that shareholders often pursue their religious objectives through their control of the corporation. That might mean that such shareholders exercise religion in a way that can be burdened by government regulation of the corporation-as they write, "[w]hen we regulate corporations we in fact burden the individuals who use the corporate form to pursue their goals." But that fact does not demonstrate that the corporation itself, as distinct from its shareholders, exercises religion. Meese and Oman specifically decline to address the question of RFRA burdens on shareholders (see footnote 10). For reasons I've discussed previously and summarize in this post--not least of which is that the Greens are not shareholders of Hobby Lobby and Mardel--such shareholder claims should not be viable in Hobby Lobby. Posted 5:58 AM by Marty Lederman [link]
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