Wednesday, February 19, 2014

Hobby Lobby Part VIII: Hobby Lobby's identification of the "precise religious exercise at issue here," and some thoughts on whether federal law substantially burdens it

Marty Lederman

Most of my previous posts here about Hobby Lobby and Conestoga Wood have been devoted to the question of whether the plaintiffs have adequately alleged that federal law imposes a "substantial burden" on their exercise of religion--the threshold question under RFRA.  I've tried to make two principal points:

First, as I elaborated in this post, the overwhelming attention in the lower court decisions, and in the briefs, to the question of whether for-profit corporations have "beliefs" or can otherwise exercise religion, is misdirected:  Although such for-profit corporations probably can exercise religion in at least some cases, they cannot sustain the sort of claim at issue in these cases, namely, that federal law requires them to violate a religious injunction.  It's unlikely any religion imposes such obligations upon for-profit corporations and, in any event, there are no such allegations here.  But that does not mean that the plaintiffs necessarily lose, since the real question is whether and how federal law might require or substantially pressure the individual plaintiffs--the Green family members in Hobby Lobby; the Hahn family members in Conestoga Wood--to violate their own religious obligations.  I've argued further that the "substantial burden" aspect of these cases ultimately turns on whether federal law requires the Greens and/or the Hahns in their capacities as decision-makers (i.e., directors) of the companies to do something their religions prohibit--in particular, to decide whether the employee health insurance plans offered by the three companies in question should include (or "provide") coverage of certain contraceptive methods.

Second, in a series of posts (see the Posts labeled III, III-A and III-B below) I have explained that, contrary to popular belief, there is no "employer mandate":  federal law does not in fact require any employer to offer contraceptive insurance to its employees.  To be sure, if employers choose to offer their employees a health insurance plan, that plan must include many required features, including coverage of persons with pre-existing conditions, coverage for dependents up through age 26, and cost-free coverage of such services as immunizations, colo-rectal cancer screening, and women's health services, including access to 18 contraceptive methods.  But employers are legally entitled to decline to offer such an employee plan at all--and if they do so, it is likely that the direct effect would be a cost savings to the employer, even after accounting for a tax assessment that would be imposed on large employers such as Hobby Lobby, Martel, and Conestoga Wood.  Of course, many employers will conclude, for an array of complex and firm-specific reasons, that it remains in their interest to offer a health-insurance plan to their employees.  Even in those cases, however, it is at best uncertain whether federal law as a whole would impose substantial pressure upon them to do so.  More to the point for present purposes, the plaintiffs in these cases have not alleged facts that would demonstrate such substantial pressure.  And as long as this alternative legal option would not itself impose a substantial burden on plaintiffs' religious exercise, the RFRA claims should be rejected, regardless of whether an actual federal mandate to cover contraception would impose a substantial burden.

Hobby Lobby's brief, filed last Monday, addresses both of these matters.  I'll discuss the first in this post, and the latter in a follow-up post.  The upshot of the points, taken together, is that Hobby Lobby's own brief calls into serious question whether the plaintiffs have alleged facts sufficient to establish that the HHS rule imposes a substantial burden on their exercise of religion.

As for the first question:  Hobby Lobby's brief, like Conestoga Wood's, confirms that these cases are not really about the question of corporate religious exercise that has dominated the briefing and public reporting.

Hobby Lobby makes little effort to explain how the corporations' own religious exercise is burdened by federal law and, more to the point, the brief makes no effort to argue that any religion imposes obligations or injunctions upon Hobby Lobby Stores, Inc. or on Mardel, Inc.  Instead, the brief makes it clear that the real issue in the case is the Greens' "religious commitments," and whether federal law imposes a substantial burden on the Greens' religious exercise by requiring (or substantially pressuring) them to violate those commitments.

Moreover, Hobby Lobby's brief confirms my surmise that the case is not fundamentally about coercing the Greens to pay for contraception, or the Greens' religious exercise in their capacity as shareholders.  (Indeed, there's no allegation that the Greens even 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.)  Nor is it about the Greens' capacities (if any) as administrators of the employee insurance plans.  (The brief at several places asserts that federal law requires the Greens or the employers "to provide specific contraceptives" to employees (p. 15; see also pp. 34, 41).  This is an unfortunate, perhaps inadvertent, shorthand.  Of course federal law doesn't require anyone--not even the insurance plans--to "provide contraceptives" to employees.  The law merely requires that all insurance plans cover certain contraceptive services without cost, i.e., that plans guarantee employees they will be reimbursed if they choose to purchase such contraceptives.)

The brief instead confirms that this case is, instead (as Judge Bacharach of the court of appeals recognized), about whether federal law coerces the Greens to violate a religious obligation in their capacities as corporate directors, i.e., decision-makers.  (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), by its terms describing "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.
As I noted in my earlier post, 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 here's why that analogy breaks down in Hobby Lobby:

On the plaintiffs' own view of the way the law works -- by imposing a so-called "employer mandate" -- once the HHS Rule goes into effect, it would not be the Greens who “chose,” in any practical sense, to cover contraception in the employee benefit plans:  That would, instead, be a legal requirement imposed by the government that will apply to any and all such plans throughout the nation.  It would be Kathleen Sebelius, in other words, rather than the Greens, who would be the relevant decision-maker--who would "direct" the employee benefit plans to provide reimbursement for contraceptive services.

That's important in this case for two related reasons.  First, federal law does not require the Greens to do anything in particular--not to purchase contraception, nor to reimburse employees, nor to file any plan documents involving contraception, etc.  (If the insurance plan's administrators failed to include the required coverage, then not only the plan itself, but Hobby Lobby, as well, would be subject to a severe tax; therefore it's fair to say that Hobby Lobby has a duty to ensure that the plan follows the law.  But it's unlikely that issue would ever arise:  All insurers and plan administrators will now include the federally required services as a matter of course--it'll be a pro forma standard included in every plan.  Thus the possibility that Hobby Lobby--let alone the Greens--would ever have to take steps to ensure contraceptive coverage in the plan is not only speculative but highly unlikely.)

Moreover, and relatedly, the gravamen of the Greens' claim is not that the use of their labor, or their funds, or their expertise, or their property, would make them complicit in wrongdoing.  Instead, as the brief clarifies, the Greens allege that they would be complicit in the use of contraceptives by virtue of their direction, i.e., as a result of the choices that they make as directors of the companies about which services their employee health plans will and will not insure.  Because the only plausible claim for the Greens' possible complicity in the use of contraception is 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), then 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.) 

There is nothing in Hobby Lobby's brief, or in its complaint, that attempts to explain, or even to articulate, why the Greens' religion would make them morally culpable in such a case, where the decision has been taken out of their hands and where they therefore would not be responsible for "directing" the Hobby Lobby and Martel plans to include contraception coverage, or for making any choice at all in the matter.  Therefore, without more, the Greens have not alleged facts that would explain why the law imposes a substantial burden on their religious exercise in their capacities as corporate directors.

However . . .

. . . there is a catch, for the plaintiffs are wrong that federal law leaves them with no real choice.  There remains at least one decision for the Greens qua directors to make.

As I've explained in previous posts and will take up again in my next post, federal law does leave the Greens with at least one important choice, namely, whether or not the companies should continue to offer an employee health insurance plan.  If the Greens, acting in their capacity as corporate directors of Hobby Lobby and Martel, decide 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, whether or not it made them complicit in the employees' eventual use of contraceptives. 

On the other hand, they can't have it both ways:  If, as I have argued (and will discuss further in my next post), federal law does not impose substantial pressure upon the Greens to retain the employee benefit plans, but they choose to do so anyway, then the federal government cannot be said to have substantially burdened their religious exercise, and their RFRA claims thus should be rejected at the outset.  But if, on the other hand, plaintiffs were correct that they have no real choice--that the federal "option" of dropping the companies' plans is an offer that they simply must refuse because of substantial pressure applied by federal law--then, once again, they could hardly be thought to be morally complicit for the choice of retaining a plan that complies with a federal law that governs all insurance plans throughout the nation. 

My Posts on Hobby Lobby and other contraceptive-coverage cases

Hobby Lobby Part I -- Framing the issues

Hobby Lobby Part II -- What's it all about? (contraception?  abortifacients?  other religious objections?)

Hobby Lobby Part III -- There is no "employer mandate"

Hobby Lobby Part III-A -- Does federal law substantially pressure employers to offer health insurance coverage in violation of religious obligations, even though there is no “Employer Mandate”?

Hobby Lobby Part III-B -- Is it necessary that the government-imposed pressure to violate a religious obligation be substantial?

Hobby Lobby Part IV -- The myth of underinclusiveness

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

Hobby Lobby Part VI --  The parties' common ground . . . and a fundamental divide about religious exemptions for for-profit employers

Hobby Lobby Part VII -- Hobby Lobby's arguments on compelling interest and the alleged exemption "honeycomb" 

Hobby Lobby Part VIII -- Hobby Lobby's identification of the "precise religious exercise at issue here," and some thoughts on whether federal law substantially burdens it

* * * *

Not Quite Hobby Lobby: The Nonprofit Cases (including Little Sisters and Notre Dame), and Opting Out as Complicity [with UPDATE on Little Sisters "church plan" situation]

Government brief in Little Sisters

Little Sisters State of Play

Not With a Bang . . . (The Supreme Court wisely preserves the status quo in Little Sisters)

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