Sunday, July 06, 2014

Hobby Lobby Part XVIII -- The one (potentially) momentous aspect of Hobby Lobby: Untethering RFRA from free exercise doctrine

Marty Lederman

In earlier posts, such as this one, I noted that in the context of commercial activities, the Supreme Court—and virtually every other court, for that matter—has consistently construed the Free Exercise Clause and religious accommodation statutes not to require religious exemptions from generally applicable regulations, from at least 1944 until this week.  That unbroken history was easily explained:  In virtually all such cases, I wrote, "conferral of an exemption would require third parties (customers, employees, competitors) to bear significant burdens in the service of another’s religion, something the Court has understandably been loath to sanction." 

That is why a unanimous Supreme Court was able to declare, in the 1982 case of U.S. v. Lee, that "[w]hen 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,” at least where “[g]ranting an exemption . . . to an employer operates to impose the employer’s religious faith on the employees.” 

Whether or not this was a stand-alone holding in Lee, there is no doubt that the statement fairly characterized the Court’s virtually unbroken line of decisions over many decades.

At first glance, Monday's decision in Hobby Lobby might appear to be a departure from these decades of precedents:  After all, the Court held that actors in the commercial sphere--employers such as Hobby Lobby and Conestoga Wood--could be entitled to a religious exemption from a generally applicable regulation designed to ensure an important and virtually universal benefit for women.  (Whether they will in fact be entitled to the exemption may depend upon an adjudication of disputed facts, including especially whether they can demonstrate that federal law imposes substantial pressure on them not to discontinue their employee health plans.  See below.) 

As I explained on Tuesday, however, the Court's specific holding in the case is quite narrow, and is therefore consistent with the past few decades of Court jurisprudence.  Indeed, in its opinion the Court majority acknowledged once more that "[i]t is certainly true that in applying RFRA 'courts must take adequate account of the burdens a requested accommodation may impose on nonbeneficiaries.'” (quoting Cutter v. Wilkinson).  And Justice Kennedy, whose vote was essential to the holding, emphasized that RFRA cannot be applied to “unduly restrict other persons, such as employees, in protecting their own interests, interests the law deems compelling.”

As for the Court's actual holding, it was, perhaps surprisingly, consistent with these statements and with the Court's history.  The Hobby Lobby Court merely held that RFRA required conferral of a religious exemption in a commercial setting where that accommodation need not result in (i) significant harm to third parties or (ii) any additional legislative appropriations in order to guarantee realization of the government's compelling interests. 

As Justice Kennedy emphasized, where that is the case -- where the religious objection can be accommodated under an “existing, recognized, workable, and already-implemented framework” without any significant harm to third parties or any need for additional appropriations -- the fact that the accommodation is sought by an actor participating in the commercial sphere should not be an absolute bar to the exemption.  As the Court put the point in its introductory summary, extension of the HHS secondary accommodation to for-profit enterprises "constitutes an alternative that achieves all of the Government's aims while providing greater respect for religious liberty."  Everybody wins!* 

The Court's holding, in other words, was quite narrow, as the majority itself was at pains to emphasize.**  As such, Hobby Lobby is the rare exception that reveals the scope of the traditional doctrinal rule:  Religious exemptions in the commercial setting are presumptively disfavored because they will ordinarily result in significant harm to third parties or a significant obligation for taxpayers . . . but "ordinarily" does not mean "always," and a presumption is just that--in rare cases it can be overcome.

If the holding in Hobby Lobby was narrow, however, the same cannot be said for much of the reasoning in Justice Alito's majority opinion.  If the Court had adopted several of Justice Alito's propositions as holdings, then Hobby Lobby would, indeed, have been a dramatic development, and a sharp departure from decades of law, with potentially serious ramifications.  

From all that appears, however, Justice Kennedy would not join in the two most significant holdings that Justice Alito proposed; and a third major part of Justice Alito's analysis, although quite important, is merely a reaffirmation of the Court's previous case law.  Therefore, I generally agree with Chip Lupu and Bob Tuttle's assessment that Hobby Lobby will likely generate few, if any, victories for commercial employers seeking to impose the costs of their religious convictions on their employees, customers or competitors.

On the other hand, there is a fourth aspect of Justice Alito's opinion that Justice Kennedy apparently did not reject, one that could indeed be quite groundbreaking--namely, the proposition that RFRA is far more demanding of the government, and thus generates a more robust regime of religious exemptions, than the Court's pre-Smith Free Exercise Clause jurisprudence.

Fortunately, the Court in Hobby Lobby pulled back at the last minute and therefore did not go so far as to issue a holding to that effect.  Even so, the signals it sent are anything but subtle.  Therefore there is a good chance the idea could take root in the lower courts and in future Supreme Court opinions.  If it did, then Hobby Lobby could, indeed, become a groundbreaking decision, with potentially far-reaching consequences for federal law across a range of subjects.  Indeed, it might even begin to unravel the Court's traditional understanding that religious exemptions in the commercial setting are presumptively disfavored.

Here's a quick summary of these four notable aspects of the Alito and Kennedy opinions:

1.  Underinclusiveness, the Grandfathering "Exception," and Compelling Interests

At page 40 of his opinion, Justice Alito expressed some sympathy with the plaintiffs' argument that the government's interest in guaranteeing women cost-free access to all of the FDA-approved contraception methods cannot be deemed "compelling" for purposes of RFRA in light of an alleged "underinclusiveness" created by the so-called grandfathering "exception."  

Ultimately, however, the Court "find[s] it unnecessary to adjudicate this issue"--it assumed for the sake of argument that the government's interest is, indeed, compelling.  In his concurring opinion, Justice Kennedy wrote that "[i]t is important to confirm that a premise of the Court’s opinion is its assumption that the HHS regulation here at issue furthers a legitimate and compelling interest in the health of female employees."  More importantly, Justice Kennedy signaled that in his view the assumption is warranted:  "[T]he Department of Health and Human Services (HHS) makes the case that the mandate serves the Government’s compelling interest in providing insurance coverage that is necessary to protect the health of female employees, coverage that is significantly more costly than for a male employee."  See also footnote 23 of Justice Ginsburg's dissent ("Although the Court’s opinion makes this assumption grudgingly, one Member of the majority recognizes, without reservation, that 'the [contraceptive coverage] mandate serves the Government’s compelling interest in providing insurance coverage that is necessary to protect the health of female employees.'”).

In other words, a majority of the Justices have rejected the radical notion that the grandfathering provision of the ACA -- an unremarkable transition rule -- undermines the government's case that its interests are compelling.     

2.  New Appropriations as a Less-Restrictive Alternative

Justice Alito also floated the notion (pp. 41-43) that applying a legal requirement to religious objectors cannot be the "least restrictive" means of advancing a compelling government interest if Congress can simply appropriate new funds to compensate for the cost of RFRA exemptions.  Here, too, however, the Court pulled back without resolving that question: "In the end, however, we need not rely on the option of a new, government-funded program in order to conclude that the HHS regulations fail the least-restrictive-means test."  

The paragraph of Justice Kennedy's concurrence devoted to this question is somewhat cryptic; but he did stress that is was "proper[]" for the Court not to resolve the question.  And at the very end of his opinion, he added a strong hint of his views on it:  He writes that the option the Court ultimately relies upon, of extending the HHS secondary accommodation to for-profit religious objectors, "might well suffice to distinguish the instant cases from many others in which it is more difficult and expensive to accommodate a governmental program to countless religious claims based on an alleged statutory right of free exercise."

The Court may not be able to postpone indefinitely its resolution of this question.  Some of the plaintiffs in the nonprofit cases will argue that the secondary accommodation, in which the insurer or the third-party administrator, rather than the employer, provides the contraception coverage, is insufficient to alleviate their religious objections.  If and when such a case reaches the Court, presumably it will be up to Justice Kennedy to decide whether the government must resort to the "alternative" of a new congressional appropriation, even in a time where one house of Congress reflexively refuses to enact any legislation the President favors.  Tom Goldstein predicts that Justice Kennedy will reject the RFRA claim in such a case, and I tend to agree that is the most likely outcome.  But for now the issue remains unresolved.

3.  Deference to Plaintiffs' "Religious Claims" (and other "Substantial Burden" Issues)

The Hobby Lobby Court held that, in assessing whether a law imposes a substantial burden on a plaintiff's religious exercise, a court must afford virtually unqualified deference to the plaintiff's own view of what his or her religion forbids--in particular, to the individual's view on the "difficult and important question of religion and moral philosophy" concerning "the circumstances under which it is wrong for a person to perform an act that is innocent in itself but that has the effect of enabling or facilitating the commission of an immoral act by another."  (This does not mean that a court must defer to a plaintiff's mistaken factual assumptions underlying such a religious view--such as whether performance of the act in question does, in fact, "have the effect of enabling or facilitating the commission of" the allegedly immoral conduct of another.  But the Court apparently will defer on the question of where to draw the line that determines where prohibited complicity begins.)

I think that this view of the proper role of the courts (and other government actors) in assessing questions of complicity--and the Court's assumption that this is necessarily a "religious claim," the plausibility of which is beyond the ken of civil authorities--is open to serious question.  But whether I am right about that or not, Justice Alito is surely correct when he notes that it is not a new proposition:  The Court first adopted it in the 1981 case of Thomas v. Review Board, and Hobby Lobby does not do much more than reaffirm that particular holding of Thomas.

As I explained on Tuesday, the Court did err, quite inexplicably, in another aspect of its substantial burden analysis:  Under RFRA, the plaintiff has the burden of demonstrating that the challenged law substantially burdens its religious exercise.  The Hobby Lobby majority, however, effectively shifted the burden to the government to demonstrate that federal law does not impose significant pressure on an employer to retain an employee health plan.  The majority opinion concedes that it is "far from clear" what the costs of this lawful option would be for any particular employer, since the question is an "intensely empirical" one.  That ought to mean that the RFRA inquiry does not even reach the "compelling interest"/"least restrictive means" assessment unless and until a plaintiff employer such as Hobby Lobby presents sufficient evidence to resolve the empirical uncertainty in its favor, i.e., to demonstrate that federal law does impose substantial pressure on it not to discontinue its employee plan.  The Court, however, affirmed preliminary relief in favor of Hobby Lobby, which had made no such showing (or even alleged facts that would satisfy its burden).

This error by the majority is indefensible, and unexplained.  Nevertheless, the Court did acknowledge, as no lower courts had previously done, that this is an issue that must be resolved in the substantial burden analysis.  Therefore, as the pending cases now begin to proceed beyond the preliminary stages, the government will have an opportunity to put employers to their proof on this question.

4.  RFRA's Relationship to pre-Smith Free Exercise Doctrine

And so we finally come to the most significant aspect of Hobby Lobby--the Court's dramatic reconceptualization of the relationship between RFRA and the Court's pre-1991 free exercise doctrine.  A couple of hours before the Court issued its decision on Monday, I predicted that we would see an opinion, joined by Justice Scalia and one or more other Justices, "arguing that the words of RFRA must be applied according to their literal terms, regardless of what Congress intended and regardless of how unexpected the results might be."  "Even so," I wrote, "I'd be very surprised if such a view commands a majority of the Court, since such a reading of RFRA "would result in a virtual revolution in federal law, across the U.S. Code--something that I doubt five Justices would endorse."

Well, I was right that there'd be such an opinion; but I was wrong that it would not command five votes.  

In order to understand what the Court has done (or at least what it has come very close to doing), it's necessary to review the pre-Hobby Lobby state of play:

RFRA incorporates the language of strict scrutiny:  If the plaintiff demonstrates that federal law imposes a substantial burden on her exercise of religion, the government must show that denying a religious exemption would be "in furtherance of a compelling governmental interest; and is the least restrictive means of furthering that compelling governmental interest.”  42 U.S.C. § 2000bb-1.   

Congress did not intend to prescribe strict scrutiny, however; instead, it intended to incorporate the Court's own Free Exercise Clause jurisprudence from the generation before the decision in Employment Division v. Smith (1990), a jurisprudence that Chip Lupu once accurately characterized as “strict in theory, but ever-so-gentle in fact.”

In particular, RFRA itself specifically provides that "the compelling interest test as set forth in prior Federal court rulings is a workable test for striking sensible balances between religious liberty and competing prior governmental interests.”  42 U.S.C. § 2000bb(a)(5). 

Notably, the legislators who were most insistent on this point were pro-life Republicans, who were concerned that RFRA might be construed to establish abortion rights if and when the Court ever overruled Roe v. Wade.  Thus, for example, Representatives Hyde, Sensenbrenner, McCollum, Coble, Canady, Inglis, and Goodlatte wrote this (H.R. Rep. No. 103-88, 103rd Cong., 1st Sess. 14-16 (1993)):   
A major issue of contention in the 102nd Congress was whether the bill was a true ‘restoration’ of the law as it existed prior to Smith or whether it sought to impose a statutory standard that was more stringent than that applied prior to Smith. . . .  Several changes were made to the bill during the Judiciary Committee markup in late September of 1992 and prior to the bill’s introduction in 103rd Congress.  [ML:  Most importantly, earlier proposed versions of RFRA had required the government to show that denial of an exemption was “essential to” a compelling government interest; but RFRA as enacted requires the government merely to show that the denial is “in furtherance” of a compelling interest.]  These changes resolved the ambiguity about the standard to be applied and made it clear that the bill does not reinstate the free exercise standard to the high water mark as found in Sherbert v. Verner and Wisconsin v. Yoder, but merely returns the law to the state as it existed prior to Smith. . . .  The amendments . . . make clear that the purpose of the statute is to ‘turn the clock back’ to the day before Smith was decided.
Until Monday, this had been the Supreme Court's understanding of RFRA, too.  See Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 424 (2006) (RFRA “adopts a statutory rule comparable to the constitutional rule rejected in Smith”).

Hobby Lobby calls all of this into question:  The majority opinion describes a statute affording much more robust protection for religious exercise than what the Court had recognized under the Free Exercise Clause pre-Smith--a statute that would operate in a way virtually no one in Congress or the Executive branch intended when they crafted RFRA.

The Court reads RFRA to deviate from pre-Smith doctrine in two ways.  The first is with respect to the statutory definition of the "exercise of religion," which the majority describes as "an obvious effort [by Congress] to effect a complete separation from First Amendment case law."  I agree with Justice Ginsburg that this conclusion "is not plausible":  If it was so "obvious," why did it not occur to virtually anyone involved in the legislative process that such a "complete separation" was afoot?  

Even so, I'm not sure much turns on this particular aspect of the Court's decision, since there are not (as far as I know) any significant disputes in RFRA litigation about what constitutes the "exercise of religion." 

The much more significant deviation invoked by the Hobby Lobby majority is with respect to the "least restrictive means" prong of RFRA.  Justice Alito's majority opinion calls this standard "exceptionally demanding," and Justice Kennedy, in his concurrence, calls it a "'stringent test,'" quoting a stray remark in the Court's decision in City of Boerne v. Flores.  As the Court itself concedes, the pre-Smith case law did not impose anything like an "exceptionally demanding" or "stringent" burden on the government to justify denial of religious exemptions.  And yet that is what the Justices understand RFRA to require.

"In City of Boerne v. Flores," writes Justice Alito, "we wrote that RFRA’s 'least restrictive means requirement was not used in the pre-Smith jurisprudence RFRA purported to codify.” . . . .  On this understanding of our pre-Smith cases, RFRA did more than merely restore the balancing test used in the Sherbert line of cases; it provided even broader protection for religious liberty than was available under those decisions."

Justice Ginsburg responds, correctly, that the stray remarks in City of Boerne about RFRA's test were dead wrong on this score.  As noted above, the statute itself specifically provides that "the compelling interest test as set forth in prior Federal court rulings is a workable test for striking sensible balances between religious liberty and competing prior governmental interests.”  42 U.S.C. § 2000bb(a)(5).  The committee reports likewise made clear that courts should “look to free exercise cases decided prior to Smith for guidance in determining whether the exercise of religion has been substantially burdened and the least restrictive means have been employed in furthering a compelling governmental interest. . . .  [T]he compelling interest test generally should not be construed more stringently or more leniently than it was prior to Smith.”  S. Rep. No. 111, 103d Cong., 1st Sess. 8-9; accord H.R. Rep. No. 103-88, 103rd Cong., 1st Sess. 7 (1993).

Confronted with this proper, and virtually uncontroverted, account of RFRA, the majority blinks:  In footnote 18, Justice Alito writes that "[f]or present purposes, it is unnecessary to adjudicate this dispute" about whether RFRA established a new, much more searching, form of a "least restrictive means" test.  Therefore it is not a holding of Hobby Lobby.

Even so, lower courts are bound to take heed when the Court calls a test "exceptionally demanding" and "stringent."  More importantly, perhaps, such lower courts will also notice that in applying RFRA to the Hobby Lobby case itself, the Supreme Court majority paid virtually no attention to pre-Smith free exercise precedents.  (Well, not no attention.  When it suited his interests, Justice Alito was quick to embrace the "burden" analysis of Thomas v. Review Board, as noted above.  But his fealty to pre-Smith case law is decidedly a case of selective incorporation.) 

Most significant of these pre-Smith precedents, of course, was the 1982 decision in Lee, in which (as I noted at the top of this post) the Court had unanimously confirmed the lesson of its uniform case law that "[w]hen 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,” at least where “[g]ranting an exemption . . . to an employer operates to impose the employer’s religious faith on the employees.”  Justice Alito's treatment of this statement in Lee is the most alarming part of the Hobby Lobby opinion:
Lee was a free exercise, not a RFRA, case, and the statement to which HHS points, if taken at face value, is squarely inconsistent with the plain meaning of RFRA.  Under RFRA, when followers of a particular religion choose to enter into commercial activity, the Government does not have a free hand in imposing obligations that substantially burden their exercise of religion.  Rather, the Government can impose such a burden only if the strict RFRA test is met.
In other words, according to the majority, although the Lee statement did fairly reflect the Court's longstanding jurisprudence under the Free Exercise Clause, RFRA effected a sea change, a sharp break with everything that had been done before 1993--as Justice Ginsburg put it, "the Court sees RFRA as a bold initiative departing from, rather than restoring, pre-Smith jurisprudence."

As note 18 of the majority opinion concedes, this understanding of RFRA is mere dicta for the time being.  But there appear to be five Justices prepared to embrace it, which could, indeed, mean a radical shift from decades of law involving claims for religious exemptions.

As I was drafting this post, my fellow Balkinization bloggers Micah Schwartzman, Rich Schragger and Nelson Tebbe published a piece on Slate quite aptly sounding precisely this alarm.  I don't agree with quite everything they write there--in particular, and as I explain at the top of the post, I'm not sure that the Court's pre-Smith jurisprudence would have "blocked the outcome in Hobby Lobby," since Hobby Lobby is the exceptional case in the commercial setting in which a religious exemption might not require significant harms to third parties.  But surely Micah, Rich and Nelson are correct that the Court's untethering of RFRA from the Court's free exercise precedents "invites a new generation of challenges to federal laws, including those designed to protect civil rights."  And their conclusion is spot-on:
Ignoring congressional intent, the court reads RFRA as having shed its First Amendment skin.  It is not entirely clear what American law will look like after that change.  But if anything is clear, it is that the Roberts Court is now unconstrained by precedent.  It has loosened itself from decades of First Amendment doctrine and has begun remaking the law of free exercise.
Perhaps we should not be too surprised by this dramatic doctrinal development in Hobby Lobby.  In retrospect, it was a serious mistake for Congress to use the language of strict scrutiny (especially "least restrictive means") in a statute that was intended only to restore a generation of Court precedents that applied a form of scrutiny that was far less searching.  Chip Lupu sounded the alarm about this, not only in his testimony to Congress during RFRA's consideration, but also in his excellent 1995 article on RFRA.  Chip was prescient:  He foresaw (see pp. 193-198) that the statutory language was a loaded gun that might one day be employed by judges inclined to press religious exemption claims far beyond what the Court had sanctioned in the pre-Smith generation:  "[T]he government will be very hard-pressed to prevail if the provision is construed straightforwardly," he wrote two decades ago.  "RFRA, literally construed, would . . . insulate religious exercise far beyond its most stringent protection in the prior law.  If government is truly required to employ the means least restrictive of religion, without regard to the loss to the state in attaining its objectives, the Act would significantly 'over-restore' religious liberty in two distinct ways.  It would exceed all prior law protection, and it would frequently be insensible."

After Hobby Lobby, that might be where RFRA is heading.  Chip himself is somewhat doubtful that the decision will result in a significant increase in religious exemptions, at least in the commercial setting.  But if courts take seriously the Court's suggestion that RFRA actually imposes an "exceptionally demanding" burden on the government, and that the lessons of Lee and related free exercise cases are obsolete in the context of RFRA, there's no telling what the legacy of Hobby Lobby might be, no matter how narrow its actual holding may have been.


* The majority of the Court appears to be of the view that the same is true with respect to its order on Thursday in the Wheaton College case--that Wheaton employees and students will still receive cost-free contraceptive coverage even if Wheaton does not submit "Form 700" but instead notifies informs HHS of its religious objection.  As I elaborated in my most recent post, that assumption appears to be based upon a misunderstanding of the underlying law, and therefore it is not yet clear whether the Wheaton College case can or will be resolved in a manner that is satisfactory to all concerned. 

** "[O]ur holding is very specific.  We do not hold, as the principal dissent alleges, that for-profit corporations and other commercial enterprises can 'opt out of any law (saving only tax laws) they judge incompatible with their sincerely held religious beliefs.'  Nor do we hold, as the dissent implies, that such corporations have free rein to take steps that impose 'disadvantages . . . on others' or that require 'the general public [to] pick up the tab.'  And we certainly do not hold or suggest that 'RFRA demands accommodation of a for-profit corporation’s religious beliefs no matter the impact that accommodation may have on . . . thousands of women employed by Hobby Lobby.'  The effect of the HHS-created accommodation on the women employed by Hobby Lobby and the other companies involved in these cases would be precisely zero. Under that accommodation, these women would still be entitled to all FDA-approved contraceptives without cost sharing."

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