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The Supreme Court and the Hobby Lobby Case

Practical Considerations for the Religious Freedom of Corporations

by PETER BELMONT

Introduction

The USA’s Supreme Court has been asked to decide if a corporation can entertain such sincere religious convictions that, under the constitution’s protection of freedom of religion, will allow that corporation to refuse to pay for certain contraceptive coverage under Obamacare.

For this essay, I assume that the court will not allow a corporation sincerely religiously opposed to certain forms of contraception to avoid the mandate of Obamacare completely or even in a manner to save it money.

I will assume, rather, that the court will allow such a corporation to “opt out” (on behalf of its employees) of the coverages religiously objectionable to the corporation, that the corporation will still be required to pay the same amount for the health-insurance, and that its employees will lack these coverages (to the extent paid for by the corporation’s premiums under Obamacare).

On these assumptions, what will be the practical consequences of such a decision?

The principal difference between corporations and people as to sincerely held religious convictions is that people hold such convictions long-term, perhaps life-long, whereas the sincere religious convictions (if there are really such things) of corporations evidently depend on the sincere religious convictions of their owners or managers and are a some-time thing. They can change.

So the practical consequences of such a decision by the court are two-fold. The government (HHS) and the insurance companies will have to add mechanisms to allow for such opt-outs to one or more coverages under Obamacare. And they will have to add mechanisms to allow such opt-outs to change.

Courts usually think of long-term consequences of their decisions. Judicial decisions usually become “generalized” over time. If a judicial holding is not specific, in its reasoning, to small corporations, it will come to be applied to corporations of all sizes. If it is not specific to closely-held corporations, it will be applied equally to corporations whose stock is traded on the exchanges. If the holding is not confined by its reasoning to Obamacare or to certain birth-control methods, it will be generalized to all government programs on all subject matters.

Assuming full generality, we will see that every government program which creates a mandate requiring corporations to do (or to refrain from doing) various things which can be objected to for sincerely held religious reasons will be subject to the creation of opt-outs.

I examine the consequences of such a decision in this essay.

What the Supreme Court Must Decide

The recently argued “Hobby Lobby” case asks the US Supreme Court to decide if corporations can entertain religious views sufficient to exempt them from duties under laws of general applicability.

This is really several questions. Can a corporation be said to entertain a religious belief at all? If so, must the law “respect” such religious belief (as it must respect the sincere religious beliefs of people)? If so, how is such a corporation’s religious opinion to be determined and then how is it to be declared so as to acquire the desired “respect” in regard to law?

And if the law “respects” a corporation’s properly declared “religious beliefs”, what does that entitle the corporation to do or to decline to do as an exception to a law that corporations must generally follow?

And if a corporate “religious belief” be so declared, what next? And what are the administrative and other costs of allowing “religious freedom” to corporations?

I believe that it is important that these questions be examined from a mechanistic view point. The question has been asked whether a corporation can in principle entertain a religious belief, but the follow-up questions have not been asked: how—in practice—such “belief” would be determined, manifested, promulgated, and given effect (as to health-insurance or otherwise). I look at those questions here.

In the “Hobby Lobby” case, the issue is Obamacare and the provision of morning-after contraception by health insurance policies paid for by corporations. Some people believe such contraception is abortion and religiously forbidden. It is asserted that some corporations have the same religious “belief”. Presumably such “beliefs” are not based on church membership, baptism, confirmation, church attendance, or any other similar indicia of religious affiliation of the corporation itself.

Religious Freedom for People

Now “religious freedom” has until recently been thought mainly to be a freedom for human beings to believe what their religions teach them free of interference by the state and, in some cases, to do or to abstain from doing acts required or forbidden by their religions.

Sometimes, but not always, laws which require actions have granted legislated or judicially created exemptions to people who for religious reasons do not wish to do the required actions. Sometimes, but not always,[1] laws which forbid actions have granted exemptions for religious reasons.

Exemptions for religious reasons, it seems, are not inevitable. Not even for people. Should they be granted, at all, for corporations?

And, of course, contraception and abortion are a particularly difficult arena of religious belief since some people think that some contraception is abortion and that abortion is murder.

As a matter of their own religious belief, some people believe that morning-after contraception is a form of abortion and that it is impermissible for them to provide abortion to themselves or to another.

These issues have arisen in cases where pharmacists have wished to refuse to sell morning-after contraception pills and in cases where hospital workers (doctors, nurses) have wished to refuse to participate in abortions. Presumably selling the pharmaceuticals and participating in the abortions were required by law, or such refusals would not be remarkable. These are evidently cases where persons have sought exemptions from law for religious reasons.

Religious Freedom for Corporations

What happens when we attempt to imagine that corporations, too, may enjoy religious freedom and seek religious exemptions from laws of general applicability?

Suppose, as the “Hobby Lobby” case does, that Obamacare requires some corporations to provide health-care insurance to its employees—paid for in whole or in part by the corporation—and that a particular corporation subject to this requirement claims to “believe” that this requirement impermissibly violates the religious freedom of the corporation. So the corporation desires to be exempted not from Obamacare’s general mandates but from the particular mandate to provide morning-after contraception care to its employees—at its expense—via health-insurance.

The corporation desires to be able to “opt-out” of paying for a particular, narrow, health-insurance coverage—that is, coverage for a particular method of contraception otherwise required by Obamacare.

Let’s examine the determination of a corporation’s religious belief through a little story.

The Little Story of ABC Corp.’s Religious Belief

Suppose that the corporation “ABC Corp.” is owned by a single owner, Mr. Senior. Mr Senior desires that ABC Corp. be exempt from the contraceptive requirement of Obamacare and asks his lawyer how to get the exemption. Easy, says the lawyer. Have the secretary of the corporation draft a Resolution of the Board of Directors stating that ABC Corp. believes, as a matter of religious belief, that [1] morning-after contraception is abortion and [2] that abortion is religiously impermissible to ABC Corp. Mr. Senior does that. It’s really easy, because as sole owner he himself appoints the Secretary and the entire Board of Directors.

What next, he asks? His lawyer tells him, mail a copy of that resolution to the Secretary of HHS and copies to all insurance companies from which ABC Corp. has purchased Obamacare-related health-insurance for its employees.

At this point, HHS files this resolution without further action taken, and the insurance companies go into a more or less difficult administrative dance, involving record keeping, computer programming, and data-entry and manage to mark each health-insurance policy involved as not-providing-morning-after-contraception. They thereupon re-issue health-insurance cards for all the insureds, each card marked as not-providing-morning-after-contraception.

OK. One month later, Mr. Senior dies and his son, Mr. Junior, takes over as owner of ABC Corp. His religious views are the opposite of his father’s on this point, and he quickly issues a resolution of the Board of Directors of ABC Corp. reversing the religious stand earlier taken. He sends this to Sec. HHS and to all the insurance companies. Again, a fandango of administrative effort occurs as a result of ABC’s action.

OK, one month later, Mr, Junior dies and Ms. Granddaughter takes the helm and carries things back to where Mr. Senior had put them.[2] And again the administrative fandango, the flutter of papers at HHS and at the insurance companies, the letters to the insureds, the re-issuance of insurance cards, etc.

What About Widely-Held Corporations?

And, really, why should changes of religious belief not take place daily, hourly even? I mean, it’s not as if corporations were human and had (more or less) permanent religious beliefs, is it?

Imagine a corporation owned by thousands of shareholders. Imagine that the corporation, desiring to be fair to its shareholders, establishes a procedure for the determination of the “religious belief” of the corporation—it will depend upon the views of all the shareholders and will be made electronically by shareholders “voting” (so to speak) electronically to register with the Secretary of the corporation their views (weighted by number of shares owned no doubt) on the several (several? or several hundred?) religious questions. Since shares of the corporation are traded every day, the religious belief of the corporation could change every day. And holders of large blocks of shares—retirement funds, mutual funds, how would they vote, if at all, especially if they actually wished to accurately register the desires of their own owners and beneficiaries? Beats me!

Now, about which religious questions must the corporation take such care to inform itself (and HHS and all the insurance companies)? What about providing (or refusing to provide) blood transfusions? What about euthanasia (wherever it is legal)? What about use of marijuana as a drug (wherever it is legal)? What about hospice? What about artificial insemination? Is there any end to the medical matters upon which well established religions may not take a position? And what of less well established religions, new religions, religions introduced by recent immigrants? Not to mention (what some may regard as spurious) “Jim Jones” religions.

Visualizing the Administrative Nightmare

Let us assume a fully general Supreme Court decision not tied down to Obamacare, to contraception, to closely-held corporations. I mean, corporations are people, right?—to the Supreme Court, that is (and so far)? And all people have religious rights!

Well! The number of imaginable religious demands for exemptions from statutory requirements is, in principle, inexhaustible. How shall all corporations which fall under the mandate of Obamacare (or any other local, state, or federal statute) arrange to learn the religious views of all their shareholders? Of all the religious beliefs which might result in legal differences, which will the government, the law, the courts recognize and which will they refuse? How and when will this determination be made? And once this determination is made—so that insurance companies and government agencies and police departments have all got a good idea of the types of religious exceptions to the laws that may be asserted properly by corporations—how will all these insurance companies, government agencies, and police departments be advised of the—possibly quickly changing—religious views of the millions of corporations? And how shall all insurance companies, etc., arrange to provide implementation for the exemptions which might be demanded by the corporations?

Simplifying the Questions

Well, all of this could be made simpler in either of two ways.

Easiest, the Supreme Court might rule that corporations do not enjoy any religious freedom under the First Amendment, but that religious freedom is enjoyed only by persons and by religious organizations such as churches and seminaries.

I would deny “religious freedom” to religious-affiliated hospitals and other businesses just as I would deny “religious freedom” to businesses merely because they were owned in whole or in part as investments made by religious endowments, billionaire TV evangelists, etc.

If the court allows religious opt-outs for corporations, what about administrative efficiency?

The court (or Congress) might rule (though not as part of the Hobby Lobby case, I imagine) that the “religious beliefs” of a corporation are whatever the Board of Directors say they are as stated once a year at an annual meeting (or perhaps as stated in a resolution taken and promulgated before December 1 to take affect for the entirety of the following calendar year). This would at least cut down on the flutter of registration of religious exemptions. But it would not cure the fact that millions of corporations might wish to register, and would not reduce the number of types of religious-exemption registrations possible—in principle.

Because the administration of health-insurance might be overwhelmed by complexity otherwise, the court might direct that no religious exemption to any rule of law will be given effect unless and until the possibility of such exemption is asserted legislatively, asserted via the rule-making machinery of HHS (or other administrative agency), or asserted by a court of competent jurisdiction in an actual case. Thus the ten-thousand possible and impossible requests for religious exemption from laws which corporations might one day seek would not overwhelm HHS or the health-insurance companies (or anyone else). At least not without some notice.

Final Comment

I find the entire notion of granting to anyone a religious exemption from making a required payment—be that “anyone” a person or a corporation or anything else—preposterous. We would not allow a person professing conscientious objection to war to refuse to pay taxes just because 1/2 or 1/3 of those taxes go to support present and past wars. We would not permit a corporation (or person) to refuse to pay real-estate taxes just because the city spends tax money to support unwed mothers, drug addicts, etc. Taxes are a mandate, and provision of health-insurance under Obamacare is likewise a mandate. Exemptions for hardship, sure. But for “religious belief”? Of a corporation? Of a labor union? Of a partnership?

It is always wonderful to see the creative ways that lawyers and others seek to undermine the already difficult matter of governance, and I take my hat off to the inventors of the “religious freedom of corporations”. And, of course, it has nothing much to do with corporations. Suppose Hobby Lobby was owned by one person without the corporate form. Would a for-profit company so owned be any more entitled to a religious exemption? Even if the owner were the Pope himself?

And what of not-for-profit corporations? If they can afford to buy insurance for their employees, why should they be exempt from doing so? What has not-for-profit got to do with it?

And now I must really get around to writing, again, about “freedom of speech” for corporations, a far more pernicious idea even than “freedom of religion” for corporations. And I cannot say I “look forward to” (although I surely expect) the demand by corporations of a corporate “right to bear arms”.

Peter Belmont lives in Brooklyn. He can be reached at: pabelmont2007@verizon.net.

Notes.

[1] But people who wish to smoke peyote as part of religious ritual can be prosecuted for doing so. See peyote case.

[2] Sorry to disappoint some of my readers. Not all women are feminists, not all women favor morning-after contraception, and many children reject the opinions of their parents!