The Hobby Lobby ruling invites a raft of religious liberty litigation

Let loose the lawsuits!

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In the U.S. Supreme Court’s much-anticipated Hobby Lobby decision handed down Monday, swing Justice Anthony Kennedy tried to cut the unborn baby in half.

He joined four conservatives, signing a majority opinion written by Justice Samuel Alito stating that closely held corporations are exempt from the Affordable Care Act’s contraceptive mandate. But Justice Kennedy wrote separately to say that, in his opinion, the government could require insurers to pay for the contraceptive care and that this would not violate the corporation’s religious liberty rights under the Religious Freedom Restoration Act.

The decision is a defeat for the Obama administration, which insisted that the religious freedom act didn’t require the exemption, but it’s not necessarily the end of the world for advocates of contraceptive rights. Congress needn’t even act. Potentially, the executive branch could extend this contraceptive coverage by regulation.

Justice Alito’s decision goes back to his time as a judge on the Third Circuit Court of Appeals when his pet issue was religious exemptions from generally applicable, neutral laws. At least when it comes to the Religious Freedom Restoration Act, which applies to all federal laws, Justice Alito’s view is now the law of the land. The core of the court’s opinion held that the Obama administration had failed to satisfy its burden under the law to show that it had adopted the least-restrictive means to respect religious liberty rights.

To get there, the court first had to decide that closely held corporations are entitled to protection under the law. The court broke this into two questions. The first was whether corporations are persons under the RFRA. The court answered this with a resounding yes that extended to all corporations.

The logic is questionable, in that it treats organizations created to perform nonprofit functions the same way it treats for-profit corporations. This analogy between nonprofit and for-profit, however, had already been adopted by the Supreme Court in the Citizens United decision with respect to free speech, so it’s not terribly surprising that it was adopted in the context of religious liberty.

The second question, however, was whether corporations could be said to hold religious beliefs. Here the court restricted itself to holding that closely held corporations can be said to possess the religious beliefs of their owners. This is not the same thing as holding that all corporations — and certainly not publicly traded corporations — would necessarily have the capacity to possess religious beliefs under federal law or under the Constitution. It was a much easier case to make that closely held corporations such as Hobby Lobby are in essence proxies for their owners — and the precedent from today stretches no further.

The liberal dissenters protested that even within closely held corporations, shareholders might disagree about the content of the corporation’s religious belief. Justice Alito responded that state corporate law could cover any internal disagreements.

Once the court said that closely held corporations had rights under the religious freedom act, it then explained that the administration could have done something less restrictive that would have delivered contraceptive care without violating religious liberty. Justice Alito’s opinion made that something explicit: The administration could pay for the care directly itself, thereby sparing the religious liberty violation. Justice Kennedy’s concurrence offered the option of making the insurer pay, “without cost-sharing” — an approach also mentioned, less prominently, by Justice Alito.

To some degree, the administration was hoist by its own petard. In the politically intense set of negotiations that followed the issuance of the contraceptive mandate, President Obama agreed to provide a greater degree of accommodation for religiously motivated nonprofit organizations. These organizations — not churches themselves, but affiliated entities — were entitled to be exempt from the contraceptive mandate provided they certified that their religious liberty would be violated by paying for the care. The cost of the care would then be borne by the health care provider.

Justice Alito’s opinion pointed out that the administration could have extended the same consideration to closely held corporations. In effect, the accommodation that the Obama administration had already made became evidence that the administration had not adopted the least restrictive means to avoid violating the rights of the closely held corporations.

This is dangerous logic. If the government must extend the same exemptions it gives to some religious organizations to anyone who claims a religious motivation, such exemptions may become less likely.

In practical terms, Justice Kennedy’s concurrence makes it likely that, if the administration decides it wants to, it can cover contraceptive care for the employees of Hobby Lobby and similar firms. But that was nowhere near enough for the liberal dissenters.

The lead dissent, written by Justice Ruth Bader Ginsburg, claimed that the majority had established the principle whereby any claim for religious exemption from any insurance scheme would now prevail on the theory that the government could have “picked up the tab.” Justice Ginsburg warns of challenges to insurance systems providing coverage for blood transfusions and other medical practices that are rejected by some religious groups.

The majority disclaimed such breadth, restricting its holding to the contraceptive mandate. But such litigation is now coming. Religious liberty lawsuits are about to become a major growth industry.

Noah Feldman, a professor of constitutional and international law at Harvard University, is a columnist for Bloomberg View.


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