Conestoga Wood May Be the Bigger Case

Today, as has been reported, the Supreme Court agreed to hear the case of Sebelius vs. Hobby Lobby, a challenge to the so-called contraception mandate in health care coverage mandate in Obamacare on religious liberty grounds. There are several liberal commentators already online writing about this case which are less than truthful. First, this is not a case about contraception per se. Despite the liberal media’s attempt to characterize the owners of Hobby Lobby Stores as some kind of knuckle-dragging religious zealots, this business employs over 13,000 people nationwide. They offer health care insurance to those employees now that covers contraceptive services. In fact, that health care package covers 14 of the 20 drugs approved by the FDA for contraception. What they object to is coverage for drugs that are abortificents- the morning after pill and such- and they do so on religious grounds. The White House and Harry Reid have waded in with tweets about hoping the Supreme Court upholds the mandate and women’s rights. Secondly, this is not a woman’s rights case, nor one about feminism. Third, should the Court rule in favor of Hobby Lobby, it is not the death knell for Obamacare, nor is it a major stake in its heart. However, it would be even more in the arsenal of evidence that this was a terribly conceived and worded law.

Hobby Lobby won their case in the Circuit Court. The government appealed the case which the Solicitor General’s office naturally argued for the Court to take. In the Third Circuit around the same time another business- Conestoga Wood- lost a similar case which was appealed to the Supreme Court. There, the Solicitor General argued for the Court to deny that appeal and to take only the Hobby Lobby case. Instead, the Supreme Court granted both cases delivering the government a setback in this first round of arguments. Most likely, the Court took the case (Hobby Lobby) because it conflicts with the Conestoga Wood case. A major circuit split in opinions is a good recipe for getting the Supreme Court to take a case.

The reason the government originally argued against taking the Conestoga Wood case (besides winning that case) was that its appeal was more far-reaching than that of the Hobby Lobby case. The Hobby Lobby case implicates only the Religious Freedom Restoration Act (RFRA), a law that dates back to 1993 which requires that religious freedom cases in federal courts use strict scrutiny in their analysis. Conversely, the Conestoga case is deeper and directly implicates the First Amendment’s Religious Exercise Clause as well as the RFRA. Thus, by arguing to take only the Hobby Lobby case, the government was hoping for a more narrow ruling based only on the RFRA. Along the way, there are several issues that need to be resolved and these cases are actually more complicated than a liberal perception of an attack on contraception or a conservative perception as an attack on religious liberty.

The Court did not ask for an expedited submission of briefs by any party. Therefore, since their oral argument docket is full through February, it will likely be slated for argument some time in March meaning a decision will be forthcoming very late in the term, most likely in June before they adjourn for the summer.

Obviously, the government cannot regulate individuals with respect to their religious beliefs. But the question is whether individuals can rely on those religious beliefs to refuse to offer certain mandates in Obamacare if those mandates conflict with the religious beliefs of the business owners? Along the way, because of the Conestoga Wood grant, the Court needs to answer whether a for-profit corporation engaged in commercial activity can have religious beliefs and can they base their business decisions and practices on those beliefs?

The RFRA requires that strict scrutiny be applied in these cases. That means for the law to survive, the government must (1) have a compelling interest in enacting the law in question and (2) that they use the most least-restrictive means to achieve those interests. It is true that there are religious exemptions from some of Obamacare’s mandates for officially recognized religious organizations. Likewise, the administration has granted exemptions for religiously affiliated non-profit organizations. They, however, have drawn the line in the case of for-profit corporations such that exist here. To illustrate the possible harm, should Hobby Lobby not prevail in this case, they would be subject to $1.3 million in fines assessed daily which would obviously lead to their bankruptcy. Those fines would be assessed in 2015 should they drop health care coverage altogether as a result of the coverage provisions. The other option is for the company to fold up and go out of business altogether. Hence, the government is holding a very big gun to the head of Hobby Lobby and other similarly situated businesses.

Regarding that strict scrutiny, there is an obvious compelling governmental interest which both sides can agree upon- health care reform in general. The problem is if the law uses the least restrictive means possible to achieve those ends. Here, the government runs into problems since there is a plethora of exemptions from the law’s mandates based on everything from “grandfathered” plans, economic hardships, and the obvious exemptions granted to religious organizations and religiously-affiliated non-profits. Therefore, both Conestoga Wood and Hobby Lobby argue that the least restrictive means was not employed. To see how this sort of works in reverse, the dissenting Third Circuit judge in the Conestoga case gave this example: What if a religious organization lost its 501(c) tax-exempt status? Because they lose that status, does that make them any less of a religious organization? Of course, it does not. If the law was generally enforced (that is, there were no exemptions), the government would have a stronger case. However, the exemptions doom the general applicability argument. Because of this, businesses are “forced” to run their businesses in defiance of their religious beliefs.

The Conestoga case asks directly whether a corporation involved in commercial activity and that makes a profit and is involved in interstate commerce can “exercise” a religion? If the Court rules they cannot, then obviously there is no First Amendment claim here. However, the lawyers for Conestoga argue that the religious beliefs and tenets of the owners of such businesses can “pass through” in how they run their business, their business practices and their business decisions. In fact, the very liberal Ninth Circuit subscribes to this “pass through” theory with respect to the Free Exercise Clause of the First Amendment.

Another question that will have to be answered in relation to the above question is the nature of “personhood” as it applies to for-profit corporations. Since at least 1826, the Supreme Court has recognized the fact that corporations have First Amendment rights and are “persons” within the meaning of the Constitution. Among the very first acts passed by our First Congress, it states that unless otherwise noted, corporations are persons within the meaning of any law passed. And what rights are listed in the First Amendment with respect to individuals and, thus, corporations? The right to free speech, the freedom of the press, assembly, association, redress of grievances and exercise of religion. Citizens United and its free speech implications were directly addressed. They are free to take out advertisements in newspapers and on television to present a message of political or commercial importance. They can redress grievances which is the whole reason we have lobbyists. Freedom of assembly is the whole purpose behind incorporation. Given these recognized First Amendment rights of for-profit organizations, it would be a stretch to say those rights cease when it comes to the Exercise Clause.

There is no doubt that many business owners today- big and small- base their decisions on religious tenets and beliefs and ways of living. In the case of Hobby Lobby, a business that provides health care coverage that covers most of what Obamacare mandates in the area of “reproductive health,” it is simply the coverage of abortificents to which they object. Obviously, the government is using this case as a stopgap against the future use of a religious objection. If they could grant exemptions elsewhere, they could have granted an exemption in this case as the religiosity of the owners (and those in the Conestoga case) are not in dispute.

The only downside in these cases is if the Supreme Court rules in favor of either or both of these companies, they would have to inquire into the alleged religious motivations of other business owners in future instances of a religious exemption. Thus, instead of “death panels” we may have “religion panels.” The bigger story is that Obamacare was passed with very little attention to details like this and their possible constitutional infirmities.

Columnist Ken Sheppard summarizes the whole case best:

As a direct result of government policy, Mr. Green (of Hobby Lobby) is being asked to sacrifice his business for his religious beliefs. Because of the way Obamacare is written, it is impossible for him to find a health insurance plan which does cover abortificent contraception. Also because of the way Obamacare is written, should Mr. Green drop health care coverage for his employees, he will be slapped with an onerous daily fine which will most certainly bankrupt his company.

When a government policy damns you if you do and damns you if you don’t, that’s a damn sure violation of religious liberty.