For-profit corporations, free exercise, and the HHS mandate.

AuthorGaylord, Scott W.
PositionDept. of Health and Human Services - Abstract through I. Background on the Current Challenges to the HHS Mandate, p. 589-619

ABSTRACT

Under the Patient Protection and Affordable Care Act, most employers must provide their employees with health insurance that covers all FDA-approved contraceptive methods and sterilization procedures (the "HHS mandate"). Across the country, individuals, religious schools, and corporations have sued to enjoin the mandate, arguing, among other things, that it violates the Free Exercise Clause of the First Amendment and the Religious Freedom Restoration Act ("RFRA"). These cases require the federal courts to sort out the complex relationship between the Free Exercise Clause and laws that are alleged to be neutral and generally applicable, such as the HHS mandate. But they also raise a novel threshold question: whether corporations can exercise religion under the First Amendment and RFRA. As several federal courts have noted, whether secular corporations can exercise religion is an open question. To date, this question has confounded the courts, resulting in a split between the Third, Sixth, Seventh, Tenth, and D. C. Circuits as well as the numerous district courts that have ruled on challenges to the HHS mandate. The Supreme Court recently granted certiorari in two of these cases, Hobby Lobby (Tenth Circuit) and Conestoga Wood Specialties (Third Circuit). This Article analyzes this novel and unresolved issue, arguing that the Supreme Court should follow its reasoning in Bellotti and Citizens United and hold that, just as corporations can engage in free speech, for-profit corporations can exercise religion under the Free Exercise Clause and RFRA.

Although never having addressed this specific issue, I argue that the Supreme Court has established rules for determining whether corporations can invoke particular constitutional rights and that, under these rules, corporations can invoke the protection of the Free Exercise Clause. The Third and Sixth Circuits, along with several district courts have reached the opposite conclusion, while several others have avoided the issue altogether. Relying primarily on a single footnote in Bellotti, the courts denying free exercise protection to for-profit corporations maintain that the free exercise of religion is a "purely personal" right that is limited to individuals and religious non-profit organizations. This Article contends, however, that a more detailed review of Bellotti, Citizens United, and the Court's other decisions regarding the constitutional rights of corporations reveals that free exercise, like the freedom of speech, is not a "purely personal" right. Consequently, corporations--whether for-profit or non-profit--can claim its protection. Moreover, in the wake of Bellotti and Citizens United, neither the "profit motive" of a for-profit corporation nor the "religious nature" of religious organizations (e.g., churches) justifies limiting the Free Exercise Clause only to individuals and non-profit religious organizations. Although many (perhaps most) corporations may choose not to engage in religious activities, there is no constitutional basis for precluding a priori all for-profit businesses from raising free exercise claims.

TABLE OF CONTENTS INTRODUCTION I. BACKGROUND ON THE CURRENT CHALLENGES TO THE HHS MANDATE A. Overview of the Free Exercise Issues Implicated by the HHS Mandate B. The Federal Courts' Analysis of the Free Exercise Rights of For-Profit Corporations 1. The Argument Against Free Exercise Rights for For-Profit Corporations: The Third Circuit and the District Courts in Hobby Lobby and Korte 2. Judicial Agnosticism Regarding the Free Exercise Rights of For-Profit Corporations: Grote Industries and O'Brien 3. The Argument That For-Profit Corporations Have Standing to Assert Free Exercise Claims: The Tenth Circuit and Tyndale House Publishers II. THE FREE EXERCISE CLAUSE PROTECTS FOR-PROFIT AND NON- PROFIT CORPORATIONS ALIKE BECAUSE, AS BELLOTTI AND WHITE DEMONSTRATE, THE RIGHT TO FREE EXERCISE IS NOT A "PURELY PERSONAL" RIGHT BUT "SERVES SIGNIFICANT SOCIETAL INTERESTS" A. Because, as the Supreme Court Previously Acknowledged, Non-Profit Corporations Can Exercise Religion, the Free Exercise Clause Is Not a "Purely Personal" Right That Applies "Only to Natural Individuals" B. The First Amendment Protects Speech and Religious Activity Generally and Is Not Limited to Corporations That Are in the "Speech Business " or the "Religious Business, " Respectively C. Restricting the Free Exercise Clause to Pervasively Religious Organizations Impermissibly Discriminates Against For-Profit Corporations That Promote Religious Views III. RFRA--SECURING STRICT SCRUTINY FOR CORPORATE FREE EXERCISE CLAIMS IV. ALTHOUGH THE FREE EXERCISE CLAUSE APPLIES TO FOR-PROFIT CORPORATIONS, SUCH CORPORATIONS CAN INVOKE ITS PROTECTION ONLY IF THEY EXERCISE RELIGION CONCLUSION INTRODUCTION

In recent years, the Free Exercise Clause of the First Amendment (1) has not received a lot of attention from the Supreme Court or the circuit courts of appeals. (2) That is about to change. The Third and Tenth Circuits recently decided challenges to the mandatory contraception coverage provisions ("HHS mandate") of the Patient Protection and Affordable Care Act ("ACA"), and twelve other ACA cases are pending in five different federal circuit courts. To date, the federal courts have reached disparate conclusions regarding whether the HHS mandate violates the Free Exercise Clause and the Religious Freedom Restoration Act ("RFRA"). Given that some circuit courts of appeals have granted injunctions on appeal while other have not, the circuit courts are apt to reach conflicting conclusions--as evidenced by the split between the Third and Tenth Circuits--thereby creating the need for the Supreme Court to resolve the important free exercise and RFRA claims raised in these cases. (3)

Under the ACA, most businesses are required to provide certain minimum levels of health care coverage to their employees, including no-cost coverage for preventive care and screening for women. (4) Pursuant to regulations promulgated in relation to the preventive care for women, these businesses must provide health plans that cover all FDA-approved contraception and sterilization procedures. (5) Confronted with these new requirements, business owners across the country have challenged the ACA regulations, arguing that the new regulations force companies to cover procedures and drugs that are inconsistent with the faiths of the individual owners and the religious values upon which their businesses are based. For example, some business owners and their corporations object to all forms of contraception based on their religious beliefs. Others are primarily concerned because they believe that some of these contraceptives act as abortifacients. (6) The HHS mandate, therefore, requires these employers, who seek to implement their religious beliefs in and through their companies, to provide and pay for health coverage that violates their sincerely held religious beliefs in violation of the Free Exercise Clause of the First Amendment and RFRA.

In the wake of the Supreme Court's landmark decision in National Federation of Independent Businesses v. Sebelius, which upheld the ACA under Congress's taxing power, Congress has broad power to regulate the medical field and to pass legislation directed at curtailing health care costs. (7) The HHS mandate cases, however, raise a different and extremely important question regarding the ACA: whether the federal government can force individuals and businesses to provide medical coverage for procedures that directly contradict their religious tenets. Although the federal courts have consistently recognized that individuals have free exercise rights, the pending HHS mandate cases require the courts to look more closely at the proper scope of religious exercise under the Free Exercise Clause and RFRA. If the federal government can require businesses and their owners to provide health coverage that includes access to services contrary to the owners' religious beliefs, there may be no limit to the government's power to infringe on and contravene the religious tenets of business owners and their companies.

The HHS mandate, therefore, raises an entirely novel First Amendment question: whether for-profit corporations have free exercise rights. (8) Because the federal courts have not previously been called on to address this issue, there are no cases "concluding that secular, for-profit corporations ... have a constitutional right to the free exercise of religion." (9) Of course, the opposite is true as well: the "conclusory assertion that a corporation has no constitutional right to free exercise of religion is unsupported by any cited authority." (10) Thus, the HHS mandate cases present a unique opportunity for the Supreme Court to establish the proper guidelines for corporate free exercise under RFRA and the First Amendment.

While the lack of precedent may suggest that the lower federal courts are writing on a tabula rasa with respect to corporate free exercise rights, the slate is not as blank as several district courts have suggested. In 2010, the Court confirmed in Citizens United v. Federal Election Commission that corporations--both for-profit and non-profit--are protected by the First Amendment: "The Court has recognized that First Amendment protection extends to corporations." (11) Specifically, the Court explained that corporations have the same speech rights as individuals: "The Court has thus rejected the argument that political speech of corporations or other associations should be treated differently under the First Amendment simply because such associations are not 'natural persons.'" (12) The plaintiffs in the HHS mandate cases in effect contend that the reasoning in Citizens United applies with equal force to free exercise rights--that, contrary to the government's claims, the religious exercise of corporations should not be treated differently just because...

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