Taking free exercise the second mile: why Hobby Lobby fails to go far enough.

• Author: Checketts, Eric

1. INTRODUCTION II. BACKGROUND A. The Patient Protection and Affordable Care Act B. 42 U.S. Code Section 300gg-13, Coverage of Preventive Health Services C. The U.S. Department of Health and Human Services' Addition of Contraceptives to the List of Mandated Benefits D. The Religious Freedom Restoration Act E. Hobby Lobby's Efforts to Avoid Compliance with the Contraceptives Mandate F. Corporations Have Free Exercise Rights G. The Supreme Court's Hobby Lobby Ruling and Closely Held Corporations III. ANALYSIS 982 A. Burwell v. Hobby Lobby Stores, Inc. B. Closely Held Corporations 1. Corporations Are Entities Separate from Their Owners and Cannot by Themselves Exercise Religion 2. Corporations Shield Their Owners from Liability, and Society Should Not Allow Them to Operate as an Extension of Their Owners for Religious Purposes as Well 3. Corporate Free Exercise Empowers Corporations to Intrude into Individuals' Private Lives IV. RECOMMENDATION. A. The Considerations That Motivate the Protection of Closely Held Corporations Also Apply to Publicly Held Corporations B. Publicly Held Corporations Are Afforded Freedom of Speech Under the First Amendment and Should Also Enjoy the Other Rights Extended by That Amendment V. CONCLUSION I. INTRODUCTION

   In 2010, Congress enacted the Patient Protection and Affordable Care Act (ACA). (1) The new law is controversial for a variety of reasons. (2) Some feel the law goes too far, (3) while others feel it does not go far enough. (4)

   In 2011, the controversy entered the religious realm when the U.S. Department of Health and Human Services (HHS), pursuant to the new law, required certain employers to provide insurance coverage for contraceptives that some believe cause abortion. (5) This new requirement created conflict for certain closely held corporations, the owners of which felt they would violate their religious beliefs if they were to support abortion in any way. (6) The most notable of these companies was Hobby Lobby, Inc. (Hobby Lobby). (7)

   In an effort to avoid both the violation of sincerely held religious beliefs and the imposition of millions of dollars in fines, Hobby Lobby and other closely held corporations filed suit against the government. (8) Hobby Lobby and other plaintiffs argued that the Religious Freedom Restoration Act (RFRA) protected them from enforcement of the contraceptives mandate because the mandate was a substantial burden on the owners' free exercise of religion. (9) Ultimately, the Supreme Court agreed, and rejected the government's assertion that RFRA cannot apply to for-profit corporations. (10) The Court restricted the reach of its holding to closely held corporations, however, prompting some to ask, what exactly is a closely held corporation? (11)

   This Note examines a slightly different question; specifically, whether there is any compelling reason not to extend the Hobby Lobby ruling to corporations of every size and type. Part II introduces the ACA, RFRA, and the Hobby Lobby case itself. Part III explores the arguments for and against affording RFRA protection to corporations. And finally, Part IV recommends that either the Court, Congress, or both, extend Hobby Lobby (12) to all corporations.

2. BACKGROUND

   This Part first discusses the ACA, its purpose, and some of its effects; this is followed by a summary of the ACA provision that calls for the coverage of preventive health services. This Part next discusses the so-called "contraceptives mandate" established by HHS. This Part then explores RFRA and Hobby Lobby's efforts to avoid compliance with the contraceptives mandate by using that Act as a shield. This is followed by a discussion of whether corporations have Free Exercise rights, and a summary regarding the ambiguity as to the Court's Hobby Lobby ruling vis-a-vis the definition of a "closely held" corporation.

   1. The Patient Protection and Affordable Care Act

      Enacted on March 23, 2010, the ACA is a law that Congress promulgated in response to the U.S. healthcare crisis. (13) The healthcare crisis that catalyzed the law's enactment consisted not of skyrocketing costs alone, but also a reported 50 million Americans who were unable to obtain health insurance as a result of those costs. (14) A truly expansive--and, many still insist, unconstitutional (15)--approach to an admittedly complicated problem, "the ACA is the most extensive reform to the U.S. health care system since the creation of Medicare and Medicaid in 1965." (16)

      Congress passed the ACA, claiming it had the authority to do so pursuant to the Commerce Clause. (17) In its original 906 pages, (18) the ACA made substantial changes to the way insurance companies--and employers generally--do business. (19) Among these sweeping changes are prohibitions against excluding applicants with preexisting conditions; (20) restrictions on insurance plan pricing; (21) and, most relevant to this Note, mandatory coverage of "preventive health services." (22)

   2. 42 U.S. Code Section 300gg-13, Coverage of Preventive Health Services

      The part of the ACA that calls for the coverage of preventive health services is found in U.S. Code, Title 42. The relevant section states: "In general ... [a] ... group health plan and a health insurance issuer offering group or individual health insurance coverage shall, at a minimum provide coverage for and shall not impose any cost sharing requirements for," among other things, "preventive care and screenings ... as provided for in comprehensive guidelines supported by the Health Resources and Services Administration." (23) For clarity's sake, it is important to note that the Health Resources and Services Administration (HRSA) is "an agency of the [HHS]." (24)

   3. The U.S. Department of Health and Human Services' Addition of Contraceptives to the List of Mandated Benefits

      About a year and a half after Congress enacted the ACA, HHS implemented significant additions to the law's scope. (25) Pursuant to its authority under 42 U.S.C. section 300gg-13, "[o]n August 1, 2011, HHS adopted new Guidelines for Women's Preventive Services (Guidelines)--including well-woman visits, contraception, and domestic violence screening and counseling." (26) Additionally, "[t]hese preventive services are required to be covered without cost sharing in most non-grandfathered health plans starting with the first plan or policy year beginning on or after August 1, 2012." (27)

      The new rules did contain an exemption, which excluded "religious employers" from the requirement of providing contraceptives. (28) Under the rules, to qualify for the religious exemption, an employer had to meet certain criteria. (29) These criteria included:

      (a) [t]he inculcation of religious values is the purpose of the organization; (b) [t]he organization primarily employs persons who share the religious tenets of the organization; (c) [t]he organization serves primarily persons who share the religious tenets of the organization; and (d) [t]he organization is a nonprofit organization as described in section 6033(a)(1) and section 6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code of 1986, as amended [i.e., an organization exempted from filing IRS Form 990].30

      The exemption was, however, a narrow one--at least sufficiently narrow as to make the mandate ripe for conflict between the government and certain employers who felt their religious liberty was in jeopardy. (31)

   4. The Religious Freedom Restoration Act

      RFRA is best understood in light of the history behind both the colonization of the New World and the subsequent adoption of a constitutionally enshrined right to the free exercise of religion. Indeed, "[r]eligious liberty is embedded in our nation's DNA. Respect for religious conscience is not an afterthought or luxury, but the very essence of our political and social compact. RFRA embodies America's tradition of protecting religious conscience^ a tradition] that predates the United States itself." (32)

      American deference to religious liberty has endured for centuries. (33) As far back as the 1600s, that deference included religious legal exceptions. (34) Such exceptions included "Quakers [being] exempted in some colonies from oath-taking and removing their hats in court[;] Jews [being] ... granted exemptions from marriage laws [that were] inconsistent with Jewish law[; and] exemptions from paying taxes to maintain established churches." (35)

      While America's Constitution makes no mention of a "separation of church and state" (36)--a mythical freedom from religion (37)--it does guarantee a freedom of religion. (38) This guarantee is forged in the first line of the First Amendment: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof." (39) Of course, the courts have never interpreted the First Amendment's protection for the "free exercise of religion" as granting absolute license for any action motivated by religious intent; (40) but the latter half of the twentieth century saw a tightening of the judicial belt, vis-a-vis deference to religious liberty against conflicting government interests. (41)

      A series of cases over several decades established conflicting positions on government interference with religious liberty, and ultimately prompted, congressional action to reaffirm the First Amendment's "Free Exercise" protections. (42) The first notable case was Sherbert v. Verner, in which plaintiff Sherbert contested South Carolina's denial of her application for unemployment benefits. (43) Sherbert's employer had fired her because she refused to work on Saturdays, notwithstanding her religious reasons for that refusal. (44)

      The defendant, Employment Security Commission (Commission), denied her subsequent application for unemployment benefits, stating that Sherbert's religious opposition to Saturday work was not "good cause" to decline alternative work opportunities offered by the employer or the Commission. (45) Ultimately, the Supreme Court...