Misunderstanding the Mandate

January 8, 2013
Guest Post

by Leslie C. Griffin, William S. Boyd Professor of Law, University of Nevada, Las Vegas, William S. Boyd School of Law

The preventive care provisions of the Affordable Care Act (ACA), which include coverage of women’s reproductive health, took effect on January 1. To date, the thirteen district courts’ and three appeals courts’ decisions involving secular, for-profit companies’ challenges to the ACA’s contraceptive insurance mandate are all over the map. They lack a coherent rationale and reasoning. Instead, the courts should rule consistently that the exemption requested by the plaintiffs violates the Establishment Clause.

According to the contraceptive coverage mandate, employee group health benefit plans must contain preventive care coverage that includes FDA-approved contraceptive methods and sterilization procedures. Numerous secular, for-profit companies and their Catholic, Christian or Mennonite owners challenged the mandate as a violation of their constitutional free exercise rights and the statutory protection of the Religious Freedom Restoration Act, which prohibits the federal government from “substantially burden[ing] a person’s exercise of religion.”

Among the plaintiffs in the secular, for-profit lawsuits are Weingartz Supply Company, which sells outdoor power equipment; Hobby Lobby, an arts and crafts store; Mardel, Inc., a bookstore and educational supply company; Hercules Industries, which manufactures and distributes heating, ventilation and air conditioning (HVAC); O’Brien Industrial Holdings, LLC, which mines, processes and distributes refractory and ceramic materials and products; Tyndale House Publishers, a Christian publishing company; American Pulverizer Co., Springfield Iron and Metal, LLC, Hustler Conveyor Co., and City Welding, businesses engaged in scrap metal recycling and manufacturing of scrap-related machines; Korte & Luitjohan Contractors, a construction business; Domino’s Farms, a property management company owned by Thomas Monaghan, the founder of Domino’s Pizza; Sharpe Holdings, Inc., a non-bank holding company including farming, dairy, creamery, and cheese-making; Conestoga Wood Specialties Corp., a cabinet and wood specialties company; Grote Industries, which manufactures vehicle safety systems; Triune Health Groups, which helps injured workers reenter the workplace; and Autocam Industries, which provides automotive parts.

The decisions conflict in results and reasoning. Eight district courts granted preliminary injunctions or temporary restraining orders for the plaintiffs (Legatus, Newland, Tyndale, American Pulverizer,Conestoga Wood, Domino’s Farms, Sharpe Holdings and Triune); five did not (O’Brien, Hobby Lobby, Korte, Grote and Autocam). Three courts ruled that plaintiffs’ religion was substantially burdened by the legislation. (Tyndale, Domino’s Farms and Sharpe Holdings.) Three courts questioned whether the government could meet its RFRA burden of proving that the mandate was the least restrictive means of advancing its compelling interests. (Newland, American Pulverizer and Domino’s Farms.) Four courts granted a preliminary injunction because the plaintiffs faced irreparable harm (or at least harm greater than that suffered by the government) by having the mandate enforced. (Legatus, Conestoga Wood, Domino’s Farms and Sharpe Holdings.) Five courts denied preliminary injunctions because free exercise was not violated and the mandate did not substantially burden plaintiffs’ religion under RFRA. (Hobby Lobby, O’Brien, Korte, Grote and Autocam.) Two courts ruled that corporations do not exercise religion under the First Amendment. (Hobby Lobby and Korte.) One court held, in Hobby Lobby, that a corporation is not a person under RFRA.

In the appeals courts, the Tenth Circuit rejected an injunction pending appeal (Hobby Lobby) while the Seventh and Eighth Circuits reversed the district courts’ rulings and granted injunctions pending appeal. (Korte and O’Brien). In her capacity as the Supreme Court justice assigned to the Tenth Circuit, Justice Sonia Sotomayor refused to grant an injunction pending appellate review because Hobby Lobby did not “satisfy the demanding standard for the extraordinary relief they seek.”

In Hobby Lobby, the Tenth Circuit adopted the district court’s reasoning that the plaintiffs’ religion was not substantially burdened. The fact that the “insurance funds might, after a series of independent decisions by health care providers and patients covered by [the corporate] plan, subsidize someone else’s participation in an activity that is condemned by plaintiff[s’] religion” was too “indirect and attenuated” to constitute a substantial burden. (Hobby Lobby.) In a 2-1 decision, however, the Seventh Circuit rejected the Tenth Circuit’s reasoning about substantial burden, arguing that it was coerced coverage that substantially burdened religion, not disappointment that employees would use contraceptives. (Korte.) The court therefore ruled that the Kortes had established a reasonable likelihood of success on the merits of their RFRA claim and that the balance of harms was in their favor. The majority also ruled that the for-profit status of Korte & Luitjohan was irrelevant because the Kortes were also plaintiffs. Judge Rovner dissented that the corporate form separates the individuals from the corporation. (Korte.) The Eighth Circuit simply issued a stay pending appeal without analysis by a 2-1 vote. (O’Brien.)

The courts puzzled over the connection between corporate status and the exercise of religion. They asked, but did not always answer, whether corporations have First Amendment rights and are persons under RFRA. Most courts avoided those foundational questions and focused on the religious individuals associated with the companies. Even if corporations lack constitutional and statutory rights, they ruled, the owners possess them. Therefore all the courts struggled with the substantial burden analysis of RFRA. The courts took different positions about what constitutes a substantial burden based on the facts of each particular case.

By jumping to an analysis of RFRA’s substantial burden prong, the courts missed the main point. They should have focused on the balance between the two Religion Clauses, Free Exercise and Establishment, and the meaning of “free exercise” in the Constitution and “exercise of religion” in the statute.

The Court has long acknowledged that the government may accommodate the free exercise of religion without violating establishment. In Corporation of Presiding Bishop of Latter-day Saints v. Amos, for example, the Court ruled unanimously that the Deseret Gymnasium, a secular, nonprofit facility run by a religious organization associated with the Latter-day Saints, could constitutionally be exempted from Title VII’s prohibition on religious discrimination. Similarly, today’s secular, for-profit corporations argue they should be exempted from the ACA.

The concurrences of Justices William Brennan and Sandra Day O’Connor in Amos, however, sounded cautionary notes that should be heeded today. Justice Brennan argued that a different constitutional analysis should apply to for-profit organizations than to nonprofit. Giving accommodations to for-profit organizations, he argued, “puts at the disposal of religion the added advantages of economic leverage in the secular realm, . . . and has the effect of furthering religion in violation of the Establishment Clause.” Similarly, exemption of Hobby Lobby and the other for-profit companies run by religious individuals gives them an added advantage in the economic realm and should be judged an Establishment Clause violation.

Justice O’Connor also warned that some accommodations of religion violate the Establishment Clause. Any “government action lifting from religious organizations a generally applicable regulatory burden,” she warned, advances religion. Because religious exemptions advance religion, the Court must “separate those benefits to religion that constitutionally accommodate the free exercise of religion from those that provide unjustifiable awards of assistance to religious organizations.” Although Justice O’Connor agreed on the facts of Amos that an exemption for a nonprofit organization was permissible, she specifically questioned the constitutionality of an exemption of for-profit companies. Freeing for-profit organizations from the generally applicable regulatory burden of the ACA advances religion and provides an unjustifiable award of assistance to companies that are just like other businesses that provide HVAC, power equipment, scrap recycling and crafts.

The main reason both justices questioned exemptions of for-profit organizations was because accommodations are supposed to serve the free exercise of religion. For-profit activity, they argued, was less likely to be religious and therefore not deserving of special First Amendment protection. This important point about free exercise has received insufficient attention in the ACA cases.

The Court has long held that the Free Exercise Clause protects beliefs absolutely, not actions. Free exercise “means, first and foremost, the right to believe and profess whatever religious doctrine one desires,”and therefore excludes regulation of religious beliefs. Religious action, however, is another story. “Laws are made for the government of actions, and while they cannot interfere with mere religious belief and opinions, they may with practices.”Many discussions of the mandate assume that any conduct motivated by religious belief enjoys constitutional and statutory protection. It does not. Religions are comprehensive doctrines that govern all aspects of their adherents’ lives. To give special protection to all religiously-motivated conduct puts religious citizens and corporations completely outside the orbit of the law. Such exclusion is not required by free exercise and is prohibited by establishment.

In interpreting the Religious Land Use and Institutionalized Persons Act, which prohibits land use regulations that impose a substantial burden on the exercise of religion and is similar to RFRA in analysis, courts have ruled that some conduct of religious organizations is not the exercise of religion. The courts have wisely held that many activities -- such as building a commercial fitness center or a dance studio-- do not qualify as the exercise of religion. They have rightly decided in particular that commercial activities -- building apartment houses and leasing religious properties for commercial events, e.g., -- are not the exercise of religion.

So too with the ACA. Instead of measuring the substantial burden on religion, the courts should hold that the exercise of religion is not implicated in the business of secular, for-profit companies. Running a business is not the exercise of religion. Providing insurance coverage is not the exercise of religion. When the Seventh Circuit ruled that coerced coverage substantially burdens religion, it missed the point that insurance coverage is not the exercise of religion.

Two courts that decided ACA cases came close to understanding this point about the exercise of religion. Hobby Lobby, one judge wrote, does not “pray, worship, observe sacraments or take other religiously-motivated actions separate and apart from the intention and direction of their individual actors.” That court then ruled that a corporation could not exercise religion. Frank O’Brien, another judge wrote, “is not prevented from keeping the Sabbath, from providing a religious upbringing for his children, or from participating in a religious ritual such as communion.” That court then ruled that O’Brien’s religion was not substantially burdened.

The activities described by those judges -- praying, worshiping, and keeping the Sabbath -- are the exercise of religion. Running for-profit businesses and providing insurance coverage for employees is not. In the ACA cases there is no substantial burden on the exercise of religion because there is no exercise of religion. Therefore giving a religious accommodation to commercial activity violates the Establishment Clause in defiance of Amos. It is time for the courts to abandon the substantial burden analysis and recognize that not every religiously-motivated activity is the exercise of religion.