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Posts Tagged ‘Gonzales v. O Centro Espírita Beneficente União do Vegetal’

USA Today ran an editorial today arguing that businesses should not be able to rely on religious freedom in refusing to provide no-copay coverage for all FDA-approved contraceptive drugs and devices.  The newspaper also ran Mark Rienzi’s better op-ed for the opposite position. (HT: Mirror of Justice)

Both op-eds are written in plain English and make their points effectively. But USA Today’s house editorial is marred by a misunderstanding of existing religious liberty law. In particular, the editorial is written as if RFRA does not already exist. Instead of arguing that RFRA does not protect business corporations, as some have tried to do, the editorial simply misdescribes the state of the law. It argues that “the issue is one of balance” without describing the law that describes how that balance is to be struck. Indeed, the editorial describes “granting religious exemptions to private organizations” as “troubling” and “open to abuse,” seemingly unaware that RFRA exists and does precisely this. Although the Obama Administration has tried to carve out the category of for-profit, secular corporations from RFRA’s reach, everyone agrees that RFRA provides some “religious exemptions to private organizations.”

The editorial also is mistaken about Supreme Court precedent. Consider the following paragraph:

Over the years, plaintiffs have demanded religious exemptions from laws on racial equality, the military draft, paying taxes, child neglect, drug use, animal cruelty and more. The Supreme Court has repeatedly said no, drawing a line between laws that explicitly target or place a substantial burden on a religion and those that impose broad, secular requirements on society that people might find religiously objectionable.

This paragraph implies that the Supreme Court has said “no” to religious exemptions from laws on drug use and animal cruelty. But that is not true. In Gonzales v. O Centro Espirita Beneficente UDV, 546 U.S. 418 (2006), the Supreme Court held that RFRA provided an exemption for “drug use” in a religious ritual. (The lead party that brought the claim in this case, by the way, was a New Mexico corporation.) And in Church of the Lukumi Babalu, Aye, Inc. v. Hialeah, 508 U.S. 520 (1993), the Court held that the Free Exercise Clause protected ritual animal sacrifice by adherents of the Santeria religion; this ruling prohibited enforcement of a city ordinance justified in part by concerns about animal cruelty.

A bigger problem with USA Today’s statement of the law, however, is that it conflates laws that explicitly target religion and laws that place a substantial burden on religion, and then contrasts those two kinds of laws with laws that “impose broad, secular requirements on society that people might find religious objectionable.” The problem with this framing is that some laws that impose broad, secular requirements on society also place a substantial burden on religion. And that is why Congress passed RFRA. Unlike the Free Exercise Clause, which the Supreme Court has held to provide no protection against neutral and generally applicable laws, RFRA protects against such laws whenever they impose a substantial burden on religion. RFRA’s protections are triggered by the imposition of the burden, not the nature of the law imposing that burden. RFRA claims do not always win, of course. But RFRA places the burden on the government to satisfy strict scrutiny when a federal law imposes a substantial burden on the exercise of religion. If the Obama Administration has to satisfy strict scrutiny for its contraceptives mandate, it will lose.

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A split panel of the Third Circuit recently joined the minority of federal courts that have denied preliminary injunctive relief to for-profit corporations and their owners in RFRA and Free Exercise challenges to the HHS Mandate. Both judges in the majority (Judge Rendell and Judge Garth) endorse the district court’s conclusions that “a secular, for-profit corporation . . . has no free exercise rights under the First Amendment, and is not a “person” under RFRA.” Writing in dissent, Judge Jordan contends (powerfully) that these conclusions rest on erroneous premises and merit further consideration by the court. If anything, Judge Jordan’s dissent understates the problems with the majority’s adoption of these conclusions because the standard of review did not require him to reach definitive conclusions. There is no legal basis for a judicial carve-out of “secular, for profit corporations” from RFRA’s protections.

RFRA provides that “[g]overnment shall not substantially burden a person’s exercise of religion” unless the government satisfies strict scrutiny. 42 U.S.C. § 2000bb-1(a) (emphasis added). In the U.S. Code, “person” ordinarily encompasses “corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals.” 1 U.S.C. § 1. Nothing in RFRA excludes corporations generally. To the contrary, it is plain that corporations can assert claims under RFRA. The only Supreme Court case applying RFRA against the federal government involved a claim asserted by a corporation, O Centro Espírita Beneficente União do Vegetal.

Rather than adopt the obviously incorrect interpretation of “person” to exclude corporations, courts have carved up the category of corporations into “religious corporations” and “secular, for-profit corporations.” But there is no textual basis for this distinction in the statutory term “person.”

When one analyzes the claim, it turns out that the argument is not really about the meaning of the word “person” (even though the conclusion of the argument purports to be a claim about the meaning of this word). Rather, the argument pivots on “exercise of religion.” In the words of the district court opinion adopted by the Third Circuit, “a for-profit, secular corporation cannot exercise religion.”

Again, the claim is not that corporations cannot engage in exercise of religion. After all, corporations can, and do, exercise religion. Consider, for example, Church of Lukumi Babalu Aye, Inc. or Corporation of the Presiding Bishop of the Church of Jesus Christ of Latter-Day Saints. The claim, rather, is limited to “secular, for-profit corporations.” But the claim rests on a mistake about “exercise of religion” under federal law and a mistake about corporate action.

As to “exercise of religion,” it is plain that a religiously based refusal to do something otherwise required by law is an “exercise of religion.” Indeed, two of the leading cases on the meaning of the Free Exercise Clause involved individuals who refused, in the course of their employment (profit-seeking employment!) to do something. Because of their religious beliefs, Eddie Thomas refused to fabricate tank turrets and Adele Sherbert refused to work on Saturdays. These religion-based refusals were their protected exercises of religion.

A corporation’s religion-based refusal to engage in a particular action is also an “exercise of religion.” A corporation’s religion-based refusal to open its stores on Sundays, for example, is as much an exercise of religion as an individual’s refusal to  work on Saturdays. The involvement of a profit motive makes no difference. People work for money, and some choose not to work on certain days for religious reasons. Similarly, for-profit corporations operate for money, and some choose not to operate on certain days for religious reasons.

Some judges seem to think that a for-profit corporation can do nothing but seek profits. In the Third Circuit decision mentioned above, for example, Judge Garth insists that “the purpose–and only purpose–of the plaintiff Conestoga is to make money!” There is no reason to characterize corporate purpose so narrowly, and certainly no basis in corporate law to do so. Even a publicly traded corporation with an obligation to act in the best interests of shareholders can be “socially responsible” and incur various costs in pursuit of long-term value and goodwill.

Unfortunately, the misunderstandings involved run even deeper. Judge Garth approvingly adopts Judge Heaton’s reasoning in the Hobby Lobby case that “[g]eneral business corporations . . . do not pray, worship, observe sacraments or take other religiously-motivated actions separate and apart from the intention and direction of their individual actors.” But this reasoning applies as well, of course, to religious corporations. All corporations act through “the intention and direction of their individual actors.” When performed under certain circumstances, however, the actions of individuals count as the action of the corporation. We have no problem understanding this concept in the context of discrimination. If a for-profit corporation were to announce a policy to refuse to hire Muslims, or adherents of some other religion, there would be no difficulty in attributing that religion-based discrimination to the corporation. The law recognizes corporate intention and corporate motivation all over the place. If a for-profit corporation can discriminate on the basis of religion, why can’t a for-profit corporation perform some other act on the basis of religion? When Hobby Lobby Stores, Inc., for example, decides to honor the Sabbath by staying closed on Sundays (and thereby forgoing profits the corporation would otherwise earn), that is a corporate act on the basis of religion–a corporate “exercise of religion.” And just as a corporate refusal, for religious reasons, to operate on a particular day is a corporate “exercise of religion” under federal law, so too is a corporate refusal, for religious reasons, to include particular drugs and devices in the group health plan offered by the corporation to its employees.

Statutory law does sometimes distinguish between for-profit and not-for-profit corporations. Under Title VII, for example, for-profit corporations may not limit hiring to co-religionists, while some not-for-profit corporations can. But this only shows that Congress knows how to make that distinction when it wishes to do so. Congress made no such distinction in RFRA.

If people think that, as a matter of good public policy, there should be such a difference, then Congress can amend RFRA. Or Congress can amend the PPACA to explicitly exclude the application of RFRA’s protections from the statutory scheme. These exclusions might raise some constitutional questions, but we are not even close to that right now. Instead, some courts are incorrectly carving out certain corporations from RFRA’s blanket coverage. These judicial carve-outs are based on mistaken statutory interpretation, a mistaken understanding of the meaning of “exercise of religion,” and a mistaken understanding of corporate action.

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