Burwell v. Hobby Lobby Stores

PETITIONER:Sylvia Burwell, Secretary of Health and Human Services, et al.
RESPONDENT:Hobby Lobby Stores, Inc.
LOCATION: Hobby Lobby Stores Inc.

DOCKET NO.: 13-354
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT:

CITATION: 573 US (2014)
GRANTED: Nov 26, 2013
ARGUED: Mar 25, 2014
DECIDED: Jun 30, 2014

Facts of the case

The Green family owns and operates Hobby Lobby Stores, Inc., a national arts and crafts chain with over 500 stores and over 13,000 employees. The Green family has organized the business around the principles of the Christian faith and has explicitly expressed the desire to run the company according to Biblical precepts, one of which is the belief that the use of contraception is immoral. Under the Patient Protection and Affordable Care Act (ACA), employment-based group health care plans must provide certain types of preventative care, such as FDA-approved contraceptive methods. While there are exemptions available for religious employers and non-profit religious institutions, there are no exemptions available for for-profit institutions such as Hobby Lobby Stores, Inc.

On September 12, 2012, the Greens, as representatives of Hobby Lobby Stores, Inc., sued Kathleen Sebelius, the Secretary of the Department of Health and Human Services, and challenged the contraception requirement. The plaintiffs argued that the requirement that the employment-based group health care plan cover contraception violated the Free Exercise Clause of the First Amendment and the Religious Freedom Restoration Act of 1993 (RFRA). The plaintiffs sought a preliminary injunction to prevent the enforcement of tax penalties, which the district court denied and a two-judge panel of the U.S. Court of Appeals for the Tenth Circuit affirmed. The Supreme Court also denied relief, and the plaintiffs filed for an en banc hearing of the Court of Appeals. The en banc panel of the Court of Appeals reversed and held that corporations were “persons” for the purposes of RFRA and had protected rights under the Free Exercise Clause of the First Amendment.

Question

Does the Religious Freedom Restoration Act of 1993 allow a for-profit company to deny its employees health coverage of contraception to which the employees would otherwise be entitled based on the religious objections of the company’s owners?

Media for Burwell v. Hobby Lobby Stores

Audio Transcription for Opinion Announcement – June 30, 2014 (Part 2) in Burwell v. Hobby Lobby Stores
Audio Transcription for Oral Argument – March 25, 2014 in Burwell v. Hobby Lobby Stores

Audio Transcription for Opinion Announcement – June 30, 2014 (Part 1) in Burwell v. Hobby Lobby Stores

The second opinion addresses two cases, Burwell v. Hobby Lobby Stores Inc. No.13-354 and Conestoga Wood Specialties Corporation v. Burwell No. 13-356.

The first decision that I just summarized involved freedom of speech and freedom of association and the opinion that I will now summarize involves freedom of religion.

But it is not about the First Amendment, it involves the interpretation of a statute, the Religious Freedom Restoration Act or RFRA.

It addresses a case from the Third Circuit, the Conestoga Case and a similar case from the Tenth Circuit, the Hobby Lobby Case.

Both cases concern families who own and operate businesses that are organized as closely held corporations.

And in both cases, the family members and the businesses claim that the Federal Government has violated the religious liberty that the Religious Freedom Restoration Act protects.

The Third Circuit case involves Norman and Elizabeth Hahn and their three sons.

The Hahns are devout Mennonites.

Fifty years ago, Norman Hahn started a woodworking business out of his garage and since then, this company has grown and now has 950 employees.

But this company called Conestoga Wood Specialties remains closely held.

The Hahns have retained sole ownership and control.

The Tenth Circuit case involves David and Barbara Green and their three children.

They are devout Christians.

Forty-five years ago, David Green started an arts and crafts store that has grown into a nationwide chain called Hobby Lobby.

One of David’s sons also started and affiliated business, Mardel, which operates 35 Christian bookstores.

These two businesses have expanded over the years.

There are now — there are now 500 Hobby Lobby stores, but the company remains closely held and the Greens retained exclusive ownership and control over that company.

The same is true of Mardel.

Both the Hahns and the Greens believe that they have a religious obligation to run their businesses in accordance with the tenets of their faith.

They also believe that life begins at conception and that they must not facilitate the destruction of an embryo and there is no dispute that their beliefs are sincere.

That is reflected in their company’s mission and value statements which make it clear that in seeking to make a reasonable profit, they must do so in a way that reflects their Christian heritage.

In accordance with their religious beliefs, the Hahns and the Greens provide generous group health insurance plans for their employees, but they object to offering coverage for four methods of contraception that may operate after conception.

New government regulations however, require them to do just that.

The Department of Health and Human Services has issued regulations that generally require larger employees to offer group health insurance that provides their employees with cost-free coverage for all 20 FDA approved contraceptives including the four to which the Hahns and the Greens object.

Now, many employees — many employers I should say, are exempt from this mandate.

Employers with fewer than 50 employees do not have to provide group health insurance at all.

A contraceptive mandate does not apply to the tens of millions of employees who were covered by so called grandfathered plans.

That is plans that have not been changed since the enactment of the Affordable Care Act.

Religious employers such as churches are exempt and HHS has crafted an accommodation that effectively exempts non-profit religious organizations that attests to having religious objections to the contraceptive mandate.

Under this accommodation, the employers’ insurer or third party administrator is responsible for providing the employees with contraceptive coverage without imposing any cost on the employer or the employee.

HHS has concluded that this accommodation is generally cost neutral for insurers.

Thus, a great many employers need not comply with the contraceptive mandate.

But if an employer is not exempt, and it does not comply, it must pay a very high price.

The companies involved in this case do not fall within any of the exemptions that I mentioned, and therefore, the Hahns, the Greens and their companies sued to stop enforcement of the contraceptive mandate insofar as it requires them to provide health insurance coverage for the four FDA approved contraceptives to which they object.

They asserted claims under the Religious Freedom Restoration Act and the lower courts disagreed on the question whether the corporations and their owners could sue.The Third Circuit held that they could not but the Tenth Circuit held that the businesses could bring suit.

We granted certiorari to decide whether RFRA permits the Government to demand that these closely held corporations and their owners provide health insurance coverage for methods of contraception that violates the owner’s sincerely held religious beliefs.

RFRA prohibits the Government from “substantially burdening” a person’s exercise of religion even if the burden results from a rule of general applicability.

But RFRA provides an exemption if government “demonstrates” that application of the burden to the objecting party is in furtherance of a compelling governmental interest and is the least restrictive means of furthering that compelling governmental interest.

Applying RFRA in these cases potentially involves four separate questions.

The first of this is whether we can even entertain the claims that are presented due to the fact that the three companies involved are for-profit corporations.

For reasons explained at length in our opinion, we hold that the language of RFRA makes it clear that we can hear these claims.

The issue here is not the size of Hobby Lobby or the other companies.

It is their status as closely held for-profit corporations.

Many closely held for-profit corporations are mom and pop operations.

If we hold that RFRA — if we held that RFRA does not apply in a case involving a closely held for-profit corporation, the owners of these small businesses would be put to a cruel choice.

On the one hand, they could incorporate and by doing so, give up the protection for religious liberty that RFRA provides.

On the other hand, they could give up the benefits of the corporate form.

Think of the owners of the corner store who were worried about the consequences for their family if everything the family owns could be taken by a judgment creditor.

The Congress that enacted RFRA wanted to provide very broad protection for religious liberty and we are confident that it did not want religious believers with dissenting views to be turned into second class citizens.

HHS would do just that and I will briefly discuss three of its arguments.

These are also endorsed by two of the dissenting justices.

One is that a corporation is really nothing but a piece of paper, and therefore, it cannot exercise religion.

That argument misses the point.

The owners of a closely held corporation can exercise religion.

The Hahns have religious beliefs and they are trying to live their lives in accordance with those beliefs.

The same is true of the Greens.

That is what is at stake, and that is why RFRA allows us to hear their claims.

The second argument is even more strange than the first.

It goes as follows.

It is contended that RFRA flash froze the protections for religious liberty that were specifically recognized by our First Amendment cases prior to April 17, 1990.

That was the date of our decision in Employment Division v.Smith, the decision that prompted RFRA’s enactment.

According to this argument, if a party does not fall into a category of plaintiffs who is right to assert a free exercise claim or specifically recognized by this Court as of that date, the party is out of luck.

As of that magic date, this Court had never held that a for-profit corporation can raise a free exercise claim, so the argument goes the objecting parties here cannot even be heard.

Never mind the fact that no pre-Smith case held or even suggested the contrary, never mind the fact that in the only case in which the question could’ve been decided Gallagher v. Crown Kosher Super Market, three justices, Justices Brennan, Stewart and Douglas concluded that the for-profit corporation could raise such a claim and not a single justice expressed disagreement.

Nothing in RFRA even remotely suggest that Congress wanted to adopt this theory.

Finally, HHS and the two of the justices in dissent argue that extending religious liberty protection in cases involving for-profit corporations is unprecedented but that is simply not so, in our opinion, we point to other statutes in which Congress appears to have done just that.

This brings us to the second question presented in this case.

Do the HHS regulations impose a substantial burden on the exercise of religion?

As noted earlier, the Hahns and Greens have religious objections to abortion, and according to their religious beliefs, the four contraceptive methods at issue induce abortions.

If they comply with the HHS Mandate, they believe they will be facilitating abortions and committing a grave wrong.

And if they do not apply — do not comply, they will pay a very heavy price as much as 1.3 million dollars per day or about 475 million dollars per year in the case of one of the companies.

If these consequences do not amount to a substantial burden, it is hard to see what would.

HHS and the dissenters disagree but their main argument is a dangerous one that this Court has repeatedly rejected.

Although they try hard to characterize the argument differently, this is what it comes down to.

The religious beliefs of the Hahns and the Greens are unreasonable.

The argument goes like this.

The Hahns and the Greens object to the destruction of an embryo, but providing the mandated coverage will not in itself destroy an embryo.

There is a risk that this will happen only if one of their employees obtains and uses one of the four contraceptive methods at issue, and because this consequence would be dependent on something done by an independent actor, the Hahns and the Greens should not feel anymore responsibility.

The religious beliefs are excessively fastidious.

This Court has said however, time and time again, that we have no business judging whether any sincere religious belief is valid or reasonable and it would be dangerous if we started down that road.Some years ago, we considered and rejected an argument that is indistinguishable from the one that the Federal Government and the dissent now make.

That case involved a man who had a religious objection to making implements of war.

He worked in a steel mill and he believed that it was acceptable to work on the production of steel even though some of the steel would be used to make tanks, but he drew the line at making tank turrets.

The lower court thought that this line did not make much sense but we held that “it is not for us to say that the line he drew was an unreasonable one.”

That was a religious question, and thus outside the scope of our authority.

The same is true here.

This brings us to the third question, does the HHS Mandate serve a compelling government interest?

The parties strenuously debate this point.

HHS argues among other things that the Government has a compelling interest in making sure that every woman whose employer is subject to the mandate is able to get every FDA approved contraceptive without any out of pocket expense.

The plaintiffs dispute the point but our decision does not turn on this question.

We assume for present purposes that this requirement is satisfied, so we come to the final question.Can the Government’s interest be achieved by any means that imposes a lesser burden on religious liberty?

And we find that the HHS mandate cannot meet the least restrictive means test.

As mentioned earlier, HHS has already devised and implemented a system that seeks to respect the religious liberty of religious non-profit corporations while ensuring that the employees of these entities have precisely the same access to all FDA approved contraceptives as do employees of companies whose owners have no religious objections.

And according to HHS, this system imposes no net economic burden on the insurance companies that are required to provide the coverage.

Although HHS has made this system available to religious non-profits, HHS has provided no reason why the same system cannot be made available when the owners of for-profit corporations have similar religious objections.

And we therefore conclude that this system constitutes an alternative that achieves all of the Government’s aims while providing greater respect for religious liberty and under RFRA, that conclusion means that the enforcement of the HHS contraceptive mandate against closely held corporations is unlawful.

As this description of our reasoning shows our holding is very specific, but in later, some of the charges made by the dissenters, it is appropriate to add a few words about what we do not hold.We do not hold the corporations can opt-out a generally applicable law simply by claiming a religious exemption.

We do not hold the corporations who raise religious objections have free reign to impose disadvantages on others or to require the general public to pick up the tab.

Neither of those things will occur as a result of our decision.

The effect of the HHS created accommodation on the women employed by the companies involved in these cases will be precisely zero.

We do not hold that claims involving coverage for other medical procedures or drugs, for example, vaccines would succeed.Cases involving other procedures or drugs are likely to implicate different considerations such as preventing the spread of disease.We do not hold that RFRA protects invidious discrimination that is said to be based on a religious belief.

Preventing invidious discrimination is the compelling interest that cannot be served without outlawing the practice.

Our decision will not lead to battles amongst shareholders of publicly traded companies.

It is limited to closely held corporations.

And our decision will not produce novel fights among owners of closely held corporations, disagreements among family members or others who own closely held corporations are nothing new.

State corporate law provides ways of resolving such dispute.

The Religious Freedom Restoration Act provides very broad protection for religious liberty and under RFRA, the HHS mandate is unlawful as applied to closely held corporations whose owners have sincere religious objections to the mandated coverage.

The judgment of the Tenth Circuit in number 13-354 is affirmed.

The judgment of the Third Circuit in number 13-356 is reversed and that case is remanded for further proceedings consistent with this opinion.

Justice Ginsburg has filed a dissenting opinion in which Justice Sotomayor joins and in which Justices Breyer and Kagan join as to all but Part III-C-1.

Justices Breyer and Kagan have filed a dissenting opinion.