The Hobby Lobby Decision
Professor Michael W. McConnell, Richard and Frances Mallery Professor of Law (Photo by Jennifer Paschal)

Of all its cases last term, the Supreme Court’s decision in Burwell v. Hobby Lobby attracted the most strident criticism. The Court held that Hobby Lobby, a family-owned, for-profit corporation that operates a successful chain of craft stores, could not be compelled to pay for health insurance covering abortion-inducing contraceptive drugs where that would violate the sincere religious beliefs of the owners. This was greeted by many commentators as an assault on women’s rights to contraceptive services and as an improper extension of religious freedom rights to corporations.

These attacks have more to do with politics than with law. For all the commotion the decision has inspired, the Court’s decision was an unsurprising and entirely reasonable application of established legal principles. If the result proves to have negative consequences, which I doubt, Congress is free to change it by ordinary legislation.

In this essay, I will discuss whether the Court was correct to hold that a family business can invoke the protections of the Religious Freedom Restoration Act despite its corporate form. In an upcoming issue of the Stanford Lawyer, I will discuss the Court’s holding that the contraceptive mandate was not the least restrictive means of achieving the government’s purpose.

Corporations are not people. Neither, of course, are churches, clubs, cities, political organizations, newspapers, or any of the many other collective entities through which flesh-and-blood people join together to accomplish their objectives. Nonetheless, these entities are able to own property, sue and be sued, publish information and opinions to the public, be prosecuted for criminal violations, and exercise virtually every constitutional right that they are capable of exercising, including under the First Amendment. In law, corporate “personhood” is a familiar idea. It does not mean corporations are people, which is a silly misunderstanding. It means that corporate entities can exercise certain legal rights in their own name. 

Critics have expressed shock and surprise that corporations might have the right to religious exercise. But consider the legal background:

Corporations routinely exercise rights under other parts of the First Amendment, including commercial, political and artistic speech; press; petition; and the right to be free of an establishment of religion.

Nonprofit entities such as churches, colleges, and foundations have long asserted religious freedom claims despite being corporations. The last three successful religious freedom claimants in the Supreme Court before Hobby Lobby were all corporations; all prevailed unanimously, without a single justice thinking their status as corporations affected the case.

For-profit businesses, such as kosher butchers or retailers who close on the Sabbath, long have asserted religious freedom rights in court; they have never lost on the ground that they have no right to religious exercise.

Indeed, Justice William J. Brennan, Jr. wrote for the Supreme Court that “by 1871, it was well understood that corporations should be treated as natural persons for virtually all purposes of constitutional and statutory analysis” (Monell v. Department of Social Services, 1978). Until the contraceptive mandate cases, no lower court—state or federal—ever questioned that corporations could raise religious freedom claims either in their own name or as representative of the owners. The Ninth Circuit, perhaps the most liberal of the circuits, has entertained religious freedom claims by profit-making corporations since at least 1988, with no untoward consequences and no dissent.

With this background, it came as no surprise that Hobby Lobby was allowed to sue. It is noteworthy that the vote on this point was 5-2. Justices Breyer and Kagan declined to join the dissent on this point.

Critics of the Hobby Lobby decision claim that corporations have only one purpose: to make money. But under standard corporate law, corporations are entitled to pursue any lawful purpose, and there is nothing either wrong or unusual for them to have social or religious purposes. The charters of the joint stock companies with which the framers of our Constitution would have been most familiar—the Virginia Company and the Massachusetts Bay Company—explicitly mixed religious and profit-making purposes. 

Critics correctly point out that corporations are regarded as separate from their owners for some legal purposes. But it is not unusual to impute to corporations the intentions and other characteristics of their owners. Corporations can be prosecuted for crimes of intent; they can be held liable for intentional discrimination; and they are entitled to express a point of view—all based on the intentions, beliefs, and opinions of their owners.

The issue of religious freedom for profit-making entities does not arise often, because few religious tenets are addressed to them. But kosher and halal butchers, Islamic banking establishments, religious book and music publishers, nursing home operators, pharmacists, midwives, and businesses of any sort that observe a day of Sabbath, all may need the protection of the Religious Freedom Restoration Act or the First Amendment to enable them to operate in accordance with religious beliefs. In the Christian, Jewish, and Islamic faiths (and presumably others), business owners are expected to obey the commands of their God not only in their personal lives but also in their businesses.

Constitutional law is not designed for the protection of corporations. But it extends its protection to real people even when they act through groups or other collective entities. The Court was correct, in my opinion, not to exclude incorporated businesses when they seek to operate in accordance with religious belief.  SL

1 Response to The Hobby Lobby Decision
  1. Title: Too convenient an argument?
    Response by Paul Bator, Stanford Lecturer, to:
    “The Hobby Lobby Decision” by Professor Michael McConnell
    Stanford Lawyer Issue 91 Point of View

    Along the same lines as Justice Alito’s majority opinion, Prof. Michael McConnell (The Hobby Lobby Decision” Point of View, Issue 91) puts forth an entirely suasive argument: that corporations may, for purposes of 1st amendment redress, be considered “people.” But that’s not the hackle at hand in Hobby Lobby.

    Prof. McConnell treats an appendage as if it were the heart. “Critics have expressed shock and surprise” not because “corporations might have the right to religious exercise.” Critics’ “commotion” over the Court’s decision in Hobby Lobby was triggered by several more vital matters, particularly that no consideration of the rights of the employees receives the light of day in the majority decision. McConnell’s piece works in tandem with Alito’s narrowed opinion to make it seem as if this is solely a case about how financial obligations “burden” a for-profit corporation’s owners.

    Listen to Justice Kennedy in the oral arguments: “[H]ow would you suggest that we think about the position and the rights of the employees?” Kudos to Kennedy’s concurrence, wherein he responds to his own query: “Among the reasons the United States is so open, so tolerant, and so free is that no person may be restricted or demeaned by government in exercising his or her religion. Yet neither may that same exercise unduly restrict other persons, such as employees, in protecting their own interests, interests the law deems compelling.”

    Insofar as the critics are represented by the Dissent, McConnell’s point of view is a bit disingenuous since it does not represent a central counter-claim–one which splatters the parchment immediately from the pen of Justice Ginsburg as notice of “disadvantages that religion-based opt-outs impose on others.” The Dissent continues: “Indeed, by law, no religion-based criterion can restrict the work force of for-profit corporations.” “One can only wonder,” she laments, “why the Court shuts this key difference from sight.”

    Along with SL readers, I look forward to reading part two of Professor McConnell’s analysis, whether or not it has the space to address critics’ [Dissent] concerns more genuinely: “No tradition, and no prior decision under RFRA, allows a religion-based exemption when the accommodation would be harmful to others—here, the very persons the contraceptive coverage requirement was designed to protect.”

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