A year and a half ago, I posted some preliminary thoughts on the viability of the HHS mandate that was the subject of oral argument at the Supreme Court this past Tuesday. Three months before the case will be decided by the Court, it’s fair to say that the same legal issues continue to swirl around and divergent views abound.
Having witnessed the arguments first hand, the following are my impressions on where the case is headed:
1. The Court seems skeptical of the government’s claim that for-profit corporations, by definition, cannot “exercise” religion.
As Solicitor General Verrilli conceded, there is nothing in the corporate form, per se, that inhibits the exercise of religion. After all, churches and other religious organizations, granted exemption or accommodation by the government, share the corporate form and undeniably “exercise” religion. The issue is whether for-profit status, i.e. entering the marketplace to earn money as entity, bar religious expression. Somewhat surprisingly given expectations pre-argument, Justice Breyer raised a few eyebrows when he asked Verrilli about the local, kosher deli that nearly everyone is familiar with in their neighborhood. The government had a hard time distinguishing why the deli manager who incorporates all of sudden loses free exercise rights that he or she would otherwise possess if he or she chose to not take advantage of corporate protections under state law. After all, isn’t it bizarre to suggest that availing one’s business of state law protection inhibits exercise of a federal right? Given that both Justice Breyer and Justice Kennedy seemed skeptical of the logic of the government’s position regarding for-profit corporations, and the common sense statutory arguments under the Religious Freedom Restoration Act (RFRA), it appears likely that the corporate petitioners will clear the first hurdle.
2. The suggestion that Hobby Lobby and Conestoga Wood could avoid the substantial burden by refraining from offering health care insurance misunderstands the Court’s jurisprudence regarding the definition of substantial burden.
The Court has made clear that courts should give broad latitude to plaintiffs claiming that they are substantially burdened by a law or government practice. Therefore, how the petitioners frame the burden is of utmost importance and should be given extensive deference. This is to avoid the so-called judicial entanglement problem when it comes to adjudicating religious liberty disputes. If the court probes too far into the legitimacy or credibility of the substantial burden, it may run the risk of engaging in theology, which is not its province. Because nobody questions the sincerity of the petitioners, this threshold is easier for the petitioners to meet than the staunchest supporters of the mandate would have others believe.
One other notable point regarding the substantial burden portion of strict scrutiny is the focus on making the burden “cost-neutral.” Even if Justice Kennedy was correct and the decision to offer insurance or pay the penalty was a “wash” (which it is not), the Court must still consider and account for the moral burden put forth by the plaintiff. And because courts are required to give deference to this aspect of the calculation, this question of whether a substantial burden exists is likely to be answered in the affirmative.
3. The government faces an uphill battle when it comes to arguing for a compelling interest and that the regulation is the least restrictive means for pursuing that interest.
a. Compelling Interest
1. As Justice Kennedy suggested when asking about the amount of delegation given to HHS, if the compelling interest was so strong, why would Congress leave the details to an agency to define who is exempt?
2. As Justice Alito suggested, HHS considers itself capable of granting for-profit corporations exemption from the regulation. How can the interest be compelling if the agency considers how to pursue it an open-ended question?
3. The third-party burdens argument is tautological because, after all, the case is about whether the free exercise clause and RFRA require reallocation of burdens. In other words, the government cannot say that the third-party burdens felt by employees supports the idea that the regulation promotes a compelling interest. Otherwise the government would always win under strict scrutiny because strict scrutiny asks whether third party burdens must be felt given other constitutional commitments. Further, the Court is tasked with answering this precise question: whether statutory rights can amount to a compelling interest in this context. The mere existence of those statutory rights, as granted by the agency, cannot itself answer that question. Finally, this certainly would not be the first context in which third parties feel the weight of burdens given other constitutional commitments.
4. The HHS regulations at issue allowed for delayed compliance with the contraceptive mandate. How compelling could the interest be if time was not of essence?
5. The government’s position regarding how the corporations could avoid the substantial burden, i.e. dropping coverage and paying the fine, undermines its very argument that the interest is compelling. Why would the government say it is ok to not comply with the law if the law is really that important? Isn’t the government’s goal to truly make the services available to the employees through their employers?
b. Least Restrictive Means
If the government’s goal is not as specific as described in number five above, and is instead availability of the contraceptive methods by any way possible, why did it force employers to provide the services through existing employer health insurance? There are other ways that the government could have achieved its goal: direct subsidies to the employees, tax credits, or stipends. In other words, the government arguably could have achieved its stated goal in much easier fashion: by paying for it itself.
4. The decision will be 6-3 or 5-4, depending on how Justice Breyer votes.
I foresee a narrow decision that strikes down the mandate because it fails strict scrutiny, as outlined by RFRA. The Court will not answer the question of whether the Free Exercise Clause covers for-profit corporations and instead will decide the case under RFRA, and hint to Congress that it must clearly define the meaning of “person” if it wishes to narrow the decision of the Court. Any distinction between closely-held and publicly-held corporations will be saved for another day or act of Congress. The decision also will hint that its rule does not extend beyond the facts before the Court given the outstanding issues. Finally, this will not be the last case regarding this issue that comes before the Court.
Modest Commentary 