Hobby Lobby Recap: Kennedy the Swing Vote, But Breyer Wavers Too

by Carrie Severino

Today the Supreme Court heard arguments in the Hobby Lobby and Conestoga Wood cases challenging the HHS contraceptive mandate. Defenders of religious liberty have much to be optimistic about in today’s arguments, but the outcome is far from clear. The justices’ questions broke down along typical liberal/conservative lines — Justice Kennedy offered questions on both sides, but Justice Breyer had a few comments that were surprisingly harsh to the government.

For those unfamiliar with the case, Ed has done a great job previewing the issues in great detail. The case will turn on the Religious Freedom Restoration Act, which effectively creates a statutory exception from laws that substantially burden the exercise of religion unless the law advances a compelling government interest and is the least restrictive means for doing so. A threshold issue is whether RFRA protections are even available to for-profit corporations like Hobby Lobby and Conestoga.

On the threshold question, Justice Sotomayor took the lead, challenging Paul Clement, who argued for both Hobby Lobby and Conestoga Wood, to show how corporations practice religion. Solicitor General Verrilli joined her in his argument, focusing on the challenges presented in determining what a business’s religious practice is when its board or shareholders disagree and the issues presented by a lack of evidence that it’s being run according to religious principles.

This, Clement responded, is chiefly a question of sincerity, which is something the courts are accustomed to looking at in such cases. The chief justice — often looking for the most “narrow” grounds on which to decide a case — suggested that the Court could simply limit its decision to closely held businesses like those in the case, obviating the shareholder-disagreement issue. He speculated that publicly held corporations that would be able to claim they were sincerely exercising religion are vanishingly rare, so the Court probably would never have to decide that harder question. Justice Kagan, despite being one of the clearest votes for the government today, signaled that even she felt this threshold question was a loser for the solicitor general.  

Justice Alito’s questioning highlighted the ad hoc nature of the government’s distinction regarding for-profit corporations. He prompted the solicitor general to concede that RFRA applied to nonprofit corporations — meaning nothing inherent in the corporate form made the law inapplicable — as well as to for-profit businesses if they’re organized as sole proprietorships or partnerships. Thus, Verrilli conceded, nothing about entering the marketplace itself puts one outside the bounds of RFRA. Even Justice Breyer agreed with the challengers on this point, and questioned the solicitor general as to why a kosher butcher should suddenly lose its free-exercise claim once incorporated.

Justice Kennedy put the solicitor general into the uncomfortable position of admitting that its arguments would mean for-profit hospitals could be forced to perform abortions, even if that violated their conscience rights. Verrilli’s obvious discomfort at admitting this further evidenced the degree to which the government’s hostility to the religious objectors in this case turns on its disagreement with their theology. After all, regardless of the government’s position on when life begins, Hobby Lobby and Conestoga Wood believe it begins at conception, meaning that, for them, the contraceptives they object to can cause the death of a human being. From the perspective of the parties in this case, the government is forcing them to pay for abortions, and the Court must view the religious burden from that perspective, rather than second-guessing their theology.

If, as seems likely, the Court holds that Hobby Lobby and Conestoga Wood can bring a RFRA claim, they have to show that they suffer a substantial burden as a result of the HHS mandate. The mandate either forces them to pay a penalty for offering insurance that doesn’t include certain contraceptives, or decline to provide insurance at all and pay a substantially smaller, though still significant, tax. Justices Sotomayor and Kagan argued vigorously that there was no real harm to the businesses because, by dropping insurance, the companies could actually save money. The Chief Justice, Justice Scalia, and Justice Alito all disagreed, arguing that the companies would have to pay higher wages in order to compensate their employees for the loss of health care. This was one point at which Justice Kennedy showed sympathy toward the government, and asked hypothetically what was left of the religious objectors’ cases if dropping insurance turned out to be a wash financially. Clement responded that the companies felt a religious duty to offer health insurance to their employees, and pointed out that previous cases had found a fine of as little as $5 to be substantial. Thus, even if the cost of providing no insurance at all turns out to be less than the estimated $26 million and doesn’t force Hobby Lobby out of business, it still burdens their religious practice.

The argument moved from that discussion to one of compelling interest, and on that point the Court was most concerned about the many exemptions to the law, particularly the grandfathered businesses who — for some indefinite time — will not have to comply with the mandate. The existence of such exemptions suggests that the government’s interest is not in fact compelling. 

Justice Sotomayor suggested that the grandfathering period would be very short, and the solicitor general agreed. But when pressed by the Chief Justice, Verrilli acknowledged that he had no sense of how many plans would continue to be grandfathered or for how long. Another problem for the government was created by the exemptions created by HHS for certain religious nonprofits. Justice Kennedy seemed on this point to be siding against the government, particularly because the exemptions were created by a regulatory agency rather than Congress itself. He pointed out that RFRA was passed by Congress as a whole to create exemptions for religion, while HHS – a mere regulatory agency — has decided to draw different lines for exemptions. In our constitutional system, shouldn’t Congress’s judgment govern?

Another aspect of the compelling-interest test found Justice Kennedy questioning the Hobby Lobby/Conestoga side. When he asked Paul Clement how the Court should consider the rights of the employees, Clement responded that the government shouldn’t be able to immunize itself from religious-freedom claims by creating third-party beneficiaries. He contrasted a law that forces individuals to burn all their books, including their Bibles, with another law that forces them to give someone all their books, including their Bibles. While both have the same negative effect on the religious believer, under the second case someone could also complain of unfairness if Bibles were excluded from the “book mandate” because they then would receive fewer books.  Yet, Clement contended, religious believers would see their freedoms violated equally if they weren’t exempted from both laws.

The government also claimed an interest in the uniformity of the law, which Justices Kagan and Sotomayor explored. They suggested that granting the exemptions requested in this case would open the door to widespread religious exemptions to providing everything from blood transfusions to vaccines. Clement pointed to the different analyses that would have to take place for each of these objections. While all present the same burden on religious exercise, it is possible that there would be a more significant government interest in requiring coverage, say, of blood transfusions than of contraception, particularly in a regime that already exempts so many businesses from covering contraceptives.

If the government’s interest in providing the specified contraceptives is deemed compelling, then the Court has to ask whether the HHS mandate was narrowly tailored to achieve that interest. This distinct feature of RFRA makes it an even stronger protection for religious freedom than the First Amendment alone. The religious objectors suggested that the government could simply pay for the contraceptives itself, make a different group (like insurers or hospitals) provide them, or offer subsidies like it does in the exchanges. Justice Breyer questioned the solicitor general about why this wasn’t an option, and it wasn’t clear whether he was satisfied with the answer.

At the end of the day, this case is still very much a toss-up, with Justice Kennedy the swing vote as usual. But with Justice Breyer apparently also in play, there are good grounds to hope that the administration’s attack on religious freedom will not win the day.