Hobby Lobby, Corporate Law, and the Theory of the Firm”

by Ed Whelan

That’s the title of an excellent and comprehensive law-review article recently published online by the Harvard Law Review. Co-authored by William & Mary law professors Alan J. Meese and Nathan B. Oman, the article explains why for-profit corporations are persons for purposes of the federal Religious Freedom Restoration Act. Among other things, Meese and Oman directly contest the arguments set forth by other law professors in an amicus brief in the Hobby Lobby case.

Here’s their conclusion (which I’m breaking into multiple paragraphs for ease of reading):

For-profit corporations infused with their owners’ religion are common. These businesses do no violence to corporate law, which is primarily contractual and facilitative, allowing firms, including those that are closely held, to adopt provisions best suited to their needs. There is no evidence that these businesses generate greater corporate dysfunction than their secular counterparts.

It is true that society treats corporations as legally distinct persons for some purposes, but this is a pragmatic choice rather than a normative judgment that human concerns do not apply to such firms. Corporations are just means by which groups of people pursue common purposes, and acknowledging the exercise of religion by for-profit corporations is by no means a category mistake. Nor, given that corporations can be formed for “any lawful purpose,” do shareholders violate some social compact by accepting the benefits of the corporate form while pursuing both profits and religious values.

Of course, granting religious exemptions from otherwise applicable laws raises the risk of opportunism and can undermine important governmental policies. These risks are present with natural persons as well, however. RFRA deals with these concerns not by narrowing the definition of “person,” but instead by scrutinizing only those burdens on religious exercise that are substantial and allowing compelling interests to justify such burdens in appropriate cases. Simply put, corporate law provides no reason for excluding for-profit corporations from RFRA.

As I hadn’t noticed it before elsewhere, I’ll also highlight this passage that Meese and Oman quote from the majority opinion in 1978 in Monell v. New York City Dep’t of Social Services:

[B]y 1871, it was well understood that corporations should be treated as natural persons for virtually all purposes of constitutional and statutory analysis.

Guess which retrograde Neanderthal corporate shill wrote that passage? Justice William J. Brennan Jr. (in a part of the majority opinion joined by six other  justices, including Marshall, Blackmun and Stevens).

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