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Tuesday, February 4, 2014
What side has corporate America taken in the Hobby Lobby challenge?
This spring, the Supreme Court will decide—for the first time in our nation’s history—whether secular, for-profit corporations are entitled to invoke the constitutional guarantee of the free exercise of religion. The stakes are huge, as the justices will determine whether business corporations can claim a religious exemption from federal laws that protect the rights of their employees. You would think that corporations, which routinely jump in to protect their interests at the high court, would have weighed in on an issue of such significance. But not this time. Indeed thus far, the response of the business community has been near-total silence.
Last week, more than 80 friend-of-the-court briefs were filed in the cases brought by Hobby Lobby and Conestoga Wood—an arts-and-crafts chain and wood manufacturer, respectively—challenging the Affordable Care Act’s requirement that employer health plans cover the full range of Food and Drug Administration–approved contraceptives for their employees. The mountain of amicus briefs covered an incredible terrain of legal issues: the framers’ understanding of the free exercise right, the history of the Supreme Court’s jurisprudence on corporate personhood, the court’s cases interpreting the Free Exercise Clause, and the history leading to the passage of the Religious Freedom Restoration Act. Many briefs were filed on behalf of Hobby Lobby and Conestoga Wood, including important support offered from members of Congress, state governments, scholars, theologians, and a number of religious businesses, groups, and organizations. But almost none of those briefs came from secular businesses. Not one Fortune 500 company filed a brief in the case. Apart from a few isolated briefs from companies just like Hobby Lobby and Conestoga Wood, the U.S. business community offered no support for the claim that secular, for-profit corporations are persons that can exercise religion.
Perhaps most significant, the U.S. Chamber of Commerce—by far the most powerful and successful voice on behalf of corporations before the Supreme Court—remained on the sidelines in the case as well. The chamber touts itself as the world’s largest business federation. It regularly participates in major Supreme Court litigation, and its views often carry significant weight with the conservative justices on the Roberts Court. In fact, it’s been widely reported that since Chief Justice John Roberts and Justice Samuel Alito joined the court, the chamber has had a success rate of more than 70 percent. Yet here, the chamber decided not to support the claim that secular businesses can exercise religion. This stands in sharp contrast to Citizens United, when the chamber urged the court to grant corporations the right to spend unlimited money on elections. The chamber had a lot to say about corporate personhood when it came to free speech.
Just like the chamber, the National Federation of Independent Business—a group that prides itself on being “the voice for small businesses in the nation’s courts”—also chose not to participate in the Hobby Lobby appeal. NFIB, of course, was one of the named plaintiffs in the constitutional challenge to the Affordable Care Act that the Supreme Court rejected two years ago. In that case, the plaintiffs were ably represented by conservative superstars Michael Carvin and Georgetown Law professor Randy Barnett. Since then, NFIB has participated as a friend of the court in many other important Supreme Court cases concerning government regulation of corporations, including cases concerning the First Amendment rights of corporations. Yet, like the chamber, NFIB took a pass on Hobby Lobby’s big challenge to the part of Obamacare that helps ensure that women can protect their health and control their reproductive lives.
Hobby Lobby and its supporters have made much of the fact that a large majority of friend-of-the-court briefs were filed on their side, but the only noteworthy corporate voices to weigh in—the U.S. Women’s Chamber of Commerce and the National Gay and Lesbian Chamber of Commerce—actually came down against them. These groups in fact urged the justices to see that recognizing a corporate right to the free exercise of religion would wreak havoc in corporate boardrooms across the country. These two chambers of commerce—whose corporate partners include many of the nation’s biggest corporations, including Google, American Express, and JPMorgan Chase & Co.—explained that recognizing a corporate right to free exercise of religion would hamper, not aid, the efficient organization, management, and operations of American business, embroiling businesses in disputes over what are essentially individual religious beliefs. The groups pressed the argument that, far from protecting business interests, the act of creating a corporate right to the free exercise of religion would complicate corporate governance and destabilize the market, giving a competitive advantage to corporations that could claim a religious exemption from laws applicable to other businesses.
These arguments were seconded by a group of corporate law scholars, who argued that Hobby Lobby’s argument would eviscerate the fabric of corporate law, undercutting the corporate veil that protects owners and shareholders from liability for the actions of the corporation. Filed on behalf of some of the nation’s most-well-respected corporate law scholars, the brief urges the justices to reject Hobby Lobby’s invitation to ascribe the religious views of Hobby Lobby’s individual owners to the corporation itself. Why? Because contrary to the most fundamental precepts of corporate law, Hobby Lobby’s approach would treat the owners and the corporation as one and the same. This would undermine the basis for limited liability as well as other aspects of corporate law designed to encourage entrepreneurial activity by business leaders, lending by investors, and risk-taking by corporate managers. Such an unprincipled, idiosyncratic exception from corporate law fundamentals, the scholars argued, would breed confusion in the law, lead to costly litigation, and undermine critical aspects of corporate law designed to spur creativity and innovation. Perhaps this is why groups like the chamber are sitting this one out.
The right to the free exercise of religion has never been a right that secular, for-profit corporations claimed to possess. Over the course of American history, corporations have claimed the protection of many constitutional rights, but, until these challenges to the contraception mandate were filed, corporations never asserted that they are in fact persons who exercise religion in the same way that living, breathing humans do. That claim, it seems, is one that hardly any secular, for-profit corporations support. As they look forward to argument in these challenges, the justices may want to remind themselves that this is one constitutional right that corporate America cannot and will not defend.