Four years ago, in the Citizens United case, the Supreme Court affirmed that corporations are “people,” at least when it comes to their First Amendment rights of free speech. This March, the nine justices will take up Sebelius v. Hobby Lobby, pairing it with a second, similar case, Conestoga Wood Specialties, to begin hearing oral arguments regarding the next question in corporate evolution: Can for-profit companies be religious people?

At issue in the highly publicized Hobby Lobby case is whether it and other for-profit companies whose owners have strong moral objections to birth control can use the Religious Freedom Restoration Act of 1993 to opt out of contraceptive requirements under the Department of Health and Human Service's reading of the Patient Protection and Affordable Care Act.

Under that stance, companies of more than 50 employees must provide full-time workers with medical benefits, including birth-control information and a formulary of 20 contraceptive drugs and devices, several of which may function as abortifacients.

The Obama administration has already had to craft an uneasy truce concerning the contraceptive requirement with religiously-affiliated, non-profit organizations—churches, charities, hospitals and universities.

After a quick, one-time self-certification process, religious non-profits can keep their hands clean, sort of, by off-loading the birth-control mandate to their insurer or some other third-party, who will then provide employees the full range of contraceptive drugs and services, free of charge.

Of course, nothing is free, and many critics of the compromise predict higher premiums and co-pays for employees of these organizations. And needless to say, the Catholic Church wants no part of birth control whatsoever, no matter who delivers it, though Notre Dame University did recently agree to accept the deal, with this caveat to employees: the program may be ended if the university's legal action against the birth-control mandate prevails in court.

Currently, there are about 60 cases in various stages of litigation around the country as various jurisdictions try to resolve the PPACA's contraceptive requirement with the moral objections of corporate and organizational leaders whose owners and boards have objections wholly, or partly, to birth control drugs and information. About half of these cases involve for-profit companies, which Sebelius v. Hobby Lobby intends to address.

CHap. I – Wins and losses

“I fought the law and the Lord won,” exclaimed Thomas Beckwith last June after learning that a federal judge ordered a temporary injunction that relieved him from providing his 163 employees with certain PPACA-mandated contraceptives that he found morally objectionable.

The judge wrote, “Does this liberty of conscience travel with an individual in his or her commercial endeavors as a shareholder of a corporation? This court believes it does.”

Had he lost, Beckwith was looking at some $6 million in non-compliance penalties for his Florida-based electrical manufacturing and supply company.

The Lord didn't do quite as well a bit further North when last September the Cincinnati, Ohio, 6th Circuit Court of Appeals denied a similar case brought by Michigan-based Autocam, a 600-employee manufacturer of precision components for the medical and automotive industries.

Closely held by CEO John Kennedy and his family, the owners cited their Roman Catholic faith as the reason for relief from the contraceptive mandate. The 6th was not sympathetic. “The decision to comply with the mandate falls on Autocam, not the Kennedys. For this reason,” the court said, “the Kennedys cannot bring claims in their individual capacities under RFRA, nor can Autocam assert the Kennedys' claims on their behalf.”

Incorporation comes with advantages, but also disadvantages, stressed the court, one of which is the prohibition of using the corporation in direct legal action to redress injuries of primary stockholders in the business.

CHap. II – Religious freedom vs. women's health

If the Supreme Court remains silent, many observers believe, cases like these with differing rulings from courts around the country will only multiply in the coming months and years ahead.

Amicus briefs presented to the high court last year suggest a full range of concerns among various stakeholders. The Association of Gospel Rescue Missions and seven other Christian groups reminded the justices that the “nation's historic, bipartisan commitment to religious liberty requires that the government respect the religious beliefs of those faith traditions whose religious beliefs prohibit participating in, funding, or otherwise facilitating the use of contraceptives generally, or abortion-inducing drugs specifically.”

For The Ovarian Cancer National Alliance, the matter wasn't religious freedom but women's health. The alliance presented the court with numerous studies showing that the use of oral contraceptives and intrauterine devices can reduce the incidence of certain deadly cancers in women. “Requiring most health plans to provide coverage for contraceptives” the alliance brief stressed, “promotes women's health by ensuring that all women, regardless of their employer, have access to medical treatments that effectively reduce the risk of some of the most lethal cancers.”

CHap. III – god and mammon

In Sebelius v. Hobby Lobby, God and Mammon came together in the perfect storm for the Supreme Court. More than 40 years ago, founder David Green and his family started a picture-frame business in the garage of their home, an endeavor that eventually became Hobby Lobby Stores Inc., a privately held arts and crafts powerhouse with 13,000 employees and locations in 41 states. The company also operates Mardel, a chain of 35 Christian bookstores with 400 employees.

Green and his family—the sole owners of Hobby Lobby—are devout Christians, and their sincerity is unassailable. Green's parents were both pastors, and each of his siblings entered the ministry. “I felt like somewhat of an outsider going into retail,” he admits, “but I've found a way to minister through Hobby Lobby.”

From the very beginning, the Greens intended to use their business to “honor God” and operate the “company in a manner consistent with Biblical principles.”

They have kept that promise well: Full-time employees earn 80 percent above the national minimum wage; stores are closed on Sundays so employees can spend time with their families; Christian music plays all day long in each of the stores; employees have access to chaplains, counseling, and religiously-themed financial courses; the family contributes time and funds to national and worldwide Christian organizations; during Easter and Christmas, the company buys full-page newspaper ads to “share their faith”; the family has amassed a collection of some 40,000 religious artifacts available to scholars. In accordance with his faith, Green has rejected a number of easy profits: shot glasses and risqué cards and posters are not stocked in the stores; company trucks are not allowed to back-haul beer; a liquor store operator who once wanted to take over a lease was rejected.

“Hobby Lobby has always been a tool for the Lord's work,” emphasizes David Green, who believes that life begins at conception.

While he has no problem with 16 of the mandate's contraceptive drugs, he objects to providing employees with the four that may act as abortifacients: Plan B, Ella, and two IUDs.

CHap. IV – 'Compelling justification'

Citing the Religious Freedom Restoration Act, Mr. Green and other individuals of for-profit, faith-inspired companies have argued in court that there is no divide between their personal religious values and the operation of their companies.

They cite a key provision of the RFRA: “Government shall not substantially burden a person's exercise of religion.”

The point of contention here is the word “person.”

Can a for-profit company be considered a religiously discriminated against “person”? The Greens sought relief in court, arguing that the government's birth-control demand made it impossible to run their company in accordance with their Christian, anti-abortion values. The lower court ruled against the Greens, affirming that Hobby Lobby was a for-profit corporation and not a person suffering religious discrimination at the hands of the government. Moreover, the court stressed, RFRA was never intended to apply to for-profit corporations.

The fines for non-compliance of PPACA—whose meter will kick in Jan. 1, 2015—are steep. At $100 a day per employee, Hobby Lobby could see daily fines of some $1.3 million, or about $475 million annually. If the company chose to avoid the contraceptive mandate by simply dropping health care for all employees, it would still be looking at a penalty of about $26 million a year.

Last June, Hobby Lobby appealed, and found relief from U.S. Court of Appeals for the 10th Circuit, which reversed the lower court, finding that Hobby Lobby's RFRA rights had indeed been violated. The Greens, the court said, had every right to run the company consistent with their personal religious beliefs, which included denying their 13,000 employees—of all faiths—the four contraceptives the owners found personally and morally objectionable.

The 10th buttressed its ruling citing this RFRA provision: “Governments should not substantially burden religious exercise without compelling justification.”

The steep fines Hobby Lobby was facing in doing the Lord's work, the majority agreed, would substantially burden, if not destroy, the company. Moreover, the majority dismissed the government's “compelling justification” in promoting health among women by pointing out that if the female employees of Hobby Lobby wanted the four excluded contraceptives, nothing was stopping them from buying the drugs on their own.

As numerous studies have shown, however, women bring home only about 77 percent of what men earn for similar jobs. Moreover, two-thirds of working mothers are either the sole source of income for their family or share that responsibility with a partner. Retail jobs like those of Hobby Lobby, even if employees there do earn 80 percent more than the minimum wage, may still not provide enough income to afford costly medications. For women who can't take the birth control pill, points out Marcia Greenberger, co-president the National Women's Law Center, an IUD may be the only other contraceptive option. IUDs, she points out, cost between $500 and $1,000.

Chap. V – Defining 'personhood'

As in Citizens United, “personhood” for for-profit companies is at the heart of these arguments. The 10th Circuit tried to dispatch the issue by citing the 1871 Dictionary Act, which states that without a clear definition or restriction in a statute, the word “person” can include “corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals.”

“We could end the matter here,” wrote the majority, “since the plain language of the (Dictionary Act) text encompasses 'corporations,' including ones like Hobby Lobby and Mardel.”

Of course, one court's floor is another court's ceiling. A month earlier, in a similar case, the U.S. Court of Appeals for the 3rd Circuit, Philadelphia, ruled against cabinet-maker Conestoga Wood Specialties Corp., whose Mennonite owners similarly objected on moral grounds to offering their employees contraceptives.

In this case, however, the court ruled that “for profit, secular corporations cannot engage in religious exercise,” and that the Religious Freedom Act did not apply. Conestoga Wood Specialties Corp. was not a “person” whose religious freedom had been trammeled by an out-of-control government. It was, simply, a for-profit corporation that made nice wood cabinets, and its owners had no right to impose their moral and religious beliefs on the company's 950 employees, depriving them of the full benefits of a government health care program that was the law of the land. Or so said the 3rd Circuit.

The Obama administration, of course, disagrees. If the 10th Circuit's ruling is upheld, argued the government's lawyers in their brief to convince the Supreme Court to examine the issue, it would provide “a sword used to deny employees of for-profit commercial enterprises the benefits and protections of generally applicable laws.”

The 10th Circuit's Chief Justice Mary Beck Briscoe had this to say in a scathing dissent about her court's majority opinion: Conferring religious rights on a for-profit business “is nothing short of a radical revision of First Amendment law, as well as the law of corporations.”

For many watchers of this thorny issue, it's not just about birth control and religious freedom. It's another fusillade in the culture wars, with a whole host of familiar, collateral and often unspoken targets. Government intrusion, freedom of commerce, overregulation, corporate responsibility, the beginning of life, the role and rights of women.

In June, the Supreme Court will hand down an opinion. Some watchers expect a 4-4 split, with Justice Anthony Kennedy providing the swing vote, as he often does.

Instant Insights /

Between a rock of ages and a hard place

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