Written by Don Byrd
Yesterday, I posted excerpts from the Supreme Court’s Hobby Lobby oral argument highlighting the topic of third party burdens. How should RFRA analysis, the Court asked in a variety of ways, handle religious freedom accommodations sought by an employer that would impact negatively the rights of employees?
An even more fundamental question, and one that seemed to be generating the most public attention heading into yesterday’s argument, is whether RFRA applies to for-profit corporations in the first place. If so, how do corporations exercise religion? And who gets to determine the content of a corporation’s religious beliefs?
The Court spent a fair amount of time volleying that issue. Many justices seemed skeptical that for-profit/nonprofit was the appropriate line to draw in allowing a corporation to bring suit under RFRA. Others pressed the point. You can read the entire transcript here, or scroll down. I have compiled (lengthy) highlights from oral arguments specifically on this issue.
MR. CLEMENT (representing Hobby Lobby): I think the place to start is the statute itself, which broadly provides coverages to persons. That is not an incidental term. It’s a term that picks up additional context through the Dictionary Act and specifically applies to all corporations, to joint partnerships, to societies.
JUSTICE SOTOMAYOR: How does a corporation exercise religion? I mean, I know how it speaks and we have, according to our jurisprudence, 200 years of corporations speaking in its own interests. But where are the cases that show that a corporation exercises religion?
MR. CLEMENT: Well, Justice Sotomayor . . . I’d start with cases like Lukumi or O Centro, which all involved corporations, and nobody thought it was particularly problematic there that the plaintiffs before the court were artificial entities. And I suppose you could take –
JUSTICE SOTOMAYOR: Well, but they were really arguing about things that affected their membership, not them as a corporate entity.
MR. CLEMENT: Well, I’m not sure that you can so easily divide the two, and we can talk about how it is with corporations generally . . . The courts every day deal with issues of trying to figure out what kind of intent or motivation a corporate entity has.
JUSTICE SOTOMAYOR: So . . . how do we determine when a corporation has that belief? Who says it? The majority of shareholders? The corporate officers? The is it 51 percent? What happens to the minority? And how much of the business has to be dedicated to religion? 5 percent? 10 percent? 90 percent?
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MR. CLEMENT: . . . I think the way to approach those cases would be the same basic way you approach other questions of corporate intent or corporate motivation. You look to the governance doctrines, if any of this is put at issue. And I think that’s really a critical question, which is ultimately, I think this line of questioning goes to a question of sincerity, and if some large corporation asserts some claim that’s going to save them lots of money, I would think that the government in those kind of cases is really going to resist the sincerity piece of the analysis.
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JUSTICE ALITO (to General Verrilli): Well, if you could start with the question of whether the …companies in this case have a right to bring RFRA claims because they’re for-profit corporations. You argue that they can’t.GENERAL VERRILLI (representing the government): That’s correct.
JUSTICE ALITO: Now, why is that? Is it your position that there’s something about the corporate form per se that is inconsistent with the free exercise claim?
GENERAL VERRILLI: No, because, obviously, churches can bring claims.
JUSTICE ALITO: All right. But is it your argument that there’s something about engaging in a for-profit activity that is inconsistent with a free exercise claim?
GENERAL VERRILLI: Yes. . . . But… let me say, I think the relevant question here is what did Congress think it was doing in 1993? [W]e understand the Dictionary Act provides a broad definition of person, but the Dictionary Act doesn’t define exercise religion. And the operative statutory language is . . . person’s exercise of religion. And so you can’t look to the Dictionary Act to define that. But Congress told you where to look. It told you to look to the preSmith case law
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And in the entire history of this country, there is not a single case in which a for-profit corporation was granted an exemption…
JUSTICE SCALIA: Not a single case in which it was denied exemption, either. All you’re saying is… that there are no cases.
GENERAL VERRILLI: Well, Lee was certainly a case in which a for-profit enterprise was denied an exemption. Braunfeld was such a case. Gallagher was such a case.
JUSTICE SCALIA: Not on the ground that it was a forprofit enterprise. There is not a single case which says that a for-profit enterprise cannot make… a freedom of religion claim, is there?
GENERAL VERRILLI: Right. There is not a single case… holding that. Except that in Lee, it was critical to the Court’s analysis… that Mr. Lee and his business had chosen to enter the commercial sphere.
JUSTICE KAGAN: Isn’t that a merits question, General? I mean, I totally understand that argument… as an argument about the merits. I’m not sure I understand it as a threshold claim that… the claim is not recognizable at all.
GENERAL VERRILLI: Right. Well . . . I do want to move to the compelling interest analysis, but if I could make one point in response to Your Honor’s question, that the Court’s got to decide what… a person’s exercise of religion means. And that it would be such a vast expansion of what Congress… could have thought it was doing in 1993, when it enacted RFRA, to say that for-profit corporations can make claims for religious exemptions to any laws of general application that they want to challenge.
. . . Mr. Clement says, well, you don’t have to worry about anything other than small, tightlyknit corporations like the one at issue here. I take the point of the appeal of a situation like this one. But the way in which he suggests that you will be able to distinguish this case from a case in which a large corporation comes in or a public company comes in, is that you will have more grounds to question the sincerity of the claim. But that raises exactly the kinds of entanglement concerns that this Court has always said you should try to avoid.
CHIEF JUSTICE ROBERTS: . . . Whether it applies in the other situations is is a question that we’ll have to await another case when a large publiclytraded corporation comes in and says, we have religious principles, the sort of situation, I don’t think, is going to happen.
GENERAL VERRILLI: But even with respect to these companies, Your Honor, what are you going to do if there’s a dispute between let’s say there are three shareholders a dispute between two in the majority and one in the minority? You’re going to have to get yourself involved the courts will have to get themselves involved in all kinds of –
JUSTICE SCALIA: Whoever controls the corporation. Whoever controls the corporation determines . . .
GENERAL VERRILLI: And then and the minority shareholder will say, well, this is under state law, this is an act of oppression and this is –
CHIEF JUSTICE ROBERTS: Well, that’s a question of State corporate law. It’s not a question of who can bring an action under RFRA.
JUSTICE ALITO: What about the implications of saying that no forprofit corporation can raise any sort of free exercise claim at all and nobody associated with the forprofit corporation can raise any sort of free exercise claim at all?
Let me give you this example. According to the media, Denmark recently prohibited kosher and halal slaughter methods because they believe that they are inhumane. Now, suppose Congress enacted something like that here. What would the what would a corporation that is a kosher or halal slaughterhouse do? They would simply they would have no recourse whatsoever. They couldn’t even get a day in court. They couldn’t raise a RFRA claim. They couldn’t raise a First Amendment claim.
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GENERAL VERRILLI: Well, I think in that circumstance, you would have, I think, an ability for customers to bring suit. I think you might recognize third party standing on behalf of the corporation on the corporations, on behalf of customers. So a suit like that could be brought. . . .
JUSTICE BREYER: I mean, the point that Justice Alito was making is that take five Jewish or Muslim butchers and what you’re saying to them is if they choose to work under the corporate form, which is viewed universally, you have to give up on that form the Freedom of Exercise Clause that you’d otherwise have. Now, looked at that way, I don’t think it matters whether they call themselves a corporation or whether they call themselves individuals. I mean, I think that’s the question you’re being asked, and I need to know what your response is to it.
GENERAL VERRILL: Well, I think our response is what the Court said in Part 3 of the Lee opinion, which is that once you make a choice to go into the commercial sphere, which you certainly do when you incorporate as a forprofit corporation, you are making a choice to live by the rules that govern you and your competitors in the commercial sphere.
