The Insatiable Demand for Extreme Religious Liberty Under the RFRAs, Part I: Why Hobby Lobby Falls Outside RFRA’s Protections

This is the year of the RFRA, the Religious Freedom Restoration Act. The American public has been deluged with news about the federal and state RFRAs. On the federal front, there are the large for-profit corporations like Hobby Lobby, demanding a right under RFRA to shape their benefit packages in opposition to the Affordable Care Act and Title VII. In the states, we have had a viral contagion of state RFRA amendments that would make it possible for businesses to defend refusals to do business with homosexuals and/or same-sex couples (and in Arizona, with women, minorities, and the disabled, among others). In this column, I will focus on the federal level. In my next column for Justia, I will turn to the state RFRAs.

For those of us who have been toiling in the RFRA vineyard for 20 years, it is heartwarming to see the American public awakening to its extreme regime. Only when the people understand and speak up, will our elected representatives cease to mindlessly pander to religious demands and return to the job of serving all of their constituents.

What is a RFRA?

What is a RFRA, you ask? It is a statute that accords believers extreme religious liberty rights. It is not, in fact, a “restoration” of constitutional principles, despite its title. To understand what we are dealing with, consider the following chart:

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A Recent History of the Expansion of Religious Liberty Doctrine
1. 1878-present
Ordered Liberty Under the Constitution, First Amendment, Free Exercise Clause
Employment Division v. Smith, 494 U.S. 872 (1990)
Church of Lukumi Babalu Aye v. City of Hialeah, 508 U.S. 520 (1993)
Rules:

1. Believer must prove law imposes a substantial burden.
2. A neutral, generally applicable law is constitutional unless irrational.
3. If law is not neutral or not generally applicable, ordinary strict scrutiny applies: the government must prove a compelling interest and that the law is narrowly tailored
4. The right is only good against the government (state action)

2. 1972
Singular Departure from Ordered Liberty Cases
Wisconsin v. Yoder, 406 U.S. 205 (1972)
Rules:

1. Believer must prove a substantial burden
2. Only Supreme Court case where a neutral, generally applicable law is subjected to strict scrutiny
3. Government must prove a compelling interest and that the law is narrowly tailored

3. 1993
Religious Freedom Restoration Act of 1993
Rules:

1. Believer must prove a substantial burden
2. Government must prove a neutral, generally applicable law serves a compelling interest
3. Narrow tailoring is replaced by the more extreme “least restrictive means”
4. Relief permitted only “against a government”

4. 2000
Amendments to Religious Freedom Restoration Act (further expansion of rights for believers)
Rules: Expands definition of “religious exercise” to: “any exercise of religion, whether or not compelled by, or central to, a system of religious belief”

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As this chart should make clear, there are critical differences between the First Amendment’s Free Exercise Clause and RFRA. The chart and the following are intended to be educational, not confrontational, which, unfortunately, is something that I must say in this politically-charged atmosphere. The rhetoric used to lobby for RFRAs as though they are mirror images of the First Amendment has been just that—rhetoric. A RFRA is not a mirror image of the First Amendment and no one—least of all a legislator—should think that it is. And none of the RFRA supporters need to call my description “hysterical,” as they are wont to do, because it is simply factual.

Under the Court’s approach to rights generally, which it often calls “ordered liberty,” the First Amendment subjects a neutral, generally applicable law to rationality review. For example, if you are stopped for a speeding ticket, the fact you are religious does not help. And a law that is not neutral, or not generally applicable, is subject to strict scrutiny. For example, if a law is passed to eject a religious group or if a law provides exceptions for secular conduct but none for conduct that is religiously motivated, it receives strict scrutiny.

Strict scrutiny for the Court in the free exercise cases has meant that the law must serve a “compelling interest” and be “narrowly tailored” to serve that interest. Only laws that are not neutral or not generally applicable have received this strict scrutiny.

A RFRA is a religious liberty special-of-the-day omelet, which breaks eggs and combines them with novel ingredients. First, forget rationality review for any statute. Instead, those statutes that are neutral and generally applicable (i.e., the vast majority of laws) are subjected to a version of strict scrutiny. That is an extraordinary leap in the power of believers to trump the law. That alone means that RFRA does not mirror the First Amendment.

Second, I say they are subjected to a “version” of strict scrutiny, because the original RFRA drafters weren’t satisfied with ordinary strict scrutiny from the free exercise cases. They added a more onerous burden on the government to prove that the law at issue is not just narrowly tailored, but rather is the least restrictive means for this believer. That makes a significant difference, according to the Court.

This leap in the tailoring requirement is often ignored, because people are taken in by the statute’s title and the fact it invokes a “return” to Sherbert v. Verner and Yoder v. Wisconsin. But neither of those cases, while requiring a compelling interest test, imposed the “least restrictive means” test on the government. (And, in truth, Yoder’s application of even ordinary strict scrutiny to a neutral, generally applicable law is the exception that proves the rule.)

The difference between narrow tailoring and least restrictive means is significant, according to the Court. “Narrow tailoring” means that the law is well-tailored to the government interests it is supposed to serve. It does not mean that the means must be specifically tailored to each individual claimant, however. For narrow tailoring, the government does not have to prove that it has considered and rejected all less restrictive alternatives.

Proving a “least restrictive means” is significantly more difficult for the government. “Least restrictive means” means that the law must be tailored to this particular believer. As Justice Powell stated in 1980, and it still remains true, “this ‘means’ test has been virtually impossible to satisfy,” as Justice Powell said in Fullilove v. Klutznick. The Court has not applied this onerous least restrictive means test in a First Amendment free exercise case, as it pointed out in Boerne v. Flores. (True, the Court mentioned the phrase in Thomas v. Review Board, but did not apply it and no majority has invoked it again in a free exercise case, including in the one case applying strict scrutiny after Smith, Church of Lukumi Babalu Aye v. City of Hialeah.)

When the government’s burden is increased to the “least restrictive means” test, the believer has a high likelihood of success, and the people protected by the law have a low likelihood of protection.

Now that the RFRA baseline has been established, let me turn to the current dispute regarding the Federal RFRA and the latest attempt to extend it beyond its already capacious contours.

The Federal RFRA’s Legislative History Undermines the Argument that Large For-Profit Corporations Can Avail Themselves of RFRA’s Sword to Avoid the Law

When Hobby Lobby and other large for-profit corporations ginned up RFRA arguments against the Affordable Care Act, I was, frankly, shocked. I wasn’t surprised that Obamacare’s opponents would seek shelter in any port in a storm, but had I missed some huge element of the RFRA history, where everyone agreed that a for-profit, nonreligious corporation could invoke RFRA against the government? As someone who was clerking for Justice Sandra Day O’Connor the year Employment Div. v. Smith was decided, and who litigated RFRA at the Supreme Court in Boerne v. Texas, and who testified repeatedly on RFRA’s successors in Congress and the states, and who has written extensively on the legislative history and RFRA itself, the answer is “No.”

The same culprits who gave us RFRA in the first place, including the Christian Legal Society, are now telling the Supreme Court in an amicus brief that RFRA was always intended to be applicable to large, for-profit nonreligious corporations, like Hobby Lobby. The brief asserts, with great tendentiousness, “both sides agreed that the language . . . covered corporations.” That is a misleading statement.

First, let’s look at the facts. Hobby Lobby is one of those company names that makes you think it is a cute, small, family-owned enterprise. Not really. According to Forbes and its own website, Hobby Lobby has $3.3 billion in annual revenue, 23,000 employees, 595 stores, and sells over 67,000 “crafting and home décor” items.

There is no precedent in American history that would accord free exercise rights to a commercial behemoth like Hobby Lobby. But there is a long history of how our legal culture has dealt with corporations of such size and commercial presence, and the legislative history of RFRA shows that such an entity cannot make a claim under RFRA.

The Corporate Culture That Weighs Against Hobby Lobby Being a Religious Entity

RFRA was not the first statute ever enacted in the United States and must be considered in light of entrenched understandings of law that preceded it. With RFRA, no one in Congress was remotely considering altering corporate structures and relations in our free market economy. Had the religious lobbyists suggested that they intended to do so, you can be sure the legislative history would include a debate on why extreme religious accommodation justifies radical changes to corporate culture. It does not. The members of the Coalition for the Free Exercise of Religion like the Christian Legal Society now tell us they were intending to include any corporation with their inventive legislative history, but the record does not support them. Besides, it is Congress’s intent that counts, and there is not any history that indicates any member intended to deep-six long-observed principles in the corporate world. Quite to the contrary.

In the United States, we have a public free market in goods and a private sphere of religious exercise. Large corporations like Exxon or Wal-Mart have never been considered religious entities that have free exercise rights. True, there is a regulation involving religion and large corporations, but that is Title VII, which forbids corporations with 15 or more employees from discriminating on the basis of religion, gender, race, or alienage against their employees. It doesn’t grant corporations like Hobby Lobby rights of free exercise.

Title VII actually does exempt religious corporations from its rule against religious discrimination (though not gender, race, or alienage). Therefore, let’s ask whether Hobby Lobby might be a “religious corporation” for purposes of Title VII and, therefore, perhaps, also for RFRA. Long-established case law does not help Hobby Lobby. In a letter written by the Equal Employment Opportunity Commission (EEOC), it explained the standard for determining whether an entity is a religious corporation:

Under established case law, this Title VII exception applies only to those institutions whose “purpose and character are primarily religious.”(1) That determination is to be based on “[a]ll significant religious and secular characteristics.” (2) Although no one factor is dispositive, significant factors that courts have considered to determine whether an employer is a religious organization for purposes of Title VII include: whether the entity is not for profit, whether its day-to-day operations are religious (e.g., are the services the entity performs, the product it produces, or the educational curriculum it provides directed toward propagation of the religion?); whether the entity’s articles of incorporation or other pertinent documents state a religious purpose; whether it is owned, affiliated with or financially supported by a formally religious entity such as a church or other religious organization; whether a formally religious entity participates in the management, for instance by having representatives on the board of trustees; whether the entity holds itself out to the public as secular or sectarian; whether the entity regularly includes prayer or other forms of worship in its activities; whether it includes religious instruction in its curriculum, to the extent it is an educational institution; and whether its membership is made up of co-religionists.

These factors work against Hobby Lobby, because even though its family owners and board members are religious and its website mentions its devotion to God, it is selling arts and crafts goods to the general market, not any particular faith or believer. And its products are not tailored to send a particular religious message. Looking at the bottom line, it is obviously successfully navigating the free market with its 595 stores, 23,000 employees, and over 67,000 secular products, but a religious corporation it surely is not. The close cases under Title VII have involved a Jewish community center and a nonprofit school, not a thriving for-profit corporation. Hobby Lobby is in fact, under any ordinary metric, nonreligious. The fact that the owners are religious also should be irrelevant, because 80% of Americans are religious. If Hobby Lobby is a religious entity, then so is Exxon, as I imagine plenty of its Board members and shareholders are religious..

But let’s say, as Professor Marty Lederman has frequently pointed out in his blog posts on the case, that the corporation itself is not the only claimant. What about the owners, shareholders, and board members?

Professors of corporate and criminal law who submitted an amicus brief in the Hobby Lobby case call Hobby Lobby’s theory a “values pass-through” theory, and argue that corporation law would be devastated if it were accepted by the Court:

The first principle of corporate law is that for-profit corporations are entities that possess legal interests and a legal identity of their own—one separate and distinct from their shareholders . . . . Allowing a corporation, through either shareholder vote or board resolution, to take on and assert the religious beliefs of its shareholders in order to avoid having to comply with a generally-applicable law with a secular purpose is fundamentally at odds with the entire concept of incorporation…If this Court were to agree that, as a matter of federal law, shareholders holding a control bloc of shares in a corporation may essentially transfer their religious beliefs to the corporation, the results could be overwhelming. Federal courts faced with RFRA and Free Exercise Clause lawsuits would be forced to resolve questions about what degree of ownership constitutes “control.” They would also be forced to resolve difficult questions about the “legitimacy” of controlling shareholders’ efforts to imbue the corporation with a religious identity . . . .

The separateness between shareholders and the corporation that they own (or, in this case, own and control) is essential to promote investment, innovation, job generation, and the orderly conduct of business . . . . Adoption by this Court of a “values pass-through” theory here would be disruptive to business and generate costly litigation. It would encourage intrafamilial and intergenerational disputes. It would also encourage subterfuge by corporations seeking to obtain a competitive advantage.

However you slice it, Hobby Lobby is a for-profit, nonreligious corporation whose owners, board members, and shareholders can’t channel their religious beliefs through the corporation.

Their only argument, therefore, would be if RFRA explicitly preempted corporate law and culture and, therefore, Hobby Lobby could take advantage of RFRA despite its corporate structure and purpose. That, it did not do.

RFRA Legislative History

Before turning to the legislative history that hurts Hobby Lobby’s case, it is worthwhile to consider the legislative history arguments raised by the Christian Legal Society’s amicus brief. That brief boldly tells the Court that the legislative history shows that everyone agreed that the language covered all corporations. Not so.

Their argument, based on the House Report, is that RFRA was intended to apply to “all governmental actions which have a substantial external impact on the practice of religion.” They dub this RFRA’s “universal coverage,” which is a none-too-subtle jibe at Obamacare, but also one that does not make their point. The question is whether a commercial giant like Hobby Lobby engages in “the practice of religion,” not whether every religious believer would have a claim under RFRA.

After RFRA was held unconstitutional in Boerne v. Flores, the Coalition for the Free Exercise of Religion (of which CLS is a member) returned to Congress and asked for another bite of the extreme religious liberty apple. Congress then considered the Religious Liberty Protection Act (RLPA), which was intended to be RFRA redux.

Many groups were aligned to defeat this RLPA, including the ACLU, gay rights advocates, children’s groups, cities, including Mayor Giuliani on behalf of New York City, prison administrators, and other government entities. Each of these groups were told by a number of members that the member simply would not vote for another omnibus religious liberty bill like RFRA, because it entailed too many unintended consequences. The argument that was raised that gained the most political traction was that it would be used to defeat state and local anti-discrimination laws, and in particular the fair housing laws, which was deeply concerning to the gay rights community. Their concerns were justified, because there were a handful of cases under RFRA before Boerne where believers who owned apartments had refused to abide by the fair housing laws, because they believed it was sinful to rent to unmarried couples, single mothers, and/or same-sex couples. The landlords were charged by local or state fair housing commissions with violations and raised RFRA in defense, with varying success. That prospect pushed the Democrats off the bill. (For those following the recent state RFRA news out of Arizona, note that homosexuals were concerned about being discriminated against by believers under a RFRA fifteen years ago.)

Thus, Congressman Nadler offered a Solomon-like amendment, wherein very small companies would be able to raise RLPA against the state and local civil rights laws, but large corporations would not. The amendment was not passed, and neither was RLPA. So the amendment itself tells us very little (despite CLS’s reliance on it in their amicus brief), but the debate is instructive on the views about the religious liberty “rights” of large for-profit corporations like Hobby Lobby.

The debate showed that the members viewed corporations like Hobby Lobby as incapable of having religious rights “by their nature.” For example, when debating his amendment, Nadler explained that it:

recognizes that religious rights are rights that belong to individuals and to religious assemblies and institutions. General Motors does not have sincerely held religious beliefs, by its nature.

Rep. Canady, the primary House sponsor, who opposed Nadler’s amendment, agreed on the “nature” of large, for-profit, nonreligious corporations, saying:

I do not think that General Motors or Exxon Corporation or any other such large corporation . . . could come within a mile of showing that anything that was done would substantially infringe on their religious beliefs. They do not have a religious belief. They do not have a religious practice. It is not in the nature of such corporations to have such religious beliefs or practices.

Thus, regardless of whether a member was for or against the Nadler amendment, they were all in agreement that large, for-profit corporations simply don’t have free exercise rights, by their very natures.

To put this point more directly: the Christian Legal Society’s amicus brief has misinterpreted the legislative history, just as it misinterpreted Congress on the relevant standards for free exercise at the Court with RFRA originally. Large, for-profit corporations were never intended to be protected, and RFRA is not an accurate “restoration” of the Court’s free exercise cases.

No member of Congress believed that large, for-profit, nonreligious corporations even have religious beliefs or practices. Therefore, they may not benefit from RFRA, but even more importantly, they cannot even bring a claim under RFRA in the first place. Their claims are non-starters. That should be the end of the Hobby Lobby case at the Supreme Court, actually, but what about the Christian Legal Society’s argument about “universal coverage?”

The brief says, in effect, that just because Hobby Lobby is more like Exxon than it is like a house of worship should not foreclose it from bringing a RFRA claim. Universal coverage, according to them, means that everyone gets to file a RFRA claim. But that is like saying a puppy can bring a RFRA claim. Only those that that engage in religious exercise can bring such claims, and Hobby Lobby, under the RLPA legislative history, Title VII definitions, long-settled corporate law, and common sense does not.

The bottom line is that neither Hobby Lobby, nor its owners, board members, or shareholders have claims under RFRA against the Affordable Care Act’s contraception mandate. This is good news for Hobby Lobby’s already impressive bottom line, because reproductive health care for women costs less than unplanned pregnancies. It is also good news for the women among their 23,000 employees, who will be able to make their own choices about whether they need contraceptive medications, without input from their employer either way.