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ACA and Healthcare Reform

The Hobby Lobby Primer: How A Craft Store Changed The Legal Landscape

Now that the United States Supreme Court has issued its decision in Burwell v. Hobby Lobby Stores, Inc., 2014 U.S. LEXIS 4505 (U.S. June 30, 2014)many are left with questions on the breadth of the decision and what it means going forwards. Below is a brief primer . [ subscribers may access Supreme Court briefs and an enhanced opinion for this case].).

What was the case about?

Two separate cases were filed by two companies closely-held by religious families: Hobby Lobby and Marvel, owned and operated by devoutly Christian parents and their children, and Conestoga Wood Specialties, owned and operated by Mennonites. Both families opposed the mandate of the Affordable Care Act (ACA), 42 USCS § 300gg-13, which required them to provide employees with coverage for four forms of birth control.  The plaintiffs maintained that they should be exempted from the mandate because the provision of birth control violated their religious beliefs. An Oklahoma federal court sided with the Hobby Lobby owners, issuing an injunction against enforcement of the birth control mandate Hobby Lobby Stores, Inc. v. Sebelius, 2013 U.S. Dist. LEXIS 107248 (W.D. Okla. July 19, 2013)Meanwhile, a Pennsylvania federal court reached the opposite conclusion in the Conestoga Wood case, denying an injunction to those plaintiffs. Conestoga Wood Specialities Corp. v. Sebelius, 917 F. Supp. 2d 394 (E.D. Pa. 2013)Both cases were appealed, with the Tenth Circuit Court of Appeals reversing the Oklahoma court’s ruling, Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114 (10th Cir. Okla. 2013)and the Third Circuit Court of Appeals upholding the ruling of the Pennsylvania court, Conestoga Wood Specialities Corp. v. Sec'y of the United States HHS, 2013 U.S. App. LEXIS 2706 (3d Cir. Pa. Feb. 7, 2013)The U.S. Supreme Court then granted certiorari for both cases. 

What was the holding?

In a decision written by Judge Samuel Alito and joined by Chief Justice Roberts and Justices Kennedy, Scalia, and Thomas, the majority found that closely-held corporations whose owners had strong religious beliefs could not be forced to provide insurance coverage for contraception if doing so would violate their religious beliefs under the Religious Freedom Restoration Act of 1993 (RFRA), 42 USCS § 2000bb-1. The majority found the mandate substantially burdened the plaintiffs’ religious exercise. Further, a less restrictive means was available since the federal government had already established a program to allow employees of religious non-profits to gain access to contraceptives, which could be extended to employees of closely-held corporations such as Hobby Lobby.

Does this mean corporations are now considered individuals for religious purposes? Does the decision cover other religiously objectionable medical treatment?

The majority emphasized it was a narrow ruling that only applied to closely-held corporations where a core, central religious belief could be determined from the corporations’ owners and operators. The majority also explicitly stated their decision only covered birth control and did not apply to other potential treatments that could be challenged as violating religious principles.

What did the minority have to say about the decision?

The remaining four members of the court sharply disagreed with the majority’s decision. Justice Ginsburg, writing for the minority, with Justices Kagan, Breyer, and Sotomayor concurring with the bulk of her decision, argued the majority’s decision was not as narrow as suggested. She argued that the majority decision had opened a door for closely-held corporations to attempt to opt out of any law by citing a sincerely held religious belief. Justice Ginsburg also asserted the government should not be forced to pay for contraceptives corporations were unwilling to pay for simply because a federal program for religious non-profits was already in place. Justice Ginsburg argued the majority was protecting the rights of corporations at the expense of thousands of employees. Finally, although the majority stated their decision did not extend further than contraception, the minority worried religious based objections could be extended to blood transfusions, vaccinations, certain medications, and racial issues, which would create what Ginsburg termed a “minefield” in the lower courts.

Why are opponents saying about the decision?

As Justice Ginsburg wrote in her dissent, many of the mandate’s supporters are concerned about the apparent “cracks in the door” that the decision leaves. First, closely-held corporations in the United States are not composed solely of small and/or religiously principled businesses: according to several studies, closely-held companies make up approximately 90 percent of all United States companies, including major employers such as Cargill, Koch Industries, and employ up to 52 percent of the American workforce. Opponents worry these corporations will attempt to use the decision to avoid paying for contraceptive coverage and other medical treatments, shifting the burden of payment to insurers and the insured. Gay rights and other minority groups worry that the Court’s interpretation of the RFRA could support other cases concerning businesses using religious belief as a basis for refusal to provide services to minorities and LGBT individuals.

Were any immediate actions taken by other courts following the ruling?

Shortly after the decision was issued, two decisions were issued in conformance with the Court’s holding. The United States Court of Appeals for the Eleventh Circuit, in Eternal Word Television Network, Inc. v. Burwell, enjoined the federal government from enforcing the contraceptive mandate against the plaintiff. In addition, the United States Supreme Court temporarily barred enforcement of the mandate against non-profit religious school Wheaton College, pending the filing of a response and further order of the Court.

What’s next?

Some legal pundits believe that this case has opened the door to dismissal of other contraception and business discrimination cases currently winding through the courts. A recent Washington Post article sets out possible scenarios for the battle to be renewed in Congress with amendments to the ACA or the RFRA. See What comes next for contraception coverage?  The same article notes that the Obama administration could take steps to provide objecting for-profit employers with the same accommodation offered to religious institutions. In any event, this is clearly a case to watch for additional political and judicial fallout. 

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