Sebelius v. Hobby Lobby Stores, Part I: Background and Standards of Law

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Likko, C.J. delivered the opinion of the Ordinary Court as to this Part I.

A

Petitioner Kathleen Sebelius is the Secretary of Health and Human Services of the United States. She is charged by law with implementation of portions of the Patient Protection and Affordable Care Act and regulations promulgated thereunder, including 42 U.S.C. § 300gg-13(a)(4) and 78 Fed. Reg. 39870, which requires that corporations above a certain size provide medical insurance benefits to their employees that includes coverage for certain contraceptive methods (the “Contraception Mandate”), which are named in the regulations.

Respondents Hobby Lobby Stores and Mardel (collectively, “Hobby Lobby”) are privately-held Oklahoma corporations which are subject to the Contraception Mandate.  Respondents David Green, Barbara Green, Steve Green, Mart Green, and Darsee Lett (collectively, “the Greens”) are natural persons, and they are also the stockholders, officers, and directors of Hobby Lobby. (Hereinafter, the term “Respondents” shall refer to all of the corporations and individuals collectively.)

Hobby Lobby Stores’ principal business activity is the retail sale of consumer products, specifically crafting and hobby supplies such as paint, yarn, and paper. Mardel’s principal business activity is the retail sale of books and other products with explicitly Christian content.

Respondents cite, and Petitioner does not dispute the existence of, a multiplicity of factual indicia of religious beliefs. Hobby Lobby’s statements of purpose, authored by the Greens, provide that the companies are committed to “Honoring the Lord in all we do by operating the company in a manner consistent with Biblical principles.” The Greens have each signed a “Statement of Faith” and a “Trustee Commitment” which appear to be extra-legal documents but are nevertheless treated by the Greens in the discharge of their duties as directors and officers of Hobby Lobby as binding. Under the direction of the Greens, Hobby Lobby voluntarily does not operate businesses on Sundays, Christmas, or Easter; purchases religiously-themed advertisements on Christmas and Easter; provides access to various kinds of religious guidance and education to their employees; refrains from selling alcohol or alcohol-related products like shot glasses; and provides financial support to Christian charities and missionaries.

Hobby Lobby provides employee health insurance benefits (Hobby Lobby employs over 13,000 people; Mardel employs roughly 500) but do not include coverage for what Respondents consider to be abortifacients. Respondents claim a sincere religious belief that dispensation and use of abortifacients are a form of murder. Further, Respondents claim that four contraceptive methods listed in the Contraception Mandate are abortifacients. (This opinion does not address the veracity of that claim.) And finally, Respondents claim that should they fail to comply with the Contraception Mandate in its current form, or should they discontinue offering health insurance altogether to avoid compliance with the Contraception Mandate, they will be subject to very substantial monetary penalties, which they estimate range from $26,000,000 per year to $475,000,000 per year.

B

Therefore, Respondents filed suit against Petitioner in September of 2012, in the United States District Court for the Western District of Oklahoma. They alleged that the Contraception Mandate imposed an unreasonable burden on their rights to free exercise of religion and therefore violated the Religious Freedom Restoration Act of 1993 (“RFRA”), the First Amendment and specifically the Free Exercise Clause thereof, and the Administrative Procedures Act. All three of these claims are predicated upon functionally the same legal analysis.

RFRA was passed by Congress in response to the Supreme Court’s decision in Employment Division v. Smith, 494 U.S. 872 (1990). RFRA codified the two-step burden-shifting test expounded by the Supreme Court in Sherbert v. Verner, 374 U.S. 398 (1963) and Wisconsin v. Yoder, 406 U.S. 205 (1972). Under this test, the plaintiff must prove two things: first, that the plaintiff has a claim implicating a sincere religious belief, and second, that the government’s action imposes a substantial burden upon that religious belief. If the plaintiff can prove these things, the burden then shifts to the government to show that its actions are both in furtherance of a compelling governmental interest, and that the government’s action is narrowly-tailored to restrict the free exercise of religion in the most minimal manner possible.

The District Court found that Hobby Lobby and Mardel were not “persons” within the meaning of RFRA, because as for-profit corporations, they do not enjoy the right of free exercise of religion. Then, the District Court found that the Greens were not able to show a “substantial burden” on their Free Exercise Rights because the Contraception Mandate imposed a burden on them which, if any, was only “indirect and attenuated.”

The Respondents then appealed to the Tenth Circuit Court of Appeals. The Tenth Circuit found that Hobby Lobby and Marden were “persons” for RFRA purposes and that they were capable of exercising religion. As to the Greens, the Tenth Circuit directly reversed the District Court’s ruling that the Contraception Mandate imposed only an “indirect and attenuated” burden, and instead found that the proffered justification for the Contraception Mandate, “public health and gender equality” were not “compelling” governmental interests and that the Contraception Mandate was not sufficiently narrowly-tailored so as to minimize the impact on free exercise rights. Thus, the Tenth Circuit reversed the District Court, and enjoined enforcement of the Contraception Mandate on Respondents.

Petitioner timely appealed to the Supreme Court, which granted certiorari.

C

Importantly, the Supreme Court determined in Employment Division v. Smith, supra at 879, that the Free Exercise Clause “does not relieve an individual of the obligation to comply with a valid and neutral law of general applicability.” This remains the Supreme Court’s interpretation of the Free Exercise Clause to this day. RFRA is a statute, not an amendment to the Constitution.

It is a “fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.” Davis v. Michigan Dept. of Treasury, 489 U.S. 803, 809 (1989). A court must therefore interpret the statute “as a symmetrical and coherent regulatory scheme,” Gustafson v. Alloyd Co., 513 U.S. 561, 569 (1995), and “fit, if possible, all parts into an harmonious whole,” FTC v. Mandel Brothers, Inc., 359 U.S. 385, 389 (1959). Similarly, the meaning of one statute may be affected by other Acts, particularly where Congress has spoken subsequently and more specifically to the topic at hand. See United States v. Estate of Romani, 523 U.S. 517, 530–531 (1998). In addition, we must be guided to a degree by common sense as to the manner in which Congress is likely to delegate a policy decision of such economic and political magnitude to an administrative agency. Cf. MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U.S. 218, 231, (1994). FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000). Thus, courts are guided to seek reconciliation and harmonization of the Contraception Mandate with RFRA to the maximum extent possible, and only to find a conflict when it absolutely cannot be avoided.

Likko, C.J., was joined in this part I of the opinion of the Ordinary Court by Thompson, J., Kowal, J., Togut, J., and Dave, J..

Burt Likko is the pseudonym of an attorney in Southern California. His interests include Constitutional law with a special interest in law relating to the concept of separation of church and state, cooking, good wine, and bad science fiction movies. Follow his sporadic Tweets at @burtlikko, and his Flipboard at Burt Likko.