Hobby Lobby wins big, but questions linger

Hobby Lobby and Conestoga Wood Specialties won big at the Supreme Court on Monday when the court ruled family-owned businesses have religious freedom protection from Obamacare’s contraceptive mandate. But the decision left many questions unanswered as the court said the government could find alternate ways to provide the objectionable contraceptives to the companies’ employees. Hobby Lobby and Conestoga Wood don’t have to cover Plan B and Ella, but now other objectors will wait and see what the federal government decides to do next.

The evangelical Green family owns Hobby Lobby and the Mennonite Hahn family owns Conestoga Wood. Both families object to providing coverage for Plan B and Ella on the grounds that those drugs can act as abortifacients. They provide coverage for the other forms of contraceptives.

Justice Samuel Alito, one of the court’s Roman Catholics, wrote the opinion, which Chief Justice John Roberts and Justices Antonin Scalia, Anthony Kennedy, and Clarence Thomas joined. The four liberal justices on the court—Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan—dissented.

The court ruled in favor of the businesses on nearly every question presented. It did not declare the contraceptive mandate unconstitutional, as some press releases and social media posts declared. The question at the heart of the case was whether for-profit corporations qualified as persons covered by the Religious Freedom Restoration Act (RFRA), a law passed in 1993 that provides a religious freedom test for laws. If the corporations did qualify as persons, the court had to test whether the mandate was a substantial burden on their religious practice and then whether the government was using the least-restrictive means to enforce its compelling interest in imposing the mandate.

“[W]e reject [the Department of Health and Human Services’] argument that the owners of the companies forfeited all RFRA protection when they decided to organize their businesses as corporations rather than sole proprietorships or general partnerships,” Alito wrote for the majority. “The plain terms of RFRA make it perfectly clear that Congress did not discriminate in this way against men and women who wish to run their businesses as for-profit corporations in the manner required by their religious beliefs.”

Alito methodically went through RFRA’s test, saying closely held corporations like Hobby Lobby qualify for RFRA protection, and the contraceptive mandate was a substantial burden on the Greens’ and Hahns’ religious beliefs. Alito said he assumed that the government had a compelling interest in requiring contraceptive coverage. But the court found no evidence that the government had used the least-restrictive means of providing that coverage to employees. Alito wrote that the rights of the third party, the employees, could not be used to trample religious rights.

“By framing any government regulation as benefiting a third party, the government could turn all regulations into entitlements to which nobody could object on religious grounds, rendering RFRA meaningless,” he wrote in a footnote. “In any event, our decision in these cases need not result in any detrimental effect on any third party. As we explain, the government can readily arrange for other methods of providing contraceptives, without cost sharing, to employees who are unable to obtain them under their health insurance plans due to their employers’ religious objections.”

The court did not say how the government could find another way to provide contraceptives, though, opening up a new area of debate over what, exactly, those “other methods” would be.

One possibility, Alito suggested, would be the current government accommodation for nonprofit organizations, in which nonprofit groups certify they object to the mandate and then their insurer itself provides coverage for the drugs. Some nonprofit groups objecting to the mandate find the accommodation acceptable; most have referred to it as a “shell game.”

Another method for providing the drugs to employees of companies with religious objections would be the court-endorsed approach of Little Sisters of the Poor, a Catholic nonprofit organization that won an emergency injunction from the high court.

Under the Little Sisters model, the nonprofit group notifies the government of its conscientious objection, and then the government arranges coverage through an insurer. Carl Esbeck, a religious freedom scholar and a professor at the University of Missouri School of Law, said the distinction of notifying the government instead of the nonprofit group’s insurer is important.

“At that point, it’s the government’s problem. … [The nonprofit groups are] no longer complicit when they tell the government, ‘I can’t do this,’” he said. “Here I stand. You have to at least do the Martin Luther thing. … That’s all we have a right to, is no moral complicity in wrongdoing.”

Justice Kennedy wrote an important concurring opinion signaling his openness to using the nonprofit accommodation to resolve the issue. His separate opinion signals he might differ from the conservative bloc in supporting the accommodation—the “shell game” that many companies find objectionable—in the future.

“You could lose his vote, is what he’s saying, if you push [Kennedy] too hard,” explained Esbeck, who sees a way forward for the dozens of remaining cases, since neither the government nor nonprofits groups are sure where Kennedy would come down on the government’s accommodation.

“I would think there’s a grace period here for all of this nonprofit litigation,” he said. “This would be a time to sit down with the Obama White House and hammer out a settlement, where they get a RFRA right, not a regulatory accommodation, to do what Little Sisters of the Poor could do.” Esbeck said it’s “New Testament biblical” to seek a good settlement, but he’s not sure there will be peacemaking lawyers at the White House to approach the issue.

“If you have calm minds, you can say, ‘I might lick my wounds … but I lost issue after issue after issue,” Esbeck said. “‘I can settle the rest of these cases and then all of this rancor between Catholics and Obama, that goes away.’ That’s a big deal.”