Expanding RFRA: Secular For-Profit Corporations Assert Religious Freedom in Health Insurance Mandates

Introduction

In the case of Cyril B. KORTE, Jane E. Korte, and Korte & Luitjohan Contractors, Inc., Plaintiffs–Appellants v. Kathleen SEBELIUS, Secretary of Health & Human Services, et al., the United States Court of Appeals for the Seventh Circuit addressed a pivotal issue at the intersection of religious freedom and federal regulatory mandates. The plaintiffs, two Catholic families operating secular, for-profit corporations, challenged the federal government’s contraception mandate under the Religious Freedom Restoration Act of 1993 (RFRA). This commentary delves into the court’s comprehensive judgment, exploring the new legal precedents established and their broader implications.

Summary of the Judgment

The Seventh Circuit held that the plaintiffs—the business owners and their closely held companies—could indeed challenge the federal contraception mandate under RFRA. The court determined that the mandate imposes a substantial burden on their religious-exercise rights, warranting a strict scrutiny analysis. The government failed to demonstrate that the mandate serves a compelling governmental interest through the least restrictive means. Consequently, the court reversed the lower court's denial of preliminary injunctions, thereby enjoining the enforcement of the mandate against the plaintiffs pending further appeals.

Analysis

Precedents Cited

The court's decision is deeply rooted in landmark cases and statutory interpretations. Notably, it references Employment Division v. Smith (1990), where the Supreme Court curtailed the necessity for exemptions from neutral laws under the Free Exercise Clause unless burdens are substantial. RFRA was subsequently enacted as a legislative response to restore the compelling interest test previously upheld in cases like SHERBERT v. VERNER (1963) and WISCONSIN v. YODER (1972). The court also alludes to contemporary cases such as Hobby Lobby Stores, Inc. v. Sebelius (10th Cir., 2013), which similarly dealt with RFRA claims by for-profit corporations.

Legal Reasoning

Central to the court’s reasoning is the interpretation of “person” under RFRA, where the Dictionary Act explicitly includes corporations. The court posits that for-profit, secular corporations, especially closely held ones, mirror their owners' religious convictions through corporate decisions. Consequently, mandates that conflict with these convictions impose a substantial burden on religious exercise. The court emphasized that the contraception mandate doesn't just affect corporate policies but directly aligns with the owners' religious beliefs against facilitating contraceptive use.

Furthermore, the court navigated the jurisdictional considerations, affirming that the Anti-Injunction Act does not bar this suit, as the contraception mandate is a regulatory requirement separate from tax collection. It also addressed the standing of the plaintiffs, confirming that both the corporations and their individual owners possess standing under RFRA to challenge the mandate.

Impact

This judgment significantly extends RFRA’s protective umbrella to secular, for-profit corporations, enabling them to assert religious freedom claims against generally applicable federal mandates. The potential ripple effects are extensive:

  • Businesses across various sectors might seek exemptions from federal regulations that conflict with their owners' religious beliefs, leading to a proliferation of litigation.
  • Federal agencies may encounter increased complexity in implementing nationwide mandates, having to navigate a myriad of religious exemptions.
  • Employees may find certain health benefits, such as contraceptive coverage, inconsistently applied across employers, potentially undermining the ACA’s objectives for uniform health care access.

Moreover, this decision sets a precedent that challenges the balance between individual corporate religious rights and collective public health policies, potentially necessitating legislative clarifications to address ambiguities.

Complex Concepts Simplified

Religious Freedom Restoration Act (RFRA)

RFRA is a statute that safeguards individuals and entities from substantial burdens on their religious practices imposed by federal laws, unless the government can demonstrate that such laws serve a compelling interest and are the least restrictive means to achieve that interest. Originally enacted to restore the stringent scrutiny test for religious claims disrupted by Employment Division v. Smith, RFRA has since become a cornerstone for religious liberty litigation.

Substantial Burden

A “substantial burden” under RFRA refers to significant interference with the exercise of religion, which can include both direct and indirect coercion to act against religious beliefs. The court assesses whether the governmental action forces adherence to a practice contradicting religious convictions or indirectly pressures individuals or entities to comply with such practices.

Strict Scrutiny

Under strict scrutiny, the government must prove that the challenged law serves a compelling interest and that it is narrowly tailored to achieve that interest using the least restrictive means. This is the highest level of scrutiny applied by courts, ensuring that fundamental rights are adequately protected against governmental infringements.

Conclusion

The Seventh Circuit’s decision in Korte v. Sebelius marks a transformative moment in the application of RFRA, recognizing the religious-exercise rights of secular, for-profit corporations. By extending RFRA protections to these entities, the court acknowledged that corporate decisions can embody and reflect their owners' religious beliefs, thereby subjecting federal mandates that conflict with these beliefs to rigorous judicial examination. However, this expansion raises critical questions about the future landscape of religious liberty litigation, the enforceability of federal health mandates, and the broader implications for the balance between individual corporate rights and collective public interests. As businesses and federal agencies navigate this new terrain, legislative responses may become necessary to delineate the boundaries of RFRA’s applicability and to harmonize corporate religious freedoms with public policy objectives. Ultimately, while the decision empowers corporations to assert religious freedoms in unprecedented ways, it concurrently challenges the uniform implementation of federal mandates, potentially fracturing the cohesive framework intended by the Affordable Care Act.