Religious Freedom Restoration Act Affirms Rights of For-Profit Corporations: Analysis of Hobby Lobby v. Sebelius

Introduction

The case of Hobby Lobby Stores, Inc.; Mardel, Inc.; David Green; Barbara Green; Mart Green; Steve Green; Darsee Lett v. Kathleen Sebelius et al. presents a significant judicial exploration into the intersection of corporate law and religious freedom. The plaintiffs, comprising two for-profit corporations—Hobby Lobby and Mardel—and their family owners, challenge federal regulations mandated under the 2010 Patient Protection and Affordable Care Act (ACA). Specifically, they argue that the ACA's requirement for employer-sponsored health plans to cover certain contraceptive services imposes a substantial burden on their sincerely held religious beliefs, thereby violating the Religious Freedom Restoration Act (RFRA) and the Free Exercise Clause of the First Amendment.

Summary of the Judgment

The United States Court of Appeals for the Tenth Circuit held that Hobby Lobby and Mardel are entitled to bring claims under RFRA, establishing a likelihood of success that their rights under the statute are substantially burdened by the contraceptive-coverage requirement. However, the court remanded the case to the district court for further consideration of additional factors governing the grant or denial of a preliminary injunction. The judgment acknowledged the plaintiffs' standing and irreparable harm but deferred the evaluation of the balance of equities and public interest to lower courts.

Analysis

Precedents Cited

The judgment extensively refers to key precedents shaping the legal landscape of religious freedom and corporate personhood:

• O Centro Espirita Beneficente Uniao do Vegetal v. Ashcroft: Affirmed RFRA rights for a non-profit corporation.
• Employment Division v. Smith: Led to the enactment of RFRA by highlighting limitations on the Free Exercise Clause.
• Citizens United v. FEC: Discussed corporate free speech rights, indirectly influencing views on corporate personhood.
• First Nat'l Bank of Boston v. Bellotti: Reinforced that corporations have First Amendment rights.
• Rozanova v. Ortho Pharmaceutical Corp.: Clarified that RFRA does not protect corporations with no religious affiliation.

These cases collectively underscore the evolving recognition of corporations as entities capable of exercising certain constitutional rights, particularly within the realms of free speech and religious exercise.

Legal Reasoning

The Tenth Circuit's legal reasoning hinges on the interpretation of RFRA's definition of a "person." Citing the Dictionary Act, which includes corporations within the definition of persons unless the context dictates otherwise, the court concluded that Congress did not explicitly exclude for-profit corporations from RFRA protections. Moreover, aligning Free Exercise Clause interpretations, the court recognized that for-profit corporations, when genuinely driven by religious convictions, may have protected religious liberties under RFRA.

The majority opinion navigated complex issues of corporate personhood, religious autonomy, and the scope of federal regulatory power. By affirming that Hobby Lobby and Mardel operate according to explicitly stated Christian principles and that federal mandates impose substantial burdens on these corporate religious exercises, the court positioned RFRA as a robust shield against what it perceives as undue governmental interference.

Impact

This judgment has profound implications for the landscape of religious freedom and corporate law in the United States:

• Expansion of RFRA Protections: Establishes a precedent that for-profit corporations can claim RFRA protections, potentially empowering numerous businesses to challenge other aspects of the ACA and similar regulations.
• Corporate Autonomy in Religious Matters: Bolsters the notion that corporations, like individuals, can base business practices on religious beliefs, influencing corporate governance and operational policies.
• Federal Regulatory Framework: Challenges the federal government's ability to enforce generally applicable laws without considering their impact on corporate religious practices, thereby prompting a reevaluation of the balance between religion and regulatory compliance.

Future cases may reference this judgment to either uphold or contest RFRA's applicability to various for-profit entities, potentially shaping the discourse around religious liberty and business operations nationwide.

Complex Concepts Simplified

Several legal concepts in this judgment merit clarification for better understanding:

• Religious Freedom Restoration Act (RFRA): A federal law that prohibits the government from substantially burdening a person's exercise of religion unless it is in pursuit of a compelling governmental interest and done in the least restrictive means.
• Preliminary Injunction: A temporary court order preventing a party from taking a specific action until a final decision is made in the case.
• Article III Standing: Legal doctrine requiring that plaintiffs have a sufficient connection to and harm from the law or action challenged to support their participation in the case.
• Anti-Injunction Act: Federal statute that generally prohibits lawsuits aimed at restraining the assessment or collection of taxes.
• Piercing the Corporate Veil: Legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders or directors.

Understanding these concepts is crucial to grasp the court's reasoning and the subsequent implications of the judgment.

Conclusion

The Tenth Circuit's decision in Hobby Lobby v. Sebelius marks a pivotal moment in the interpretation of RFRA, extending its protections to for-profit corporations with sincere religious convictions. By recognizing corporations like Hobby Lobby and Mardel as "persons" under RFRA, the court affirms the entanglement of corporate identity with religious autonomy. This judgment not only empowers businesses to align their operations with religious values but also challenges the federal government's capacity to enforce generally applicable regulations without infringing upon corporate religious practices.

As legal practitioners and corporations navigate this evolving terrain, the balance between religious liberty and regulatory compliance remains delicate. Future litigation will undoubtedly explore the boundaries established by this decision, shaping the interplay between corporate governance and religious freedoms in the United States.