The Supreme Court will come to a decision in Sibelius v. Hobby Lobby by the end of June. Given the oral arguments and what we know about the justices, how is the court likely to reason on the religious freedom aspects of this case?

By: Thomas C. Berg

The cases now before the Supreme Court involving for-profit corporations’ challenges to the Obama administration’s contraceptive-coverage mandate have provoked intense debates about the proper scope of religious freedom—and intense speculation about how the Court will rule. When the decision comes in late June, I expect that the justices, closely divided, will resolve the cases on relatively narrow grounds: for-profit corporations can raise religious freedom claims, and they may prevail in this case, but this will not validate wide-ranging challenges to commercial regulation. Such an approach makes sense.

The family-owned companies, Hobby Lobby Stores and Conestoga Wood Specialties, argue that some contraceptives included in the mandate—emergency contraceptives and IUDs—may cause abortions of newly fertilized embryos. Being forced to cover these, the companies say, would violate their religious beliefs and thus their rights under the 1993 Religious Freedom Restoration Act (RFRA). The cases present three questions involving RFRA’s key phrases: 

1. Can a for-profit corporation “exercise” religion? 
2. Does the coverage mandate “substantially burden” the companies’ or owners’ religious exercise? 
3. If so, does the mandate serve a “compelling government interest” and do so by the “least restrictive means?”

The March 25 oral argument signaled that the justices are deeply divided on these issues, with three to four clear votes on each side. Justices Ginsburg, Sotomayor, and Kagan posed repeated skeptical questions to Hobby Lobby’s lawyer. Justices Scalia and Alito and Chief Justice Roberts did the same to US Solicitor General Verrilli; I expect Justice Thomas shares their inclinations.

The deep division is suggested not only by the oral argument, but also by the fact that this dispute has become emblematic of the nation’s left-right divide, which I doubt the Court here will fully transcend. Strong conservatives see a nationwide mandate to cover potential abortifacients as an unprecedented imposition on economic freedom and religious conscience; strong liberals see the RFRA challenges as an unprecedented use of religious freedom claims to attack government’s power to regulate commercial businesses and promote women’s autonomy. Most justices will stand on one side of this fault line or the other.

That leaves Justices Kennedy and Breyer, who sent mixed signals during the argument. Kennedy likely holds the swing vote, as in so many other cases, and will likely favor a confined ruling.

To begin with, it seems unlikely that five justices will accept the government’s broad assertion that for-profit corporations have no religious freedom rights. At oral argument, Kennedy pressed the solicitor general to admit that under that broad assertion, forcing a business to pay for abortions (even, say, second-trimester abortions) would not violate religious freedom. This single question, of course, does not necessarily reveal Kennedy’s attitude toward the case. But the government’s broad position would eliminate even highly sympathetic claims: for example, if a state required gas stations to be open seven days a week to serve motorists’ emergencies, a corporation owned by Orthodox Jews that objected to opening its stations on the Sabbath would have no ability to complain. People have a significant interest in carrying their faith into economic life, including the conduct of their businesses. That makes it inappropriate to exclude business corporations entirely from asserting religious-freedom claims.

But if the Court allows claims by for-profits, and even rules ultimately for Hobby Lobby and Conestoga, it seems unlikely to do so on broad grounds. For one thing, the Court will probably limit religious-freedom claims to those asserted by closely-held corporations, with controlling owners, rather than publicly-traded corporations. For another thing, at oral argument Justice Kennedy expressed concern that ruling for the companies would place their employees in “a disadvantageous position.” As such, I would be surprised if Kennedy dismissed altogether the government’s interest in ensuring affordable contraception for women or in protecting employees generally. Courts should be cautious in granting exemptions to commercial businesses, because significant regulatory interests are often at stake. These include the interest in making sure that all people are able to participate fully in economic life as employees and customers—as well as the interest in avoiding giving unfair commercial advantages to exempted businesses.

One might analogize Kennedy’s situation here to his concurring opinion in United States v. Lopez (1995), where the Court for the first time in nearly 60 years invalidated a federal law as exceeding Congress’s power to regulate interstate commerce. Kennedy joined the majority, reasoning that basic federalism principles required the Court to “recognize meaningful limits on the commerce power,” but he also emphasized that the holding should be narrow so as “not to call in question the essential principles now in place respecting the congressional power to regulate transactions of a commercial nature.”

A parallel holding in Hobby Lobby—which similarly involves the relatively new issue of religious-freedom challenges to the regulation of business corporations—would be that RFRA’s compelling-interest test demands meaningful protection of religious freedom, even in the for-profit sphere, but that most commercial regulation will satisfy the test.

There are clearly narrow grounds for ruling for Hobby Lobby: at least two emerge from the oral argument and the relevant law and facts. First, as both Kennedy and Breyer noted, the government has already adopted an “accommodation” for religious non-profits (schools, social services, hospitals) under which their insurer provides contraception coverage directly to employees with no payment or administration by the employer. This mechanism was possible, the government concluded, because covering contraception actually reduces overall health costs by avoiding costs from pregnancies. If that’s so, then there seems no good reason why the government could not extend the accommodation to certain for-profit objectors; that would serve as a “less restrictive means” of ensuring contraceptive coverage for women.

This possibility reflects a more general point that distinguishes the coverage mandate from other situations involving religious objections to commercial regulation. As law professors Vikram Amar and Alan Brownstein have noted, the case is unusual in that the debate is not whether coverage can be provided but simply who will pay for it. If the coverage is indeed cost-neutral, as the government says, it is hard to see a compelling interest in requiring that it be provided by the employer rather than the insurer or the government.

A win for the companies, then, would not necessarily preordain success for other commercial objectors, such as the photographer who declines to provide services to a same-sex wedding and seeks an exemption from antidiscrimination law. In those cases, the plaintiffs argue—and courts have often held—that the very act of discrimination inflicts a harm that the government has a compelling interest in preventing. Now, others and I have argued that this should not be the end of those cases, and we have proposed exemptions for small businesspeople from antidiscrimination law in quite limited circumstances—where they provide services directly facilitating a wedding or marriage, such as photography or marriage counseling, and only where the business is quite small and alternatives are readily available. Even those limited proposals have faced stiff resistance; more importantly for present purposes, they do not come close to suggesting widespread exemptions for commercial refusals to serve or employ others, and the distinctive nature of the contraceptive-mandate issue means it would not trigger wide-ranging exemptions either.

Another potential narrow ruling for Hobby Lobby could invoke the abortion context of the case. Kennedy may have indicated interest in this aspect when he pushed the government to concede that its position would allow compelled coverage of abortions. American laws contain especially broad exceptions for objections to facilitating abortion, reflecting the judgment that forcing individuals or entities to facilitate a procedure they believe kills a human being certainly must be avoided. But as Roberts observed in a follow-up to Kennedy’s question, the employers here object that these contraceptives may cause abortions of newly fertilized embryos. And at least with respect to the “5 day after” pill and certain IUDs, their worries are not outlandish. (Disclosure: I filed a brief in the cases for the Democrats for Life of America making this argument.) The Court could find a distinctively strong tradition of accommodating abortion conscience and incorporate that into its RFRA analysis. Again, such a ruling would not create a limitless opportunity for religious objections to commercial regulations.

On the other hand, Kennedy could also be seeking narrow grounds to rule against Hobby Lobby. At oral argument, he joined other justices in asking why the companies could not avoid any “substantial burden” on their conscience by simply dropping health insurance and paying the $2,000-per-employee statutory assessment that this would trigger, especially since that sum may be less than per-employee insurance premiums. (In my judgment, however, the most this argument could justify is a remand to the lower courts. The government did not press the argument in briefs below, and the companies therefore never had occasion to present evidence that dropping insurance would also violate their religious beliefs and would require them to raise salaries substantially to avoid competitive disadvantage.)

We can’t be certain which way Kennedy, and therefore the Court, will go. My point is that the Court can sustain the companies’ challenges on narrow grounds that will not pose any threat to the broad range of commercial regulations. I hope, and I think the chances are good, that the Court will do just that.

Thomas Berg is the James L. Oberstar Professor of Law and Public Policy at the University of St. Thomas and co-director of the university’s Terrence J. Murphy Institute for Catholic Thought, Law, and Public Policy. 

This piece was originally authored on June 10, 2014 for the Religious Freedom Project at Georgetown’s Berkley Center for Religion, Peace, and World Affairs.