Hobby Lobby wins, bishops lose in Supreme Court ruling

by Thomas Reese

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The decision handed down Monday by the U.S Supreme Court was a win for Hobby Lobby but a mixed blessing for the bishops.

Hobby Lobby got what it wanted. The owners will no longer have to pay for coverage of the two contraceptives (IUDs and Plan B) that they consider abortifacients. The bishops got a very expansive interpretation of the Religious Freedom Restoration Act, but the decision's discussion of the accommodation granted to religious corporations will make it very difficult for the bishops to win their case against it. 

The 5-4 ruling only applies to the federal mandate. State-mandated contraceptive coverage was not changed by the decision. 

The court majority ruled that "persons" with religious beliefs protected by the 1993 Religious Freedom Restoration Act (RFRA) include "closely-held" corporations -- those defined by the Internal Revenue Service as having 50 percent of their stock owned by five or fewer individuals. This means that if the federal government wants to force such corporations to do something contrary to their religious beliefs, then it has a series of legal hurdles to overcome. 

The RFRA prohibits the government from substantially burdening a person's exercise of religion, even if the burden results from a rule of general applicability, unless the government "demonstrates that application of the burden to the person -- (1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest."

Some had argued that the RFRA was simply overruling the 1990 Employment Division v. Smith case that had made it easy for governments to impose burdens on believers through rules of general applicability. But in Monday's decision, the court interpreted the law as granting even greater protection to believers. Justice Ruth Bader Ginsburg in her dissent called it "a decision of startling breadth." This was good news for the bishops. 

The court majority ruled that the contraceptive mandate was a substantial burden to Hobby Lobby because of the owners' religious belief against specific contraceptives. It also granted that the government had a compelling interest in providing contraceptives to women. 

But the court majority argued that the mandate was not the least restrictive means of furthering that interest. It pointed to the accommodation provided by the Department of Health and Human Services to religious nonprofits, which allowed them to opt out of contraceptive coverage while requiring their insurance companies to provide it anyway. The court saw no reason the same accommodation could not be offered to for-profit corporations. 

This is where the decision is problematic for the bishops who are challenging the HHS accommodation as not good enough. Churches and dioceses are completely exempt from the contraceptive mandate. Some other religious nonprofits were given a special accommodation whereby if they objected to contraceptives, they would not have to pay for them in their insurance, but their insurance companies would have to provide them anyway. 

The bishops felt the accommodation was inadequate. First, they felt the insurance companies would find some way to pass on the cost of the contraceptives to the nonprofits. Second, they felt that participating in the process, even by just filling out a form saying they objected to the mandate, would violate their consciences. 

The court accepted the HHS argument that, since it is cheaper for insurance companies to pay for contraceptives than for births, there would be no cost to pass on to the objecting corporation. 

The court also held up the accommodation for nonprofits as a model of how to respect the religious freedom of Hobby Lobby in a less restrictive way than the mandate. Can the court turn around and rule in favor of the bishops by saying that this model solution is no good after just saying that it is wonderful?

Finally, insisting that there is no difference between a nonprofit and a profit-making corporation may have a chilling effect on granting accommodations and exemptions to religious nonprofits in the future. Any accommodation, no matter how narrowly written, may be expanded by the courts to cover for-profit corporations.

Hobby Lobby clearly won this case. If following the court's direction, HHS now offers the same accommodation to the company that it offered to religious nonprofits, then Hobby Lobby employees will get their contraceptives anyway, except the insurance company will have to pay for them.

The bishops are celebrating this decision as a victory for religious freedom, but it may be used against them by lower courts to say that the HHS accommodation is fine. It may also make it more difficult for them to convince legislators and regulators to carve out exemptions and special accommodations for religious corporations in the future since they might end up being used by for-profit corporations. 

Some experts see this decision as inviting scores of other legal challenges based on a person's religious objections to particular laws; other experts believe that the decision was so narrowly focused that other challenges will be difficult. It is going to take years before we see the full implications of this decision.

For analysis of Wheaton College case, see "Supreme Court: Accommodation yes, Form 700 no."  

[Jesuit Fr. Thomas Reese is a senior analyst for NCR and author of Inside the Vatican: The Politics and Organization of the Catholic Church. His email address is treesesj@ncronline.org. Follow him on Twitter: @ThomasReeseSJ.]

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A version of this story appeared in the Aug 1-14, 2014 print issue under the headline: Impact of Hobby Lobby decision on bishops' cases uncertain.

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