Hobby Lobby and the “Corporate Soul”

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April 20, 2013 by Tamara Piety

Hobby lobby That the old saying that a corporation has “no body to kick, no soul to damn” may have to be revised. While it still has no body to kick (or, for that matter, to send to jail –  BP pleads guilty to manslaughter), recent lawsuits filed on behalf of corporations challenge the ACA on the grounds that its mandatory coverage for contraception and some other post-intercourse medications intended to prevent pregnancy, violates the plaintiffs’ rights to free exercise of their religion under the First Amendment and is in conflict with RFRA (The Religious Freedom Restoration Act, 42 U.S.C. sec. 2000bb et seq.)  So perhaps a corporation has a “soul” after all, or at least a religion it wants to exercise. Hobby Lobby is only one of several of these cases. Hobby Lobby complaint.

To quote the Hobby Lobby complaint, while neither Hobby Lobby nor Mardel (another plaintiff in the case) are religious orders, churches, or other exempt organizations but instead are “privately held, “for-profit” corporations organized under Oklahoma law, the owners aver they (the owners) are “Christian and, from the beginning, …sought to run Hobby Lobby in harmnoy with God’s laws and in a manner which brings glory to God.” Complaint at para 18- 24.  (As a pleading aside, imagine how, if you are the defendant, you respond to this allegation: “admit”? “deny” “insufficient information”? And if you are the plaintiff, how do you prove that it is true? ). The ACA, the suit alleges, makes this impossible in that the company must pay for insurance coverage which includes medications and devices which, in their view, their religion forbids.

The Hobby Lobby case is actually one of many cases brought on behalf of many companies and individuals seeking to undermine the Health Care Act on religious grounds. The ones brought on behalf of corporations open up a new front – the free exercise clause – on what I have described in my book Brandishing the First Amendment, as an agressive use of the First Amendment to repel legislation aimed at regulating business. However, with this new free exercise claim, proponents may have  have exceeded the bounds of what the public thinks is reasonable when it comes to anthropomorphizing the corporate “person.”

The issue is complicated further because these various lawsuits often have slightly different facts, some of which may make a difference. Hobby Lobby is a closely held private company and so the notion that there is some sort of greater identity between the owners and the company has, at least at first glance, some appeal. But then consider Martha Stewart: if suits like this are successful, how should publicly traded companies be treated? And what of the views of the shareholders? Should the corporation be able to claim it is exercising their religious beliefs as well?

Another complication is that not all these suits raise precisely the same objection. Rejection of coverage for contraception is probably what gets the most press and which would be the most widespread public pushback since contraception generally is very popular. However, despite some claims in the press to the contrary, the Hobby Lobby suit does not raise an objection to what the plaintiffs call “non-abortion-causing contraception drugs and devices” (complaint at para. 57), but rather only to those drugs or devices which constitute (in their view, and this is contested by some in the medical community) “abortifacients.”

Other law suits, such as the one filed by Annex Medical, Inc. in the 8th Circuit, do  object to providing contraception coverage. And the ferocity of the objection is fairly intense because in the Annex case, Annex Medical has fewer than 50 employees, so it is  exempt from the mandate in any event. Yet, according to the plaintiff in that case, the owner’s religion requires him to pay for medical coverage for his employees, and because there are no options which do not include coverage for contraception the exemption is not sufficient.  Annex Medical – Order issuing preliminary injunction. Positions like these suggest that the Administration’s recent announcement that it would provide a further exemption Exemption will not satisfy many because it will not extend to fully for-profit businesses like Hobby Lobby.

The circuits are split on these suits, (the 10th Circuit denied Hobby Lobby’s request for an injunction, a denial which was upheld by Justice Sotomayor acting in her capacity as the Circuit Justice for the 10th Circuit).  Hobby Lobby – Supreme Court Order Although their different facts may suffice to reconcile apparently contradictory results, these various claims seem destined to make their way to the Supreme Court.

Whatever one thinks about the sincerity of the objections raised in these law suits, one thing that is notable is that they seek to elevate the free exercise claim of the corporate entity over constitutional and statutory rights of employees, many, if not most of whom may not share their employers’ interpretation of what their faith requires of them.

Indeed, it is clear that not even all those who identify themselves as a part of the same faith community as Hobby Lobby’s founders agree that their faith precludes accepting the insurance mandate. For example,  one commenter quoted in the Christian Post noted: “I’m still not seeing a cause for alarm here. The majority of the U.S. thinks women’s healthcare needs should be included in insurance plans […] I’m a Christian, and if I start a business then I expect I’ll have to comply with all the government regulations that come with incorporation. I wouldn’t expect special treatment for my personal religious beliefs. ”  (emphasis added)  Christians Question Hobby Lobby’s Defense, Biblical Stance Against Obamacare

“Others question why Hobby Lobby has chosen to address the contraceptive mandate but not other morally questionable issues within government, such as the funding of wars in Iraq and Afghanistan” Id. And some have raised the issue that “many of Hobby Lobby’s products are made in China,” a country with laws which violate many of the precepts the Hobby Lobby founders say they attempt to observe in the running of their business. Id.
There are several strands that are interesting here and they all probably deserve separate posts. One is the resistance to women’s full exercise of constitutionally and statutory rights. Another is the framing of this issue as one that purports to put those of faith at odds with the government, (although that obscures that the First Amendment not only promises free exercise but also freedom from religion). But for me the most interesting aspect  is this attempt to raise the free exercise claim on behalf of the corporate entity.
If we take the Hobby Lobby pleading at face value then it would seem that what its owners are attempting to do is to create some sort of hybrid for-profit religious corporation that doesn’t exist under current law, at least not as they would like it to exist. And the Greens (Hobby Lobby’s founders) would seem to be trying to engage in what might be called “selective piercing” or the corporate veil:  that is, they wish to pierce it for purposes of their religious beliefs, beliefs which they would like to exercise by denying even those employees of other faiths a benefit the law would otherwise provide, but presumably they would like the corporate shield to remain intact for other purposes, like protection against individual liability.
I wonder if those pursuing these lawsuits have thought fully through the possibilities that might arise if they are successful with these suits. If they succeed, why should such companies not also receive special tax treatment? (I think there is a movement afoot with the social benefit corporation model to do something like a hybrid). And if they do not receive special tax treatment, perhaps, no organization should if all organizations have potentially equal capacity to exist as moral, not just business entities. These may be questions for tax scholars and theologians, but it looks like a bumpy road ahead.
From previously on The Faculty Lounge http://www.thefacultylounge.org/2013/02/hobby-lobby-and-the-corporate-soul.html

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