To date, three Circuits have examined the constitutionality of the HHS mandate: the Tenth Circuit, in Hobby Lobby Stores, Inc. v. Sebelius (June 27, 2013); the Third Circuit, in Conestoga Wood Specialties Corporation v. Sebelius (July 26, 2013); and most recently, the Sixth Circuit in Autocam Corporation v. Sebelius (September 17, 2013). The tally stands two to one in favor of the HHS mandate, with the Third and Sixth Circuits reaching similar judgments in their respective cases.
In Hobby Lobby Stores, Inc. v. Sebelius, the religious owners of Hobby Lobby claimed that being forced to provide coverage for abortifacients––abortion-causing drugs––violated the tenets of their Christian faith. Contrary to its sister courts, the Tenth Circuit panel held that Hobby Lobby was entitled to bring claims under the Religious Freedom Restoration Act, and that Hobby Lobby had Article III standing to sue.
In contrast to the Tenth Circuit, the Third Circuit, joined just days ago by the Sixth Circuit, arrived at a quite different conclusion. In Conestoga Wood Specialties Corporation v. Sebelius, the panel denied the Mennonite owners of a cabinet manufacturing company injunctive relief against the HHS mandate. Circuit Justice Marjorie Rendell’s majority opinion argued that the plaintiffs are unlikely to succeed in their challenge of the PPACA. She further concluded that corporations cannot practice religion in the way individuals can. Therefore, corporate bodies aren't awarded protection under the Free Exercise Clause.
Joining the Third Circuit last week, the Sixth Circuit ruled on the case of Autocam Corporation v. Sebelius. “Autocam” (a company encompassing two non-profit, secular corporations controlled by the Kennedy family) brought suit against the HHS for the contraceptive mandate, claiming it forced them to violate Catholic doctrine. Similar to the Third Circuit’s ruling, the Sixth Circuit held that Autocam’s claims should be dismissed on account of the company not being a “person” capable of holding religious beliefs.
An issue common to all three cases was the Religious Freedom Restoration Act (RFRA). A federal law aimed at protecting free religious exercise, the RFRA provides a claim for individuals and religious organizations who find themselves victims of federal laws that substantially constrain their religious practices. The Sixth Circuit argued that the legislative history of the RFRA made no mention of for-profit corporations, a fact the panel took as sufficient evidence to prove Congress did not intend “persons” to encompass corporations.
After asserting that for-profit corporations such as Autocam are not “persons” in relation to the RFRA, the court turned to Autocam’s next argument, which concerned the decision in Citizens United v. Federal Election Commission. Because Citizens United recognized some First Amendment rights for corporations, Autocam argued that, consequently, all First Amendment rights should be extended to said entities.
The Sixth Circuit panel ultimately found this argument unconvincing, positing that the Free Speech Clause and the Free Exercise Clause of the First Amendment have historically been interpreted very differently. In fact, two completely separate bodies of precedent deal with the two clauses. And for this reason, the Sixth Circuit found that rights afforded to corporations by the Free Speech Clause do not automatically render true the assertion that Autocam is a person capable of exercising religion.
Another issue at hand in all three cases concerns the shareholder standing rule. The shareholder standing rule prevents corporate shareholders from bringing claims intended to redress injuries to their corporation. In Autocam, for example, the Sixth Circuit ruled that the shareholder standing rule barred the Kennedys from raising a RFRA claim because they were legally tied to Autocam.
The Sixth Circuit’s argument rested on well-established doctrines of corporate separation. They wrote, “[t]he Kennedys’ actions with respect to Autocam are not actions taken in an individual capacity, but as officers and directors of the corporation.” This conclusion, the panel ruled, barred the Kennedys from bringing RFRA claims in their individual capacities as well.
Just this past Thursday, the U.S. Supreme Court agreed to hear oral arguments on Hobby Lobby, responding to the federal government’s petition for a writ of certiorari––or petition for judicial review by the Court. Hobby Lobby has until October 21 to file a response, according to the case docket. Given the complex legal matters involved, the growing Circuit split with the Sixth Circuit’s recent ruing, and the greater social issues at stake, the Court’s ruling on Hobby Lobby is something to keep an eye on in the coming months.
Photo Credit: Flickr user Hollywata