The U.S. Supreme Court Hears Arguments on Corporation’s Religious Objections to Affordable Care Act Contraception Mandate

Megan J. Muoio, March 26, 2014

On Tuesday, March 25, 2014, the United States Supreme Court heard oral arguments in one of the most anticipated cases of the 2013-2014 Term – Sebelius v. Hobby Lobby Stores and Conestoga Wood Specialties Corp. v. Sebelius, which were consolidated for argument. Both cases concern a challenge by a private, for-profit corporation to the ACA’s mandate that all covered employee health plans provide no-cost pregnancy-related services for women, which includes prescription contraceptives.

Hobby Lobby is a national chain of craft stores with 13,000 employees and has a subsidiary, Mardel, a national chain of religious book stores with 400 employees. The Green family, which owns Hobby Lobby and Mardel, objected to the contraception mandate in the ACA because they believe that the mandate interferes with their religious beliefs. Hobby Lobby challenged the mandate to cover only those forms of birth control that it believes are abortofacients. Hobby Lobby points to the 1993 Religious Freedom Restoration Act, which prohibits the federal government from imposing a “substantial burden” on the religious exercise of a “person” unless the government can prove a compelling government interest in the burden and that it is using the least restrictive means. Importantly, for the purpose of this appeal, “person” is not defined under the Act.

The key question is whether a corporation is a “person” under the Act whose religious freedom can be impinged upon by the federal government. The United States Court of Appeals for the Tenth Circuit held that a for-profit corporation could express its faith, which should be protected under the Act. On appeal to the Supreme Court, the federal government argued that: (1) corporations do not exercise religion, (2) the ACA’s mandate only applies to corporations and not their individual owners, who are separate entities, and (3) the federal government has proven a compelling interest in ensuring women’s access to vital health benefits under the federal health insurance program.

Conestoga Wood comes to the Supreme Court on appeal from the United States Court of Appeals for the Third Circuit, which held that the Mennonite-family-owned corporation could not claim the religious rights of a “person” under the Religious Freedom Restoration Act or the First Amendment of the Constitution.

At oral argument, the Justices divided their questioning along predictable lines, with Justices Breyer, Ginsburg, Kagan and Sotomayor peppering Paul Clement, the attorney for Hobby Lobby and Conestoga Wood, with difficult questions regarding whether a corporate-religious exception to the contraception mandate would be a slippery slope to corporate objections for other medical issues, such as the provision blood transfusions or vaccinations. Their questions also expressed a concern with the possible impact of religious objections of corporations on other types of litigation, such as minimum wage and overtime laws, social security tax legislation and legislation that secures rights for lesbian, bisexual, gay and transgender individuals. Solicitor General Donald Verilli, arguing on behalf of the federal government and in support of the ACA mandate, fielded tough questions from Chief Justice Roberts, Justice Alito and Justice Scalia. Justice Kennedy played both sides of the argument, lending credence to his reputation as the Justice with the swing vote.

Attorneys and advocates on both sides of this case have been anticipating the outcome of this appeal for months and predicting the result: will the mandate be upheld or will corporations be able to deny contraceptive coverage to their employees? Whatever the outcome, a decision is expected by the end of the Court’s term in June.