Corporate Exercise of Religion and Other Thoughts on the RFRA Claim in the Mandate Litigation

There has been a curious silence in the news and on the blogs about the preliminary injunction in Newland v. Sebelius.  True, there are some unique issues involving the nature of the plaintiffs, but the case may indicate the direction that courts which get over the ripeness hump and do reach the RFRA claim might tend (and, as in all things, ripeness will come with time).  Here are two questions that interested me.

First, on the issue of substantial burden, I was struck by the fact that Judge Kane did not really answer the question at all.  He seemed to assume the substantial burden — or perhaps to hold the “difficult questions” about substantial burden in abeyance.  One of those difficult questions, he said, was: “Can a corporation exercise religion?”  Three reactions:

  1. The answer to this question, posed in this way, must be yes.  The Catholic Church is a non-profit corporation, and it certainly can exercise religion — the free exercise component of the holding in Hosanna Tabor would make no sense if it and other religious non-profits could not.  Indeed, some folks have made something like the claim that corporate free exercise, rather than individual free exercise, is the foundational right. 
  2. Though the doctrine is controversial, we do say that corporations have rights of free speech.  See Citizens United.  If a corporation can speak in a way that is protected by the Speech Clause, why can it not exercise religion in a way that is protected by the Free Exercise Clause?  And by extension, why can it not suffer substantial burdens on its free exercise under RFRA?
  3. Still, there is an interesting issue about who is exercising religion when what we’ve got is a publicly traded corporation.  Suppose the shareholders do not care at all about the religious issue that the corporation has taken a stand on.  What does it mean to say in that circumstance that the corporation is exercising religion?

Second, I was surprised at the court’s skepticism with respect to the question of compelling interest. 

The court found that the plaintiffs were likely to succeed on the merits because the government did not show that its interest in the mandate was compelling.  The reason: the many exceptions created by both Congress and HHS itself.  “[T]his massive exemption completely undermines any compelling interest in applying the preventive care coverage mandate to Plaintiffs.”  More reactions:

  1. The court did not need to reach out and decide the question of compelling interest.  Here the court really could have just assumed that the mandate advanced a compelling interest and moved right to least restrictive means.  That the court found that the plaintiffs were likely to succeed on the compelling interest issue is noteworthy.
  2. Perhaps the most interesting thing of all to me: note that the court decided the question of compelling interest by making the argument which I have claimed could ground a free exercise challenge as well.  That is, that because the regulation contains hundreds of exceptions, it is not generally applicable and therefore falls outside the Smith framework (I have called this the individualized assessment exception to Smith, but for a much more thorough treatment of it, you will need to wait for my book, Tragedy & History: The Quality of Religious Liberty, due out in the spring (sorry for this and all future plugs, of which there will be many)). 
  3. Of course, as a practical matter, courts may just avoid the constitutional question and just focus on RFRA.  But to the extent that any do reach the free exercise question, the fact that the individualized assessment argument is already in the air as applied to the RFRA claim might be important.

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