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The Montana Supreme Court did not immediately rule after hearing competing arguments from a Hutterite colony and the state on whether Montana's requirement that employers carry workers' compensation insurance can be expanded to religious organizations.
The Hutterites in rural Montana are fighting state attempts to impose the legislation backed by businesses, which complain they can't outbid the low cost of the communal workers.
A state judge has already ruled the 2009 law expanding the workers' compensation law to force the Hutterites to pay for the insurance violated their right to freely exercise their religion.
The state is asking the high court to reverse that decision, arguing the new law deals only with commercial activities and stays out of the Hutterites religious affairs.
The Hutterites are Protestants similar to the Amish and Mennonites who live a life centered on their religion, but unlike the others, Hutterites live in German-speaking communes scattered across northern U.S. states and Canada.
They don't pay wages, don't vote and don't enlist in the military. They make their own clothes, produce their own food and construct their own buildings.
"Their core belief is that they have no property. All the property and labor they have, they contribute to the colony," Ron Nelson, an attorney for the Big Sky Colony, told the Montana Supreme Court.
The Hutterites' argument that everything they do is tied to their religion cannot exempt them from regulation when they voluntarily enter into an outside commercial activity, assistant Attorney General Stuart Segrest said.
"They're not allowed to become a law unto themselves," Segrest said.
The state's high court did not issue a ruling following Wednesday's arguments.
The Hutterites are primarily agricultural producers, and the men in their black jackets and the women in their colorful dresses are a common sight at farmers' markets across Montana. But in recent years they have expanded into construction with success because they can offer lower job bids than many private businesses.
Those businesses backed the 2009 expansion of Montana's workers' compensation law. The bill's sponsor, state Rep. Chuck Hunter, acknowledged then that the change targeted the Hutterites in particular and the need to create "a fair playing field" for other businesses that must pay for insurance.
"It's just frustrating for a private business that has to pay various taxes and workers' comp insurance to find themselves undercut competitively by an entity that is not subject to those same requirements," said Cary Hegreberg, executive director of the Montana Contractors' Association.
Big Sky Colony, a commune near Cut Bank in northwestern Montana, filed a lawsuit, saying the insurance requirement infringes on their religious freedom and that the colonies already provide comprehensive coverage for its members through the Hutterite Medical Trust.
The real competitive edge is that the colonies don't pay wages to their workers, not the lack of workers' compensation insurance premiums, the colony argued.
Nelson called the law "window dressing" to ease political pressure placed on lawmakers by construction lobbyists. The law puts a bulls-eye on Hutterite colonies and tries to drive a wedge between them and their members.
Hutterites don't need protection against lost wages because they don't get wages, the colony argues. Colonies don't need liability protection because they don't make claims -- there has never been a workers' compensation claim asserted by a Hutterite.
But the Hutterites are an easy target for discrimination because they look, dress, talk and live differently than anyone else in Montana, the colony's attorneys argued.
"The colonies have suffered persecution and migrated and immigrated and moved for the past 500 years. They're very protective of their religious beliefs, and they just can't let that go. They have to assert their religious rights," Nelson said.
The Hutterites have had a long history of discrimination. They moved to the Montana and Dakota territories in the 1870s after being forced to move from previous homes in Germany, eastern Europe and Russia due to persecution. They then moved into Canada after World War I when members were arrested for not enlisting in the military, returning to the U.S. after laws were passed to protect conscientious objectors.
The biggest concentration of Hutterites is in Canada, where hundreds of colonies are scattered from Manitoba to British Columbia. In the U.S., there are colonies in Montana, South Dakota, North Dakota, Minnesota, Washington and Oregon. There are about 50 colonies in Montana, with an average of about 100 people on each colony, according to a state report from 2010.
Like the Amish and Mennonites, they are Anabaptists who believe a person should be baptized only as an adult, when that person can make the decision independently. But unlike the Amish and Mennonites, they live in communes and have no personal property based in part on a Bible passage that reads, "All the believers were together and had everything in common."