Bloomberg News

Hobby Lobby Continues Trend of Expanding Corporate Rights

July 01, 2014

Contraceptive Insurance Rule Demonstrators

A demonstrator in support of U.S. President Barack Obama's health-care law contraception requirement holds up a sign outside the U.S. Supreme Court in Washington, D.C., on March 25, 2014. Photographer: Andrew Harrer/Bloomberg

The Supreme Court ventured further into the territory of granting individual rights to corporations yesterday by striking down a portion of Obamacare dealing with coverage for birth control.

Four years ago, the court under Chief Justice John Roberts rejected decades-old restrictions on corporate campaign spending, giving companies the same free-speech rights as individuals when engaging in political activity.

Taken together, the cases represent the acceleration of a trend in which the court has given far greater deference to the idea that, as 2012 Republican presidential candidate Mitt Romney put it, corporations are people.

“The constitutional and statutory protections extended to corporations have been dramatically expanded since the 1970s,” said Elizabeth Pollman, a professor at Loyola Law School in Los Angeles and one of a group of scholars who filed a brief in the case decided yesterday, Burwell v. Hobby Lobby Stores.

Under President Barack Obama’s revamp of the nation’s health-care laws, companies that pay for insurance for their workers are required to use plans that include contraception.

Hobby Lobby Stores Inc. and other businesses argued that they should be exempt from the new rule because their owners object to some forms of contraception on religious grounds. Oklahoma City-based Hobby Lobby, which had $3.3 billion in sales last year, has 600 craft stores across the country and at least 15,000 full-time employees.

Religious Freedom

In rendering its ruling, the court interpreted a 1993 religious-freedom law passed by Congress.

Justice Samuel Alito, writing for the five-justice majority, said that law gives closely held companies a right to religious freedom. “A corporation is simply a form of organization used by human beings to achieve desired ends,” Alito wrote.

In a dissenting opinion, Justice Ruth Bader Ginsburg accused the majority of finding in favor of the religious rights of a handful of corporate owners at the expense of “thousands of women” employed by Hobby Lobby and other companies who don’t share those views.

Democrats embraced her logic, and some sent out fundraising pitches to take advantage of voter frustration with the ruling. Maryland Governor Martin O’Malley e-mailed supporters with an appeal for donations to Wendy Davis, a Democrat running for the governorship of Texas.

‘Deeply Disturbing’

“No woman should have her health-care decisions made by her boss,” O’Malley wrote. “Today’s Hobby Lobby decision is wrong, and it’s a setback for women’s health.”

Hillary Clinton, a possible candidate for the 2016 presidential race, said she found the decision “deeply disturbing.” It allows closely held corporations to “impose their religious beliefs on their employees,” she said yesterday during an interview at the Aspen Ideas Festival.

Republicans hailed the decision as a rebuke of Obama’s 2010 health-care law, the Affordable Care Act, and as protection of religious rights.

“Today’s decision is a victory for religious freedom and another defeat for an administration that has repeatedly crossed constitutional lines in pursuit of its Big Government objectives,” House Speaker John Boehner, an Ohio Republican, said in a statement.

Whatever the political ramifications, legal analysts said yesterday’s decision -- like the 2010 ruling on campaign spending, Citizens United v. the Federal Election Commission -- represented a sizable expansion of corporate rights.

Corporate ‘Personhood’

“In Hobby Lobby, the Roberts Court extended corporate personhood beyond the holding in Citizens United and, for the first time in our nation’s history, conferred upon for-profit corporations the individual, human right to the free exercise of religion,” Doug Kendall, president of the Constitutional Accountability Center, wrote for the Huffington Post.

As with Citizens United, the contraceptive case split the court along ideological lines, with Roberts, Justices Antonin Scalia, Clarence Thomas and Anthony Kennedy joining Alito in the majority.

Along with Ginsburg, Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan dissented.

Two of the dissenters -- Breyer and Kagan -- said they didn’t need to decide whether the religious-freedom law protects corporations, making the court’s vote on that issue 5-2.

One lawmaker said the majority opinion did just that.

“Americans should not be forced to choose between giving up their business for their faith or giving up their faith for their business,” Senator Roy Blunt, a Missouri Republican, said.

To contact the reporters on this story: Jonathan Allen in Washington at jallen149@bloomberg.net; Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story: Craig Gordon at cgordon39@bloomberg.net Mark McQuillan, Justin Blum


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