Symposium: Congress answered this question: Corporations are covered

The following contribution to our contraceptive mandate symposium comes from Douglas Laycock, the Robert E. Scott Distinguished Professor of Law at the University of Virginia Law School. Professor Laycock also submitted an amicus brief on behalf of Christian Legal Society et al., in support of the non-government parties.

The threshold issue in Sebelius v. Hobby Lobby Stores and Conestoga Wood Specialties Corp. v. Sebelius is whether any plaintiff’s free exercise of religion is substantially burdened within the meaning of the Religious Freedom Restoration Act.

I

On that issue, the government’s argument is a shell game. Only the individuals have religious-liberty rights; only the corporations are regulated. And more: Even the individuals have no rights when they act or refuse to act as directors, officers, or managers of the corporation. Not only are the individuals separate persons from the corporation, but the individuals are divided into additional separate persons, depending on the capacity in which they act. This is formalism in the extreme.

Whatever one thinks about the corporations, the individual plaintiffs are clearly exercising their religion. The government appears to believe that these individuals forfeited their religious-liberty rights with respect to the business when they incorporated the business, and therefore forfeited any right not to pay for emergency contraception and IUDs when the business grew to more than fifty employees.

These drugs and devices sometimes prevent a fertilized egg from implanting in the uterus. The plaintiffs therefore believe that they are being asked to pay for the killing of innocent human beings. One need not agree with that characterization to recognize its enormous moral weight.

If these plaintiffs will not pay for what they believe to be such an extraordinary wrong, then in the government’s view, they are barred from owning any business with more than fifty employees. (Against an unincorporated business of that size, the government would claim a compelling interest in no more exceptions than those it has already created.)

We have a highly relevant history of analogous regulation. The penal laws in England and Ireland barred Catholics from many offices and occupations. With minor exceptions, no Catholic in Ireland could keep more than two apprentices. Fifty employees is a more generous limit than two apprentices, but the principle is the same.

The modern limit does not single out one faith by name; it is imposed by an allegedly neutral and generally applicable law. But that is irrelevant here; the very purpose of RFRA was to protect against neutral and generally applicable laws. The Free Exercise Clause must at least apply to historic methods of persecution known to the Founders, and RFRA applies to the same burdens when imposed by neutral and generally applicable laws.

II

Congress left a clear and explicit record that the public meaning of RFRA covers for-profit corporations and their owners.

The earliest RFRA bill would have protected only natural persons and religious organizations. That definition was omitted in all later bills.

The change happened between sessions and without a statement of reasons. But there are two plausible reasons. First, the lead sponsor in the House was Stephen Solarz, who represented the largest Orthodox Jewish community in the country. He may have realized that the Orthodox needed RFRA’s protection in their businesses.

Second, and less speculative, the principle of RFRA was universal coverage under a single standard. The religious claim would sometimes win and sometimes lose under that standard, but there would be no exceptions to the standard.

If one interest group had gotten an exception, it would have become much harder to say no to any other group. As Rep. Solarz testified, we would wind up with a list of congressionally disapproved religious practices excluded from the bill. The no-exceptions principle was the only way to keep Congress from picking and choosing among the diverse religious practices of the American people.

The no-exceptions principle was therefore central to the Act, and it held. Demands for an abortion exception delayed the bill by three years; the Senate voted down a prison exception. Congress did not at that time discuss any actual religious-liberty controversies involving for-profit businesses. But if anyone had asked for an exception to exclude the possibility of claims by corporations, the no-exceptions principle would have dictated a negative answer.

This theme of universal coverage is explicit in the statutory text (“all federal law;” “all cases where free exercise of religion is substantially burdened”) and confirmed in both committee reports.

More explicit evidence came six years later. After the Supreme Court held RFRA unconstitutional as applied to the states, Congress tried to replace it with the proposed Religious Liberty Protection Act. The substantive standard of the RLPA bills was copied verbatim from RFRA.

By this time, Congress was acutely aware of religious-liberty claims by for-profit businesses. There had been a series of cases in which conservative Christian landlords, who refused to rent apartments to unmarried couples, were sued for marital-status discrimination. The civil-rights community demanded a civil-rights exception to the bill. The bill’s supporters adhered to the no-exceptions policy from the RFRA debates. They said that civil-rights enforcement would generally be a compelling interest, but not always, and these cases should be litigated or settled under the same standard as all other cases.

The House struggled with this issue for seventeen months; the Senate for longer. The Senate committee and House subcommittee held a total of nine hearings. This entire political battle was conducted on the view that the language of the bill, which was also the language of RFRA, covered for-profit businesses, including incorporated businesses.

Both sides understood it that way, and both sides thought that was generally a good thing. But they deeply disagreed over whether it was a good thing in the context of civil-rights claims.

This debate was not post-enactment legislative history of RFRA. No one purported to explain in 1999 what he had been thinking in 1993. These were intense and present-tense political battles over the language of the pending bills, which was also the language of RFRA. These debates show the public meaning of RFRA as of 1999, when congressional attention had been focused on the potential for religious-liberty claims by businesses.

This debate culminated in the Nadler Amendment, which would have allowed only the tiniest of businesses to invoke RFRA in response to civil-rights claims. But the amendment would have placed no limitations on who could invoke RFRA in any other kind of case. That is: even if the Nadler Amendment had been written into RFRA, Hobby Lobby and Conestoga Wood could still have invoked RFRA in response to regulations under the Affordable Care Act.

The Nadler Amendment was offered and rejected in the subcommittee mark-up, and again in the committee markup; mark-up debates are not recorded. Then it was offered on the floor, where it was the subject of a two-hour debate. This debate was dominated by the leaders on both sides of the bill – by sponsors and former sponsors of the bill and members of the committee and subcommittee. All agreed that the bill as drafted – the language copied verbatim from RFRA – covered for-profit corporations.

Mr. Nadler said the bill “would enable the CEO of a large corporation” to say his religion prohibited hiring various kinds of sinners. Later he said the same thing about the shareholders. He wanted to create “narrow exceptions,” just for civil-rights claims. Apart from those exceptions, “any business of any size could bring any free exercise claims.”

Mr. Canady, the bill’s lead sponsor, responded that large corporations like Exxon did not exercise religion. But some corporations did, and they should be able to make a claim. The Nadler Amendment would “determine in advance that the interest of the Government will always prevail in certain cases.” He also noted – and nobody disputed – that “all the arguments related to civil rights that have been advanced today were equally applicable to the Religious Freedom Restoration Act.”

Apart from their disagreement over civil-rights claims, both sides agreed that it was important to cover corporations. They noted two kinds of corporations that needed protection: those engaged in intrinsically religious business, such as kosher slaughterhouses, and those that were closely held by religious owners.

The Nadler Amendment was defeated in the House, and the unamended bill was passed. The bill died in the Senate, where the civil-rights objection could not be overcome and the sponsors adhered to the no-exceptions principle.

But from this effort there emerged a bill that enacted the Religious Land Use and Institutionalized Persons Act and amended RFRA in two ways: to make clear that RFRA still applied to federal law, and to strengthen the definition of “exercise of religion.” In the wake of the explicit House debate about religious exercise by corporations, Congress amended RFRA to specify that “any” exercise of religion is protected – once again emphasizing RFRA’s universal coverage.

The government’s speculations about what Congress might have thought, must have thought, should have thought, cannot compare to this explicit record of what Congress actually did think. For-profit corporations do not often exercise religion, but when they do, they are covered by RFRA.

Citations for all the points in this post, and more quotations about how the language copied from RFRA covered corporations, can be found in the Christian Legal Society’s brief in the two cases.