Constitution Check: Did the Supreme Court give corporations a religious soul?

Lyle Denniston, the National Constitution Center’s constitutional literacy adviser, looks at claims made in the recent RFRA debate about the Hobby Lobby case – and what the Supreme Court actually said last year.

THE STATEMENT AT ISSUE;

“You can blame last year’s Supreme Court decision in the Hobby Lobby case for unleashing a herd of ponies that have gone off in quite unpredicted directions. There, in a partisan 5-to-4 ruling straight from Republican fever nests, the court gave certain corporations the right to challenge laws that they claim violate their religious beliefs….Let’s pause to consider this new entity – a moneymaking organization no different from a lone human being who feels conscience-bound to live a certain way because of a deeply held relationship with God. Let’s pause, because five members of the Supreme Court would not….In 2014, those five judges gave corporations a soul, a further expansion of business entity as a citizen.”

– New York Times columnist Timothy Egan, in an op-ed article on April 4, reacting to the new controversy over state laws – as in Indiana and Arkansas – providing new legal protection for religious freedom, including protection for corporations.

WE CHECKED THE CONSTITUTION, AND…

Whenever the Supreme Court issues a deeply controversial decision, it is fair game for critics and pundits. And commentary from those sources can be driven by a point of view that leads to a misreading of what the court actually has done in such a ruling.

American public conversation is filled these days with robust disagreement over the actions of several state legislatures in passing new laws to protect religious freedom, particularly in response to the emerging gains of civil rights for gay, lesbian and transgender people -- gains that offend the religious sensibilities of some people, including some members of state legislatures. In that public discourse, it is not uncommon for critics of such new laws to blame the Supreme Court, based on its decision last year in the case of Burwell v. Hobby Lobby Stores.

While that decision has drawn sometimes severe criticism, including a strongly worded complaint by four Justices who dissented, the majority ruling must be read with care to know what it did do, and, just as important, what it did not do.

First, it is not a decision based upon the Constitution, and thus it is entirely wrong to suggest that the court was interpreting the religious freedom clause of the First Amendment, and most definitely was not interpreting that clause to give corporations a constitutional right of freedom of religious belief.

Second, the ruling was based solely on an interpretation of the word “person” in a federal law, the Religious Freedom Restoration Act, and the majority did conclude that Congress intended the protection provided by that Act to include corporations as “persons.”

Third, and this may be the most significant factor, especially for purposes of the current public discussion over the new state laws, the court did not declare that corporations, in their own separate nature as legal entities, are capable of holding religious beliefs, and it certainly did not say that a corporation has a soul, in the religious sense. At critical points in the majority opinion, the court stressed that it was the religious beliefs of a corporation’s owners that were protected by the Act.

The two corporations involved in that case were each owned by just a few members of the same family, and it was those family members who managed the affairs of their business firm in order to express their religious views.   Allowing the corporations themselves to claim protection under the federal law, the court said, “protects the religious liberty of the Greens and the Hahns” – the families who own the two corporations, and do not share that ownership with anyone else, least of all public stockholders.

“It is important to keep in mind,” the opinion declared, “that the purpose of a corporation is to provide protection for human beings….When rights, whether constitutional or statutory, are extended to corporations, the purpose is to protect the rights of…the people (including shareholders, officers, and employees) who are associated with a corporation in one way or another….Protecting the free-exercise rights of corporations…protects the religious liberty of the humans who own and control those companies.”

The decision was confined, the court stressed, to the situation that existed in this particular case – the affairs of a “closely-held corporation,” or one with a tight circle of actual owners. In other words, this was not a decision that protects the religious liberty of, say, a General Motors or an Exxon or an Amazon.

In fact, following the Supreme Court’ decision, the federal government drafted a new set of rules to carry out that decision so far as it reached the rights of profit-making business corporations. In those new rules, the protection provided by RFRA will not apply to any business firm whose stock is bought or sold by the general public. (The government is still working out how to define, beyond the lack of public stock ownership, what makes a corporation “closely held.” It ultimately may specify either a maximum number of owners, or, as an alternative, a minimum percentage of a total number of owners who actually have control of corporate affairs.   But, in conforming to the Hobby Lobby decision, any final rules will treat the religious preferences at issue as those of the owners, not of the corporation itself.)

The government’s new rules also make clear that, when a “closely held corporation” does take the option of declaring its owners’ religious objections to the kind of employee benefits at issue (in this situation, access to full birth-control measures), the government will take over the duty of providing that kind of coverage at no cost to that business firm or to its female employees.

Whatever one may think about whether the Hobby Lobby decision was wrong, and whether it should not have been decided that way, it did not do what its most severe critics insist that it did, so some of the public conversation about it is definitely skewed.