The Hobby Lobby Case

The Hobby Lobby Case

Summary

This case, which is usually referred to as The Hobby Lobby Case, began before any  of the corporations involved had any knowledge that a lawsuit was in their future.  The events that precipitated the lawsuit began when Congress passed the Patient  Protection and Affordable Care Act (ACA) in 2012. The goal of the act was to make  certain that all (well, at least most) Americans had health care insurance. The mechanism by which this was to be accomplished was a mandate that all employers who  had more than 50 workers employed on a full-time basis would have to provide “a  group health plan or group health insurance coverage” that would give those employees “minimum essential coverage.” [26 USC Section 5000 A (f) (2); Sections 4980 H  (a) and (c) (2).] To enforce the law, Congress attached stiff penalties, in the form of  heavy fines, for employers who failed to obey the law. (In the case of Hobby Lobby,  for example, those fines would have been more than $1.3 million daily for a total of  $475 million annually.) Part of this health care package required that the insurance  plan provide “preventative care and screenings” for women that would be free from  “any cost sharing requirements.” [42 USC Section 300gg-13(a) (4).] The statute did  not identify the kind of prevention; rather, it empowered the Department of Health  and Human Services (HHS) acting through the Health Resources and Services  Administration (HRSA), one of the department’s subdivisions, to make that determination. The HRSA took immediate steps to fulfill that assignment by calling on the  Institute of Medicine. The institute endorsed the idea that employers should be compelled to provide coverage for all contraceptive procedures approved by the Food and  Drug Administration. Four of these methods are designed to stop the development of  an already fertilized egg. These four methods are at the heart of this case.

The HHS also issued regulations that would exempt specific not-for-profit  religious institutions from participating in the coverage of these contraceptive  devices. Any nonprofit religious organization that had genuine religious convictions against such methods could notify their insurer of their objection, and the  insurer would then eliminate that part of the plan from the institution’s coverage  and cover the cost with no cost sharing penalty for the employee. Other plans  that did not cover contraceptive methods were grandfathered into the new act  with no penalty. This provision allowed that coverage to continue without complying with the act’s contraceptive provisions. Also, based on the fundamental  requirements of the ACA, employers with less than 50 workers were also exempt.  Those original provisions would not compel them to participate in the offering of  such contraceptive methods to their employees.

These rules and the exemptions did not anticipate religious objections from  certain closely held profit-making companies that are owned and operated by a  few individuals who have strong, authentic religious objections to the use of the  contraceptive methods in question here. Three corporations in particular fell into  this category, and each one felt so strongly about the issue that they brought suit  against the secretary of the Department of Health and  Human Services. These three companies are Conestoga  Wood Specialties, owned and operated by Norman and  Elizabeth Hahn and their three sons, who belong to the  Mennonite Church; Hobby Lobby, a national chain of  arts and craft stores owned and operated by David and  Barbara Green and their three children, all of whom are  devoted Christians; and Mardel, a chain of Christian  bookstores owned and operated by one of the Greens’  sons. In each of these lawsuits the plaintiffs issued very  clear and obviously sincere position statements defending their religious objection to being compelled to join  in the coverage of what they considered a morally bankrupt practice. The lawsuit was brought under the authority of the Religious Freedom Restoration Act (RFRA)  and the Free Exercise Clause of the Constitution.

The RFRA states that the government cannot  “substantially burden a person’s exercise of religion  even if the burden results from a rule of general applicability” except when the government “demonstrates that  the application of the burden to the person (1) is in furtherance of a compelling governmental interest; and (2)  is the least restrictive means of furthering that compelling governmental interest.” [42 USC Sections 2000bb-  1(a)(b).] The threshold issue before the Court is whether  the three corporate plaintiffs qualify as “legal persons”  under the RFRA. The Court begins by noting that the  goal of the RFRA is to make certain that a wide berth is  given to individuals in the exercise of their religious beliefs. As the name of the act implies, congressional intent was to rebuild a layer of defense for religion that  had been eroded over the years by the decisions of the  judicial branch. In restoring the balance in favor of religious freedom rather than governmental power, Congress was, in essence, redirecting the courts to rebuild  that lost defensive layer. Accordingly, that protection  must be broadened, not narrowed. While it is true that  the legal fiction of a corporation does create an entity  that is separate from the founders, the purpose of that  protective layer is not to protect the fiction in and of itself. Rather, that protection was built to defend real  flesh and blood people. When the law defines the rights  and duties of a corporation, it is actually defining the  rights and duties of the people behind those corporations. They are the ones who must carry out corporate  duties and who benefit from corporate rights. Thus,  when the corporation is given property rights, those  property rights really belong to the people. This is especially true when the right in question is a religious right.  Thus, the Court in this case states with some conviction  that the term person in the statute is not meant to protect  corporate “persons” because the real protection flows to  the people behind that corporate veil.

Having disposed of the “person” argument the Court  moves on to the second argument made by the defense  and supported by several lower court judges as well as  by the principal dissent. That argument states that Hobby  Lobby, Conestoga, and Mardel do not deserve the protection afforded by the RFRA because their principal  objective is to earn a profit, not to promote religious  values. The Court finds this argument weak at best. The  Court acknowledges that it is conceivable that a law can  be enacted by the government that makes the practice of  a particular religion more expensive and thus more difficult. To demonstrate this point the Court refers to the  case of Braunfield v. Brown, 366 U.S. 599 (1961), in  which the Supreme Court acknowledged that forcing  Jewish shop owners to remain closed on Sunday in addition to being closed on Saturday, which was required by  their faith, might place an unfair burden on their constitutional right to the free exercise of their religion, even  though the direct consequence of the prohibition was a  loss of profits. Although the business owners lost the  case, the right of profit making businesses to bring free  exercise cases was affirmed by the Court. The Court also  notes that the several lower courts have erroneously held  that the Free Exercise Clause and the RFRA do not protect profit-making businesses because their only purpose  is to earn a profit not to promote religious values. The  Court points out that this is patently false in the modern  view of corporate law, which has held repeatedly that  corporations have civic and public duties beyond making a profit for their shareholders. Moreover, the plaintiffs in this case have repeatedly demonstrated that their  corporations do have religious goals.

In a lengthy footnote, the court also makes a point that  is directly related to our study of contract law. The Court  notes that the dissent argues that the historical development of business in the common law does not support the  notion that “lay corporations” (as opposed to ecclesiastical corporations) can have any religious function. This, as  we saw in our lengthy examination of the historical development of the law merchant and its merger with common law, is simply not true. In fact, no matter which  version of history we accept, the Church was closely allied with the development of the capitalist business system. Max Weber, for example, in The Protestant Ethic:  The Spirit of Capitalism, defends the proposition that European capitalism began with the Protestant Reformation  in the 16th century. Protestantism, primarily in the form  of Puritanism, Separatism, and Calvinism, promoted the  idea that the accumulation of wealth was a fairly good  sign that the merchant who so prospered was among the  elect, and, therefore, bound for heaven. In a similar vein,  Rodney Stark in his book, The Victory of Reason: How  Christianity Led to Freedom, Capitalism, and Western

Science, argues, rather convincingly, that one of the driving forces behind the growth of capitalism was the Roman Catholic Church. The medieval Church had the  ability to redirect capitalism as it did because, as a system, the Roman Catholic Church had a strong central  controlling agent and a concentration, rather than a dispersal, of power among various actors.

Thus, the Church helped provide a rational and moral  foundation for the principles and procedures that guided  the activities of merchants in their communities, their  courts, and in the making of their contracts. The Church,  which is directed by a central powerful leader, refused to  condemn commercial activity. Instead, the Church monitored how those activities were carried out. In short, the  Church encouraged this new class of sellers to establish  guilds that followed the law of the Church, a legal tradition that is generally referred to as canon law. The Church  also insisted that these emerging businessmen never engage in deceit or dishonesty and always follow a good  faith approach to contract development. As long as they  followed these basic precepts, the Church reassured the  members of the new and expanding class of professional  sellers that there was nothing inherently wrong with  making a profit in their chosen profession. Finally, Berman in his study of the growth of the law merchant, Law  and Revolution: The Formation of the Western Legal Tradition, states that, from the very beginning, merchants  were involved in the courts that heard and settled contract  disputes and commercial differences. Involvement  meant that, as a system, the law merchant, like the  Roman Catholic Church, had a strong central controlling  agent and a concentration, rather than a dispersal, of  power. This allowed the law merchant to direct, at least to  a certain degree, the other characteristics of neutrality,  universality, mutuality, integration, and evolution, all of  which have an ethical basis. (Reproduced below is that  portion of the Court’s opinion that corresponds to this  analysis. Footnote numerals are included but the citations  themselves and explanatory notes are omitted.)

The Court’s Opinion  Delivered by Justice Alito

At issue in these cases are HHS regulations promulgated under the Patient Protection and Affordable Care  Act of 2010 (ACA), 124 Stat. 119. ACA generally requires employers with 50 or more full-time employees  to offer “a group health plan or group health insurance  coverage” that provides “minimum essential coverage.” 26 U.S.C. §5000A (f)(2); §§4980H(a), (c)(2).  Any covered employer that does not provide such coverage must pay a substantial price. Specifically, if a covered employer provides group health insurance but  its plan fails to comply with ACA’s group-health-plan  requirements, the employer may be required to pay  $100 per day for each affected “individual.” §§4980D  (a)–(b). And if the employer decides to stop providing  health insurance altogether and at least one full-time  employee enrolls in a health plan and qualifies for a  subsidy on one of the government-run ACA exchanges,  the employer must pay $2,000 per year for each of its  full-time employees. §§4980H (a), (c) (1).

Unless an exception applies, ACA requires an employer’s group health plan or group-health-insurance  coverage to furnish “preventive care and screenings”  for women without “any cost sharing requirements.” 42  U.S.C. §300gg–13(a) (4). Congress itself, however, did  not specify what types of preventive care must be covered. Instead, Congress authorized the Health Resources and Services Administration (HRSA), a component of HHS, to make that important and sensitive  decision. Ibid. The HRSA in turn consulted the Institute of Medicine, a nonprofit group of volunteer advisers, in determining which preventive services to  require. See 77 Fed. Reg. 8725–8726 (2012).

In August 2011, based on the Institute’s recommendations, the HRSA promulgated the Women’s Preventive Services Guidelines. See id., at 8725–8726, and  n. 1; online at http://hrsa.gov/womensguidelines (all  Internet materials as visited June 26, 2014, and available in Clerk of Court’s case file). The Guidelines provide that nonexempt employers are generally required  to provide “coverage, without cost sharing” for “[a]ll  Food and Drug Administration [(FDA)] approved contraceptive methods, sterilization procedures, and patient education and counseling.” 77 Fed. Reg. 8725  (internal quotation marks omitted). Although many of  the required, FDA-approved methods of contraception  work by preventing the fertilization of an egg, four of  those methods (those specifically at issue in these  cases) may have the effect of preventing an already fertilized egg from developing any further by inhibiting  its attachment to the uterus. Brief for HHS 9 Cite as:  573 U.S. ____ (2014) in No. 13–354, pp. 9–10, n. 4;6  FDA, Birth Control: Medicines to Help You.7  HHS also authorized the HRSA to establish exemptions from the contraceptive mandate for “religious  employers.” 45 CFR §147.131(a). That category encompasses “churches, their integrated auxiliaries, and  conventions or associations of churches,” as well as “the  exclusively religious activities of any religious order.”  See ibid (citing 26 U.S.C. §§6033(a) (3)(A)(i), (iii)). In  its Guidelines, HRSA exempted these organizations  from the requirement to cover contraceptive.

In addition, HHS has effectively exempted certain religious nonprofit organizations, described under HHS regulations as “eligible organizations,” from the contraceptive  mandate. See 45 CFR §147.131(b); 78 Fed. Reg.39874  (2013). An “eligible organization” means a nonprofit organization that “holds itself out as a religious organization” and “opposes providing coverage for some or all of  any contraceptive services required to be covered… on  account of religious objections.” 45 CFR §147.131(b). To  qualify for this accommodation, an employer must certify  that it is such an organization. §147.131(b)(4). When a  group-health-insurance issuer receives notice that one of  its clients has invoked this provision, the issuer must then  exclude contraceptive coverage from the employer’s plan  and provide separate payments for contraceptive services  for plan participants without imposing any cost-sharing  requirements on the eligible organization, its insurance  plan, or its employee beneficiaries. §147.131(c).8 Although this procedure requires the issuer to bear the cost  of these services, HHS has determined that this obligation  will not impose any net expense on issuers because its  cost will be less than or equal to the cost savings resulting  from the services. 78 Fed. Reg. 39877.9  In addition to these exemptions for religious organizations, ACA exempts a great many employers from  most of its coverage requirements. Employers providing  “grandfathered health plans”—those that existed prior to  March 23, 2010, and that have not made specified  changes after that date—need not comply with many of  the Act’s requirements, including the contraceptive mandate. 42 U.S.C. §§18011(a), (e). And employers with  fewer than 50 employees are not required to provide  health insurance at all. 26 U.S.C. §4980H(c)(2).  All told, the contraceptive mandate “presently does  not apply to tens of millions of people.” 723 F. 3d 1114,  1143 (CA10 2013). This is attributable, in large part,  to grandfathered health plans: Over one-third of the  149 million nonelderly people in America with employer-sponsored health plans were enrolled in grandfathered plans in 2013. Brief for HHS in No. 13–354, at  53; Kaiser Family Foundation & Health Research &  Educational Trust, Employer Health Benefits, 2013 Annual Survey 43, 221.10 The count for employees working  for firms that do not have to provide insurance at all because they employ fewer than 50 employees is 34 million workers. See The Whitehouse, Health Reform for  Small Businesses: The Affordable Care Act Increases  Choice and Saving Money for Small Businesses 1.11  II A

Norman and Elizabeth Hahn and their three sons are devout members of the Mennonite Church, a Christian  denomination. The Mennonite Church opposes abortion and believes that “[t]he fetus in its earliest stages…  shares humanity with those who conceived it.”12

Fifty years ago, Norman Hahn started a wood-working  business in his garage, and since then, this company,  Conestoga Wood Specialties, has grown and now has  950 employees. Conestoga is organized under Pennsylvania law as a for-profit corporation. The Hahns exercise  sole ownership of the closely held business; they control  its board of directors and hold all of its voting shares.  One of the Hahn sons serves as the president and CEO.  The Hahns believe that they are required to run their  business “in accordance with their religious beliefs and  moral principles.” 917 F. Supp. 2d 394, 402 (ED Pa.  2013). To that end, the company’s mission, as they see  it, is to “operate in a professional environment founded  upon the highest ethical, moral, and Christian principles.” Ibid. (internal quotation marks omitted). The  company’s “Vision and Values Statements” affirms that  Conestoga endeavors to “ensur[e] a reasonable profit in  [a] manner that reflects [the Hahns’] Christian  heritage.” App. in No. 13–356, p. 94 (complaint).

As explained in Conestoga’s board-adopted  “Statement on the Sanctity of Human Life,” the Hahns  believe that “human life begins at conception.” 724 F. 3d  377, 382, and n. 5 (CA3 2013) (internal quotation marks  omitted). It is therefore “against [their] moral conviction  to be involved in the termination of human life” after  conception, which they believe is a “sin against God to  which they are held accountable.” Ibid. (internal quotation marks omitted). The Hahns have accordingly excluded from the group health-insurance plan they offer  to their employees certain contraceptive methods that  they consider to be abortifacients. Id., at 382.

The Hahns and Conestoga sued HHS and other federal officials and agencies under RFRA and the Free Exercise Clause of the First Amendment, seeking to enjoin  application of ACA’s contraceptive mandate insofar as it  requires them to provide health-insurance coverage for  four FDA approved contraceptives that may operate after the fertilization of an egg.13 These include two forms  of emergency contraception commonly called “morning  after” pills and two types of intrauterine devices.14  In opposing the requirement to provide coverage for  the contraceptives to which they object, the Hahns  argued that “it is immoral and sinful for [them] to intentionally participate in, pay for, facilitate, or otherwise support these drugs.” Ibid. The District Court  denied a preliminary injunction, see 917 F. Supp. 2d, at  419, and the Third Circuit affirmed in a divided  opinion, holding that “for profit, secular corporations  cannot engage in religious exercise” within the meaning of RFRA or the First Amendment. 724 F. 3d, at  381. The Third Circuit also rejected the claims brought by the Hahns themselves because it concluded that the  HHS “[m]andate does not impose any requirements on  the Hahns” in their personal capacity. Id., at 389.

B.

David and Barbara Green and their three children are  Christians who own and operate two family businesses.  Forty-five years ago, David Green started an arts and  crafts store that has grown into a nationwide chain  called Hobby Lobby. There are now 500 Hobby Lobby  stores, and the company has more than 13,000 employees. 723 F. 3d, at 1122. Hobby Lobby is organized as a  for-profit corporation under Oklahoma law.  One of David’s sons started an affiliated business,  Mardel, which operates 35 Christian bookstores and  employs close to 400 people. Ibid. Mardel is also organized as a for-profit corporation under Oklahoma law.  Though these two businesses have expanded over  the years, they remain closely held, and David,  Barbara, and their children retain exclusive control of  both companies. Ibid. David serves as the CEO of  Hobby Lobby, and his three children serve as the president, vice president, and vice CEO. See Brief for Respondents in No. 13–354, p. 8.15  Hobby Lobby’s statement of purpose commits the  Greens to “[h]onoring the Lord in all [they] do by operating the company in a manner consistent with Biblical  principles.” App. in No. 13–354, pp. 134–135 (complaint). Each family member has signed a pledge to run  the businesses in accordance with the family’s religious  beliefs and to use the family assets to support Christian  ministries. 723 F. 3d, at 1122. In accordance with those  commitments, Hobby Lobby and Mardel stores close on  Sundays, even though the Greens calculate that they lose  millions in sales annually by doing so. Id., at 1122; App.  in No. 13– 354, at 136–137. The businesses refuse to engage in profitable transactions that facilitate or promote  alcohol use; they contribute profits to Christian missionaries and ministries; and they buy hundreds of full-page  newspaper ads inviting people to “know Jesus as Lord  and Savior.” Ibid. (internal quotation marks omitted).  Like the Hahns, the Greens believe that life begins  at conception and that it would violate their religion to  facilitate access to contraceptive drugs or devices that  operate after that point. 723 F. 3d, at 1122. They specifically object to the same four contraceptive methods  as the Hahns and, like the Hahns, they have no objection to the other 16 FDA-approved methods of birth  control. Id., at 1125. Although their group-healthinsurance plan predates the enactment of ACA, it is not  a grandfathered plan because Hobby Lobby elected not  to retain grandfathered status before the contraceptive  mandate was proposed. Id., at 1124.

The Greens, Hobby Lobby, and Mardel sued HHS and  other federal agencies and officials to challenge the contraceptive mandate under RFRA and the Free Exercise  Clause.16 The District Court denied a preliminary injunction, see 870 F. Supp. 2d 1278 (WD Okla. 2012), and the  plaintiffs appealed, moving for initial en banc consideration. The Tenth Circuit granted that motion and reversed  in a divided opinion. Contrary to the conclusion of the  Third Circuit, the Tenth Circuit held that the Greens’ two  for-profit businesses are “persons” within the meaning of  RFRA and therefore may bring suit under that law.  The court then held that the corporations had established a likelihood of success on their RFRA claim. 723  F. 3d, at 1140–1147. The court concluded that the contraceptive mandate substantially burdened the exercise  of religion by requiring the companies to choose between “compromis[ing] their religious beliefs” and paying a heavy fee—either “close to $475 million more  in taxes every year” if they simply refused to provide  coverage for the contraceptives at issue, or “roughly  $26 million” annually if they “drop [ped] health-insurance benefits for all employees.” Id., at 1141.  The court next held that HHS had failed to demonstrate a compelling interest in enforcing the mandate  against the Greens’ businesses and, in the alternative,  that HHS had failed to prove that enforcement of the  mandate was the “least restrictive means” of furthering  the Government’s asserted interests. Id., at 1143–1144  (emphasis deleted; internal quotation marks omitted).  After concluding that the companies had “demonstrated  irreparable harm,” the court reversed and remanded for  the District Court to consider the remaining factors of  the preliminary injunction test. Id., at 1147.17  We granted certiorari. 571 U.S. ___ (2013).

III A

RFRA prohibits the “Government [from] substantially  burden[ing] a person’s exercise of religion even if the  burden results from a rule of general applicability” unless the Government “demonstrates that application of  the burden to the person—(1) is in furtherance of a  compelling governmental interest; and (2) is the least  restrictive means of furthering that compelling governmental interest.” 42 U.S.C. §§2000bb–1(a), (b) (emphasis added). The first question that we must address  is whether this provision applies to regulations that  govern the activities of for-profit corporations like  Hobby Lobby, Conestoga, and Mardel.  HHS contends that neither these companies nor  their owners can even be heard under RFRA. According to HHS, the companies cannot sue because they  seek to make a profit for their owners, and the owners  cannot be heard because the regulations, at least as a formal matter, apply only to the companies and not to  the owners as individuals. HHS’s argument would have  dramatic consequences.  Consider this Court’s decision in Braunfeld v. Brown,  366 U.S. 599 (1961) (plurality opinion). In that case, five  Orthodox Jewish merchants who ran small retail businesses in Philadelphia challenged a Pennsylvania Sunday  closing law as a violation of the Free Exercise Clause.  Because of their faith, these merchants closed their shops  on Saturday, and they argued that requiring them to remain shut on Sunday threatened them with financial ruin.  The Court entertained their claim (although it ruled  against them on the merits), and if a similar claim were  raised today under RFRA against a jurisdiction still subject to the Act (for example, the District of Columbia, see  42 U.S.C. §2000bb–2(2)), the merchants would be entitled to be heard. According to HHS, however, if these  merchants chose to incorporate their businesses—  without in any way changing the size or nature of their  businesses—they would forfeit all RFRA (and free-exercise) rights. HHS would put these merchants to a difficult  choice: either give up the right to seek judicial protection  of their religious liberty or forgo the benefits, available to  their competitors, of operating as corporations.

As we have seen, RFRA was designed to provide  very broad protection for religious liberty. By enacting  RFRA, Congress went far beyond what this Court has  held is constitutionally required.18 Is there any reason  to think that the Congress that enacted such sweeping  protection put small-business owners to the choice that  HHS suggests? An examination of RFRA’s text, to  which we turn in the next part of this opinion, reveals  that Congress did no such thing.

As we will show, Congress provided protection for  people like the Hahns and Greens by employing a familiar legal fiction: It included corporations within  RFRA’s definition of “persons.” But it is important to  keep in mind that the purpose of this fiction is to provide protection for human beings. A corporation is  simply a form of organization used by human beings to  achieve desired ends. An established body of law specifies the rights and obligations of the people (including  shareholders, officers, and employees) who are associated with a corporation in one way or another. When  rights, whether constitutional or statutory, are extended  to corporations, the purpose is to protect the rights  of these people. For example, extending Fourth  Amendment protection to corporations protects the privacy interests of employees and others associated with  the company. Protecting corporations from government  seizure of their property without just compensation  protects all those who have a stake in the corporations’  financial well-being. And protecting the free-exercise rights of corporations like Hobby Lobby, Conestoga,  and Mardel protects the religious liberty of the humans  who own and control those companies.  In holding that Conestoga, as a “secular, for-profit  corporation,” lacks RFRA protection, the Third Circuit  wrote as follows:

“General business corporations do not, separate and  apart from the actions or belief systems of their individual owners or employees, exercise religion. They  do not pray, worship, observe sacraments or take  other religiously motivated actions separate and  apart from the intention and direction of their individual actors.” 724 F. 3d, at 385 (emphasis added).

All of this is true—but quite beside the point. Corporations, “separate and apart from” the human beings who  own, run, and are employed by them, cannot do anything at all.

B 1

As we noted above, RFRA applies to “a person’s” exercise of religion, 42 U.S.C. §§2000bb–1(a), (b), and  RFRA itself does not define the term “person.” We therefore look to the Dictionary Act, which we must consult  “[i]n determining the meaning of any Act of Congress,  unless the context indicates otherwise.” 1 U.S.C. §1.  Under the Dictionary Act, “the wor[d] ‘person’…  include[s] corporations, companies, associations, firms,  partnerships, societies, and joint stock companies, as well  as individuals.” Ibid.; see FCC v. AT&T Inc., 562 U.S.  _____, _____ (2011) (slip op., at 6) (“We have no doubt  that ‘person,’ in a legal setting, often refers to artificial  entities. The Dictionary Act makes that clear”). Thus, unless there is something about the RFRA context that “indicates otherwise,” the Dictionary Act provides a quick,  clear, and affirmative answer to the question whether the  companies involved in these cases may be heard.  We see nothing in RFRA that suggests a congressional intent to depart from the Dictionary Act definition,  and HHS makes little effort to argue otherwise. We have  entertained RFRA and free-exercise claims brought by  nonprofit corporations, see Gonzales v. O Centro Spirit  Beneficiate Union do Vegetal, 546 U.S. 418 (2006)  (RFRA); Hosanna-Tabor Evangelical Lutheran Church  and School v. EEOC, 565 U.S. _____ (2012) (Free  Exercise); Church of the Lucama Babel Aye, Inc. v.  Hialeah, 508 U.S. 520 (1993) (Free Exercise), and HHS  concedes that a nonprofit corporation can be a “person”  within the meaning of RFRA. See Brief for HHS in No.  13–354, at 17; 20 Reply Brief in No. 13–354, at 7–8.19  This concession effectively dispatches any argument  that the term “person” as used in RFRA does not reach  the closely held corporations involved in these cases.  No known understanding of the term “person” includes some but not all corporations. The term “person” sometimes encompasses artificial persons (as the Dictionary  Act instructs), and it sometimes is limited to natural  persons. But no conceivable definition of the term includes natural persons and nonprofit corporations, but  not for-profit corporations.20 Cf. Clark v. Martinez, 543  U.S. 371, 378 (2005) (“To give th[e] same words a different meaning for each category would be to invent a  statute rather than interpret one”).  2  The principal argument advanced by HHS and the principal dissent regarding RFRA protection for Hobby  Lobby, Conestoga, and Mardel focuses not on the  statutory term “person,” but on the phrase “exercise of  religion.” According to HHS and the dissent, these corporations are not protected by RFRA because they  cannot exercise religion. Neither HHS nor the dissent,  however, provides any persuasive explanation for this  conclusion.  Is it because of the corporate form? The corporate  form alone cannot provide the explanation because, as  we have pointed out, HHS concedes that nonprofit corporations can be protected by RFRA. The dissent suggests that nonprofit corporations are special because  furthering their religious “autonomy… often furthers  individual religious freedom as well.” Post, at 15 (quoting Corporation of Presiding Bishop of Church of  Jesus Christ of Latter-day Saints v. Amos, 483 U.S.  327, 342 (1987) (Brennan, J., concurring in judgment)). But this principle applies equally to for-profit  corporations: Furthering their relegious freedom also  “furthers individual religious freedom.” In these cases,  for example, allowing Hobby Lobby, Conestoga, and  Mardel to assert RFRA claims protects the religious  liberty of the Greens and the Hahns.21  If the corporate form is not enough, what about the  profit-making objective? In Braunfeld, 366 U.S. 599, we  entertained the free-exercise claims of individuals who  were attempting to make a profit as retail merchants, and  the Court never even hinted that this objective precluded  their claims. As the Court explained in a later case, the  “exercise of religion” involves “not only belief and profession but the performance of (or abstention from)  physical acts” that are “engaged in for religious reasons.” Smith, 494 U.S., at 877. Business practices that  are compelled or limited by the tenets of a religious doctrine fall comfortably within that definition. Thus, a law  that “operates so as to make the practice of… religious  beliefs more expensive” in the context of business activities imposes a burden on the exercise of religion.  Braunfeld, supra, at 605; see United States v. Lee, 455  U.S. 252, 257 (1982) (recognizing that “compulsory participation in the social security system interferes with  [Amish employers’] free exercise rights”).  If, as Braunfeld recognized, a sole proprietorship  that seeks to make a profit may assert a free-exercise  claim,22 why can’t Hobby Lobby, Conestoga, and  Mardel do the same?  Some lower court judges have suggested that RFRA  does not protect for-profit corporations because the purpose  of such corporations is simply to make money.23 This argument flies in the face of modern corporate law. “Each  American jurisdiction today either expressly or by implication authorizes corporations to be formed under its general  corporation act for any lawful purpose or business.” 1 J.  Cox & T. Hazen, Treatise of the Law of Corporations §4:1,  p. 224 (3d ed. 2010) (emphasis added); see 1A W. Fletcher,  Cyclopedia of the Law of Corporations §102 (rev. ed.  2010). While it is certainly true that a central objective of  for-profit corporations is to make money, modern corporate  law does not require for-profit corporations to pursue profit  at the expense of everything else, and many do not do so.  For-profit corporations, with ownership approval, support a  wide variety of charitable causes, and it is not at all uncommon for such corporations to further humanitarian and  other altruistic objectives. Many examples come readily to  mind. So long as its owners agree, a for-profit corporation  may take costly pollution-control and energy conservation  measures that go beyond what the law requires. A for-profit  corporation that operates facilities in other countries may  exceed the requirements of local law regarding working  conditions and benefits. If for-profit corporations may pursue such worthy objectives, there is no apparent reason why  they may not further religious objectives as well.  HHS would draw a sharp line between nonprofit  corporations (which, HHS concedes, are protected by  RFRA) and for-profit corporations (which HHS would  leave unprotected), but the actual picture is less clearcut. Not all corporations that decline to organize as  nonprofits do so in order to maximize profit. For example, organizations with religious and charitable aims  might organize as for-profit corporations because of  the potential advantages of that corporate form, such as  the freedom to participate in lobbying for legislation or  campaigning for political candidates who promote  their religious or charitable goals.24 In fact, recognizing  the inherent compatibility between establishing a forprofit corporation and pursuing nonprofit goals, States  have increasingly adopted laws formally recognizing  hybrid corporate forms. Over half of the States, for instance, now recognize the “benefit corporation,” a  dual-purpose entity that seeks to achieve both a benefit  for the public and a profit for its owners.25  In any event, the objectives that may properly  be pursued by the companies in these cases are governed by the laws of the States in which they were  incorporated—Pennsylvania and Oklahoma—and the  laws of those States permit for-profit corporations to  pursue “any lawful purpose” or “act,” including the  pursuit of profit in conformity with the owners’ religious principles. 15 Pa. Cons. Stat. §1301 (2001)  (“Corporations may be incorporated under this subpart  for any lawful purpose or purposes”); Okla. Stat., Tit.  18, §§1002, 1005 (West 2012) (“[E]very corporation,  whether profit or not for profit” may “be incorporated  or organized… to conduct or promote any lawful  business or purposes”); see also §1006(A)(3); Brief for  State of Oklahoma as Amicus Curiae in No. 13–354.  ALITO, J., delivered the opinion of the Court, in  which ROBERTS, C. J., and SCALIA, KENNEDY, and  THOMAS, JJ., joined. KENNEDY, J., filed a concurring  opinion. GINSBURG, J., filed a dissenting opinion, in  which SOTOMAYOR, J., joined and in which BREYER  and KAGAN, JJ., joined as to all but Part III-C-1.  BREYER and KAGAN, JJ., filed a dissenting opinion.

Questions for Analysis

1. It should be clear that, contrary to the opinion offered by one of the dissents, that the Church  played an enormous role in the development of  contract law especially as it related to the growth  of the law merchant. How does this realization  support the majority opinion in relation to the  purpose of a corporation and the relationship of  that purpose to the RFRA? Explain.
2. In Chapter 7, “The Essentials of Contract Law,” the feature A Question of Ethics asks the following  question: “Should the Church, or perhaps religion in  general, be given a stronger voice in the political and  economic arena, to help redirect and perhaps even  equalize the distribution of wealth?” After reading  this case, how would you answer this question?  Does this answer differ from the answer you offered  when you first read Chapter 7? Why or why not?
3. The history of the law merchant offered by Harold J. Berman that we looked at briefly in Chapter 7 suggests that the law merchant always involved the  merchants in the law-making process. In fact, the  courts established by the guilds were run by elected  guild members. It is likely that these guild leaders  would have understood that the law can often make  merchants choose between making a profit and following their religious beliefs. Given that knowledge, speculate on just how these guild members  might have decided The Hobby Lobby Case.
4. Also in Chapter 7, we learned that one of the essential differences between contract law and the other areas of the law is that the duties assumed by the parties to a contract are voluntary. Use that  knowledge to develop an argument that supports  the dissenting justices in The Hobby Lobby Case.  Explain.
5. Max Weber, in The Protestant Ethic: The Spirit of Capitalism, defends the proposition that European capitalism began with the Protestant Reformation  in the 16th century. In a similar vein, Rodney  Stark in his book, The Victory of Reason: How  Christianity Led to Freedom, Capitalism, and  Western Science, argues that one of the driving  forces behind the growth of capitalism was the  Roman Catholic Church. Which view is closer to  your own view on the topic? Explain.

6. In Chapter 8, “Offer, Acceptance, and Mutual Assent,” we learned that sometimes the law acts  proactively and sometimes the law simply passively reacts. This knowledge helped explain why  the law has acted (or reacted) as it has in the area  of cyber-law. Does The Hobby Lobby Case reflect  proactive integration or passive reaction? Explain.
7. In Chapter 10, “Capacity and Legality: The Final Elements,” we learned that the most obvious type  of illegal contract is one that is designed to obligate someone to commit a crime or a tort. Should  there also be a prohibition against contracts that  are designed to obligate the parties to do something unethical? Explain.
8. If corporations are legal persons, as Justice Alito suggests in the majority opinion, can they enter contracts that are binding on their shareholders,  board members, and officers? Explain.
9. If corporations are legal persons, as Justice Alito suggests in the majority opinion, and if, in fact, they enter contracts that are binding on their  shareholders, board members, and officers, what  type of signature could they provide on any of  those contracts that have to be in writing and  signed by the party sought to be bound? Explain.
10. A complex adaptive system (CAS) is a network of interacting conditions that reinforce one another,  while at the same time adjusting to change from  agents outside and inside the system. In what ways  does Justice Alito’s opinion in this case reinforce  the idea that the law works like a complex adaptive system? Explain.

Sukys, Paul. Business Law with UCC Applications (p. 306). McGraw-Hill Higher Education. Kindle Edition.