New York Times

Justices Seem Open to Religious Claims by Companies

By Adam Liptak, 26 March 2014

WASHINGTON — In a long and lively argument that touched on medical science and moral philosophy, the Supreme Court on Tuesday seemed ready to accept that at least some for-profit corporations may advance claims based on religious freedom.

Such a ruling would echo the court’s 2010 decision in Citizens United, which recognized free speech rights for corporations. But it would be only a first step in the court’s analysis of the lawfulness of a part of the Affordable Care Act that requires many employers to provide insurance coverage for contraception.

The justices seemed closely divided along ideological lines on other parts of the case. But Justice Anthony M. Kennedy, who probably holds the crucial vote, seemed frustrated with some of the Obama administration’s positions.

The questioning was sometimes technical but often unusually blunt and direct.

Justice Kennedy asked Solicitor General Donald B. Verrilli Jr., for instance, whether for-profit corporations “could be forced in principle to pay for abortions” and be powerless to object on religious grounds.

Mr. Verrilli said that was right, though he added that there was no such law.

Chief Justice John G. Roberts Jr. jumped in. “Flesh it out a little more,” he said. “There is no law on the books that does what?”

Squirming, Mr. Verrilli said, “That requires for-profit corporations to provide abortions.”

Chief Justice Roberts looked puzzled. “I thought that’s what we had before us,” he said.

The two companies that challenged the law — Hobby Lobby, a chain of crafts stores, and Conestoga Wood Specialties, which makes furniture — say that some drugs and intrauterine devices are tantamount to abortion. Those claims are not generally accepted by scientists.

Mr. Verrilli said he did not question the sincerity of the companies’ beliefs. “With all due respect,” he added, “we’ve got about two million women who rely on the I.U.D. as a method of birth control in this country. I don’t think they think they are engaged in abortion in doing that.”

By the end of the argument, there seemed to be a tentative consensus that the two companies, both controlled by religious families, could be allowed to claim rights under the relevant law, the Religious Freedom Restoration Act of 1993, without opening the floodgates to objections from major public corporations.

“You picked great plaintiffs,” Justice Sonia Sotomayor told Paul D. Clement, a lawyer for the companies.

Chief Justice Roberts said the court could limit its decision to privately held corporations. “Whether it applies in the other situations is a question that we’ll have to await another case when a large publicly traded corporation comes in and says, ‘We have religious principles,’ ” he said, adding that this was “the sort of situation I don’t think is going to happen.”

Justice Samuel A. Alito Jr. asked about news reports that “Denmark recently prohibited kosher and halal slaughter methods because they believe that they are inhumane.”

“Now suppose,” he said, “Congress enacted something like that here. What would a corporation that is a kosher or halal slaughterhouse do? They would have no recourse whatsoever. They couldn’t even get a day in court.”

Justice Elena Kagan suggested that the two companies before the court could press their claims but should not win.

The justices signaled the importance of the case by scheduling 90 minutes for the argument rather than the usual hour. The first round of questions to Mr. Clement also seemed meant to establish how much was at stake.

Justice Kagan said the companies’ interpretation of the 1993 law could transform the legal system.

“Your understanding of this law, your interpretation of it, would essentially subject the entire U.S. Code to the highest test in constitutional law,” she said. It would allow, she continued, employers to object on religious grounds to laws banning sexual discrimination and child labor and to laws requiring a minimum wage and family leave.

Justice Sotomayor asked similar questions about the implications of a ruling in favor of the companies for blood transfusions, vaccines and “products made of pork.”

Mr. Clement responded that there was no reason to fear “a parade of horribles,” and that religious objections could be handled case by case.

Justice Kagan said that would be unwieldy. “Everything would be piecemeal, and nothing would be uniform,” she said.

Much of the argument concerned whether the coverage requirement imposed a serious burden on the companies, a threshold question under the 1993 law. The companies remained free, some justices said, not to offer health insurance at all, pay a tax and emerge financially better off. On that point, the court’s liberal wing seemed to have Justice Kennedy’s support.

“How is the employer hurt?” he asked.

But Chief Justice Roberts said that approach ignored another problem. “I thought that part of the religious commitment of the owners was to provide health care for its employees,” he said.

Justice Kennedy also seemed to side with his more liberal colleagues when they said religious objections that imposed burdens on others should not be allowed. Here, Justice Kennedy expressed solicitude for “the rights of the employees.”

“The employee may not agree with the religious beliefs of the employer,” he said. “Does the religious beliefs just trump? Is that the way it works?”

But Justice Kennedy also had significant and possibly crucial reservations about the Obama administration’s carrying out of the contraceptive coverage requirement. It was hard to see, he suggested, how the requirement could simultaneously be a compelling government interest and yet be subject to a web of exemptions and accommodations for religious groups and others.

A decision in the two consolidated cases — Sebelius v. Hobby Lobby Stores, No. 13-354, and Conestoga Wood Specialties v. Sebelius, No. 13-356 — is expected by the end of June, two years after a closely divided court upheld another provision of the Affordable Care Act, one requiring most Americans to obtain health insurance or pay a penalty.

At the time, the decision created tension and bitterness on the court. But the references to it on Tuesday were lighthearted.

When Mr. Clement said his clients would face annual penalties if they failed to provide health insurance, Justice Sotomayor corrected him, relying on a distinction that played a role in Chief Justice Roberts’s 2012 opinion upholding the law.

“It’s not called a penalty,” she said. “It’s called a tax.”

Chief Justice Roberts agreed, to laughter in the courtroom. “She’s right about that,” he said.

Later, Justice Kennedy, who dissented in the 2012 case, playfully asked Mr. Verrilli whether “the constitutionality of the whole act has to be examined before we accept your view.”

Mr. Verrilli’s response was also greeted with laughter. “I think it has been examined, Your Honor, is my recollection,” he said.