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Posts Tagged ‘tightly-held corporation’

Where has Reason Gone?

 

Writer and Curator: Larry H. Bernstein, MD, FCAP

 

UPDATED on  8 July 2014

 

This will be a series of presentations on the Supreme Court decision on Hobby Lobby, it’s impact, and the distamce it places on Chief Justic Roberts’ decision to go with a 5-4 majority after this year achieving a direction of concensus largely undivided decisions.  Both Justice Kennedy and Chief Justice Roberts could have taken a different position with a much appreciated decision, or the alternative was to send the case back to the lower court.  That did not happen, and the consequences are unfolding.

  • Where has the reason gone?

http://pharmaceuticalintelligence.com/2014/07/07/where-has-reason-gone-2/

  • Justice Ginsberg written dissent – Third Part

http://pharmaceuticalintelligence.com/2014/07/08/justice-ginsberg-written-dissent/

  • The physicians’ view of Supreme Court on an issue of public health

http://pharmaceuticalintelligence.com/2014/07/08/the-physicians-view-of-supreme-court-on-an-issue-of-public-health/

  •  Reason in Hobby Lobby

http://pharmaceuticalintelligence.com/2014/07/08/reason-in-hobby-lobby/

 

Where has the Reason Gone?

We are in a period of widespread instability that is bereft of  comprehensibility, not just in Asia, the Middle East, and Africa, but also imposing constrainsts on our constitutional government.  This web sight is concerned with science and also health.  Science is challenged to figure out the complexity of biology and the physical world.  But it has been challenged for centuries by an uncompromizing view of how to organize a society, driven by hatred and violence, and excused by fanatical views. We have a most advanced society in the US, self selected to be the leader of nations.  Yet we have a separation of powers in the presidency, two houses of Congress, and a judiciary that cannot function for the good of the people.  The Congress is at war within itself , unable to carry out its obligations, and only functioning to blockade the presidential authority.

But most disconcerting is a third branch, the judiciary, with Supreme Court Justices, all of whom are political appointmnt for LIFE, and half of who have shown sufficient incompetence to wonder how they can stay in office.  Perhaps, what we don’t have to keep them in line is a periodic review of performance by the American Association of Legal Constitutional Scholars.  What we have is as good as it gets, but not good enough. I refrain from saying more, and proceed to the most recent ABSURD events.   In the Hobby Lobby case, the Court’s conservative majority held that closely held corporations are entitled to some of the same religious rights as people. That means corporations can decide whether or not birth control is covered in the health plans of female employees. Corporations are not people, period. A boss’s religious views should not trump a physician’s medical judgement or a woman’s considered need .

The White House must move fast on expanding contraception coverage.

One proposal…would assign companies’ insurers or health plan administrators for contraceptive coverage… Another would give the administration itself a larger role.” Robert Pear and Adam Liptak in The New York Times.

A rare but potentially important dissent?

“Dissents to Supreme Court orders are rare, and a 17-page dissent to a curt, four-paragraph order is extraordinary. But Sotomayor is on to something: What the majority did in Hobby Lobby, was to allow the plaintiff also to determine what constitutes a ‘substantial burden’ upon it.” Daniel Fisher in Forbes.

Here’s what everyone has been missing in this debate.

“Ginsburg, in her scathing dissent…made an important point about women’s health that’s been almost entirely overlooked elsewhere: For many American women, the birth-control pill has nothing to do with controlling births. It’s a life-saving medicine….The decision…may affect millions of women who suffer from a variety of medical conditions. These women depend on the pill to regulate their hormones and do everything from ease pain to reduce the risk of cancer. These medical benefits have nothing to do with sex or the prevention of pregnancy….Even if these women never have sex once in their lives, they need to be on birth control.” Lucia Graves in National Journal.

“The share of privately insured women who got their birth control pills without a copayment jumped to 56 percent, from 14 percent in 2012. The law’s requirement that most health plans cover birth control as prevention, at no additional cost to women, took full effect in 2013. The average annual saving for women was $269.” Ricardo Alonso-Zaldivar in the Associated Press.

In Hobby Lobby, Supremes grant religious objection rights to for-profit corporations.

by Adam  B In a widely-awaited-but-still-85 percent-as-sucky-as-you-feared 5-4 decision this morning,the Supreme Court of the United States has held that for-profit corporations are “persons” for purposes of the Religious Freedom Restoration Act, and that their religious rights were unduly burdened by the contraceptive mandate provisions of the Affordable Care Act. Because the contraceptive mandate was not the least restrictive means available for the government to provide such coverage—in the Court’s mind, the Government could just assume the costs itself, and already provided an opt-out for religious non-profit employers—the mandate on private employers violates the law. The Court was careful to limit its opinion (in theory) to these facts.

  • It applies only to closely held corporations, and not publicly traded ones.
  • It applies to the contraceptive mandate and
  • not religious objections to all laws in general,

believing that the “compelling interest” struck a sensible balance between religious liberty and competing prior governmental interests. But … we’ll see about that. Justice Ginsburg, writing for the four dissenting Justices, refers to the decision thusly:

In a decision of startling breadth, the Court holds that commercial enterprises, including corporations, along with partnerships and sole proprietorships, can opt out of any law (saving only tax laws) they judge incompatible with their sincerely held religious beliefs.

Compelling governmental interests in uniform compliance with the law, and disadvantages that religion-based opt-outs impose on others, hold no sway, the Court decides,

  • at least when there is a “less restrictive alternative.”

And such an alternative, the Court suggests, there always will be whenever, in lieu of tolling an enterprise claiming a religion-based exemption, the government, i.e., the general public, can pick up the tab….

Religious organizations exist to serve a community of believers.

For-profit corporations do not fit that bill.

Moreover, history is not on the Court’s side. Recognition of the discrete characters of “ecclesiastical and lay” corporations dates back to Blackstone, see 1 W. Blackstone, Commentaries on the Laws of England 458 (1765), and was reiterated by this Court centuries before the enactment of the Internal Revenue Code. See Terrett v. Taylor, 9 Cranch 43, 49 (1815) (describing religious corporations); Trustees of Dartmouth College, 4 Wheat., at 645 (discussing “eleemosynary” corporations, including those “created for the promotion of religion”). To reiterate,

“for-profit corporations are different from religious non-profits in that they use labor to make a profit, rather than to perpetuate [the] religious value[s] [shared by a community of believers].”

Let’s be clear, explains Justice Alito for the five majority opinion, corporations are people too (in aggregate) (for purposes of this statute): 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.”

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…

This statement extends the rights beyond the statement above in that it cannot apply to a closely held corporation with only the owner having fiduciary interest

Indeed, the opinion claims, you can go back over 50 years and find the Court not questioning that a for-profit corporation’s had religious rightsin that 1961 case, a kosher supermarket seeking the right to be open on Sundays despite Massachusetts blue laws. [To which the dissent counters, “The suggestion is barely there. True, one of the five challengers to the Sunday closing law … was a corporation owned by four Orthodox Jews. The other challengers were human individuals, not artificial, law-created entities, so there was no need to determine whether the corporation could institute the litigation.”]

The Court insists that this isn’t something publicly traded companies are going to get involved in. We could use corporate law principles to suss out what their religious beliefs are: HHS contends that Congress could not have wanted RFRA to apply to for-profit corporations because it is difficult as a practical matter to ascertain the sincere “beliefs” of a corporation. HHS goes so far as to raise the specter of “divisive, polarizing proxy battles over the religious identity of large, publicly traded corporations such as IBM or General Electric.” These cases, however, do not involve publicly traded corporations, and it seems unlikely that the sort of corporate giants to which HHS refers will often assert RFRA claims. HHS has not pointed to any example of a publicly traded corporation asserting RFRA rights, and numerous practical restraints would likely prevent that from occurring. For example,

  • the idea that unrelated shareholders—including institutional investors with their own set of stakeholders—would agree to run a corporation under the same religious beliefs seems improbable. In any event, we have no occasion in these cases to consider RFRA’s applicability to such companies.
  • The companies in the cases before us are closely held corporations, each owned and controlled by members of a single family, and no one has disputed the sincerity of their religious beliefs.

HHS has also provided no evidence that the purported problem of determining the sincerity of an asserted religious belief moved Congress to exclude for-profit corporations from RFRA’s protection…. HHS and the principal dissent express concern about the possibility of disputes among the owners of corporations, but that is not a problem that arises because of RFRA or that is unique to this context. The owners of closely held corporations may—and sometimes do—disagree about the conduct of business. Even if RFRA did not exist, the owners of a company might well have a dispute relating to religion…. Courts will turn to that structure and the underlying state law in resolving disputes.

So, what about the contraceptive mandate?

Interestingly, the Court concedes for sake of argument that it serves a compelling state interest. But, still, that’s not enough. By requiring the Hahns and Greens and their companies to arrange for such coverage, the HHS mandate demands that they engage in conduct that seriously violates their religious beliefs. If the Hahns and Greens and their companies do not yield to this demand, the economic consequences will be severe. If the companies continue to offer group health plans that do not cover the contraceptives at issue, they will be taxed $100 per day for each affected individual. For Hobby Lobby, the bill could amount to $1.3 million per day or about $475 million per year; for Conestoga, the assessment could be $90,000 per day or $33 million per year; and for Mardel, it could be $40,000 per day or about $15 million per year. These sums are surely substantial. … Are their religious beliefs loony? The Court’s not going to look into that.

The sincerity is what counts, and that creates a burden: …If I may ask—how do you measure sincerity?

How much it will spend on litigating its case!

The Hahns and Greens believe that providing the coverage demanded by the HHS regulations is connected to the

destruction of an embryo in a way that is sufficient to make it immoral for them to provide the coverage.

This belief implicates a difficult and important question of religion and moral philosophy, namely, the circumstances under which it is wrong for a person to perform an act that is innocent in itself but that has the effect of enabling or facilitating the commission of an immoral act by another.

Arrogating the authority to provide a binding national answer to this religious and philosophical question, HHS and the principal dissent in effect tell the plaintiffs

  • that their beliefs are flawed. …
  • we have repeatedly refused to take such a step.

See, e.g., Smith, 494 U. S., at 887 (“Repeatedly and in many different contexts, we have warned that courts must not presume to determine . . . the plausibility of a religious claim”)

Incredible!!      So, RFRA applies,   there’s a burden, and the contraceptive mandate fails the test.

The least-restrictive-means standard is exceptionally demanding, and it is not satisfied here.  HHS has not shown that it lacks other means of achieving its desired goal without imposing a substantial burden on the exercise of religion by the objecting parties in these cases. See §§2000bb–1(a), (b) (requiring the Government to “demonstrat[e] that application of [a substantial] burden to the person . . . is the least restrictive means of furthering [a] compelling governmental interest” (emphasis added)).

The most straightforward way of doing this would be for the Government to assume the cost of providing the four contraceptives at issue to any women who are unable to obtain them under their health-insurance policies due to their employers’ religious objections. This would certainly be less restrictive of the plaintiffs’ religious liberty, and HHS has not shown that this is not a viable alternative. HHS has not provided any estimate of the average cost per employee of providing access to these contraceptives, two of which, according to the FDA, are designed primarily for emergency use. Nor has HHS provided any statistics regarding the number of employees who might be affected because they work for corporations like Hobby Lobby, Conestoga, and Mardel. Nor has HHS told us that it is unable to provide such statistics. It seems likely, however, that the cost of providing the forms of contraceptives at issue in these cases (if not all FDA-approved contraceptives) would be minor when compared with the overall cost of ACA.

According to one of the Congressional Budget Office’s most recent forecasts, ACA’s insurance-coverage provisions will cost the Federal Government more than $1.3 trillion through the next decade. If, as HHS tells us, providing all women with cost-free access to all FDA-approved methods of contraception is a Government interest of the highest order, it is hard to understand HHS’s argument that it cannot be required under RFRA to pay anything in order to achieve this important goal.

HHS contends that RFRA does not permit us to take this option into account because “RFRA cannot be used to require creation of entirely new programs.”  But we see nothing in RFRA that supports this argument, and drawing the line between the “creation of an entirely new program” and the modification of an existing program (which RFRA surely allows) would be fraught with problems. And don’t worry, Justice Alito insists! This is a really, really narrow holding, and doesn’t create religious exemptions to good laws: HHS and the principal dissent argue that a ruling in favor of the objecting parties in these cases will

  • lead to a flood of religious objections regarding a wide variety of medical procedures and drugs, such as vaccinations and blood transfusions,

but HHS has made no effort to substantiate this prediction. HHS points to no evidence that insurance plans in existence prior to the enactment of ACA excluded coverage for such items. Nor has HHS provided evidence that any significant number of employers sought exemption, on religious grounds, from any of ACA’s coverage requirements other than the contraceptive mandate. …

What are the credentials for Alito and associates in the domain of medical therapies?  None!

[O]ur decision in these cases is concerned solely with the contraceptive mandate.

Our decision should not be understood to hold that an insurance-coverage mandate must necessarily fall if it conflicts with an employer’s religious beliefs. Other coverage requirements, such as immunizations, may be supported by different interests (for example, the need to combat the spread of infectious diseases) and may involve different arguments about the least restrictive means of providing them. The principal dissent raises the possibility that discrimination in hiring, for example on the basis of race, might be cloaked as religious practice to escape legal sanction. Our decision today provides no such shield. The Government has a compelling interest in providing an equal opportunity to participate in the workforce without regard to race, and prohibitions on racial discrimination are precisely tailored to achieve that critical goal. Justice Kennedy adds an additional concurrence to remind everyone that Justice Kennedy believes in the Court, America, and his own importance:

In our constitutional tradition, freedom means that all persons have the right to believe or strive to believe in a divine creator and a divine law. For those who choose this course, free exercise is essential in preserving their own dignity and in striving for a self-definition shaped by their religious precepts. Free exercise in this sense implicates more than just freedom of belief. It means, too, the right to express those beliefs and to establish one’s religious(or nonreligious) self-definition in the political, civic, and economic life of our larger community.

But in a complex society and an era of pervasive governmental regulation, defining the proper realm for free exercise can be difficult. … “[T]he American community is today, as it long has been, a rich mosaic of religious faiths.” Town of Greece v. Galloway, 572 U. S. __ (2014) (Kagan, J., dissenting) (slip op., at 15). Among the reasons the United States is so open, so tolerant, and so free is that no person may be restricted or demeaned by government in exercising his or her religion. Yet neither may that same exercise unduly restrict other persons, such as employees, in protecting their own interests, interests the law deems compelling.

In these cases the means to reconcile those two priorities are at hand in the existing accommodation the Government has designed, identified, and used for circumstances closely parallel to those presented here. RFRA requires the Government to use this less restrictive means. Justice Ginsburg writes the principal dissent, and begins by reminding us of the importance of sexual autonomy, and the economic stakes for women in this litigation: “The ability of women to participate equally in the economic and social life of the Nation has been facilitated by their ability to control their reproductive lives.” Planned Parenthood of Southeastern Pa. v. Casey, 505 U. S. 833, 856 (1992).Congress acted on that understanding when, as part of a nationwide insurance program intended to be comprehensive, it called for coverage of preventive care responsive to women’s needs.

… The [ACA] had a large gap, however; it left out preventive services that “many women’s health advocates and medical professionals believe are critically important.” 155 Cong. Rec. 28841 (2009) (statement of Sen. Boxer). To correct this oversight, Senator Barbara Mikulski introduced the Women’s Health Amendment, which added to the ACA’s minimum coverage requirements a new category of preventive services specific to women’s health…Women paid significantly more than men for preventive care, the amendment’s proponents noted; in fact, cost barriers operated to block many women from obtaining needed care at all. See, e.g., id., at 29070 (statement of Sen. Feinstein) (“Women of childbearing age spend 68 percent more in out-of-pocket health care costs than men.”); id., at 29302 (statement of Sen. Mikulski) (“copayments are [often] so high that [women] avoid getting [preventive and screening services] in the first place”). And increased access to contraceptive services, the sponsors comprehended, would yield important public health gains. See, e.g., id., at 29768 (statement of Sen. Durbin) (“This bill will expand health insurance coverage to the vast majority of [the 17 million women of reproductive age in the United States who are uninsured] . . . . This expanded access will reduce unintended pregnancies.”). And the dissenters deride as unfounded the Court’s new recognition of religious rights for for-profit corporations: Until this litigation, no decision of this Court recognized a for-profit corporation’s qualification for a religious exemption from a generally applicable law, whether under the Free Exercise Clause or RFRA.

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