Monday, July 07, 2014

Hobby Lobby Post-Mortem Part 2: The Wheaton College Stay

By Michael Dorf

Perhaps because of the title (". . . a Not Very Important Case"), the aspect of my initial post on Hobby Lobby that drew the most critical attention from readers was my claim that it was not that important. I think some readers misread me to say the case was unimportant, whereas I made clear that Hobby Lobby may well have been the most important case of the past Term, but that I thought it was not important relative to blockbuster end-of-Term decisions from recent past years, like DC v. Heller in 2008, NFIB v. Sebelius, or U.S. v. Windsor last year.

I continue to think that comparative assessment is correct because of three factors: In light of City of Boerne v. FloresHobby Lobby will have no direct impact on state and local laws; Justice Kennedy's concurrence gives some assurance that there will not be a fifth vote to grant religious exceptions that would hobble government; and Hobby Lobby is only a case of statutory construction, so that Congress could, at least in principle, amend RFRA if the granting of religious exceptions becomes onerous.

Nonetheless, I recognize that the prospects for congressional repeal or modification of RFRA are bleak, given the current composition of Congress. Moreover, I agree with the commentators (both in the comments on my last post and in the broader world) who say that the principles underlying the Hobby Lobby majority opinion are dangerously broad. In saying that RFRA goes (well) beyond the pre-1990 Free Exercise case law, Justice Alito has potentially opened the floodgates to religious exception claims that could hobble government. In the balance of this post, I want to focus on last Thursday's SCOTUS order in Wheaton College v. Burwell, which makes me more than a little nervous about where the Court will  go next.

I'm calling today's post "Hobby Lobby Post-Mortem Part 2" on the assumption that my same-day post last week counts as Part 1. Part 3 will run tomorrow, with Part 4 coming on Wednesday. (Thus, this week will continue on the "old" DoL schedule, not the new one I announced on Friday.)

Arguably, the projected length of this mini-series on Hobby Lobby proves my critics right, as a case that prompts me to write four post-decision posts probably qualifies as quite important, or at least interesting. Further evidence that I initially underestimated the importance of the Hobby Lobby ruling came in the Wheaton College case, when the SCOTUS issued an order temporarily permitting Wheaton--an exempt religious organization--to notify the government of its objection to providing contraceptive health insurance in its own way, rather than using the government's Form 700, on the ground that filling out the form would substantially burden Wheaton College's religious beliefs by (the College believes) requiring it to facilitate third-party provision of contraception insurance. 

The order prompted a spirited dissent by Justice Sotomayor, joined by Justices Ginsburg and Kagan, thereby putting the Court in the very awkward position of apparently having broken on strict gender lines over the provision of contraceptive services to women. (I say "apparently" because it's possible that Justice Breyer voted against the order but chose not to register his dissent publicly.) The dissent and the order are each somewhat odd in their own way.

The dissent accuses the majority of disregarding Hobby Lobby just three days after that ruling was handed down. In Hobby Lobby, the Court said that imposing the contraception mandate on for-profit corporations was not the least restrictive means of achieving contraception coverage, pointing to the very procedure utilizing Form 700 that the Court in Wheaton College says (at least sufficiently for a stay) subtantially burdens the plaintiff's religious exercise. Justice Sotomayor writes:
After expressly relying on the availability of the religious-nonprofit accommodation to hold that the contraceptive coverage requirement violates RFRA as applied to closely held for-profit corporations, the Court now, as the dissent in Hobby Lobby feared it might, . . . retreats from that position. 
But that looks like a misreading of Hobby Lobby. As I noted in my post last week:
Justice Alito's footnotes 9 and 39, together with the following statement, make clear that he is not foreclosing [a] challenge [like Wheaton College's]: "We do not decide today whether an approach of this type", i.e., the opt-out combined with insurance coverage being directly supplied by the insurer, "complies with RFRA for purposes of all religious claims."
So the dissenters' accusation that the Wheaton College stay is inconsistent with the narrow-tailoring analysis of Hobby Lobby is peculiar. Meanwhile, the order itself is also peculiar, or worse.

The majority assumes that the notice to the government on a different piece of paper is equally effective as notice on Form 700, and that's almost certainly right so far as notifying the government is concerned. If someone has a sincere religious objection to using off-white paper but no such objection to using white paper, the government can readily accommodate by accepting the white paper, and learn the same information.

But Form 700 does not just serve notice to the government. It also gives notice to the insurance provider because a religious non-profit using Form 700 is required to copy the provider. Justice Sotomayor says in dissent that absent that notice, the government will not know what insurer the exempt organization uses. And thus, the government will not know what entity is obligated to provide substitute coverage. Justice Sotomayor writes:
Of course, HHS is aware of Wheaton’s third-party administrator in this case. But what about other cases? Does the Court intend for HHS to rely on the filing of lawsuits by every entity claiming an exemption, such that the identity of the third-party administrator will emerge in the pleadings or in discovery? Is HHS to undertake the daunting—if not impossible—task of creating a database that tracks every employer’s insurer or third-party administrator nationwide?
This does seem like a vitally important question that goes to the issue of narrow tailoring. Yet the majority says nothing in response. Perhaps there is some other government regulation that requires organizations like Wheaton to inform the government of what insurance administrators they use; after all, the regulatory regime in this area is complex. But one can only assume from the majority's silence in response to this objection that: a) there is no such other regulation; or b) none of the Justices really understands the regime sufficiently to know the answer to this basic question. Perhaps if and when the issue returns to the Court in a non-emergency posture, they will be better informed about what the government knows or does not know without Form 700. 

Meanwhile, there is a further problem. Justice Sotomayor goes on to ask how the majority's order solves Wheaton's problem. She asks: "why wouldn’t Wheaton’s claim be exactly the same under the Court’s newly-fashioned system? Either way, the end result will be that a third-party administrator will provide contraceptive coverage."

Put differently, Wheaton's objection is not like the objection to off-white paper. The objection is not to the form of Form 700 but to its effect, which is to designate the company that was administering its self-insurance plan as a "plan administrator," i.e., as an entity that provides contraceptive coverage directly. As Marty Lederman explains on Balkinization, Wheaton and similarly situated religious non-profits object to the role--under the existing regs--that Form 700 plays in authorizing a plan administrator to provide contraceptive coverage. And as Marty goes on to explain, it's not clear under existing law that the government can treat the non-Form 700 notice as doing that, without leading to further religious objections in just the way that Justice Sotomayor notes. Marty also offers a potential solution by which RFRA as construed in Hobby Lobby can be construed as tacitly amending the law, but it remains to be seen whether that will succeed.

My own suspicion is that if Wheaton continues to object to whatever backup to the backup the government tries in order to accommodate it, then Wheaton will lose. I base that assessement on Justice Kennedy's Hobby Lobby concurrence, which indicates that the creation of a whole new program--here, direct provision of contraceptive insurance or contraception itself by the government--is not a "less restrictive alternative" that the government must use as an accommodation to a religious objection. But even that is uncertain. Justice Kennedy did join Justice Alito's Hobby Lobby opinion in full, and that opinion indicates (but ultimately does not rely on the conclusion that) the possibility of direct government provision of insurance or services counts as a less restrictive alternative under RFRA.

Perhaps the least bad news about Wheaton College is that the majority didn't say anything in response to the dissent, so that the majority Justices did not commit themselves to an untenable legal position on the ultimate merits. That's only least bad news, however, rather than good news, because there is a tendency of interim rulings to foreshadow and/or influence ultimate rulings. See, e.g., the stay order halting the Florida recount in Bush v. Gore.

And on that ominous note, I'll sign off until tomorrow, when I'll return with: Hobby Lobby Post-Mortem Part 3: Overlapping Magisteria and the Truthiness Critique.

35 comments:

Shag from Brookline said...

Mike, do you plan to discuss the propriety of the injunctive relief in Wheaton which is before a federal trial court that has not ruled on the case? Marcia Coyle on the Newshour (PBS) suggested this was unusual. What were the machinations at the end of the Court's term regarding Wheaton?

djg273 said...

An ERISA governed health plan must file a Form 5500 with the DOL and IRS. Schedule A Part I to Form 5500 requires plan sponsors to report information regarding the Plan's insurance coverage.

James said...

To me, this is all a cascade of undesirable outcomes that stems from an initial flawed premise: that allowing full health insurance is complicity in allowing immoral behavior. The Hobby Lobby plurality rejected the argument that the employee or the employee's dependents have free will and make their own decisions, thereby interrupting the chain of causation.
By this logic, employers like Hobby Lobby - who pay employees money without strings attached - can now require employees to sign a pledge not to use any of their pay to purchase "immoral" things. Please tell me what is wrong with that argument.

djg273 said...

The problem is that many of the non-profits seeking an exemption from the contraceptive mandate sponsor ERISA exempt Church Plans which do not file Form 5500.

As Church Plans have no funding requirements,need not follow non-discrimination rules etc... it seems odd to draw the line at contraception. I understand the importance of providing contraceptive coverage, but we are dealing with organizations that are not required to provide vested pension benefits to retirees.

In summary, Church Plans have been permitted to operate outside the laws ordinary plan sponsors must follow since 1974, exempting them from a new ERISA recordkeeping requirement is par for the course.

Joe said...

The verbiage on this single controversy is pretty telling to me.

RFRA sets up this sort of thing for each and every regulation under the sun. There won't be as much attention to them while Marty Lederman, e.g., works on Hobby Lobby: Part 87.

I think long term, Wheaton might lose & that might be what Breyer was thinking when he decided to let the ruling be men v. women. But, what about meanwhile? And, in other cases?

The "line" here btw is not "contraceptives" for some people. "Abortion" is said to be the problem. But, it is being used so broadly to apply to something that even many those against abortion don't treat as such.

Big picture, "abortion" shouldn't be an exception either, at least in many cases. It is outrageous that even clearly health indicated abortions (those that few would disagree over) are denied Medicaid coverage or some military dependent might (depending on recent rules) not even be able to get it on base if they pay for it.

Joe said...

Quick point: Kennedy wrote a concurring opinion in Burwell v. Hobby Lobby, but he joined to main opinion as well. It is therefore not a "plurality," but a full five majority.

David Ricardo said...

Three significant points which hopefully Mr. Dorf will address in his future commentary.

The first is the nature of religious persecution. Note the absolute horror of persecution that has taken place over the last 2,000 years. The horrendous torture and murder of early Christians by Romans, the horrific practices against medieval Jews symbolized by the Inquisition, the systematic killing of both Catholics and Protestants by each other during the last 700 years including burning at the stake, the executions involving one sect of Muslims by another sect which continue to this day, Muslim and Hindu violence in south Asia and the culmination of anti-Semitism in the Holocaust.

In now in the United States we have religious persecution being defined as and debated over filling out a short form in which a religiously affiliated organization must state that it does not wish to pay for contraception coverage in its health care plans when the truth of the matter is it does not wish to pay for contraception in its health care plans. Really, can the filling out of a short form stating its position even be defined as an attack on religious freedom? This situation is ludicrous compared to what real religious persecution is and has been.

(And while I am only one person I think I can speak for each and every member of the Jewish faith in telling the world that if you will only let us alone, if you will stop discriminating against us, if you will recognize our right to exist, if you will cease killing us, if you will stop blaming us for all of the world’s ills, if you can accept the fact that not a single Jewish person alive today participated in the death of Jesus and if you will recognize that no, we do not control the world wide media or the entertainment industry or the financial sector, then we will gladly and without complaint sign whatever innocuous form you wish to present us with and never ever call that persecution or an assault on our freedom of religion.)

The second point involves the Supreme Court. This great Court, a forum that has dealt with issues of slavery, of a right to privacy, of civil rights, of segregation, of the right to counsel, of voting rights and other issues which go the core of a civilized nation is now partly consumed with whether or not religious freedom is violated by an inanimate institution having to fill out a simple form stating its position on a part of its health insurance coverage. Would Mr. Dorf and others agree that in even taking up this issue the Court has brought disgust and disgrace upon itself, the issue is not even close to being worthy of consideration?

The third point is economics. Conservatives have long argued that government mandated employment benefits (SS, unemployment benefits, worker’s comp etc) are paid for by employees even when they are assessed against the employer because the costs are passed on to the employees in the form of lower wages. The most prominent example here being that Conservatives count as part of the individual tax burden the employer portion of payroll taxes; that these are in effect taxes paid by the employee and that the employer is only the tax collector. The same position is stated with respect to corporate income taxes.

So under this reasoning the contraception mandate is not paid for by the employer at all, that it is the employee who is paying and the employer thus is not supporting policy with which it disagrees. Thus consistency requires that Conservatives should argue that there is no burden on the employer. Their own reasoning defeats their position on this issue.

Michael C. Dorf said...

Many thanks to all of the commentators for these points--especially to djg273 for the helpful info on ERISA. (You should volunteer as a law clerk for one or more of the Justices.)

I also appreciate the suggestions by Shag and David Ricardo for future posts. As noted, I have two additional posts on these issues coming tomorrow and Wednesday. But there will remain much more to say (even if I leave some of it for others to say.)

I think that part of what I was saying when I first deemed Hobby Lobby relatively unimportant parallels what DR writes: That the COMPLAINT is an objection to extremely mild government coercion.

James said...

I would like to know what is wrong with the logic of my point; it seems different but I can't identify why. Anyway: can a religious employer now make employees sign a pledge not to use their pay to buy, e.g., alcohol, tobacco, birth control, whatever?
Also what is wrong with this comparison: The Hobby Lobby majority (thanks for the correction) is saying, in essence, "Sorry, black people; you can't eat at this lunch counter because the owner has a religious objection; but it's OK because the government will open a special little lunch counter just for you."

David Ricardo said...

Mr. Dorf in indeed correct that Hobby Lobby is relatively unimportant due to the subject matter being relatively insignificant. But a question which I hope Mr. Dorf will address is whether or not Hobby Lobby is in itself a legal evolutionary dead end or whether it is an evolutionary step on the way to a much broader position that any employer may opt out of any employee benefit program (and other laws) which it deems violates its religious principles.

This evolutionary process has been evident in campaign finance decisions where narrowly tailored opinions are obviously leading to the position that any and all campaign finance laws are unconstitutional and it is evident in the gay marriage issue where the narrow decisions in Lawrence and Windsor are seen (unless thwarted by Justice Scalia et. al.) as evolutionary steps towards the position of legalizing gay marriage in every state. Is Hobby Lobby a part of a similar process? The fact that the Court is so involved and that it granted the injunction in Wheaton suggests that it is, and that I believe is the worrisome nature of the Hobby Lobby case despite the trivial nature of its issue.

Joe said...

Per James' comment, I do wonder the limits of the logic here. Parochial schools, e.g., seem to have a constitutional right to do that, at least for ministerial employees.

But, maybe, at least in some states, there would be some limit for non-religious / private companies. Then, again, maybe "closely held" are different?

For instance, if something was needed for free exercise, it might be seen as discriminatory (see, e.g., Civil Rights Act of 1964, religious liberty component). Or, against the public interest in respect to birth control, if you couldn't even use your own money. California, e.g., has a broad right to privacy, which applies even to the actions of non-governmental companies.

Who knows, especially if the matter is not deemed a "compelling interest" -- something the main opinion in HL only accepted for the sake of argument. Fun times.

James said...

Pardon my additional comment, but remarks about the "trivial nature" of the issue and "especially if the matter is not deemed a compelling interest" seem to disregard Griswold v. Connecticut, Roe v. Wade, and so on. I understand that you might mean that the burden on the employer is trivial; that is true, and it is therefore all the more appalling that the decision utterly downplays - I might say ignores - the privacy rights of women, simply offering the unsupported statement that they will not suffer at all. Hence my lunch counter example.

David Ricardo said...

James is correct, the nature of the requirement is so trivial with respect to the employer that the issue does not even come close to meriting Supreme Court review, unless of course this is part of the evolutionary course the Court wishes to take that will result in massive intrusion of religion in employment. The initial reaction of most of us after the Hobby Lobby decision was that this was an exercise in triviality until the Wheaton injunction which has caused us to re-think that position.

Joe said...

I'm no fan of such rulings, but the USSC has long held that Roe v. Wade, e.g., does not require supplying positive benefits such as Medicaid coverage even when the abortions are needed for compelling health reasons and other procedures are covered. Harris v. McRae etc.

Shag from Brookline said...

Is the post-end-of-term timing of Wheaton political (whether intentional or not) or did it become political (whether intentional or not) with the dissent? The failure of the majority to address the dissent may indeed have been political (whether intentional or not). What are the potential impacts on November's midterms?

Unknown said...

The least restrictive means I see, while still maintaining a "fill out a form" mechanism, is to have the Employee of the objecting Employer file a form which says, "My Employer provides insurance which does not offer contraception coverage". Then, the Employer has zero participation of any kind and the government is still free to pay for the coverage exactly the same as if the Employer filed form 700.

Joe said...

Unknown's suggestion would rely on employees to be aware of coverage, which involves a range of items that they might not even know they have a legal right to have.

I see certain problems arising there.

matt30 said...

So when I criticized your last post declaring the decision "not important" it wasn't because of some imagined interpretation of what the title referred to, it was because of the analysis that followed. In particular, it was the idea that the decision was narrow and circumscribed (an opinion I also read in every prominent news publication after the decision) based on a misreading of the opinion. Some claimed that Alito cabined this opinion within the 4 walls of the facts of this case (he didn't), others, like you, claimed that this ruling would be little used because corporations for essentially image reasons would avoid using it because despite the fact that the government ostensibly passed the legislation because those market factors were ineffective in the first place. I happen to believe that is wrong as well.

Then in the comments you brushed off the distinction between a religious harm and a pecuniary one--and what that could mean going forward. I feel pretty vindicated by the Wheaton order. It shows the court is willing to entertain arguments that play fast and loose with what counts as a substantial burden.

As far as the "least restrictive means" prong is concerned, I have no strong feelings about it. I know you think that the fact the government has authority (maybe)to arrange for coverage for religious objectors is what swayed Kennedy to the majority--I am less certain.

Shak Olreal said...

But Form 700 does not just serve notice to the government. It also gives notice to the insurance provider because a religious non-profit using Form 700 is required to copy the provider. Justice Sotomayor says in dissent that absent that notice, the government will not know what insurer the exempt organization uses. And thus, the government will not know what entity is obligated to provide substitute coverage.Elo Boost
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Monday, July 07, 2014 Hobby Lobby Post-外送Mortem Part 2: 台中茶訊The Wheaton College Stay By Michael Dorf 茶訊交流網Perhaps because of the title (". . . a Not Very Important Case"), the aspect of my initial全套 post on Hobby Lobby that drew the most critical 桃園叫小姐attention from readers
文章來源:http://stbck.blogspot.com/

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