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. Flores, Hobby 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.