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Supreme Court evaluates Hobby Lobby suit

During arguments about contraception coverage requirements, female justices pointedly question companies’ lawyer

WASHINGTON — During oral arguments on Tuesday, the Supreme Court’s female justices expressed the greatest skepticism about two for-profit corporations’ claims that the Affordable Care Act’s (ACA) regulation requiring employer-provided group health insurance plans cover contraception without co-pays violates their religious freedom.

In the two cases, Sebelius v. Hobby Lobby Stores Inc. and Conestoga Wood Specialties Inc. v. Sebelius, justices also questioned the attorneys for both sides about whether, under the Religious Freedom Restoration Act (RFRA), for-profit corporations have a religious conscience, whether their religious exercise is burdened by the regulation and whether exercise of that conscience may legally infringe on their employees’ entitlement to the contraception benefit.

The lawsuits are among the most closely watched religious freedom cases in decades. In both cases, the Hobby Lobby and Conestoga Wood’s owners — who are evangelical Christians and Mennonites, respectively — object to some types of emergency contraceptives, which they say can cause abortions and thus infringe on their religious beliefs. The medical establishment refutes that claim.

Justices Sonia Sotomayor, Elena Kagan and Ruth Bader Ginsburg were the first to question the companies’ lawyer, former Solicitor General Paul Clement, about whether recognizing his clients’ claims could open the door to other calls for religious exemptions under the ACA, such as exemptions from covering immunizations or blood transfusions. Kagan raised questions about even further expansion of religious exemptions from a wide array of other federal laws, including employment discrimination, minimum wage and child labor laws.

“Your interpretation,” she said to Clement, “would subject the entire U.S. code to scrutiny,” adding, “if your argument applied, then you would see religious objections come out of the woodwork on all of these laws.”

Clement discounted this argument, telling the justices that if those statutes and the RFRA were “on a collision course, we would have seen that collision already.”

He defended the unique nature of his clients’ claims by asserting that the issue of contraception was so “fraught with controversy” that the Department of Health and Human Services (HHS) exempted houses of worship from having to provide coverage for it. But Solicitor General Donald Verrilli, arguing the government’s case, pointed out that this very specific exemption was due to the “special solicitude” churches receive under the First Amendment and that it is not afforded other organizations.

In 2012, after an outcry from religious conservatives, HHS developed an accommodation for religious nonprofits, such as hospitals and universities, that shifts to their insurers the burden to provide contraception coverage. Many nonprofits have challenged that accommodation in court, although these challenges have yet to reach the high court on the merits. Some of the justices nonetheless suggested that such an accommodation could provide a resolution for the for-profit companies, without any impact on their employees’ ability to obtain coverage.

Kagan and Sotomayor surprised court watchers when they raised questions about whether the law even constitutes a mandate. This argument, which Georgetown University Law School professor Marty Lederman first wrote about last year, holds that contrary to widespread use of the word “mandate” to describe the contraception benefit, there is actually none. And contrary to the corporations’ claims that the penalties imposed for noncompliance would be ruinous, there is no penalty but rather a tax they would pay for not providing a group health plan at all.

Justices Sonia Sotomayor, Elena Kagan and Ruth Bader Ginsburg were the first to question Hobby Lobby and Conestoga Wood’s lawyer about whether recognizing his clients’ claims could open the door to other calls for religious exemptions under the ACA.

In the courtroom, Kagan emphasized that Hobby Lobby could choose to pay a tax of $2,000 per employee per year — which is less than the cost of a group plan. Even if the company provided its employees higher wages so that they could purchase individual insurance plans on the ACA’s exchanges, the cost to the company would be less than what it is paying for a group plan.

“It’s not saying you have to do something that violates your religion,” she said. “It’s a choice.”

Justice Anthony Kennedy, thought to be the critical swing vote in the case, chimed in, “assume it’s a wash,” and challenged Clement to articulate his clients’ case.

Clement insisted there would still be a substantial burden, but noted that the theory had not been litigated in the case.

Kennedy also raised the question of how granting the exemption would affect the rights of Hobby Lobby’s employees, who may not share their employers’ religious views. Again, the female justices framed the question most pointedly, with Ginsburg saying that any accommodation of religious belief “must be measured so it doesn’t override other significant interest.” Kagan noted that “Congress made a judgment to provide an entitlement ... That entitlement is to women,” who are “harmed” if they don’t get the benefit.

In his argument, Verrilli amplified this point, arguing that if the court recognized the corporations’ claims, it would be the first time under the RFRA that any court has held that a religious exemption could “extinguish statutorily guaranteed benefits.”

As expected, the court did not ask detailed questions about the companies’ objections to only four out of 20 covered drugs and devices or the companies’ assertion that these methods — intrauterine devices (IUDs) and emergency contraceptives ella and Plan B — could act as substances that cause abortions.

Justice Antonin Scalia said that these methods are “not terribly expensive,” suggesting the burden on employees is not significant. Verrilli pointed out that IUDs are among the most effective contraceptive methods and have the “highest up-front cost.”

A decision is expected this summer.

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