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Judge Michael McConnell On Hobby Lobby And The Free Exercise Rights Of Corporations

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Judge Michael McConnell of Stanford law School was my guest in hour two today to discuss the brief he authored in the Hobby Lobby/Conestoga Woods cases.  The transcript and audio are below:




HH: I have been spending a lot of time focused on the March 25th argument looming in front of the Supreme Court in two cases – Hobby Lobby, so ably represented by the Beckett Fund for Religious Liberty, and Conestoga Woods, so ably represented by Alliance Defending Freedom, have been battling for years against the mandate imposed by the Affordable Care Act, otherwise known as Obamacare, that they provide a raff of different sorts of contraception to the employees that work for those corporations. They will have an epic argument on March 25th against the government seeking to impose that mandate, and a number, eighty-plus amicus briefs have been filed in that case, one of them by my next guest, Professor Michael McConnell. Judge Michael McConnell is the Richard and Frances Mallery professor of law and the director of the Stanford Constitutional Law Center, as well as a senior fellow at the Hoover Institution. And he filed a brief on behalf of an interesting group of amicus – the Christian Booksellers Association, Deseret Book Company, and for the benefit of those who don’t know, that’s wholly owned by the Church of Jesus Christ, Latter Day Saints, Feldheim Publishers, a Jewish publishing house, and Tyndale House publishers, an Evangelical publishing house. He joins me now. Professor McConnell, welcome, good to have you, Judge.

MM: Thank you. Good to be with you.

HH: Now your brief is different. I had all my law students read your brief specifically, because it does not wade into all of the details of the case, but it takes on maybe the central issue, do corporations have free exercise rights. Can you tell us what your conclusion is and how you get there?

MM: That’s right, our conclusion is that corporations do have free exercise rights, and even more clearly, rights under the Religious Freedom Restoration Act, and that this goes back, actually, to the earliest days of the republic, that it’s a quite modern notion that business and religious concerns cannot go hand in hand. And many of the world’s great religions believe that business should be conducted in accordance with religiously-inspired requirements of conscience such as closing their doors on the Sabbath day, treating their workers properly and so forth. And I think it’s only been in the last few years that it has, would even have been seriously questioned that companies of this sort, that adhere in everything that they do, they have to religious dictates, don’t have to the right to do that.

HH: Now at the end of the summary of your argument in your amicus brief, you write, “Whether the government has a compelling interest in enforcing the contraceptive coverage regulation may be a matter of debate, though we think the challengers have the better of the argument.” So I want to point out to the audience, you actually are not wading into that, although you kind of give a head tip towards there not being a compelling reason. You are solely concerned, these publishing houses and a variety, are solely concerned with making sure the Court gets this point right, that history and precedent believe that corporations have free exercise rights.

MM: That’s right, because that point goes way beyond any disputes over the Affordable Care Act or contraception. It includes the rights of businesses with respect to closing on the Sabbath, it applies to, say, kosher slaughterhouses that frequently need exemptions from meat slaughtering laws to be able to practice their trade. It applies certainly to my clients, which are religious publishers and bookstores. A very interesting area where it applies with increasing importance is to Islamic banking. As you may know, the Koran prohibits Islamic people from charging interest. And that means that in order to be able to participate in the modern, commercial world, they need to organize their financial institutions in a way which is quite different from ordinary American banking. And again, I see as long as these claims meet the ordinary standards of free exercise, that is to say there has to be a sincere religious belief, not overcome by a compelling governmental interest, there’s no reason why these businesses should not be able to practice in accordance with their religion.

HH: Now Judge McConnell, he’s my friend, and I assume he’s yours as well, Erwin Chemerinsky, comes on the program once a week to debate with John Eastman some point of Constitutional Law, and we spend a lot of time on Hobby Lobby and Conestoga Woods. And Erwin always opens up with an adamant denunciation of the idea that a fictional entity designed to shield profits in any way can have free exercise. And just by force of repetition, he persuades people of this. What is their best argument for that proposition?

MM: I’m not sure what their best argument is, because I don’t even believe that they would want it to be said that businesses do not have social consciences. This is something that we generally regard as progressive social policy, that companies can comport themselves, maybe they have an environmentalist ethic, or they may have an ethic of not supporting countries abroad that engage in abuse of labor tactics, or they may have a truth-telling ethic, or any number of things that may well cut into their profits. And generally speaking, we applaud corporations when they have a social conscience. It would be crazy to say you can have a social conscience, but your social conscience can’t be formed by religious belief.

HH: Now I think part of the worry, though it’s not an argument, surfaced yesterday in the aftermath of the veto of SB1062 in Arizona, which is if you begin to allow corporations to exercise religious rights, they will discriminate broadly and repeatedly against people. How do you answer that slippery slope concern, Judge McConnell?

MM: Well, the funny thing about that is that businesses have been free to bring free exercise claims all along. So we have a great, we have decades, centuries, really, of experience with this, and it has not happened. But this claim, this sort of argument of the slippery slope is brought with respect to every kind of religious claim. When it was recognized that prisoners have a right to free exercise of religion, such things as being able to have their Bibles and pray and meet in prayer groups, the prison officials come forward and say this will lead to chaos, this will be terrible, we’ll have chaos and disruption and anarchy in the prison. And when free exercise is applied to zoning law, you have the zoning officials coming out and saying similar things. The fact is that free exercise, like other Constitutional rights, is something that this country has lived with for quite some time. And the notion that all of a sudden large numbers of pernicious claims are going to come out of the woodwork is really quite fanciful.

HH: You cite Terrett V. Taylor, an 1815 Supreme Court case. Why does that figure into your argument, Judge McConnell?

MM: Well, it just so happens that that is the first time that the United States Supreme Court ever considered the concept of free exercise of religion. Now it wasn’t interpretation of the 1st Amendment. It was a discussion of the free exercise provisions of the Virginia, under Virginia law. But that case happened to involve a corporation, and it was argued in that case that because it was a corporation, it could not raise free exercise rights. And the Supreme Court, way back then, held unanimously that there was no inconsistency between being able to exercise religion and having corporate rights.

HH: Now much of the reaction, do you think, is because of Citizens United, about which there has been considerable propaganda and debate as to how awful it is that corporations have 1st Amendment rights in the area of speech? Do you think that is the precipitating event here? Or is it just offending Obamacare that makes people so vigorous on the other side?

MM: Actually, I think Citizens United has a great deal to do with it. Even though you would think that anyone would see that for profit corporations like the New York Times Corporation have always exercised freedom of speech and press, it just, it seems just ludicrous to say that because you’re a for profit corporation, you can be silenced or censored. It’s particularly ludicrous that the New York Times Corporation itself purports in its editorial page to think that corporations like itself do not exercise free speech rights. But as you say, there was a great deal of agitation in the wake of that, and I think that that has generated a lot of this controversy. Let me give you a concrete example of that.

HH: Can you hold it through the break, Judge McConnell?

MM: Sure.

HH: I’ll be right back with Professor McConnell, the Richard And Frances Mallery professor of law at Stanford, where he also directs the Constitutional Law Center. We’re talking about the brief he filed on behalf of the Christian Booksellers Association, Deseret Book Company, Feldheim Publishers and Tyndale House Publishers in the cases of Hobby Lobby and Conestoga Woods, so able brought and defended by the Beckett Fund and by the Alliance Defending Freedom.

—- – – – –

HH: Judge McConnell, going back to where we were before the break, we were talking about the impact of the fallout from Citizens United, the controversial case in which the United States Supreme Court upheld the free speech rights of corporations, for profit corporations. And you were about to expand on why that impacts this conversation so much about Hobby Lobby and Conestoga Woods.

MM: Yes, I think that the agitation over Citizens United actually created this false view that the 1st Amendment, for some reason, does not apply to people who organize their affairs in corporate form. It wasn’t long ago that that was essentially uncontested. I was going to give a specific example involving a piece of longstanding litigation in the 9th Circuit, that’s probably our most liberal circuit out in California. The case comes out of Washington State involving a pharmacy which was challenging some Washington State regulations requiring them to prescribe abortifacient drugs. And the state fought this case tooth and nail, and the 9th Circuit has decided against the pharmacy. But in the course of that, in a single footnote, said well of course the pharmacy has the right to raise these claims either in its own name or as a representative of the owner, and that that was unquestioned. It was a one sentence footnote stating what I think the court, even a hostile court, thought was completely obvious. Maybe they had been reading the Supreme Court, because in a case in the 1970s, let me just read one sentence from this. This is Monell V. Department of Social Services. “By 1871, it was well understood that corporations should be treated as natural persons for virtually all purposes of Constitutional and statutory analysis.”

HH: And the Dictionary Act, it goes on and on. But I think part of it is if they lose this, they lose Citizens United, even the attempt to reverse it rhetorically. And if the left loses this, Obamacare, and this is a separate subject, Judge McConnell, if Obamacare as written creates all of these exceptions for religious churches, and creates all sorts of exemptions for favored secular organizations, can it, ought it to be understood as a rule, a law a general applicability such that it would benefit from the holding in Employment Division V. Smith? Or does it become obviously and fatally flawed?

MM: Well, the Court is not even going to need to reach that, because under the Religious Freedom Restoration Act, federal laws have to meet a higher standard, which is the compelling interest test. And these cases were brought under the Religious Freedom Restoration Act. And then so again, assuming that the Court will not find that they are excluded on behalf, or because of being for profit corporations, that is the standard. And it is, I think, a very difficult argument for the government to make that there is a compelling interesting in doing something that constantly gets delayed, where there are thousands of exception, I think even besides the repeated delays by administrative fiat of the employer mandate altogether, about a third of the population of the United States comes within one exception or another. When you have a genuinely compelling interest like protecting health or safety, you don’t have a third of the population excluded, you don’t have arbitrary one year delays. Genuinely compelling interests are important enough that they, that the protection is applied from the beginning. I think the most you could say for this is that Congress thought, or actually, that the administration thought it was a good idea. This is not even something that’s in the act itself. It was not, the contraceptive mandate was not voted upon by Congress. It’s just, it was imposed by the Secretary of Health and Human Services under delegated authority in the statute. I think it’s going to be pretty hard.

HH: If it is not sustained as to religious corporations, it’s another thread pulled out of Obamacare. I’m curious looking past this case and assuming for the moment that your position is upheld, that free exercise rights attach, and that the position of Hobby Lobby and Conestoga Woods is upheld, that they are not obliged to comply with the mandate as regulated by HHS. What’s the future of Obamacare, in your view? Obviously, you’ve studied the original Sebelius decision, the Chief Justice’s opinion. Is it about to collapse under the weight of a thousand blows?

MM: I have to disagree with you there. At least I don’t think that this particular case has much of an effect on Obamacare in general. This is a relatively small exception for a relatively, for really an extremely small number of conscientious objectors. If Obamacare unravels, it’s going to be because the basic economics of it are so unrealistic.

HH: Do you see any challenge, though, developing out of the Swiss cheese nature of a mandate that isn’t a mandate, so that insurance pools are especially put in a position of its economically irrational to try and predict the cost of a policy when you can’t predict to whom it will be available and how often it will be purchased? It’s asking the insurance industry to be prophetic in ways that no economic actor ought rationally to be asked to be?

MM: Well, that is true, and I think we are anticipating very large losses from the major insurers in this field precisely because of that. But a little noticed provision in the statute allow, I believe it’s three years of bailout for the insurance companies, where the taxpayers are going to step in and reimburse these for profit health insurance companies for their losses. I don’t think anybody even noticed that provision at the time that the bill was being passed, but it’s going to hit us taxpayers mightily heavily.

HH: Yeah, the risk corridors. So one minute left, Judge McConnell, so your advice is don’t look to the courts to save you even on a second and a third try. It’s going to have to be undone politically?

MM: I think that that’s right. Now I do think, so the courts are going to be available and vigilant when there are specific Constitutional rights at stake. That’s why I believe that the Hobby Lobby and Conestoga Woods cases are on firm ground. But I think when it comes to overall social and economic policy that the, and it’s a tradition and it’s a good tradition in this country, is to leave that to the political process.

HH: Judge Mike McConnell of Stanford Law School, thanks so much for your time. Terrific brief in the case of Hobby Lobby and Conestoga Woods on behalf of the Christian Booksellers Association, Deseret Book Company, Feldheim Publishers and Tyndale House Publishers. It’s available if you simply go to Hobby Lobby and SCOTUSblog on Google. You can find it.

End of interview.


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