Friday, July 26, 2013

3rd Circuit Rejects ACA Challenge: For-Profit Corporations Cannot Engage In Religious Exercise

In Conestoga Wood Specialties Corp. v. Secretary of U.S. Department of Health and Human Services, (3rd Cir., July 26, 2013), the U.S. 3rd Circuit Court of Appeals in a 2-1 decision denied a preliminary injunction sought by a family-owned business to stop enforcement of the Affordable Care Act contraceptive coverage mandate.  Rejecting free exercise and RFRA claims, Judge Cowan's majority opinion held that "for-profit, secular corporations cannot engage in religious exercise," and the conscience rights of the owners of a corporation do not pass through to the corporation.  Cowan in his majority opinion wrote, in part:
We are unable to determine that the "nature, history, and purpose" of the Free Exercise Clause supports the conclusion that for-profit, secular corporations are protected under this particular constitutional provision....
We recognize the fundamental importance of the free exercise of religion.... Thus, our decision here is in no way intended to marginalize the Hahns' commitment to the Mennonite faith. We accept that the Hahns sincerely believe that the termination of a fertilized embryo constitutes an ―intrinsic evil and a sin against God to which they are held accountable ... and that it would be a sin to pay for or contribute to the use of contraceptives which may have such a result. We simply conclude that the law has long recognized the distinction between the owners of a corporation and the corporation itself. A holding to the contrary—that a for-profit corporation can engage in religious exercise—would eviscerate the fundamental principle that a corporation is a legally distinct entity from its owners.
Judge Jordan, dissenting, wrote in part:
 My colleagues, at the government's urging, are willing to say that the Hahns' choice to operate their business as a corporation carries with it the consequence that their rights of conscience are forfeit.
That deeply disappointing ruling rests on a cramped and confused understanding of the religious rights preserved by Congressional action and the Constitution. The government takes us down a rabbit hole where religious rights are determined by the tax code, with non-profit corporations able to express religious sentiments while for-profit corporations and their owners are told that business is business and faith is irrelevant. Meanwhile, up on the surface, where people try to live lives of integrity and purpose, that kind of division sounds as hollow as it truly is.
[Thanks to Jeffrey Pasek for the lead.] 

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