Supreme Court hears crucial Obamacare challenge

Activists clash outside the Supreme Court on March 25, 2014 in Washington, D.C./Photo: AFP

WASHINGTON — The three female justices, all appointed by Democratic presidents, wasted no time in going on the attack, asking pointed questions repeatedly to the plaintiff's attorney, often interrupting him, as the U.S. Supreme Court heard oral arguments in two cases to determine the constitutionality of requiring employers to provide certain kinds of contraceptive coverage under Obamacare.

Hobby Lobby Stores and Conestoga Wood Specialties Corporation both claim that the Affordable Care Act violates their religious freedoms guaranteed under the First Amendment and under a 1993 federal law, the Religious Freedom Restoration Act, or RFRA.

At the heart of the matter is an Obamacare provision that requires employers to provide health insurance that covers all 20 FDA-approved forms of contraception at no cost to employees.

The owners of Hobby Lobby and Conestoga Wood Specialties do not object to providing coverage for most types of contraception, but they do object to providing coverage for abortifacients, the so-called emergency contraceptives such as Plan B or ella. They also object to IUDs.

That is because, as the owners of Hobby Lobby said, their "religious beliefs prohibit them from providing health coverage for contraceptive drugs and devices that end human life after conception”.

The attorney for the corporations, Paul Clement, got no more than two sentences into his argument before Justice Sonia Sotomayor interjected to ask what would happen if an employer complained about having to provide coverage for vaccinations because it violated his religious beliefs?

As Clement attempted to offer an involved explanation about whether that would impose an undue burden, Justice Elena Kagan interrupted to ask what if an employer had a religious objection to provding coverage for blood transfusions?

The two justices, and Justice Ruth Bader Ginsburg, would return to this theme repeatedly during Clement's presentation, with Kagan even wondering what if an employer found the minimum wage a violation of his religious principles?

Clement eventually succeeded in bringing to an end that line of questioning by characterizing it as a matter of "sincerity."

He pointed out how courts often have to decide if a person's religious beliefs are a matter of sincerity, or whether they are merely a matter of legal convenience. For instance, he explained, if someone is arrested with a large amount of marijuana and claims it is his right as a member of the "Church of Marijuana," it would be easy for a court to reject that argument.

Similarly, he explained, it is clear that his clients' religious objections to providing abortifacients is sincere.

Hobby Lobby and Conestoga Wood Specialties argue they should not have to provide coverage for abortifacients and IUDs because, given the religious character of their companies, the RFRA entitles them to exemption from the Affordable Care Act's contraception mandate. That argument also raises the question of whether corporations are, at heart, "people", and whether those people have had their rights violated.

Sotomayor asked Clement, "How does a corporation exercise religion?"

He cited cases in which it was shown the religion of a corporation was the one practiced by members of its board, and noted that courts deal with cases everyday that require them to discern a corporation's intent.

Solicitor General Donald B. Verrilli Jr., who argued for Health and Human Services secretary Kathleen Sebelius, rhetorically asked the bench, "Who determines if a corporation has a religion?" but Justice Antonin Scalia shot back, "Whoever holds the corporation."

Chief Justice John Roberts then asked Verrilli, "Does a corporation have a race?"

No, the attorney replied, but conceded the point Roberts was steering him towards, that a corporation can make a claim of racial discrimination.

So, Roberts asked, could a corporation make a claim of religious discrimination?

No, Verrilli maintained, because that was not what Congress intended when it wrote RFRA.

Justice Samuel Alioto countered. "You're saying they can't even get their day in court? That's pretty strong."

He also noted RFRA did not appear to distinguish between individuals and corporate entities, even though the Obama administration has argued otherwise.

Another point of contention revolved around the fact that nonprofit companies have been granted an exemption from the contraception mandate in Obamacare, but for-profit companies have not.

Clement said that showed that even the Obama administration saw fit to grant an “accommodation” to religiously affiliated nonprofits.

Questions posed on that issue by Justice Stpehen Breyer, considered to be on the liberal wing of the court, indicated he might be sympathetic to the arguments that the HHS law may be too restrictive, compared to the intent of RFRA to restore religious rights.

The case was not decided today, but the questions asked by the justices could indicate how they are leaning.

Justice Anthony Kennedy is often a swing vote, and, on Tuesday, he often appeared to be skeptical of the government's case, posing a number of hypotheticals which did not seem elicit satisfactory responses.

In particular, he seemed concerned the government's argument would make it impossible for companies to object to paying for anything, even abortions.

Kennedy zeroed in on a concern that a number of justices expressed, the government's claim that for-profit companies have no religious rights under federal law.

The justice concluded, "A profit corporation could be forced in principle to pay for abortions," Kennedy said. "Your reasoning would permit it."

In an uncomfortable moment, Verrilli was forced to concede that, under the government's argument, for-profit corporations could be forced to pay for abortions.

If Kennedy does prove to be the swing vote in this case, and the court rules in favor of the corporations, that moment may one day be seen as pivotal.

However, after making that damaging admission, Verrilli stuck to the Obama administration's position that for-profit corporations, such as Hobby Lobby and Conestoga Wood, have never been afforded religious protections by the federal government.

Verrilli also repeatedly argued that not covering these forms of contraception would be a burden on employees who do not necessarily share the companies' religious beliefs.

He even went so far as to question the medical accuracy of the religious beliefs of the plaintiffs. Verrilli said, "with all due respect," that "most" people did not consider IUDs to cause abortions.

Verrilli also said, while the government “respects” the sincerity of the company owners’ belief that abortifacients and IUDs can cause an abortion, he maintained that state and federal law does not classify them that way.

When that argument gained no traction the attorney conceded that such questions make this "a difficult case."

RFRA states the “Government shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability." If the justices decide Obamacare does infringe upon the plaintiffs' exercise of religion, the court will then have to decide if the government has a compelling reason to override the law.

Kagan focused on whether changing the law might hurt women. She noted Congress intended women to have full contraception coverage (including abortifacients) and that if denied, women could be harmed.

Clement appeared to score a key point when he countered that it was not a matter of access to contraceptive coverage, it was a question of who would pay, and that there are ample alternatives to making employers violate their religious beliefs.

The government could even pay for such coverage, he suggested. Thus, he concluded, women would not be harmed. An alternative would simply have to be found.

Hobby Lobby and Conestoga Wood would have to pay $100-a-day fine for each employee for not complying with the contraception provision.

Hobby Lobby says that could cost the company $475 million a year. The companies' other option would be to offer no health insurance and, instead, pay a tax of $2,000 a year for each employee, which Clement said would cost Hobby Lobby $26 million a year.

Sotomayor tried to argue that paying the $26 million a year would not be an undue burden on the company because it would be less than the company was currently paying for health care coverage.

Besides, she added, the company could simply "pay bigger salaries" so employees could afford to buy their own coverage. The justice opined that the multi-million dollar penalty would not hurt the company much and would not put it out of business.

Scalia jumped all over that statement, saying it would be "absurd" to suggest it would not do the company significant financial harm, particularly if it has to raise salaries.

Sotomayor countered that the company should just consider it a tax to provide employees contraception coverage.

Clements then listed the three distinct ways paying the penalty would significantly hurt Hobby Lobby.

It would have to pay the $26 million a year. It would have to raise salaries (so employees could obtain their own heath care coverage.) And it would put the company at a competitive disadvantage in attracting new employees, by not offering health care.

A comic moment broke the tension in the courtroom at one point, when Sotomayor insisted that the penalty be referred to instead as a tax.

Evoking a strong round of laughter in the courtroom, Roberts quippped, "I can vouch for that."

It was his highly controversial decision that it was a tax and not a penalty that allowed him to argue for the constitutionality of Obamacare in a 2012 decision bitterly criticized by conservatives.

These cases made it to the Supreme Court after lower courts split on whether for-profit companies have a right to exercise religious freedom under RFRA. Three federal appeals courts struck down the contraception mandate and two upheld it. (A separate set of cases deal with whether religiously affiliated business have to comply with the Obamacare contraception mandate.)

Hobby Lobby is based in Oklahoma City, The chain of 649 arts and crafts stores is owned by co-founders David and Barbara Green, who are devout Southern Baptists.

According to the Wall Street Journal, they filed their case after a lawyer for the Becket Fund for Religious Liberty, a nonprofit Washington law firm, informed the company about the contraception mandate.

David Green was shocked to learn his company was forced to pay for abortifacients, instructed his insurer to stop the coverage and signed onto the Becket Fund's lawsuit.

The Greens' family foundation is building a Bible museum in Washington D.C, slated to open in 2017.

Conestoga Wood Specialties builds kitchen cabinets and was founded by a Mennonite, Norman Hahn, in Pennsylvania.

The Washington Post recounted how the company's lawyer, Randall Wenger, told Lancaster Newsapers, "As Mennonites, they're not thrilled about going to court. They're probably the most reluctant clients I've ever encountered."

Clement, who has previously argued against Obamacare before the Supreme Court, argued for the constitutionality of the Defense of Marriage Act and defended Arizona's immigration law. Obama's former acting solicitor general Neal Katyal once called him "the best lawyer of his generation."

Regarding the administration's lawyer, last year the New York Times reported," It’s conventional wisdom in some circles that Mr. Verrilli is a fumbling lawyer who can’t hold his own at the Supreme Court. He received bad marks from professional colleagues after defending the Affordable Care Act last year," but "This reputation is undeserved. While he’s not inspiring, he’s often effective."

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