Corporations Are People, But Can They Go to Church?
On July 26, the Third Circuit Court of Appeals definitively held that for-profit secular corporations cannot practice a religion. Just a month earlier, on June 27, the Tenth Circuit Court of Appeals ruled just as definitively that for-profit secular corporations can practice a religion. In both cases, the plaintiff corporations were objecting to the coverage requirements of Obamacare on religious grounds, specifically under the Free Exercise clause of the First Amendment. These corporations object specifically to the fact that the law requires employers and insurers to cover certain contraceptive measures, most famously prescribed birth control. These lawsuits are just two of around 50 that have been brought in the wake of the passage of the Affordable Care Act and are still pending in the courts. But a look at legal precedent reveals how ridiculous most of these cases are. Corporations may be people in certain legal senses, but they can't practice religions — and they shouldn't be able to force the owners' religions beliefs onto employees.
Given the massive amount of litigation on this topic and the split in the federal circuits, the Supreme Court will likely have to weigh in sooner rather than later. Considering that most for-profit secular corporations do not fit within the exception reserved for "religious organizations" provided for by the new law, and therefore could be faced with staggering penalties for not complying with the coverage mandate, the stakes are extremely high for businesses across the country.
The question of whether a for-profit secular corporation can practice a religion such that it can assert religious rights under the Free Exercise clause has not been addressed by the high court before.
The Supreme Court's ruling will likely hinge upon an examination of the nature of the legal fiction of incorporation. The purpose of incorporation is to create a separate legal entity, a fictitious person wholly unique and detached from its owners, officers, or shareholders. The corporation can enter into contracts, conduct business, and exist independently in perpetuity as its owners or corporate officers come and go.
As such, corporate officers are by and large shielded from liabilities created by the corporations. To illustrate: One cannot sue a CEO personally for a breach of contract, since it was the corporation, not the CEO, who was bound by it.
In return for what is known in legalese as the "corporate veil," owners trade away some of their own personal control of the corporation. At the most basic level, this means that the owner of a corporation lacks the near-complete financial dominion that an owner of a private company or partnership can have.
Accordingly, the corporations themselves are afforded their own rights and privileges. The most famous example would be the Citizens United case, where the Supreme Court ruled that corporations have the right to free speech and expression under the First Amendment. This applies as equally to lobbyist groups as it does to newspapers. Many courts, like the Tenth Circuit, argue that in light of Citizens United, corporations should be similarly protected under the the First Amendment Free Exercise clause.
Detractors contend that Free Exercise rights are not available under the "purely personal" doctrine. This exception stems from a long line of cases addressing similar distinctions between natural persons and corporate entities. Under this doctrine, a right is unavailable to a corporation if the nature, history and purpose of the constitutional provision suggests that it was intended for natural persons only. Under this doctrine, previous courts have held that corporations are not entitled to the right against self-incrimination, and are not entitled to the same immunities provided to natural persons under the Fourth and Fifth Amendments. As early as 1868, the Supreme Court determined that corporations are not "citizens" within the meaning of the Privileges and Immunities clause.
The crux of the relatively obscure "purely personal" doctrine, then, is whether the particular constitutional concern is inherently humane.
As the Third Circuit pointed out, for-profit secular corporations cannot pray, worship, receive sacraments, or otherwise practice a religion in a way that the founders could ever have been concerned about protecting. Corporations are "persons" only once they have been legally incorporated, and only for limited purposes. Their existence in reality is abstract — they do not live, die, think, or believe, which precludes them from religious practice. Surely the halls of Valhalla are not populated with the likes of K.B. Toys, CompUSA, and Fashion Bug.
The policy concerns at stake are immense. Imagine if employers everywhere suddenly found God and objected to health plans providing blood transfusions as Jehovah's Witnesses.
When the Supreme Court does finally address the issue, it would be better for everyone, including those opposed to Obamacare, if the court followed the lead of the Third Circuit and left the practices of religions to real, flesh-and-blood people.