Justices will hear contraception challenge to Obamacare

Richard Wolf | USA TODAY

WASHINGTON — The Supreme Court added a new legal challenge Tuesday to the legislative and political battles raging over President Obama's embattled health care law.

The justices agreed to consider whether for-profit corporations whose owners oppose abortion on religious grounds must abide by the law's mandate that health insurance policies include free coverage of government-approved forms of contraception.

It's the first legal challenge to reach the high court since it upheld the law 17 months ago in a 5-4 decision written by Chief Justice John Roberts. While a loss for the government wouldn't strike down the law itself, conservatives still seething over Roberts' rescue of Obamacare say the case offers Roberts an initial chance to rule against it.

Beyond its attachment to the health care law, however, the legal challenge is significant in its own right because it will answer a fundamental question with far-reaching consequences: Can corporations pray? Until now, no court has granted religious rights under the First Amendment's "free exercise clause" to for-profit businesses.

The corporations whose lawsuits were chosen over some 40 others say, in essence, that they do pray. The cases were filed by Hobby Lobby, a chain of more than 500 arts-and-crafts stores with about 13,000 full-time employees, and Conestoga Wood Specialties, a Lancaster, Pa., woodworking business run by a Mennonite family.

Hobby Lobby, an Oklahoma City-based company founded by David Green in 1970, closes on Sundays and funnels millions of dollars in profits to ministries. Its website proclaims its commitment to "honoring the Lord in all we do by operating the company in a manner consistent with biblical principles."

To avoid promoting alcohol, for instance, Hobby Lobby doesn't sell shot glasses. And to avoid promoting abortion, it doesn't cover drugs or devices which it claims are capable of terminating a pregnancy, including the after-sex drugs Plan B and Ella and two types of intrauterine devices. The government and abortion rights groups say those drugs and devices only postpone ovulation.

Norman and Elizabeth Hahn operate Conestoga Wood with their three sons, and they "integrate their faith into their daily lives, including their work," says their brief to the high court.

"Both cases represent a broad diversity in which families in America practice their faith as they try to earn a living, all the way from Mennonites making wood cabinets to the Green family operating a chain store," said Matt Bowman of Alliance Defending Freedom, which is representing Conestoga.

The health care law says companies with 50 or more workers that offer health insurance must cover contraceptives as part of a preventive care package for women. Churches and other houses of worship were excluded from the mandate, and some religious institutions, such as universities, were allowed to have insurers offer the benefit directly.

"We believe this requirement is lawful and essential to women's health and are confident the Supreme Court will agree," White House press secretary Jay Carney said Tuesday. "These steps protect both women's health and religious beliefs, and seek to ensure that women and families — not their bosses or corporate CEOs — can make personal health decisions based on their needs and their budgets."

The law's defenders say the exclusions should not extend to corporations like Hobby Lobby and Conestoga Wood. "Corporations don't pray … they don't have a religious conscience," says David Gans of the Constitutional Accountability Center, a liberal law firm and advocacy group. "These are all human attributes that don't apply to corporations."

Combined with smaller companies and those who did not change their insurance plans since the law was implemented, up to one-third of Americans are covered by exempt plans. But larger for-profit corporations must comply or face fines of $100 per day per employee, which could total $475 million a year in Hobby Lobby's case. An alternative -- dropping employee health insurance altogether -- would cost $26 million in annual penalties.

Hobby Lobby says that's a violation of the Religious Freedom Restoration Act, passed by Congress in 1993 to protect "a person's exercise of religion" from government intrusion. Conestoga Wood also alleges that the mandate violates its right under the Constitution to freely exercise its religious beliefs.

"As the federal government embarks on an unprecedented foray into health care replete with multiple overlapping mandates, few issues are more important than the extent to which the government must recognize and accommodate the religious exercise of those it regulates," Hobby Lobby argues in its brief.

The Supreme Court already has established that corporations have free-speech rights. In Citizens United v. Federal Election Commission (2010), the justices struck down government restrictions on corporate and union political advertising.

But a generation earlier in 1990, the court ruled in an Oregon case that the government does not have to protect religious beliefs when they conflict with existing laws. That case led Congress to pass the Religious Freedom Restoration Act in an effort to tilt the balance back toward individuals.

Now comes the question that subjected Republican presidential candidate Mitt Romney to ridicule last year: Are corporations people?

Appeals courts have split down the middle, virtually forcing the Supreme Court to settle the matter. Two federal circuit courts have said private companies should be able to sidestep contraception coverage on religious grounds, including Hobby Lobby. Two have said the companies must comply with the contraception mandate, including Conestoga Wood. And one ruled earlier this month that companies cannot exercise religious beliefs in that way, but their owners can.

"The court took this case because there is a wide and rapidly deepening circuit split on these important issues," said Kyle Duncan of The Becket Fund for Religious Liberty, which represents Hobby Lobby. "People who run a commercial business also have religious liberty rights."

The 10th Circuit Court of Appeals ruled for Hobby Lobby in a case from Oklahoma, where the company is based. The court said the Obama administration "has given us no persuasive reason to think that Congress meant 'person' ... to mean anything other than its default meaning in the Dictionary Act — which includes corporations regardless of their profit-making status."

But Marcia Greenberger, co-president of the National Women's Law Center, warns a decision for the companies could subject other forms of health care to religious freedom challenges, including end-of-life care and coverage for HIV/AIDS.

In a dissent this month from another decision against the contraception policy, Judge Ilana Rovner of the 7th Circuit appeals court raised similar warnings for stem cell therapy, unpaid family leave for gay parents and even traditional medicine, depending on company owners' religious beliefs.

The U.S. solicitor general's office warned in its brief asking the Supreme Court to take the case that a victory for the companies would transform the Religious Freedom Restoration Act "from a shield for individuals and religious institutions into a sword used to deny employees of for-profit commercial enterprises the benefits and protections of generally applicable laws."

While most Supreme Court experts had predicted the justices would grant the Hobby Lobby case, the court may have added Conestoga's challenge because that company is owned directly by a family, rather than a trust.

"It's a really significant case," says Josh Blackman, an assistant law professor at South Texas College of Law and author of a recent book on the constitutional challenges to Obamacare.