Microsoft Word - 08Ross_Note_1951-2000 1951 SHALL BUSINESSES PROFIT IF THEIR OWNERS LOSE THEIR SOULS? EXAMINING WHETHER CLOSELY HELD CORPORATIONS MAY SEEK EXEMPTIONS FROM THE CONTRACEPTIVE MANDATE Christopher S. Ross* May for-profit, secular corporations claim the protection of the Religious Freedom Restoration Act (RFRA)? This question is central to numerous lawsuits against the federal government in which business owners argue that certain regulations under the Patient Protection & Affordable Care Act substantially burden the exercise of their religion. This Note examines the threshold hurdle that for- profit business owners must clear to successfully state a claim under RFRA: the question of whether the businesses are “persons” the statute protects. This is an issue of first impression for the U.S. Supreme Court, and it has split the circuit courts of appeal. First, this Note provides an overview of free exercise jurisprudence, with a focus on the ebbs and flows of the Supreme Court’s exemption doctrine. This overview includes a discussion of the Religious Freedom Restoration Act and the laws, regulations, and religious objections that form the basis of the current disputes. Second, this Note introduces the conflict among circuit courts and their varying interpretations of whether for-profit corporations are “persons” under RFRA. Third, this Note assesses this conflict by examining RFRA’s text and the context in which Congress enacted the statute. Nothing within this context precludes corporations from stating RFRA claims. In addition, this Note examines legislative history that supports application of the Dictionary Act, which explains that the word “person” in federal statutes includes corporations. This Note ultimately concludes that RFRA does indeed grant corporations the ability to seek exemptions, but that the statute will require courts to undertake the task of ascertaining the proper contours of the law as applied to different corporate forms.   * J.D. Candidate, 2015, Fordham University School of Law; B.A., 2010, The King’s College. I am grateful to my family and my friends for their constant love and support. I would like to thank my adviser, Professor Abner Greene, for his guidance as I wrote this Note. 1952 FORDHAM LAW REVIEW [Vol. 82 TABLE OF CONTENTS INTRODUCTION ........................................................................................ 1953  I. FREE EXERCISE JURISPRUDENCE, LEGISLATIVE EXEMPTIONS, AND CORPORATE CONSTITUTIONAL RIGHTS: A BACKGROUND ......... 1956  A. The Historical Understanding of the Free Exercise Clause ............................................................ 1956  B. The Court Giveth and the Court Taketh Away: A History of Exemptions in the Supreme Court ......................................... 1958  1. The Creation of the Exemption Regime: Sherbert v. Verner and Wisconsin v. Yoder ....................................... 1959  2. The Fall of the Exemption Regime: Employment Division v. Smith ............................................................. 1963  C. Congress Restores the Exemption Regime: The Religious Freedom Restoration Act ...................................................... 1965  D. An Overstep of Authority: The Court Limits RFRA’s Reach ....................................................................... 1969  E. Free Exercise Claims by Profit-Seeking Individuals and Corporations ......................................................................... 1971  1. Claims from Individuals in the Pursuit of Profit .............. 1972  2. Claims from Religious Nonprofit Corporations ............... 1973  3. Theories of the Corporation and Corporate First Amendment Claims ......................................................... 1973  F. A New Challenge: The Affordable Care Act and Its Perceived Threat to Religious Liberty .................................. 1977  II. DISSENSION IN THE RANKS: THE CIRCUITS DIFFER ON CORPORATE RFRA CLAIMS ................................................... 1980  A. The Tenth and Seventh Circuits Hold That a For-Profit Corporation May State a Claim Under RFRA ...................... 1981  1. The Tenth Circuit Finds That RFRA Protects Corporations Through a Textual Analysis ...................... 1981  a. Statutory Analysis Indicates That RFRA’s “Person” Includes Corporations .............................................. 1982  b. Constitutional Principles of Free Exercise Do Not Require Excluding For-Profit Corporations From RFRA’s Protection .................................................... 1983  2. The Seventh Circuit Agreed That a Secular Corporation Could Invoke RFRA’s Protection ................................... 1984  B. The Third Circuit Holds That a For-Profit Corporation Cannot Exercise Religion ..................................................... 1987  1. The Third Circuit Rejects For-Profit Corporations’ Ability To Exercise Religion Under the First Amendment ..................................................................... 1987  a. The Direct Exercise of Religion by a Corporation .... 1987  b. The Third Circuit Rejects the Ninth Circuit’s Pass- Through Method ....................................................... 1988  2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1953 2. The Third Circuit Rejects Corporate Personhood for Purposes of RFRA .......................................................... 1989  C. The D.C. Circuit Holds That the Owners of a Closely Held Corporation Can Assert a RFRA Claim on Behalf of the Corporation .......................................................................... 1989  III. FINDING THE PROPER FRAMEWORK: PUTTING STATUTORY INTERPRETATION BEFORE CONSTITUTIONAL INTERPRETATION ............................................ 1991  A. The Context of RFRA and the Nature, History, and Purpose of the Free Exercise Clause Do Not Preclude Corporate RFRA Claims ........................................................................ 1991  1. Context Matters: Congress’s Intent To Restore the Pre-Smith Regime ........................................ 1992  2. “Person” v. “Person’s Exercise of Religion”: The Result Is the Same ........................................................... 1993  a. Most Narrow Interpretation: Purely Textual Analysis and the Dictionary Act ............................... 1993  b. Most Broad Interpretation: The Entire Free Exercise Jurisprudence and Bellotti ......................... 1994  3. A Brief Note on Legislative History ................................ 1996  4. The Corporate Form and Its Relevance to the HHS Mandate ........................................................................... 1997  5. Why the Common Law Model Is Crucial ........................ 1997  a. Congress Has the Final Say ....................................... 1998  b. Courts Should Develop a Jurisprudence To Determine the Contours of Corporate RFRA Claims .......................................... 1998  B. If the Court Precludes All Corporations From RFRA, Then the D.C. Circuit Provides an Alternative Approach ............. 1999  CONCLUSION ........................................................................................... 2000  “In reality, the [Religious Freedom Restoration Act] will not guarantee that religious claimants bringing free exercise challenges will win, but only that they have a chance to fight.”1 INTRODUCTION Religious observers typically act according to their religion’s view of the ultimate good.2 This pursuit of the good can affect how an individual orders his or her entire life.3 Sometimes, however, obedience to religious   1. H.R. REP. NO. 103-88, at 17 (1993) (Additional Views of Hon. Henry J. Hyde, Hon. F. James Sensenbrenner, Hon. Bill McCollum, Hon. Howard Coble, Hon. Charles T. Canady, Hon. Bob Inglis, Hon. Robert W. Goodlatte). 2. See Alan Brownstein, Taking Free Exercise Rights Seriously, 57 CASE W. RES. L. REV. 55, 86 (2006). 3. See id. 1954 FORDHAM LAW REVIEW [Vol. 82 dictates might require action that appears questionable to others or is even against the law. Some Native American traditions, for example, suggest that followers ingest certain hallucinogens as part of sacramental ceremonies, even though the government classifies these hallucinogens as controlled substances.4 In addition, many faiths require action outside of ritualistic exercise. Thus, members of pacifist religions might refuse to produce weapons in their work.5 Some religious acts, such as a Roman Catholic nurse objecting to performing abortions,6 even offend the sensibilities of those with different opinions on social or religious matters.7 For each of these religious actors, faith governs more than merely association with the divine; it governs relationships, interactions with society, personal development, and even careers. A law or regulation might hinder or restrict religious exercise.8 Following a shift in the U.S. Supreme Court’s jurisprudence that Congress believed might result in increased burdens on religion, Congress enacted the Religious Freedom Restoration Act9 (RFRA). RFRA sought to minimize the burdens that the nation could place on religious believers and gave courts the ability to review burdensome laws and exempt claimants burdened by those laws.10 But Congress was silent on exactly who it envisioned could take refuge within RFRA. Federal courts now face a novel interpretive question: whether for-profit, closely held11 corporations may claim the protection of this law. Indeed, in March of 2014, the U.S. Supreme Court will hear a consolidated appeal of cases from the Third and Tenth Circuits, which disagreed on the approach to this question.12 Plaintiffs in these cases object to a regulation promulgated by the Department of Health and Human Services (HHS) under the Patient Protection and Affordable Care Act13 (ACA). Over 300 plaintiffs claim   4. See Emp’t Div. v. Smith, 494 U.S. 872, 874 (1990). 5. See Thomas v. Review Bd., 450 U.S. 707, 710 (1981). 6. See Cenzon-DeCarlo v. Mount Sinai Hosp., 626 F.3d 695, 696 (2d Cir. 2010). 7. See The Opposition Is Overwhelming but Will the Administration Listen?, PLANNED PARENTHOOD (Sept. 27, 2008), http://www.plannedparenthood.org/about-us/newsroom/ press-releases/opposition-overwhelming-but-will-administration-listen-22389.htm. 8. See, e.g., Smith, 494 U.S. at 874 (examining whether a state law classifying peyote possession as a felony burdened the free exercise of the claimants’ religion). 9. 42 U.S.C. §§ 2000bb to 2000bb-4 (2006). 10. See infra Part I.C. 11. This Note’s analysis focuses on closely held corporations, see infra note 241, in discussing corporate RFRA claims. It does not analyze whether other business organizations can also state RFRA claims. For a discussion of the relevance of corporate form to issues of standing, see generally Steven J. Willis, Corporations, Taxes, and Religion: The Hobby Lobby and Conestoga Contraceptive Cases, 65 S.C. L. REV. 1 (2013). 12. See Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114 (10th Cir.) (en banc), cert. granted, 134 S. Ct. 678 (2013); Conestoga Wood Specialties Corp. v. Sec’y of the U.S. Dep’t of Health & Human Servs., 724 F.3d 377 (3d Cir.), cert. granted, 134 S. Ct. 678 (2013). 13. Pub. L. No. 111-148, 124 Stat. 119 (2010) (codified in scattered sections of 26 and 42 U.S.C.). 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1955 that the HHS regulation burdens their religious exercise.14 The regulation, known colloquially as “the HHS mandate,”15 requires employer-sponsored insurance plans to provide some women’s preventive services, including contraceptives and sterilization procedures, without requiring the employee to share the cost.16 But it exempts companies below a certain size, as well as religious and nonprofit organizations that meet a stringent test.17 Both for-profit and nonprofit organizations have made religious objections to the HHS mandate18—most coming from various Christian traditions that have long opposed the use and distribution of contraception, particularly methods that they believe have an abortive tendency.19 This Note examines a threshold hurdle that stands in the way of for-profit corporations’ ability to state RFRA claims: the question of whether corporations are “persons” under the statute. This is an issue of first impression for the Supreme Court, and it has split the circuits.20 Part I of this Note provides an overview of free exercise jurisprudence, with a focus on the ebbs and flows of the Supreme Court’s exemption doctrine and Congress’s legislative response. Part I also explains the laws and regulations—and the religious objections—that form the basis of the current disputes. Part II introduces this conflict more thoroughly by analyzing four appellate decisions with differing opinions. Part III assesses this conflict, concludes that the purposes anticipated by RFRA do not exclude corporations, and provides the outline of a basic framework for courts as they begin the daunting task of ascertaining RFRA’s contours for corporate claimants.   14. See HHS Mandate Information Central, BECKET FUND FOR RELIGIOUS LIBERTY, http://www.becketfund.org/hhsinformationcentral/ (last visited Feb. 24, 2014). 15. See id. 16. See Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventive Services Under the Patient Protection and Affordable Care Act, 77 Fed. Reg. 8725 (Feb. 15, 2012) (to be codified at 26 C.F.R. pt. 54, 29 C.F.R. pt. 2590, 45 C.F.R. pt. 147); see also 42 U.S.C. § 300gg-13(a)(4) (Supp. V 2011). 17. See Hobby Lobby, 723 F.3d at 1122. For a description of the nonprofit exemption, see infra notes 269–71. 18. See, e.g., Briscoe v. Sebelius, 927 F. Supp. 2d 1109, 1112 (D. Colo. 2013) (confronting the argument that a for-profit corporation run by an Evangelical Christian was bound by faith not to provide access to abortion); Univ. of Notre Dame v. Sebelius, No. 3:12-CV-253(RLM), 2012 WL 6756332, at *1 (N.D. Ind. Dec. 31, 2012) (confronting the argument that a nonprofit, Catholic educational institution was bound by religious doctrine not to provide access to abortion, sterilization, or contraception). 19. See, e.g., POPE PAUL VI, HUMANAE VITAE ¶ 14 (1968), available at http://www.vatican.va/holy_father/paul_vi/encyclicals/documents/hf_p- vi_enc_25071968_humanae-vitae_en.html (“[T]he direct interruption of the generative process already begun and, above all, all direct abortion, even for therapeutic reasons, are to be absolutely excluded as lawful means of regulating the number of children. Equally to be condemned . . . is direct sterilization . . . .” (emphasis added)). 20. See infra Part II. 1956 FORDHAM LAW REVIEW [Vol. 82 I. FREE EXERCISE JURISPRUDENCE, LEGISLATIVE EXEMPTIONS, AND CORPORATE CONSTITUTIONAL RIGHTS: A BACKGROUND The Supreme Court’s free exercise jurisprudence and Congress’s subsequent reactions create a complex ebb and flow of tests and doctrines. This Part first examines the history of free exercise and the Court’s cases that established and then disestablished a regime of exempting religious adherents from laws that burdened their religious exercise. It then examines the legislative response to this line of cases and introduces how corporations fit into the picture. A. The Historical Understanding of the Free Exercise Clause The question of exemptions for religious believers has roots in the historical understanding of the Free Exercise Clause, which represents a fusion of various political theories.21 A number of American colonies protected religious dissenters and afforded members of religious sects the opportunity to escape the religious persecution of both England and the other colonies.22 The most protective colonies were the first to formulate the free exercise of religion as a legal principle.23 Eventually, certain colonial charters also allowed colonial proprietors to grant “indulgences and dispensations” to religious believers burdened by the colony’s laws.24 This exemption power was discretionary.25 Following the Revolutionary War, the new states and eventually the federal government had to determine how best to protect religious liberty.26 For example, James Madison successfully27 proposed that Virginia’s Bill of Rights protect “the full and free exercise of [religion].”28 The American system would no longer be based on mere tolerance—religion was not a gift from government, but rather a duty to God that no government could abridge.29 By 1789, every state except Connecticut provided some protection of religious freedom.30 This generally extended to religious   21. See John Witte, Jr., The Essential Rights and Liberties of Religion in the American Constitutional Experiment, 71 NOTRE DAME L. REV. 371, 377–89 (1996). 22. See Michael W. McConnell, The Origins and Historical Understanding of Free Exercise of Religion, 103 HARV. L. REV. 1409, 1424–25 (1990). 23. See id. at 1425. 24. See id. at 1428 (quoting CAROLINA CHARTER OF 1665, reprinted in 2 FEDERAL AND STATE CONSTITUTIONS, COLONIAL CHARTERS, AND OTHER ORGANIC LAWS OF THE UNITED STATES 1328, 1338 (Benjamin Perley Poore ed., Washington, Gov’t Printing Office 2d ed. 1878)). For examples of legislatures and executives granting exemptions, see id. at 1467– 73. 25. See id. at 1428. 26. See id. at 1455, 1473. 27. See id. at 1443. 28. See Stephen Pepper, Taking the Free Exercise Clause Seriously, 1986 BYU L. REV. 299, 303 (alteration in original) (quoting Gaillard Hunt, James Madison and Religious Liberty, in 1 ANNUAL REPORT OF THE AMERICAN HISTORICAL ASSOCIATION FOR THE YEAR 1901, at 163, 165–66 (1902)). 29. See McConnell, supra note 22, at 1443–44. 30. See id. at 1455. 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1957 practice, in addition to belief.31 Accordingly, some states offered accommodations32 to minorities whose beliefs were at odds with societal mores.33 Free exercise rights, however, were subject to certain limitations that served the interests of the states.34 For example, a state might allow free exercise rights for peaceable actions, but not for licentious ones.35 When the several states joined to form the federal government, they drafted a Constitution banning religious tests for office36 and allowing for either oaths or affirmations.37 Beyond these, however, the Federalists writing the Constitution saw little need to enact protection of religious rights, as they believed that the nature of the federal system, checks and balances between government branches, and the numerous religious sects would ensure the protection of religious minorities.38 This argument did not convince such groups as the Quakers, who feared the effects of laws passed without consideration of minority beliefs.39 Later, to protect individual liberty expressly, Congress enacted the Bill of Rights40 and, within this set of amendments, the Religion Clause.41 Initially, the delegates discussed religious liberty in terms of the “rights of conscience”   31. See id. at 1459 (explaining that the dictionaries of the day included “action” in their definitions of “exercise”). 32. McConnell acknowledges that his examples of religious accommodation “were initiated by the legislature.” Id. at 1473. He suggests, however, that it is reasonable to suppose that framers of state and the federal free exercise provisions understood that courts would create and enforce similar protections. Id. 33. See id. at 1467. For example, an oath requirement might ensure honest testimony in court, but it would violate the religious beliefs of Quakers. Id. A Quaker in a lawsuit, therefore, would not be able to testify in court. See id. To protect conscientious objectors, most state governments allowed alternative procedures. Id. 34. See id. at 1461–62. 35. See id. 36. See U.S. CONST. art. VI. 37. See U.S. CONST. art. II, § 1 (providing the text of an oath or affirmation the president must take before entering office); U.S. CONST. art. VI (requiring that all government officials take an oath or affirmation to support the U.S. Constitution). 38. See McConnell, supra note 22, at 1475–80; see also THE FEDERALIST NO. 84 (Alexander Hamilton). 39. See McConnell, supra note 22, at 1480. The Quakers’ concern comports with a view of the Free Exercise Clause described by Christopher Eisgruber and Lawrence Sager, who propose that the Free Exercise Clause should protect minority viewpoints rather than privilege religion. See generally Christopher L. Eisgruber & Lawrence G. Sager, The Vulnerability of Conscience: The Constitutional Basis for Protecting Religious Conduct, 61 U. CHI. L. REV. 1245 (1994). 40. See U.S. CONST. amends. I–X. 41. See U.S. CONST. amend. I (“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof . . . .”). Scholars divide this section of the First Amendment into two bodies of law. See, e.g., Abner S. Greene, The Political Balance of the Religion Clauses, 102 YALE L.J. 1611, 1612 (1993); Ira C. Lupu, Threading Between the Religion Clauses, 63 LAW & CONTEMP. PROBS. 439, 439 (2000). Each clause has its own corresponding jurisprudence. Compare Lemon v. Kurtzman, 403 U.S. 602, 612 (1971) (explaining a test for whether a law violates the Establishment Clause), with Emp’t Div. v. Smith, 494 U.S. 872, 881–82 (1990) (holding that neutral laws of general applicability do not violate the Free Exercise Clause). 1958 FORDHAM LAW REVIEW [Vol. 82 but eventually decided on the “free exercise of religion.”42 As used in the colonies and states, “free exercise” protected public conduct emanating from religious motivation, including religious speech, worship, assembly, publication, and education.43 Exercise also included the right to join with other members of the faith to worship.44 This understanding of the Free Exercise Clause fused views of both the importance of protecting religion and the prevailing Enlightenment philosophy of the day by allowing individuals to worship according to their conscience and restricting government from interfering with religious practice.45 B. The Court Giveth and the Court Taketh Away: A History of Exemptions in the Supreme Court At its core, the Free Exercise Clause, made applicable to the states through the Fourteenth Amendment,46 means the right to believe and to profess religious doctrine.47 The Clause therefore prohibits the government from any regulation of religious beliefs,48 such as compelling beliefs or punishing religious expression.49 The extent to which the Clause protects conduct, however, has been the subject of much debate.50 The Supreme Court initially protected matters of belief, but not necessarily conduct.51 For example, the Mormon practice of polygamy was religious, and Mormons sought to use religion as a defense while on trial for violating an antipolygamy statute.52 The Court disagreed and held that the Constitution did not require the government to allow   42. See McConnell, supra note 22, at 1482–83 (internal quotation marks omitted). “Free exercise” protects more than the “rights of conscience,” according to McConnell. See id. at 1490. The former denotes the application of the religious belief, while the latter indicates the knowledge or rationale of the belief. Id. at 1489. For the First Amendment, this is a key distinction. Beliefs are definitively protected, but it would appear that actions undertaken as a matter of sincere, religious belief receive protection too. See id. at 1491–96. 43. See Witte, supra note 21, at 394–95. 44. See id. at 395. The liberty to join in religious association included the liberty to govern the religious body without governmental interference. See id. 45. See McConnell, supra note 22, at 1498–99 (“The religious view emphasizes the importance of the individual; the Enlightenment, the incapacity of the government.”). For a description of additional political and theological understandings that form the foundation of the American conception and dedication to religious liberty, see generally Witte, supra note 21 (describing theories that yielded principles of liberty of conscience, free exercise of religion, pluralism, equality, separationism, and disestablishment of religion). 46. See Cantwell v. Connecticut, 310 U.S. 296, 303 (1940). 47. See Emp’t Div. v. Smith, 494 U.S. 872, 877 (1990). 48. See Sherbert v. Verner, 374 U.S. 398, 402 (1963). 49. See Smith, 494 U.S. at 877. 50. See infra Part I.B–D. 51. See Davis v. Beason, 133 U.S. 333, 345 (1890) (“Whilst legislation for the establishment of a religion is forbidden, and its free exercise permitted, it does not follow that everything which may be so called can be tolerated. Crime is not the less odious because sanctioned by what any particular sect may designate as religion.”); Reynolds v. United States, 98 U.S. 145, 166 (1878) (holding that laws banning polygamy were within Congress’s legislative power). 52. See Reynolds, 98 U.S. at 161. 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1959 Mormons to state this belief as a defense before a jury.53 This distinction between belief and conduct did not stand, however, in the latter half of the twentieth century.54 Beginning in Sherbert v. Verner,55 the Court construed the First Amendment to require exemptions from otherwise valid laws that substantially burdened individuals’ religious beliefs or practice.56 Sherbert and its progeny, including Wisconsin v. Yoder,57 presented cases where an individual claimed that a law had the effect of hampering his or her religious practice. 1. The Creation of the Exemption Regime: Sherbert v. Verner and Wisconsin v. Yoder The Supreme Court first articulated a standard for exemptions in Sherbert.58 Adell Sherbert was a member of the Seventh-Day Adventist Church when her employer adjusted the number of days in its work week.59 Because Sherbert refused to report to work on the Adventists’s holy day, her employer discharged her.60 She sought unemployment benefits from South Carolina’s Employment Security Commission, but the agency found that her refusal to take Saturday work disqualified her.61 In response to Sherbert’s free exercise challenge, the South Carolina Supreme Court upheld the commission’s decision, holding that the unemployment statute did not restrict her ability to observe her religious beliefs.62 The U.S. Supreme Court reversed South Carolina’s court, noting that the Free Exercise Clause prevents the government from regulating “religious beliefs as such.”63 It also acknowledged that it had rejected free exercise challenges on the ground that legislation may restrict religious practices if such practices threaten public safety, peace, or order.64 Despite this precedent, the Court found that South Carolina’s withholding of unemployment benefits was a substantial burden on the free exercise of Sherbert’s religion.65 The state denied benefits because of her religiously motivated action, and the pressure to forego her beliefs to obtain the benefit was a substantial burden.66   53. See id. at 164, 166 (explaining that Congress’s legislation was “free to reach actions which were in violation of social duties or subversive of good order” and that a person may not “excuse his practices . . . because of his religious belief”). 54. See, e.g., Sherbert v. Verner, 374 U.S. 398, 403 (1963). 55. Id. 56. See Eugene Volokh, A Common-Law Model for Religious Exemptions, 46 UCLA L. REV. 1465, 1473 (1999). 57. 406 U.S. 205 (1972). 58. See 374 U.S. at 410. 59. Id. at 399. 60. Id. 61. Id. at 399–401. 62. See id. at 401. 63. Id. at 402. 64. Id. at 402–03. 65. Id. at 403. 66. Id. 1960 FORDHAM LAW REVIEW [Vol. 82 Because the law substantially burdened Sherbert’s religion, the Court examined whether South Carolina had a compelling interest to justify infringing upon her First Amendment rights.67 In light of the claim’s constitutional basis, the Court explained that “[o]nly the gravest abuses, endangering paramount interests, give occasion for permissible limitation.”68 The state argued that its interests were to prevent fraudulent claims that might cause a dilution of the unemployment fund,69 but the Court stated that this interest did not justify abridging Sherbert’s free exercise rights.70 The state, therefore, had to exempt Sherbert from its law and provide unemployment benefits.71 The Supreme Court later affirmed this analysis in Wisconsin v. Yoder.72 There, Amish parents declined to send their children to school after their children completed the eighth grade.73 Wisconsin’s compulsory attendance law required parents to send their children to school through age sixteen.74 The Amish parents were convicted of violating this law and fined $5.00 each.75 The Court noted that education is a strong state interest, but even such strong interests are still subject to a balancing process.76 To determine the balance in this case, the Court examined the Amish religion and found that its commitment to not sending children to school beyond the eighth grade was religiously motivated behavior.77 Indeed, despite increasing regulation that had encroached upon the traditional Amish way of life, the religion’s traditions had not changed.78 Amish families continued to believe that additional schooling interfered with their way of life.79 The Court held that the Wisconsin compulsory attendance law, which carried the threat of criminal sanction, substantially burdened the petitioners’ religion.80 To   67. See id. at 406. 68. Id. at 406 (quoting Thomas v. Collins, 323 U.S. 516, 530 (1945)). 69. See id. at 407. 70. See id. 71. Id. The Court did not directly state an intent to create a constitutionally compelled exemption regime. In dissent, however, Justice John Marshall Harlan II explained that the Court’s holding meant that “if the State chooses to condition unemployment compensation on the applicant’s availability for work, it is constitutionally compelled to carve out an exception—and to provide benefits—for those whose unavailability is due to their religious convictions.” Id. at 420 (Harlan, J., dissenting). 72. 406 U.S. 205 (1972). 73. Id. at 207. The Amish “believed that by sending their children to high school, they would not only expose themselves to the danger of the censure of the church community, but . . . also endanger their own salvation and that of their children.” Id. at 209. 74. Id. at 207. 75. Id. at 208. 76. Id. at 214–15 (“[O]nly those interests of the highest order and those not otherwise served can overbalance legitimate claims to the free exercise of religion.”). 77. See id. at 216–18. 78. Id. at 217. 79. Id. at 218. 80. See id. 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1961 require compliance, the Court explained, would endanger or destroy Amish religious exercise.81 Wisconsin argued that its interest in compulsory education was sufficiently compelling to override the Amish religious practices.82 The Court did not accept such a sweeping claim, however, and stated that the government must present a specific interest and the harm that would result if the government granted an exemption.83 The resulting analysis showed that, as applied to the Amish petitioners, the additional years of school required by the law would do little to serve the state’s interests, because the Amish way of life centered around a separate agrarian community.84 Therefore, even though Wisconsin had a strong interest in education, the Amish families satisfactorily demonstrated a need for an exemption from the education law.85 Together, Sherbert and Yoder stood for the proposition that a religious believer may obtain an exemption from a law by showing that the law substantially burdens his or her free exercise of religion, and that the state has no compelling interest that outweighs the burden in question.86 This protection of religious faith extended to matters of action or conduct, and not just belief.87 Moreover, if the state action could not withstand a court’s scrutiny, the Constitution compelled the exemption.88   81. Id. at 219. 82. Id. at 221. 83. See id. In other words, the Court established that it would view free exercise exemption claims with strict scrutiny. See Volokh, supra note 56, at 1467. In cases concerning constitutional law, the Court views different types of claims with various levels of scrutiny. See ERWIN CHEMERINSKY, CONSTITUTIONAL LAW 551 (4th ed. 2011). When important rights are at stake, the government must meet a heavy burden and show that the law is “necessary to achieve a compelling government purpose.” See id. at 554 (emphasis omitted). This is the strict scrutiny explained in Sherbert and Yoder, as well as the test codified in RFRA. See infra Part I.C. The Court uses a more deferential level of review in other contexts. The rational basis test requires that the government show that it is “rationally related to a legitimate government purpose.” See CHEMERINSKY, supra, at 552 (emphasis omitted). 84. See Yoder, 406 U.S. at 222. Wisconsin also attacked the “ignorance” that Amish parents would bequeath to their children. See id. The Court rebuked this critique of a minority religion. Id. at 224 (“A way of life that is odd or even erratic but interferes with no rights or interests of others is not to be condemned because it is different.”). 85. See id. at 235. 86. See id. at 240 (Stewart, J., concurring) (“Decisions in cases such as this . . . will inevitably involve the kind of close and perhaps repeated scrutiny of religious practices, as is exemplified in today’s opinion, which the Court has heretofore been anxious to avoid.”). But see Eisgruber & Sager, supra note 39 (arguing that religion should not receive special privilege, but rather that the law should regard religions equally). In a context in which administrative schemes provide discretion to decisionmakers, therefore, courts should have discretion to grant exemptions to protect religious minorities from veiled discrimination. See Eisgruber & Sager, supra note 39, at 1299–1300. 87. See Yoder, 406 U.S. at 216; Sherbert v. Verner, 374 U.S. 398, 402–03 (1963); see also Mark L. Rienzi, God and the Profits: Is There Religious Liberty for Moneymakers?, 21 GEO. MASON L. REV. 59, 65 n.40 (2013) (explaining that the key for protected activity is motivation by religious belief). 88. See Volokh, supra note 56, at 1473 (explaining that before Sherbert, it was for legislatures to grant exemptions, but that Sherbert “launched the constitutional exemption 1962 FORDHAM LAW REVIEW [Vol. 82 Following Sherbert and Yoder, courts heard a variety of cases in which petitioners sought exemptions, claiming that laws burdened their religious practice.89 For example, the Court granted an exemption to a Jehovah’s Witness who was denied unemployment insurance after he quit his job in a metal factory when he discovered that he was producing armaments.90 The Court explained that it would not “dissect” his beliefs in order to determine whether his understanding of his religion was “unreasonable.”91 Instead, the Court found that Indiana’s law would require Thomas to modify his beliefs in order to continue working, and that conditioning unemployment benefits on this choice substantially burdened his religious exercise.92 Similarly, a woman who changed religions during the course of her employment stated a valid free exercise claim when the unemployment commission denied her benefits for failing to work on her Sabbath day.93 Claimants did not, however, always find success before the Supreme Court.94 For example, claimants who were part of the armed forces could not seek the same level of protection as civilians, even if a law substantially burdened their religion, because of the military’s compelling interest in “instinctive obedience” and the “esprit de corps.”95 A Jewish claimant, therefore, could not challenge a regulation prohibiting his religious use of a yarmulke.96 The Court also denied free exercise claims when the exemption would require the government to adjust its internal affairs to account for interference with—and not necessarily a burden on—an individual’s spiritual development.97 For example, the government’s use of social security numbers for administrative efficiency did not amount to impairing religious beliefs or exercise.98 Finally, the meaning of “burden” was in flux, and different interpretations of the term yielded different results   regime” under which the Constitution would compel an exemption if a law failed to pass strict scrutiny). 89. See, e.g., Mozert v. Hawkins Cnty. Bd. of Educ., 827 F.2d 1058, 1065 (6th Cir. 1987) (explaining that requiring students to read certain materials without requiring them to affirm or deny a belief or to participate in an objectionable practice is not an unconstitutional violation of students’ free exercise); Bethel Baptist Church v. United States, 629 F. Supp. 1073, 1085–87 (M.D. Pa. 1986) (holding that requiring churches to pay social security taxes was an indirect burden justified by a compelling governmental interest in a sound tax program). 90. See Thomas v. Review Bd., 450 U.S. 707, 710–12, 720 (1981). 91. See id. at 715. 92. See id. at 717–18. 93. See Hobbie v. Unemployment Appeals Comm’n, 480 U.S. 136, 138, 141–42 (1987). 94. See, e.g., United States v. Lee, 455 U.S. 252 (1982) (holding that a member of the Old Order Amish religion could not receive an exemption from requirements to pay Social Security taxes). 95. See Goldman v. Weinberger, 475 U.S. 503, 507 (1986). 96. See id. at 510 (Stevens, J., concurring). 97. See Lyng v. Nw. Indian Cemetery Protective Ass’n, 485 U.S. 439, 449 (1988) (holding that while construction on government land that was sacred to Native Americans might hinder spiritual development, it did not burden religious beliefs or exercise); see also Bowen v. Roy, 476 U.S. 693, 699–700 (1986) (explaining that the First Amendment did not “require the Government itself to behave in ways” to further individuals’ spiritual development). 98. See Bowen, 476 U.S. at 700. 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1963 for claimants.99 These inconsistences in the application of the doctrine caused some scholars to state that it rarely operated as strict scrutiny.100 2. The Fall of the Exemption Regime: Employment Division v. Smith The Sherbert and Yoder exemption regime appeared to end in 1990, when the Court shifted its Free Exercise Clause analysis to hold that neutral laws of general applicability did not violate claimants’ free exercise rights.101 In Employment Division v. Smith, two members of the Native American Church lost their jobs at a drug rehabilitation facility after ingesting peyote,102 a felony offense in Oregon, as part of a religious ceremony.103 Relying on the Sherbert line of cases, the respondents sought an exemption from Oregon’s law classifying possession of a controlled substance as a felony.104 The Court distinguished their case from Sherbert, however, where the religious behavior was not criminal.105 The Court explained that granting respondents’ exemption claim would result in a large expansion of free exercise rights because the law did not target their religious practice and was otherwise constitutional against other peyote users.106 The Court stated that it had never allowed an individual’s beliefs to excuse that person from complying with valid laws within the state’s purview.107 When it previously held that the First Amendment required exemption from a neutral law of general applicability, such as in Yoder, it was “in conjunction with other constitutional protections,” such as the right to free speech or parental rights.108 The Court limited Sherbert to   99. See Ira C. Lupu, Where Rights Begin: The Problem of Burdens on the Free Exercise of Religion, 102 HARV. L. REV. 933, 961 (1989). 100. See Richard F. Duncan, Free Exercise Is Dead, Long Live Free Exercise: Smith, Lukumi, and the General Applicability Requirement, 3 U. PA. J. CONST. L. 850, 852 (2001); Laura Underkuffler-Freund, The Separation of the Religious and the Secular: A Foundational Challenge to First Amendment Theory, 36 WM. & MARY L. REV. 837, 852–53 (1995). 101. See Emp’t Div. v. Smith, 494 U.S. 872, 882 (1990). 102. Peyote is a hallucinogen that comes from the plant Lophophora williamsii Lemaire. See id. at 874. 103. See id. The Court accepted that the Smith petitioners were members of the Native American Church. See id. A New York Times article, however, indicates that Alfred Smith and Galen Black were guests at the ceremony in which they ingested peyote and that they did so to learn about the religious practice, not to participate in a sacrament. See Oregon Peyote Law Leaves 1983 Defendant Unvindicated, N.Y. TIMES, July 9, 1991, at A14. 104. See Smith, 494 U.S. at 876. 105. See id. 106. See id. at 878. 107. See id. at 878–79; see also id. at 880 (explaining that recent cases upheld neutral laws of general applicability against free exercise challenges in Braunfeld v. Brown, 366 U.S. 599 (1961), and United States v. Lee, 455 U.S. 252 (1982)). 108. Id. at 881. Some, however, critique this “hybrid rights” view of the Court’s free exercise jurisprudence, stating that it represents a misreading of such cases as Yoder. See James G. Dwyer, The Good, the Bad, and the Ugly of Employment Division v. Smith for Family Law, 32 CARDOZO L. REV. 1781, 1784–85 (2011) (explaining that Yoder rejected substantive due process claims as the basis of its holding and relied wholly upon free exercise). 1964 FORDHAM LAW REVIEW [Vol. 82 unemployment cases, and explained that where state unemployment benefits programs allowed for individual exemptions, the state must describe a compelling reason for extending the system to cases of religious hardship.109 Outside of this limited scope, the Free Exercise Clause did not require court-created exemptions from otherwise neutral, generally applicable laws.110 The Court thus rejected the idea that the Constitution compelled application of the Sherbert balancing test to general laws that incidentally burdened individuals’ free exercise of religion.111 Free exercise claims that challenged neutral laws of general applicability would receive only rational basis review going forward.112 Justice Antonin Scalia bolstered his Smith holding in two additional ways. First, he explained the problems associated with judicial determination of questions about religion, even in case-by-case proceedings.113 Second, he explained that subjecting generally applicable laws to the compelling interest test whenever such a law burdened a person’s religious exercise “would be courting anarchy.”114 He did, however, note that even if the First Amendment did not require judicially crafted exemptions for these reasons, the legislature might be more accommodating.115 Indeed, he pointed to state accommodations of sacramental peyote use as a “solicitous” protection of the value of religious freedom.116 Between 1963 and 1990, the Court created a process of exempting religious behavior from burdensome laws and then later claimed not to have such power. Legal scholars fiercely debated whether the First Amendment required such exemptions.117 Following Smith, however, free exercise   109. Smith, 494 U.S. at 882–85. 110. See id.; see also Eisgruber & Sager, supra note 39, at 1247. 111. Smith, 494 U.S. at 884–85. 112. See, e.g., Korte v. Sebelius, 735 F.3d 654, 671 (7th Cir. 2013); Fortress Bible Church v. Feiner, 694 F.3d 208, 220 (2d Cir. 2012). 113. See Smith, 494 U.S. at 887 (“Repeatedly and in many different contexts, we have warned that courts must not presume to determine the place of a particular belief in a religion or the plausibility of a religious claim.”). 114. See id. at 888. 115. See id. at 890. 116. Id. (“It is therefore not surprising that a number of States have made an exception to their drug laws for sacramental peyote use.”). 117. Compare Gerard V. Bradley, Beguiled: Free Exercise Exemptions and the Siren Song of Liberalism, 20 HOFSTRA L. REV. 245, 248 (1991) (arguing that constitutionally compelled exemptions are “manifestly contrary to the plain meaning of the Free Exercise Clause”), and Philip A. Hamburger, A Constitutional Right of Religious Exemption: An Historical Perspective, 60 GEO. WASH. L. REV. 915, 940 (1992) (asserting that individuals historically sought occasional exemptions from certain laws but that this did not amount to a general or a constitutional right to an exemption), with McConnell, supra note 22, at 1513– 16 (arguing that the First Amendment requires religious exemptions). 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1965 claims required courts to analyze whether a law was neutral118 and generally applicable.119 The Constitution did not allow for exemptions. C. Congress Restores the Exemption Regime: The Religious Freedom Restoration Act Justice Scalia’s opinion in Employment Division v. Smith inspired intense debate.120 In response, a strongly bipartisan Congress121 passed RFRA, which reinstated the Sherbert regime and instructed the courts to analyze laws burdening religious practice with strict scrutiny.122 Professor Douglas Laycock, a major academic force behind the law, explained that the drafters intended RFRA to ensure that people need not abandon their religious beliefs to comply with the law.123 In its findings, Congress explained that neutral laws “may burden religious exercise as surely as laws intended to interfere with religious exercise,”124 that “governments should not substantially burden religious exercise without compelling justification,”125 and that the Smith Court “virtually eliminated the requirement that the government justify burdens on religious exercise imposed by laws neutral toward religion.”126 The Act’s purpose, then, was to restore Sherbert and Yoder’s compelling interest test.127 To achieve its goals, RFRA provided in its operative section as follows: (a) In General—Government shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability, except as provided in subsection (b) of this section.   118. See, e.g., Church of the Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520 (1993) (holding that a law directly targeting religious practices was unconstitutional). 119. See Duncan, supra note 100, at 851 (“[T]he key to understanding the Constitution’s protection of religious liberty in the post-Smith world is to locate the boundary line between neutral laws of general applicability and those that fall short of this standard.”). 120. See, e.g., William P. Marshall, In Defense of Smith and Free Exercise Revisionism, 58 U. CHI. L. REV. 308, 308 (1991) (defending Smith against McConnell and others); Michael W. McConnell, Free Exercise Revisionism and the Smith Decision, 57 U. CHI. L. REV. 1109, 1110 (1990) (critiquing the analysis in Smith). 121. See Remarks on Signing the Religious Freedom Restoration Act of 1993, 29 WEEKLY COMP. PRES. DOC. 2377–78 (Nov. 16, 1993) (explaining that the bill passed in the Senate ninety-seven to three and had overwhelming support in the House of Representatives on a voice vote). 122. See The Religious Freedom Restoration Act of 1993, Pub. L. No. 103-141, 107 Stat. 1488, invalidated by City of Boerne v. Flores, 521 U.S. 507 (1997), amended by Religious Land Use and Institutionalized Persons Act of 2000, Pub. L. No. 106-274, 114 Stat. 803 (codified at 42 U.S.C. §§ 2000bb to 2000bb-4 (2006)). 123. See Douglas Laycock, RFRA, Congress, and the Ratchet, 56 MONT. L. REV. 145, 146 (1995) (explaining, among other examples, that RFRA might protect those who run a day care, because the government might not see day care management as religious exercise). 124. See 42 U.S.C. § 2000bb(a)(2). 125. See id. § 2000bb(a)(3). 126. See id. § 2000bb(a)(4); see also Korte v. Sebelius, 735 F.3d 654, 671 (7th Cir. 2013) (“RFRA represents a congressional judgment that the rule of Smith is insufficiently protective of religious liberty.”). 127. See 42 U.S.C. § 2000bb-1(b). 1966 FORDHAM LAW REVIEW [Vol. 82 (b) Exception—Government may substantially burden a person’s exercise of religion only if it demonstrates that application of the burden to the person— (1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.128 To apply this test, courts must examine the application of the interest to the individual claimant, rather than to the general population.129 In addition, the nature of compelling interest as articulated in Yoder, Sherbert, and other pre-Smith cases places a high burden on the government to articulate concrete reasons for the law’s application.130 This strict scrutiny applies only if a law is a substantial burden of religious exercise.131 Thus, neither an insubstantial burden nor a burden on nonreligious activities qualifies for the protection afforded by RFRA.132 In the committee report that accompanied RFRA, Congress explained that it expected courts to rely on free exercise cases decided before Smith to determine whether religious exercise has been burdened.133 Moreover, the committee explained that it did not intend to codify any specific free exercise decision, but rather to restore the Court’s legal standard in those cases.134 A court must still consider relevant facts and circumstances.135 Federal courts have interpreted RFRA to expressly require accommodation instead of insisting on Smith neutrality.136 Congress defined certain operative terms in RFRA.137 Its broad scope was clear through its definition of “government,” which included the various parts of federal, state, and local governing bodies.138 In addition, Congress defined the “exercise of religion” as “the exercise of religion under the First Amendment to the Constitution.”139 Scholars noted that defining “religion” any other way would prove difficult to adjudicate, and that courts had already shown the ability to differentiate between religiously   128. See id. § 2000bb-1. Any person may state a claim for judicial relief if a law burdens the exercise of their religion. See id. § 2000bb-1(c). 129. See Laycock, supra note 123, at 148. 130. See Douglas Laycock & Oliver S. Thomas, Interpreting the Religious Freedom Restoration Act, 73 TEX. L. REV. 209, 222–26 (1994). 131. See id. at 228. 132. See id. 133. H.R. REP. NO. 103-88, at 7 (1993). 134. See id.; see also Laycock & Thomas, supra note 130, at 218. 135. See Laycock & Thomas, supra note 130, at 218. 136. See Korte v. Sebelius, 735 F.3d 654, 671–72 (7th Cir. 2013) (quoting O’Bryan v. Bureau of Prisons, 349 F.3d 399, 401 (7th Cir. 2003)). 137. See 42 U.S.C. § 2000bb-2 (2006). Notably, Congress did not define “person.” See infra Part II. 138. See The Religious Freedom Restoration Act of 1993, Pub. L. No. 103-141 § 5, 107 Stat. 1488, invalidated by City of Boerne v. Flores, 521 U.S. 507 (1997), amended by Religious Land Use and Institutionalized Persons Act of 2000, Pub. L. No. 106-274, 114 Stat. 803 (current version at 42 U.S.C. § 2000bb-2). 139. See id. This language was amended by the Religious Land Use and Institutionalized Persons Act of 2000. The current version can be found at 42 U.S.C. § 2000cc-5(7)(A). 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1967 motivated and nonreligious behavior.140 Principal organizers of RFRA indicated, however, that it would protect individuals and that the Dictionary Act’s default definition of “person”141 meant it would also cover religious organizations.142 Defining the statute in such broad terms was not only a political necessity to keep Congress out of the weeds of specific applications; it was also a matter of principle because the statute performed a constitutional function by enacting the congressional understanding of the Free Exercise Clause.143 The statute’s sweep was also clear from its broad applicability; as originally enacted, RFRA “applie[d] to all Federal and State law, and the implementation of that law, whether statutory or otherwise, and whether adopted before or after [November 16, 1993],” unless Congress excluded applicability through explicit reference to 42 U.S.C. § 2000bb-3.144 Because of its applicability to every law passed by any local, state, or federal government, RFRA garnered a reputation as a “super-statute.”145 Because the law had such breadth and swept across the entirety of American law, it was not simply a change from Smith.146 Rather, it represented a substantially different vision of religious liberty and indicated Congress’s intent to allow people of all religious persuasions to enjoy a fundamental right by restoring pre-Smith free exercise protection.147   140. See Laycock & Thomas, supra note 130, at 233–34. 141. See 1 U.S.C. § 1 (2012). For further explanation of the Dictionary Act, see infra note 215. 142. See Laycock & Thomas, supra note 130, at 234. Interestingly, early drafts of RFRA defined “person,” whereas the enacted version did not. See H.R. 5377, 101st Cong. § 4(4) (1990) (defining person as “natural persons and religious organizations, associations, or corporations); H.R. 4040, 102d Cong. § 5(4) (1991) (defining person as “natural persons and organizations, association [sic], corporations, or other entities”). The use of legislative history in statutory interpretation is frequently suspect, especially when the history is unexplained, prior versions of a statute. See JOSEPH L. GERKEN, WHAT GOOD IS LEGISLATIVE HISTORY? JUSTICE SCALIA IN THE FEDERAL COURTS OF APPEALS 22 (2007); Max Radin, Statutory Interpretation, 43 HARV. L. REV. 863, 873 (1930). The difficulty lies in weighing the relative value of various sources. See CHRISTIAN E. MAMMEN, USING LEGISLATIVE HISTORY IN AMERICAN STATUTORY INTERPRETATION 66 (2002). If a judge can determine a reason for the change, however, it might be useful in interpreting the statute. See JOHN F. MANNING & MATTHEW C. STEPHENSON, LEGISLATION & REGULATION 159–60 (1st ed. 2010). 143. See Laycock & Thomas, supra note 130, at 219. 144. See The Religious Freedom Restoration Act of 1993 § 6. 145. See Michael Stokes Paulsen, A RFRA Runs Through It: Religious Freedom and the U.S. Code, 56 MONT. L. REV. 249, 253–54 (1995) (“RFRA is thus a powerful current running through the entire landscape of the U.S. Code.”). 146. See Laycock & Thomas, supra note 130, at 244–45. 147. See id. There is some debate about whether Congress intended to expand pre-Smith protection through RFRA, or whether it intended to restore this protection. Compare Michael C. Dorf, Incidental Burdens on Fundamental Rights, 109 HARV. L. REV. 1175, 1213 (1996) (“RFRA does not, however, simply restore the pre-Smith law.”), with H.R. REP. 103-88, at 15 (Additional Views of Hon. Henry J. Hyde, Hon. F. James Sensenbrenner, Hon. Bill McCollum, Hon. Howard Coble, Hon. Charles T. Canady, Hon. Bob Inglis, Hon. Robert W. Goodlatte) (“[T]he bill does not reinstate the free exercise standard to the high water mark as found in Sherbert v. Verner and Wisconsin v. Yoder, but merely returns the law to the state it existed prior to Smith.”). Because the Court frequently rejected pre-Smith free exercise claims using the Sherbert test, see supra notes 94–100 and accompanying text, the difference between expanding and restoring pre-Smith protection matters for resolving the merits of 1968 FORDHAM LAW REVIEW [Vol. 82 Professor Eugene Volokh explained that RFRA sought to restore the courts as decisionmakers on claims of religious freedom, contrary to Smith’s claim that courts were not the proper body to make such decisions.148 Sherbert launched a constitutional model in which courts decided who would receive exemptions, but Smith instructed that exemptions should be purely statutory.149 RFRA, then, adopted a model in which courts would evaluate claims individually and continue to build upon Sherbert and its progeny.150 Volokh called this the “common-law exemption model” because it granted courts the “initial discretionary decision-making power” and asked them to design a jurisprudence in accordance with Congress’s vision for religious liberty.151 In addition, RFRA claimed that the pre-Smith compelling interest test provided a sensible balance between religious liberty and the government’s interests.152 A judge striking this balance does not necessarily have the final say, however, because the decision would be statutory and not constitutional.153 In matters of statutory interpretation, judges must interpret the law and might make incremental changes, but legislatures retain ultimate authority to reverse judicial action.154 If Congress determined that a court was “too stingy” in withholding an exemption from a statute that substantially burdens a person’s religious exercise, then it could enact a specific exemption to address that situation.155 Conversely, if Congress found that a court overreached in granting an exemption, it could amend the relevant statute to withhold exemptions.156 Although the decisions in individual RFRA cases would be final, the underlying statute could be amended for future application, placing claims for religious liberty into the political process, which is how American law generally developed in a common law system.157 Thus, the law acts to overcome legislative inertia by granting individuals the ability to petition courts for redress rather than wait for legislatures to act.158 RFRA may also encourage courts to   RFRA claims. This Note, however, does not address the substance of the HHS mandate claims and therefore does not attempt to resolve this issue. 148. See Volokh, supra note 56, at 1468. 149. See id. 150. See id. 151. See id. at 1470. 152. See 42 U.S.C. § 2000bb(a)(5) (2006). 153. See Douglas Laycock, The Religious Freedom Restoration Act, 1993 BYU L. REV. 221, 253 (“If the Court strikes the balance in an unacceptable way, Congress can respond with new legislation.”). 154. See GUIDO CALABRESI, A COMMON LAW FOR THE AGE OF STATUTES 5–6 (1982). 155. See Volokh, supra note 56, at 1476. 156. See id. 157. See id. at 1469. Like Volokh, this Note does not refer to common law “in the specific sense of the particular body of contract, tort, and property law” developed over centuries by Anglo-American courts, but rather “in the general sense of ‘law made initially by judges but subject to statutory override.’” Id. at 1469 n.10. 158. See id. at 1481. 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1969 grant exemptions more generously, sound in the knowledge that the legislature possesses an additional level of review.159 D. An Overstep of Authority: The Court Limits RFRA’s Reach Although Congress enacted RFRA with strong bipartisan support, the Supreme Court held that Congress exceeded its power by extending the law’s reach to local and state governments.160 In City of Boerne v. Flores,161 a Catholic church in Texas sought review of a local zoning board decision denying its application for a building permit.162 In response, the city challenged the constitutionality of the law.163 The Court explained that Congress relied on its enforcement power in section five of the Fourteenth Amendment,164 which Congress can use to address constitutional violations in the states.165 This enforcement power, however, has limits.166 Any enforcement mechanism passed pursuant to section five must actually enforce the Constitution, not substantively change its meaning.167 The Court defined this requirement by saying there must be congruence and proportionality between the injury the law seeks to prevent and the means it adopts to effect that end.168 Without congruence and proportionality, a legislative act effects a substantive change beyond enforcement.169 For RFRA, specifically, the Court found a dearth of examples where legislatures passed laws because of religious bigotry.170 Rather, the Court found that RFRA addressed occasional, incidental effects that general laws can have on religious exercise.171   159. See id. at 1487. Critics of RFRA suggested that Congress asked the Court to do precisely what the Court rejected in Smith: to engage in a balancing of religious claims with governmental interests. For examples of such critiques, see id. at 1491 n.70 (quoting various scholars critiquing RFRA). 160. See generally City of Boerne v. Flores, 521 U.S. 507 (1997); see also Christopher L. Eisgruber & Lawrence G. Sager, Congressional Power and Religious Liberty After City of Boerne v. Flores, 1997 SUP. CT. REV. 79, 86–87. 161. 521 U.S. 507. 162. See id. at 511. 163. See id. at 517. The Court’s analysis in Boerne appeared to limit the constitutional question to RFRA’s legitimacy as applied to state and local governments. The Court later applied RFRA to the federal government in Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418 (2006). 164. U.S. CONST. amend. XIV, § 5 (“The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.”). 165. See Boerne, 521 U.S. at 517–18. 166. See id. at 518. 167. See id. at 519 (“Congress does not enforce a constitutional right by changing what the right is.”). 168. See id. at 520; see also Eisgruber & Sager, supra note 160, at 87. 169. See Eisgruber & Sager, supra note 160, at 88. The Court confirmed this analysis by analyzing the history of the Fourteenth Amendment’s adoption, see Boerne, 521 U.S. at 520–26, as well as its early section five jurisprudence. Id. at 524–25 (explaining that in The Civil Rights Cases, 109 U.S. 3 (1883), the Court held that section five allowed for legislation that corrects state constitutional violations, but does not allow general legislation). 170. See id. at 530. 171. Id. at 530–31 (citing examples from the legislative history, including “anecdotal evidence of autopsies performed . . . in violation of” certain religious beliefs). 1970 FORDHAM LAW REVIEW [Vol. 82 RFRA, it held, was not proportional to what it sought to remedy.172 Instead, its “[s]weeping coverage” included local, state, and federal laws without temporal limitation.173 For these reasons, the congruence and proportionality required by section five were not present.174 According to the Court and some scholars, this decision was necessary on federalism grounds because it protected the states from overweening action by the federal government.175 On the other hand, Justice Anthony Kennedy’s opinion elevated the Court’s interpretation of the Constitution above the interpretation of the other branches and gave little to support his assertions that the other branches cannot engage with the Court on the meaning of a constitutional provision.176 The Court did note, however, that in its proper spheres of responsibility, Congress “has not just the right but the duty to make its own informed judgment on the meaning and force of the Constitution.”177 Thus, the Court’s precedent compelled the application of Smith in Boerne, but the Court’s reasoning left the possibility that if RFRA were enacted in accordance with Congress’s powers, then it could apply to the federal government.178 Boerne’s federalism rationale also inspired a wave of state analogues to RFRA that reflected what the Court stripped from the federal RFRA.179 The Court confirmed RFRA’s applicability to federal laws and regulations in Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal180. There, the Court entertained a claim by a Brazilian Christian Spiritist sect, O Centro Espirita Beneficente Uniao do Vegtal (UDV), seeking an exemption from the federal Controlled Substances Act181 (CSA). Part of the sect’s worship was ingesting hoasca, a tea brewed from two plants.182 One of the plants in the tea contained dimethyltryptamine, which the CSA classified as a Schedule I drug.183 The tea was central to UDV’s rituals, and banning it indisputably burdened the church’s religious exercise.184 The Court explained that RFRA requires the government to justify a compelling interest to burden a person seeking an exemption.185 The   172. See id. at 532. 173. Id. 174. Id. at 533 (“The stringent test RFRA demands of state laws reflects a lack of proportionality or congruence between the means adopted and the legitimate end to be achieved.”). 175. See, e.g., Marci A. Hamilton, City of Boerne v. Flores, A Landmark for Structural Analysis, 39 WM. & MARY L. REV. 699, 711–12 (1998). 176. See ABNER S. GREENE, AGAINST OBLIGATION 238 (2012). 177. Boerne, 521 U.S. at 535. 178. Id. at 536. 179. See Volokh, supra note 56, at 1468 n.6 (compiling state analogues to RFRA). 180. 546 U.S. 418, 428 (2006). 181. See id. at 425 (citing 21 U.S.C. §§ 801–971 (2006)). 182. See id. 183. See 21 U.S.C. § 812(c) sched. 1(c)(6). 184. See Gonzales, 546 U.S. at 426. 185. See id. at 430. 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1971 government must state more than “broadly formulated interests,” and the Court “must searchingly examine” the government’s interests, as well as any impediments flowing from granting an exemption.186 This level of strict scrutiny results in a highly fact-intensive analysis for each claim.187 In Gonzales, the Court held that the government’s argument for a compelling interest in uniform application of the law failed.188 The CSA contained a provision allowing for nonuniform enforcement, so the government could not claim uniform enforcement as a compelling interest.189 The Court thus found that the law could support exemptions and held that the application of the CSA to the 140 members of the UDV sect violated RFRA.190 RFRA granted the power of exemption to judges, and the Court used this power to exempt the UDV.191 E. Free Exercise Claims by Profit-Seeking Individuals and Corporations The Court has not yet used its RFRA exemption power to entertain a claim from a secular corporation.192 The Court has heard, however, free exercise claims from individuals involved in the pursuit of profit193 and corporations organized around religious ends.194 In addition, it has articulated a standard for applying First Amendment rights to corporations, which have long been considered “persons” in many aspects of statutory law.195 This section briefly explores each of these aspects.   186. Id. at 431 (quoting Wisconsin v. Yoder, 406 U.S. 205, 213 (1972)). 187. See id. at 430. 188. See id. at 434–37. 189. See id. Similarly, a longstanding exemption on the use of peyote for religious purposes supported the argument that uniform application of the Controlled Substances Act was a weak argument. It showed that Congress expected certain limitations on the Act and that the Act did not require uniform application. Id. at 434–35. 190. See id. at 438–39. 191. See id. The Gonzales case did not challenge the constitutionality of RFRA, so whether the law violates the Establishment Clause or represents an overreach of Congress’s powers applied to the federal government is still a possible source of future litigation. 192. See Hobby Lobby Stores, Inc. v. Sebelius, 133 S. Ct. 641, 642 (2012) (Sotomayor, Circuit Justice) (denying application for an injunction pending appellate review). 193. See, e.g., Braunfeld v. Brown, 366 U.S. 599 (1961) (adjudicating a claim by merchants who believed a law burdened their religious exercise). 194. See, e.g., Gonzales, 546 U.S. at 425 (adjudicating free exercise claim by incorporated church group); Church of the Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520 (1993) (same); see also Scott W. Gaylord, For-Profit Corporations, Free Exercise, and the HHS Mandate, 91 WASH. U. L. REV. (forthcoming) (manuscript at 40), available at http://ssrn.com/abstract=2237630. 195. See, e.g., First Nat’l Bank of Bos. v. Bellotti, 435 U.S. 765 (1978); see also Julie Marie Baworowsky, Note, From Public Square to Market Square: Theoretical Foundations of First and Fourteenth Amendment Protection of Corporate Religious Speech, 83 NOTRE DAME L. REV. 1713, 1723–47 (2008) (explaining three theories of corporations and the availability of corporate speech under each). 1972 FORDHAM LAW REVIEW [Vol. 82 1. Claims from Individuals in the Pursuit of Profit In several cases, the Supreme Court has heard free exercise challenges to laws that allegedly burdened the religion of individuals engaged in business.196 The Court decided Braunfeld v. Brown before it created the Sherbert regime, but it contained seeds of the compelling interest test.197 The plaintiffs were Orthodox Jews who claimed that a law requiring their stores to close on Sundays violated their free exercise of religion; the plaintiffs already closed for the Sabbath on Saturdays, and would therefore lose further economic benefit.198 Although the Court accepted that this would be a result, it held that the state had a compelling interest in Sunday closing laws, and that the interest in a uniform day of rest outweighed the business owners’ free exercise claims.199 In United States v. Lee,200 decided after Sherbert and Yoder, the Court examined the claims of an Old Order Amish farmer and carpenter who did not pay Social Security taxes for several employees on the grounds that the Amish faith forbids receipt of and contributions to Social Security.201 The Court held that the law burdened Lee’s religious exercise, but it also found that the government’s interest in a uniform Social Security system justified this burden.202 The Court distinguished the feasibility of exemptions from Social Security from Yoder, where the exemption was from an education system.203 In short, the Court found that exemptions from a tax system would be difficult to manage if myriad faith groups sought exemptions.204 In these cases, an individual in his capacity as either an employee or an employer sought judicial protection from a law that burdened the exercise of his religion.205 Without that protection, the petitioners would face the choice of following the instructions of their religion and losing a government benefit, or abandoning their religion to gain a benefit.206   196. See United States v. Lee, 455 U.S. 252, 254 (1982); Thomas v. Review Bd., 450 U.S. 707, 710 (1981); Braunfeld, 366 U.S. at 601. 197. See Braunfeld, 366 U.S. at 603–04 (“[L]egislative power over mere opinion is forbidden but it may reach people’s actions when they are found to be in violation of important social duties or subversive of good order, even when the actions are demanded by one’s religion.”). 198. See id. at 601. 199. See id. at 608–09 (explaining that allowing an exemption from the single day of rest for business owners of other religions could create enforcement problems or unfair economic advantage); see also Gonzales, 546 U.S. at 435 (explaining the meaning of Braunfeld for the Court’s analysis of individual exemptions to state’s interests). 200. 455 U.S. 252. 201. See id. at 254–55. 202. See id. at 257–60. 203. Id. at 259–60. 204. See id. 205. See supra notes 196–204 and accompanying text; see also Korte v. Sebelius, 735 F.3d 654, 679–81 (7th Cir. 2013). 206. See Hobbie v. Unemployment Appeals Comm’n, 480 U.S. 136, 144 (1987). 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1973 2. Claims from Religious Nonprofit Corporations In addition to claims from individuals in the pursuit of profit, the Supreme Court has entertained claims from corporations organized for religious purposes, even though such nonprofit corporations do not pray, worship, or undertake any act independent of the individuals comprising them.207 Gonzales was the most recent RFRA claim by a nonprofit organization.208 There, the petitioner was a New Mexico corporation.209 Thirteen years earlier, the Court heard a free exercise claim from a Florida nonprofit corporation in Church of Lukumi Babalu Aye, Inc. v. City of Hialeah.210 The church in that case was part of the Santeria religion211 and sued the city over an ordinance forbidding the sacrifice of animals in the town.212 The Court held that such laws intentionally targeting religious exercise were not neutral, and therefore received strict scrutiny rather than Smith’s rational basis review.213 Ultimately, the law did not survive that level of scrutiny.214 In each of the cases described in Part I.E.1 and I.E.2, the Court did not question whether the religious person or corporation had the ability to assert a claim. Both individuals in the search of profit and corporations organized around religious principles could equally seek exemptions under the Free Exercise Clause, and a religious corporation could state a claim under RFRA. The Court did not always grant such exemptions, but when it did, the availability of an exemption hinged on the balancing test rather than on who stated the claim. 3. Theories of the Corporation and Corporate First Amendment Claims American law regularly considers corporations to be “persons” for purposes of statutory construction.215 Corporations are separate legal entities with rights, obligations, and liabilities that are different from those of their owners and operators.216 The Court has explained that a   207. See Gaylord, supra note 194, at 55. Rather, nonprofits act according to their directors’ instructions. See id. at 65. 208. See supra notes 180–91 and accompanying text. 209. Joint Appendix at 18, Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 435 (2006) (No. 04-1084), 2005 WL 1628869 (reproducing plaintiff’s complaint). 210. 508 U.S. 520 (1993). 211. See id. at 524. 212. See id. at 525–28 (explaining the town’s distaste for the religion’s practices of ritualistic animal slaughter and the process by which it created laws curtailing the practice). 213. See id. at 542–46. 214. Id. at 546. But cf. Bob Jones Univ. v. United States, 461 U.S. 574, 604 (1983) (rejecting a religious freedom claim on the grounds of compelling interest, not standing). 215. See, e.g., 1 U.S.C. § 1 (2012) (defining the word “person” in the U.S. Code as inclusive of corporations, partnerships, trusts, and other entities unless the context of the law dictates otherwise); 18 AM. JUR. 2D Corporations § 72 (2013); ANTONIN SCALIA & BRYAN A. GARNER, READING LAW 273 (2012) (explaining the artificial person canon of construction, which mirrors the Dictionary Act). 216. 1 WILLIAM MEADE FLETCHER ET AL., FLETCHER CYCLOPEDIA OF THE LAW OF CORPORATIONS § 1 (rev. vol. 2006). 1974 FORDHAM LAW REVIEW [Vol. 82 corporation is “an artificial being, invisible, intangible, and existing only in contemplation of law.”217 Black’s Law Dictionary defines “corporation” as an entity “having authority under law to act as a single person distinct from the shareholders who own it and having rights to issue stock and exist indefinitely.”218 A corporation, therefore, is a separate legal entity with distinct rights and obligations and is the product of positive law.219 Corporations do business through a board of directors, not through shareholders.220 Many corporations elect to make business decisions based on values and principles outside of the bottom line, and many corporations have adopted a theory of corporate social responsibility as a meaningful purpose of doing business.221 A corporation might be a “person” for purposes of a statute if such a construction will give effect to the purpose or the spirit of the law.222 The U.S. Code recognizes this in the Dictionary Act223 by providing a rebuttable presumption that the word “person” in a statute includes corporations, and courts have held that a corporation does not literally need to be the actor for such statutes, because corporations do nothing without human actors.224 Language imparting personhood to corporations has existed as long as corporations have,225 although the prevailing theories of corporations have changed.226 Three dominant theories of corporations include the artificial person theory, the contractual theory, and the real entity theory.227 The artificial person theory was the earliest theory of corporations in American law.228 It taught that a corporation was an artificial entity created through legislative grant and controlled by the state for public reasons.229   217. Trs. of Dartmouth Coll. v. Woodward, 17 U.S. (4 Wheat.) 517, 636 (1819). 218. BLACK’S LAW DICTIONARY 391 (9th ed. 2009) (listing and defining numerous types of corporations). 219. See Thomas E. Rutledge, A Corporation Has No Soul—The Business Entity Law Response to Challenges to the PPACA Contraceptive Mandate, 5 WM. & MARY BUS. L. REV. (forthcoming) (manuscript at 20–23), available at http://ssrn.com/abstract=2294582. But see Jonathan T. Tan, Comment, Nonprofit Organizations, For-Profit Corporations, and the HHS Mandate: Why the Mandate Does Not Satisfy RFRA’s Requirements, 47 U. RICH. L. REV. 1301, 1355 (2013) (arguing that the separate legal status of a corporation is true for both nonprofit and for-profit corporations). 220. See Rutledge, supra note 219, at 21; see also Lucian A. Bebchuk & Robert J. Jackson, Jr., Corporate Political Speech: Who Decides?, 124 HARV. L. REV. 83, 87 (2010). 221. See Rienzi, supra note 87, at 83–84 (providing the examples of Whole Foods and Chipotle that have adopted social purposes as part of their business platforms). 222. See FLETCHER ET AL., supra note 216, § 7.05. 223. 1 U.S.C. § 1 (2012). 224. See Jeremy M. Christiansen, Note, “The Word[] ‘Person’ . . . Includes Corporations”: Why the Religious Freedom Restoration Act Protects Both For- and Nonprofit Corporations, 2013 UTAH L. REV 623, 645–46. 225. See Margaret M. Blair, Corporate Personhood and the Corporate Persona, 2013 U. ILL. L. REV. 785, 796. 226. See id. at 798–808 (explaining three theories of corporations). 227. See id. 228. See Katherine Lepard, Note, Standing Their Ground: Corporations’ Fight for Religious Rights in Light of the Enactment of the Patient Protection and Affordable Care Act Contraceptive Coverage Mandate, 45 TEX. TECH L. REV. 1041, 1044 (2013). 229. See Baworowsky, supra note 195, at 1725. 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1975 Indeed, corporate charters frequently went to the politically connected elite.230 Under this theory, the corporation, with purposes dictated by the state, could not assert a claim against the entity that allowed its existence.231 The contractual theory arose in backlash to the artificial person theory, which granted corporate status as a privilege.232 Corporations desired protection from the regulatory power of the government, so states created statutes through which individuals could join together and incorporate businesses to pursue legal business activities.233 This theory asserted that the sole goal of a corporation is profit234 and ostensibly viewed corporate rights as those of the individuals joined together for sake of the business.235 The contractual theory crumbled, however, as publicly traded companies increased the number of shareholders involved in a business venture.236 The real entity theory replaced the dying contractual theory and is a middle ground between the contractual and the artificial entity theories.237 The theory accounts for the natural human inclination to associate and to form purposeful groups, and it holds that individual owners are different from the directors.238 Under this theory, a corporation can develop an identity, pursue certain purposes defined by its board of directors, and serve a mediating function in society between individuals and government.239 The real entity theory provides a framework for conceiving corporations as more than mere profit-generating machines.240 Especially in closely held corporations,241 where individual owners also participate in the   230. See Blair, supra note 225, at 799. 231. See Baworowsky, supra note 195, at 1726. 232. See id. at 1727–28. 233. See id.; see also Blair, supra note 225, at 801–02. 234. See Baworowsky, supra note 195, at 1731; see also Conestoga Wood Specialties Corp. v. Sec’y of U.S. the Dep’t of Health & Human Servs., 724 F.3d 377, 385 (3d Cir.), cert. granted, 134 S. Ct. 678 (2013). 235. See Blair, supra note 225, at 804. 236. See id. 237. See Baworowsky, supra note 195, at 1736. 238. See id. at 1737 (calling the corporation “a new group body naturally forming from the cooperation of its individual members”); see also Blair, supra note 225, at 807 (explaining that scholars and courts developed this theory to account for the shareholder becoming more of an investor than a owner). 239. See Baworowsky, supra note 195, at 1740–41 (citing ALEXIS DE TOQUEVILLE, DEMOCRACY IN AMERICA 180 (Harvey C. Mansfield & Delba Winthrop eds. & trans., Univ. of Chi. Press 2000) (1835)). This position is far from gaining universal acceptance, however, as many view corporations as a source of economic inequality and societal injustice. See, e.g., Kent Greenfield, Daniel J.H. Greenwood & Erik S. Jaffe, Should Corporations Have First Amendment Rights?, 30 SEATTLE U. L. REV. 875, 877–81 (2007); We the People, Not We the Corporations, MOVE TO AMEND, https://movetoamend.org (last visited Feb. 24, 2014). 240. See Blair, supra note 225, at 819–20 (explaining that the existence of a corporate person is necessary for companies like Facebook and Google to achieve their goals of emphasizing “the importance of such factors as ‘culture’ and ‘reputation’ and ‘innovativeness’ in the value creating process” rather than simply acting in accordance with a number of contracts). 241. See 1A FLETCHER ET AL., supra note 216, § 70.10 (rev. vol. 2002) (“Courts generally identify common law close corporations by three characteristics: (1) a small number of 1976 FORDHAM LAW REVIEW [Vol. 82 management of the company, a corporate identity can emerge from the deliberate actions of those directing the corporation.242 In the context of a company run by those sharing a religion, “these individuals can choose to maintain a religious identity.”243 The Supreme Court has relied on each of these theories in its various decisions on corporate rights, so it is unclear which theory it will use to examine corporate exercise of religion under either the Constitution or RFRA.244 The best compass for its potential treatment of corporate religion is its treatment of corporate speech.245 In First National Bank of Boston v. Bellotti,246 the Court heard an argument by a corporation alleging that a Massachusetts statute restricting use of corporate funds to influence elections violated its free speech rights.247 At the outset of its analysis, the Court instructed that the proper framing of the question was not whether the corporation has the right, but rather whether the regulated activity was something “that the First Amendment was meant to protect.”248 Certain constitutional rights are “purely personal,” meaning that historically, only individuals received protection under that right.249 To determine whether the right was purely personal, the Court examined “the nature, history, and purpose of the particular constitutional provision.”250 In its analysis of the Free Speech Clause, the Court explained that First Amendment freedoms comprise “fundamental components of liberty” and that speech has no “separate source” when asserted by a corporation.251 Because of this, the Court held that the First Amendment protected the bank and struck down the state statute as unconstitutional.252 The Court recently upheld Bellotti in Citizens United v. Federal Election Commission.253 The Citizens United Court held that the Free Speech Clause protects a corporation’s ability to speak in the electoral context.254 Specifically, it overturned a statute that limited corporate expenditures on   shareholders; (2) no ready market for corporate stock; and (3) active shareholder participation in the business.”). 242. See Baworowsky, supra note 195, at 1744. 243. Id. 244. See Lepard, supra note 228, at 1046. 245. See U.S. CONST. amend. I (“Congress shall make no law . . . abridging the freedom of speech.”). 246. 435 U.S. 765 (1978). 247. See id. at 767–69. 248. Id. at 776; see also Gaylord, supra note 194, at 30. In Bellotti, the Court explained that the issue was whether “the corporate identity of the speaker deprives this proposed speech of what otherwise would be its clear entitlement to protection.” Bellotti, 435 U.S. at 778. 249. See Bellotti, 435 U.S. at 778 n.14 (citing United States v. White, 322 U.S. 694, 698– 701 (1944), for the example that the right against self-incrimination applied only to individuals). 250. See id. 251. See id. at 780. 252. See id. at 795. 253. 558 U.S. 310 (2010). 254. See id. at 365. 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1977 speech related to elections.255 Justice Anthony Kennedy explained that the First Amendment’s protections extend to corporations and that Bellotti’s holding means that corporate speech does not lose constitutional protection merely because it comes from a corporation.256 In the corporate context, political speech decisions are made by directors through “the same rules as ordinary business decisions.”257 In Citizens United, the corporation was a nonprofit, but the Court explicitly stated that the Constitution forbids suppression of the freedom of speech, regardless of whether the corporation is for profit or not for profit.258 The Citizens United holding reflected two views of corporate personhood: that corporations possess the aggregate rights of their shareholders and that corporations possess autonomous rights separate from their shareholders.259 The Court used the aggregate rights theory to determine that corporations are essentially associations of individuals and that restrictions on corporate speech are not permissible simply because the source of the speech is a corporation.260 The Court also used the entity theory of corporations by explaining that corporate political speech can have value in the marketplace of ideas.261 Thus, under either theory, the First Amendment protects corporate speech. F. A New Challenge: The Affordable Care Act and Its Perceived Threat to Religious Liberty Current litigation alleges that certain provisions of the Affordable Care Act substantially burden the free exercise of religion by those who provide insurance plans to employees and students.262 The Affordable Care Act requires group insurance plans provided by employers to ensure certain levels of health services, including coverage without cost-sharing of preventive care and screenings for women, according to regulations promulgated by the Health Resource and Services Administration (HRSA) and HHS.263 HHS sought the recommendations of the Institute of Medicine (IOM), an arm of the National Academy of Sciences, to define guidelines   255. See id. at 365–66. 256. See id. at 342. 257. See Bebchuk & Jackson, supra note 220, at 87. 258. See Citizens United, 558 U.S. at 365. 259. See Anne Tucker, Flawed Assumptions: A Corporate Law Analysis of Free Speech and Corporate Personhood in Citizens United, 61 CASE W. RES. L. REV. 497, 502–03 (2010). 260. See id. at 519; see also Citizens United, 558 U.S. at 342 (quoting First Nat’l Bank of Bos. v. Bellotti, 435 U.S. 765, 784 (1978)). 261. See Tucker, supra note 259, at 516–17; see also Citizens United, 558 U.S. at 364 (“On certain topics corporations may possess valuable expertise, leaving them the best equipped to point out errors or fallacies in speech of all sorts, including the speech of candidates and elected officials.”). 262. See infra Part II. For an overview of litigation in the federal district courts and the early stages of appellate litigation, see generally Tan, supra note 219. 263. See 42 U.S.C. § 300gg-13(a)(4) (Supp. V 2011); 29 U.S.C. § 1185d. 1978 FORDHAM LAW REVIEW [Vol. 82 for women’s preventive care and screening.264 The IOM recommended that any FDA-approved contraceptive method be part of the coverage,265 and HHS adopted this recommendation in its rulemaking process.266 The FDA has approved twenty contraceptive methods.267 These include barrier methods (such as condoms), hormonal methods (such as oral contraceptives), emergency contraception (such as Plan B or ella), implanted devices (such as intrauterine devices (IUDs)), and permanent methods (such as vasectomies).268 The ACA and the regulatory agencies enforcing it have provided authority for the HRSA to exempt religious employers from complying with this law if they object to providing contraception.269 The regulation provides that a “religious employer” is an organization that: (1) has a purpose of inculcating religious values, (2) primarily employs those who share its religious tenets, (3) primarily serves those who share its religious tenets, and (4) meets the Internal Revenue Code’s definition of a nonprofit organization.270 For these reasons, it does not cover for-profit corporations, including closely held corporations.271 Like religious nonprofit corporations, some for-profit corporations also state religious objections to providing contraception on the grounds that some methods can cause a fertilized egg to fail to implant in the uterus and that this is equivalent to facilitating an elective abortion.272 The methods to which plaintiffs in the Tenth Circuit object, for example, include Plan B, ella, and two IUDs.273 Other methods, which simply prevent fertilization, may not be objectionable, depending on the religious background of the plaintiff.274 There is medical and scientific debate concerning whether these devices actually prevent implantation, but in Hobby Lobby Stores, Inc. v. Sebelius,275 the government conceded that certain contraceptive methods   264. See Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114, 1123 (10th Cir.) (en banc), cert. granted, 134 S. Ct. 678 (2013). 265. See id. 266. See Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventive Services Under the Patient Protection and Affordable Care Act, 77 Fed. Reg. 8725, 8725 (Feb. 15, 2012) (to be codified at 45 C.F.R. pt. 147). 267. See Birth Control: Medicines To Help You, FOOD & DRUG ADMIN., http://www.fda.gov/ForConsumers/ByAudience/ForWomen/FreePublications/ucm313215.ht m (last visited Feb. 24, 2014). 268. Id. 269. See 45 C.F.R. § 147.130(1)(a)(iv)(A) (2013). 270. Id. § 147.130(1)(a)(iv)(B). 271. See id. 272. See, e.g., Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114, 1124–25 (10th Cir.) (en banc), cert. granted, 134 S. Ct. 678 (2013). 273. See id. 274. See Conestoga Wood Specialties Corp. v. Sec’y of the U.S. Dep’t of Health & Hum. Servs., 724 F.3d 377, 381–82 (3d Cir.) (explaining that the Mennonite plaintiffs object to providing Plan B and ella), cert. granted, 134 S. Ct. 678 (2013); Univ. of Notre Dame v. Sebelius, No. 3:12-CV-253(RLM), 2012 WL 6756332, at *1 (N.D. Ind. Dec. 31, 2012) (explaining that the Catholic plaintiffs object to all “abortifacients, contraception (when prescribed for contraceptive purposes), and sterilization”). 275. 723 F.3d 1114. 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1979 can prevent uterine implantation, rendering a full scientific analysis unnecessary.276 Nevertheless, amici to the Tenth Circuit disagreed about the effect that Plan B, ella, and IUDs have on ovulation, conception, and implantation.277 In the brief for the Physicians for Reproductive Health and other groups, amici explained that the scientific and legal definition of pregnancy is implantation in the uterine lining, which can occur up to five to nine days after fertilization of an egg by a sperm.278 Because the emergency contraceptives at issue in Hobby Lobby almost always act before implantation, labeling the methods “abortifacients” was improper.279 Amici also explained that a copper, FDA-approved IUD creates a toxic environment for sperm and that any changes to the endometrial lining would only prevent, not disrupt, the implantation necessary to create a scientific pregnancy.280 In contrast, amici for the plaintiff explained that FDA-approved contraceptive methods might prevent either conception or implantation.281 These amici explained various studies in an effort to persuade the court that certain contraceptive methods might prevent implantation of a fertilized cell.282 For example, they cited studies showing that ella has the potential to impair or prevent a fertilized egg from implanting in the uterine wall.283 They also argued that the scientific definition of pregnancy as a fully implanted embryo does not negate the fact that certain contraceptive methods might prevent the implantation of an embryo.284 The plaintiffs in the HHS mandate litigation have stated that their opposition to the HHS regulation is that it requires them to pay for contraception that they believe can cause the death of a fertilized embryo.285 The plaintiffs in these cases claim that requiring them to pay even part of the fees for insurance plans that cover contraception constitutes a substantial burden on the exercise of their religion.286 The Hobby Lobby plaintiffs, for example, stated that their religion barred causing the death of an embryo, and, by extension, providing certain contraceptives that could cause an embryo to fail to implant.287 The regulation imposes a burden   276. See id. at 1123 n.3. 277. Compare Brief for Physicians for Reproductive Health et al. As Amici Curiae Supporting Appellees, Hobby Lobby, 723 F.3d 1114 (No. 12-6294), 2013 WL 1291178 [hereinafter Brief for Physicians for Reproductive Health et al.], with Brief for Ass’n of American Physicians & Surgeons et al. As Amici Curiae Supporting Appellants, Hobby Lobby, 723 F.3d 1114 (No. 12-6294), 2013 WL 656598 [hereinafter Brief for Ass’n of American Physicians & Surgeons et al.]. 278. See Brief for Physicians for Reproductive Health et al., supra note 277, at *9–10. 279. Id. at *11–16. 280. See id. at *16. 281. See Brief for Ass’n of American Physicians & Surgeons et al., supra note 277, at *6. 282. See id. at *7–14. 283. See id. at *11. 284. See id. *7–14. 285. See Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114, 1122 (10th Cir.) (en banc), cert. granted, 134 S. Ct. 678 (2013). 286. See Brief of Appellants at 20, Hobby Lobby, 723 F.3d 1114 (No. 12-6294), 2013 WL 656599, at *20. 287. See Hobby Lobby, 723 F.3d at 1140. 1980 FORDHAM LAW REVIEW [Vol. 82 because it requires the company to participate in an activity prohibited by a sincere religious belief, or, at the very least, substantially pressures the company to act contrary to sincere religious beliefs.288 Such pressure comes as a result of large, annual fines for a corporation that fails to comply with the regulation.289 The government, in contrast, argues that the regulation’s burden is too attenuated to be a substantial burden because the requirement is to provide many types of insurance and because the decision to use contraceptives is between a woman and her doctor.290 II. DISSENSION IN THE RANKS: THE CIRCUITS DIFFER ON CORPORATE RFRA CLAIMS The HHS mandate cases have led to deeply fractured opinions in the circuits.291 For-profit corporate plaintiffs have sought injunctions against application of the HHS mandate to varying degrees of success.292 Some courts have found that corporations will not succeed on a RFRA claim.293 Other courts have found the possibility of success.294 The major source of conflict is whether corporations are “persons” exercising religion. The answer to this question is crucial, as RFRA contemplates strict scrutiny of laws that substantially burden a person’s religion. The issue in these cases, then, is a matter of statutory interpretation of the term “person” in RFRA.295 This Part examines four circuits’ answers to this question. The Tenth and Seventh Circuits each held that secular corporations may state claims under RFRA.296 In contrast, the Third Circuit held that corporations could not exercise religion, barring them from stating claims under RFRA.297 The D.C. Circuit fell between these two approaches, holding that individual plaintiffs may state the RFRA claims of a closely held corporation.298   288. See Brief of Appellants, supra note 286, at *20–21. 289. See Hobby Lobby, 723 F.3d at 1125 (explaining that Hobby Lobby’s fine for failing to comply would be $475 million annually). 290. See Petition for Writ of Certiorari, Hobby Lobby, 723 F.3d 1114 (No. 13-354), 2013 WL 5290575, at *26. 291. See, e.g., Hobby Lobby, 723 F.3d at 1114 (sitting en banc and resulting in six different opinions). 292. Among other factors, a litigant seeking a preliminary injunction must prove a likelihood of success on the merits of the claim. See, e.g., Conestoga Wood Specialties Corp. v. Sec’y of U.S. the Dep’t of Health & Human Servs., 724 F.3d 377, 382 (3d Cir.), cert. granted, 134 S. Ct. 678 (2013). 293. See generally Conestoga Wood, 724 F.3d at 377; Autocam Corp. v. Sebelius, 730 F.3d 618 (6th Cir. 2013); Eden Foods, Inc. v. Sebelius, 733 F.3d 626 (6th Cir. 2013). 294. See generally Korte v. Sebelius, 735 F.3d 654 (7th Cir. 2013); Gilardi v. U.S. Dep’t of Health & Human Servs., 733 F.3d 1208 (D.C. Cir. 2013); Hobby Lobby, 723 F.3d at 1114. 295. See Korte, 735 F.3d at 682. An additional question is whether the distinction between for-profit and nonprofit corporations is relevant for RFRA. See id. at 674–76. 296. See infra Part II.A. 297. See infra Part II.B. 298. See infra Part II.C. 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1981 A. The Tenth and Seventh Circuits Hold That a For-Profit Corporation May State a Claim Under RFRA The Tenth and the Seventh Circuit each held that for-profit corporate plaintiffs were “persons” exercising religion and therefore protected by RFRA. This section examines each circuit’s opinion. 1. The Tenth Circuit Finds That RFRA Protects Corporations Through a Textual Analysis In Hobby Lobby Stores, Inc. v. Sebelius,299 the Court considered a RFRA claim brought by Hobby Lobby Stores, a chain of craft stores; Mardel, Inc., a chain of book stores; and the family members who own both corporations.300 Together, these corporations employed over 13,000 people.301 Five members of the Green family owned and ran both chains according to their Christian beliefs, as described in Hobby Lobby’s statement of purpose, which recited the family’s commitment to operating their business according to biblical principles.302 Their managerial decisions stemmed from their faith.303 For example, the stores did not open on Sundays, and Hobby Lobby placed evangelistic advertisements in newspapers.304 Moreover, their corporate structure included a management trust that had religious requirements: “The trust exists ‘to honor God with all that has been entrusted’ to the Greens and to ‘use the Green family assets to create, support, and leverage the efforts of Christian ministries.’”305 The plaintiffs objected to the HHS mandate because their faith included the belief that the fertilization of an egg by a sperm is the beginning of human life and that facilitating acts that cause a human embryo to die was immoral.306 In light of this belief, the plaintiffs sought relief from enforcement of the mandate as applied to four307 of the FDA-approved contraceptive methods that they believed prevented uterine implantation.308 If Hobby Lobby and Mardel failed to comply with the regulation, each would be exposed to tax penalties, regulatory activity, and possible lawsuits.309 The regulatory taxes, for example, would amount to $100 per day for each uncovered individual.310 Because the plan covered more than   299. 723 F.3d 1114. 300. See id. 1120. 301. See id. at 1122. 302. See id. 303. See id. 304. See id. 305. See id. 306. See id. at 1122–23. 307. The plaintiffs did not object to contraception generally, as a Catholic organization might, see supra note 18, but rather objected only to four of the twenty FDA-approved methods. See Hobby Lobby, 723 F.3d at 1144. 308. See Hobby Lobby, 723 F.3d at 1125. The government did not dispute the sincerity of this belief. See id. 309. See id. (citing 26 U.S.C. §§ 4980D, 4980H (Supp. V 2011); 29 U.S.C. §§ 1132, 1185d). 310. See id. (citing 26 U.S.C. § 4980D(b)(1)). 1982 FORDHAM LAW REVIEW [Vol. 82 13,000 individuals, this would be a fine of almost $475 million annually.311 Alternatively, the plaintiffs could have eliminated health insurance coverage and would face penalties of $26 million annually.312 a. Statutory Analysis Indicates That RFRA’s “Person” Includes Corporations The Tenth Circuit held that the corporate plaintiffs were “persons” who may state a claim under RFRA, and a plurality found that these plaintiffs were likely to succeed on the merits of their claim.313 The government advanced two arguments that Hobby Lobby and Mardel did not fall under RFRA’s scope. First, it argued that the existence of religious exemptions for nonprofit organizations in civil rights and labor laws indicated that Congress intended RFRA to carry forward a distinction between for-profit and nonprofit organizations.314 Second, the government argued that the for- profit/nonprofit distinction came from the Supreme Court’s jurisprudence and that Congress did not intend for RFRA to expand the Free Exercise Clause’s scope.315 The court rejected both arguments as a matter of statutory interpretation.316 Because RFRA did not specifically define “person,” the court relied on the Dictionary Act’s default definition, which includes corporations unless the statute’s context dictates otherwise.317 Contrary to the government’s position, RFRA’s context did not include statutes that explicitly provided only for religious nonprofit exemptions.318 The court explained that exemptions for religious organizations in such acts as Title VII of the Civil Rights Act of 1964319 and the Americans with Disabilities Act320 (ADA) show that Congress “knows how to craft a corporate religious exemption.”321 The court claimed that to state that Congress intended to carry forward Title VII and the ADA’s distinction without expressly providing so is to strain the text.322 Thus, the default Dictionary Act definition applied, and RFRA protected the corporate plaintiffs.323   311. Id. 312. See id. (citing 26 U.S.C. § 4980H). 313. Id. at 1120–21. The Tenth Circuit remanded to the district court to evaluate the other preliminary injunction factors, which it did, granting the injunction. See Hobby Lobby Stores, Inc. v. Sebelius, No. 12-1000-HE, 2013 WL 3869832, at *2 (W.D. Okla. July 19, 2013). 314. See Hobby Lobby, 723 F.3d at 1128–29. 315. See id. 316. See id. at 1129. 317. See id.; see also 1 U.S.C. § 1 (2012). 318. See Hobby Lobby, 723 F.3d at 1129–30. 319. See 42 U.S.C. §§ 2000e to 2000e-17 (2006). 320. See 42 U.S.C. §§ 12101–12213 (2006 & Supp. II 2008). 321. See Hobby Lobby, 723 F.3d at 1130; cf. Korte v. Sebelius, 735 F.3d 654, 676 (7th Cir. 2013) (“If Congress intended a nonprofit limitation in RFRA, surely that would be some hint of it in the statutory text.”). 322. See Hobby Lobby, 723 F.3d at 1129–30. The Court characterized this reading this way: “In short, the government believes Congress used ‘person’ in RFRA as extreme shorthand for something like ‘natural person or ‘religious organization’ as that term was 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1983 b. Constitutional Principles of Free Exercise Do Not Require Excluding For-Profit Corporations From RFRA’s Protection The court next addressed the argument that Congress’s understanding of the Free Exercise Clause informed its passage of RFRA, and that this understanding precluded protection of for-profit corporations.324 The court rejected this analysis on the grounds that RFRA’s purpose was to restore the pre-Smith balancing test for whether a neutral law of general applicability can withstand a strict scrutiny analysis to justifiably burden religious exercise.325 Congress did not intend to alter who could bring a claim under pre-Smith free exercise jurisprudence, which included the guarantee to protect associations and not just individuals.326 The protection of associational freedom is important for protecting other individual liberties.327 Moreover, the First Amendment protects such associations as churches, which incorporate.328 The court rejected the government’s bright-line approach that precludes a RFRA claim for a corporation that does not have nonprofit status through the Internal Revenue Service.329 This, the court explained, cannot be a position rooted in the First Amendment, because its drafters rejected the term “conscience” in favor of “exercise.”330 The chosen term carried a connotation of action and thus protected “religiously motivated conduct, as well as religious belief.”331 In light of this action-oriented history, the court rejected the argument that incorporation alters First Amendment rights while individuals maintain protection.332 The court also rejected the district court’s argument that a business corporation cannot partake in “religiously- motivated actions separate and apart from the intention and direction of   used in exemptions for religious organizations as set forth in Title VII, the ADA, and the NLRA.’” Id. at 1130. 323. See id. at 1132. 324. See id. at 1133. 325. See id. 326. See id. (“An individual’s freedom to speak, to worship, and to petition the government for the redress of grievances could not be vigorously protected from interference by the State unless a correlative freedom to engage in group effort toward those ends were not also guaranteed.” (quoting Roberts v. U.S. Jaycees, 468 U.S. 609, 622 (1984))). 327. Id. at 1133; see also Citizens United v. FEC, 558 U.S. 310, 342–43 (2010) (explaining that the Court does not accept the argument that corporate First Amendment rights do not differ “simply because such associations are not ‘natural persons’”). 328. Hobby Lobby, 723 F.3d at 1134. (citing Church of the Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520, 525 (1993)). In addition, the Supreme Court has decided free exercise cases for individuals running for-profit businesses. See supra Part I.E.1. 329. See Hobby Lobby, 723 F.3d at 1134. 330. See id. 331. See id. (citing McConnell, supra note 22, at 1488–89). An additional distinction between conscience and religion is the corporate or institutional aspect of religious belief. See id. at 1134–35 (citing McConnell, supra note 22, at 1490). The court also noted that free exercise includes proselytizing. See id. (citing Emp’t Div. v. Smith, 494 U.S. 872, 877 (1990)). 332. See id. at 1134–35 (“[W]e see no reason why one must orient one’s business toward a religious community to preserve Free Exercise protections.”). 1984 FORDHAM LAW REVIEW [Vol. 82 their individual actors.”333 This could not be right, according to the court, because churches and other entities that incorporate clearly exercise religion.334 RFRA thus includes corporations in its definitions, because the for-profit/nonprofit distinction is irrelevant. 2. The Seventh Circuit Agreed That a Secular Corporation Could Invoke RFRA’s Protection Using a similar analysis to the Hobby Lobby court, the Seventh Circuit held that secular corporations could challenge the HHS mandate.335 In Korte v. Sebelius,336 the court heard a consolidated appeal involving two for-profit corporations.337 The first, Korte & Luitjohan Contractors, Inc., was a closely held construction company that employs ninety full-time workers.338 Cyril and Jane Korte were the majority shareholders of K&L Contractors, as well as its only officers and directors.339 As Catholics, they believed that artificial contraception and abortifacient drugs were contrary to their religion and objected to providing any health plan that facilitated the use of such contraceptive methods.340 To emphasize this objection, the couple, acting in their managerial capacity, enacted ethical guidelines describing limits on employee healthcare benefits.341 Failing to comply with the HHS mandate would result in penalties totaling $730,000 annually.342 In the second case, the corporate plaintiffs were Grote Industries, Inc., which acted as the managing member for Grote Industries, LLC, which manufactures vehicle safety systems.343 Six individually named plaintiffs, along with other family members, fully owned Grote Industries, Inc.344 The individual plaintiffs were the officers and directors of the corporation.345 Grote Industries employed 464 employees in the United States and provided a self-insured healthcare plan that did not carry contraception and sterilization procedures before the HHS mandate became law.346 The plaintiffs managed Grote in accordance with their Catholic faith, objected to the mandate in light of that faith, and would face an annual penalty of nearly $17 million for failing to comply.347   333. Id. at 1136 (quoting Hobby Lobby Stores, Inc. v. Sebelius, 870 F. Supp. 2d 1278, 1291 (W.D. Okla. 2012)). 334. See id. (citing Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418 (2006)). 335. See Korte v. Sebelius, 735 F.3d 654, 659 (7th Cir. 2013). 336. 735 F.3d 654. 337. See id. at 659. 338. See id. at 662. 339. See id. 340. Id. at 662–63. 341. See id. at 663. 342. See id. 343. See id. at 663–64. 344. See id. at 663 n.6. 345. See id. at 664. 346. See id. 347. See id. 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1985 Judge Diane S. Sykes began her opinion by explaining the breadth of RFRA, including its applicability to all federal law unless Congress explicitly excludes application of RFRA to a statute.348 RFRA, she explained, should alleviate “the inevitable clashes between religious freedom and the realities of the modern welfare state.”349 Against this backdrop, the court examined the meaning of “person” in RFRA by invoking the Dictionary Act.350 In its analysis, the court sought to determine whether allowing secular corporations to be “persons” for RFRA would be a poor fit with the statute’s purposes, and it held that because some corporations qualify for RFRA protection, the corporations in this litigation could qualify as well.351 As evidence of this claim, the court pointed to Gonzales,352 Church of the Lukumi Babalu Aye, Inc.,353 and the HHS mandate exemption for religious organizations.354 Like the Tenth Circuit, Judge Sykes rejected the government’s argument that RFRA carried forward the for-profit/nonprofit distinction within Title VII and the ADA.355 Instead, the court examined the history of RFRA and free exercise more broadly to see if any pre-Smith cases rejected secular corporations’ ability to exercise religion.356 Recognizing that the question of secular corporate religious exercise was novel,357 the Korte court nonetheless explained that unless something about seeking profit hinders the ability to practice religion, “a faith-based, for-profit corporation can claim free-exercise protection to the extent that an aspect of its conduct is religiously motivated.”358 An examination of Thomas, Sherbert, Braunfeld, and Lee showed that individuals in the pursuit of profit had their claims examined by the Supreme Court—not for standing, but on the merits of the argument.359   348. See id. at 673 (“The Affordable Care Act does not explicitly exclude application of RFRA.”). 349. See id. (citing Thomas C. Berg, What Hath Congress Wrought? An Interpretative Guide to the Religious Freedom Restoration Act, 39 VILL. L. REV. 1, 25–26 (1994)). 350. See id. at 673–74. 351. See id. at 674 (“A corporation is just a special form of organizational association. No one doubts that organizational associations can engage in religious practice. The government accepts that some corporations—religious nonprofits—have religious-exercise rights under both RFRA and the Free-Exercise Clause.”). 352. 546 U.S. 418 (2006) (incorporated religious sect). 353. 508 U.S. 520 (1993) (incorporated church). 354. See 45 C.F.R. § 147.131(a) (2013) (granting an exemption with or without incorporated status). 355. See Korte, 735 F.3d at 675–79 (explaining that Title VII and the ADA’s nonprofit exemptions rely on the church autonomy doctrine that provides complete immunity to religious organizations from compliance with these laws); cf. Hosanna-Tabor Evangelical Lutheran Church & Sch. v. EEOC, 132 S. Ct. 694, 704 (2012). 356. See Korte, 735 F.3d at 679. 357. See id. (citing Hobby Lobby Stores, Inc. v. Sebelius, 133 S. Ct. 641, 643 (2012) (Sotomayor, Circuit Justice) (denying an extraordinary writ on grounds including the novelty of the issue presented)). 358. See id. 359. See id. at 679–80. 1986 FORDHAM LAW REVIEW [Vol. 82 The court further rejected the government’s argument by rebuking its attempt to cast United States v. Lee as dispositive of the claim that for-profit corporations cannot pursue religious exercise.360 The Lee Court stated: Congress and the courts have been sensitive to the needs flowing from the Free Exercise Clause, but every person cannot be shielded from all the burdens incident to exercising every aspect of the right to practice religious beliefs. When followers of a particular sect enter into commercial activity as a matter of choice, the limits they accept on their own conduct as a matter of conscience and faith are not to be superimposed on the statutory schemes which are binding on others in that activity.361 Judge Sykes called the government’s interpretation of this passage “a far- too-narrow view of religious freedom,” because it assumes that the religious believer compartmentalizes his or her life.362 Having explained that neither the Supreme Court’s free exercise jurisprudence nor RFRA’s text precluded for-profit corporate religious exercise, the court turned to the Supreme Court’s “general jurisprudence of corporate constitutional rights” and found that nothing automatically limits such rights to nonprofit corporations.363 The Korte court took note of the Supreme Court’s decisions granting and withholding certain constitutional rights to all corporations364 and explained that Bellotti was the closest thing to a proper decision framework.365 Namely, if the right in question has a historical function of guaranteeing rights to individuals only, the provision in question will not be available to corporations.366 Because the issue at bar, however, was strictly statutory, the court declined to further analyze the free exercise rights of the corporate plaintiffs.367 Based on all of these findings, the Korte court held that K&L Contractors and Grote Industries could state RFRA claims.368 In dicta, the court seemed to limit its holding to closely held corporations, because the individual owners set company policy as its directors, and they are intimately involved in directing the company.369 Both the Seventh and the Tenth Circuits, therefore, held that RFRA covered corporate claimants in light of the statute’s text and purpose.   360. See id. at 680. 361. United States v. Lee, 455 U.S. 252, 261 (1982) (emphasis added). 362. See Korte, 735 F.3d at 681; see also Christiansen, supra note 224, at 30 (explaining that the business judgment rule allows directors to make decisions in the interests of nonshareholders). 363. See Korte, 735 F.3d at 681. 364. See id. at 681–82. 365. See id. at 682 (citing First Nat’l Bank of Bos. v. Bellotti, 435 U.S. 765, 778 (1978)). 366. See id. 367. See id. 368. See id. 369. See id. at 682 n.17 (dictum). Judge Sykes implied that in a larger corporation, ownership will be separate from controllers, and will have more members of the board, presumably making it more difficult to define religious beliefs. See id. 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1987 B. The Third Circuit Holds That a For-Profit Corporation Cannot Exercise Religion In contrast to the Hobby Lobby and Korte courts, the Third Circuit disagreed that for-profit corporations receive RFRA’s protection.370 In Conestoga Wood Specialties Corp. v. Secretary of the U.S. Department of Health & Human Services,371 the individual plaintiffs were members of the Hahn family, which was Mennonite.372 The family owned 100 percent of the shares of a corporation that manufactured wood cabinets and employed 950 workers.373 As Mennonites, the Hahns believed that it was intrinsically evil and a sin to take a human life, including the termination of a fertilized embryo.374 In light of this belief, the Hahns and Conestoga objected to providing Plan B and ella, which the plaintiffs believed could cause a fertilized embryo to fail to implant in a woman’s uterus.375 1. The Third Circuit Rejects For-Profit Corporations’ Ability To Exercise Religion Under the First Amendment The Third Circuit began its analysis with the issue of whether corporations can exercise religion under the First Amendment. The plaintiffs suggested two theories: (1) that a corporation can exercise religion directly under the First Amendment, and (2) that a corporation can exercise religion indirectly by asserting the owners’ rights under a theory established by the Ninth Circuit.376 a. The Direct Exercise of Religion by a Corporation Conestoga premised its direct exercise theory on Citizens United, which held that the First Amendment applied to corporations in the context of a free speech case.377 Corporations may exercise a number of constitutional rights,378 but the guarantee must not be one that is “purely personal.”379 The Third Circuit examined Bellotti’s relationship to Citizens United and explained that the latter’s holding was specific to the Court’s history of protecting corporate free speech.380 Moreover, free speech cases pose a   370. See Conestoga Wood Specialties Corp. v. Sec’y of the U.S. Dep’t of Health & Human Servs., 724 F.3d 377, 385 (3d Cir.), cert. granted, 134 S. Ct. 678 (2013). 371. 724 F.3d 377. 372. See id. at 381. 373. See id. 374. Id. at 381–82; see also First Amended Verified Complaint ¶ 92, Conestoga Wood, 724 F.3d 377 (No. 13-1144), 2013 WL 6181041 (explaining that the Board of Directors of Conestoga adopted “The Hahn Family Statement on the Sanctity of Human Life,” which explains the family’s belief that life begins at conception and their moral opposition to participating in any act involving the termination of human life). 375. See Conestoga Wood, 724 F.3d at 382. 376. See id. at 383. 377. See id. 378. See id. 379. See id. at 384 (quoting First Nat’l Bank of Bos. v. Bellotti, 435 U.S. 765, 778 (1978)). 380. See id. 1988 FORDHAM LAW REVIEW [Vol. 82 separate analytical and interpretive framework than free exercise cases.381 The Conestoga court, therefore, found that Bellotti had no influence on the HHS mandate cases.382 For these reasons, it found that Bellotti’s “nature, history, and purpose” test was not met for corporate free exercise rights.383 The court particularly emphasized a corporation’s inability to hold religious beliefs.384 In addition, it distinguished cases relied on in the petitioners’ and dissent’s arguments that showed recent Supreme Court cases allowing free exercise claims by religious organizations.385 These cases were inapposite for the majority because none involved a for-profit corporation.386 Religious organizations are a means through which individuals can practice their religion, and that such organizations receive protection within the Free Exercise Clause is not determinative for for- profit corporations.387 b. The Third Circuit Rejects the Ninth Circuit’s Pass-Through Method After dispensing with the plaintiffs’ first theory, the Court examined their second theory. The plaintiffs cited two cases from the Ninth Circuit388 that allowed closely held corporations to state the free exercise claims of their owners.389 Under this “pass-through theory,” the Ninth Circuit explained that closely held corporations may convey by extension the beliefs of the family members who own them.390 The corporate plaintiffs in these cases did not have any free exercise rights separate from or greater than their   381. See id. at 386. 382. See id. at 385. 383. See id. (“We do not see how a for-profit ‘artificial being, invisible, intangible, and existing only in contemplation of law,’ that was created to make money could exercise such an inherently ‘human’ right.” (quoting Consol. Edison Co. of N.Y., Inc. v. Pataki, 292 F.3d 338, 346 (2d Cir. 2002))). 384. See id. (“It might also be added that corporations have no consciences, no beliefs, no feelings, no thoughts, no desires.” (quoting Citizens United v. FEC, 588 U.S. 310, 466 (2010) (Stevens, J., concurring in part and dissenting in part))); Sch. Dist. v. Schempp, 374 U.S. 203, 223 (1963); Hobby Lobby Stores, Inc. v. Sebelius, 870 F. Supp. 2d 1278, 1291 (W.D. Okla. 2012) (“General business corporations do not, separate and apart from the actions or belief systems of their individual owners or employees, exercise religion. They do not pray, worship, observe sacraments or take other religiously-motivated actions separate and apart from the intention and direction of their individual actors.”), rev’d, 723 F.3d 1114 (10th Cir.) (en banc), cert. granted, 134 S. Ct. 678 (2013). 385. See Conestoga Wood, 724 F.3d at 385–86. 386. See id. 387. See id. at 386. 388. See id. at 386–87 (citing EEOC v. Townley Eng’g & Mfg. Co., 859 F.2d 610 (9th Cir. 1988), which held that for-profit corporations can assert the free exercise claims of their owners, and Stormans, Inc. v. Selecky, 586 F.3d 1109 (9th Cir. 2009), which affirmed Townley). 389. See id. 390. See Townley, 859 F.2d at 619 (“Townley is merely the instrument through and by which Mr. and Mrs. Townley express their religious beliefs.”); Stormans, 586 F.3d at 1120 (“Stormans, Inc. does not present any free exercise rights of its own different from or greater than its owners’ rights. We hold that, as in Townley, Stormans has standing to assert the free exercise rights of its owners.”). 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1989 owners’ rights.391 The Third Circuit rejected this analysis, claiming it rested on a faulty analysis of the corporate form, which creates a distinct entity.392 In exchange for limited liability, the corporate owner gives up certain prerogatives.393 The pass-through theory, in contrast, ignores this separate legal entity.394 On this basis, the Third Circuit found that the pass-through theory was legally incorrect, and that the mandate’s burden falls squarely on Conestoga and not the Hahns.395 Because Conestoga itself cannot exercise religion, it has no free exercise recourse to seek an exemption from the mandate.396 2. The Third Circuit Rejects Corporate Personhood for Purposes of RFRA The Third Circuit also rejected Conestoga’s ability to state a RFRA claim with a brief, plain-language analysis. Because the statute is for a “person’s exercise of religion,” and because the court held that a corporation cannot exercise religion under the Free Exercise Clause,397 it also held that a corporation is unable to state a claim under RFRA.398 C. The D.C. Circuit Holds That the Owners of a Closely Held Corporation Can Assert a RFRA Claim on Behalf of the Corporation In Gilardi v. United States Department of Health & Human Services,399 the D.C. Circuit held that the individual plaintiffs who owned the corporate plaintiff could state a RFRA claim on behalf of their corporation, although it rejected the Ninth Circuit’s pass-through theory.400 The individual plaintiffs were two brothers who owned two companies equally.401 Freshway Foods and Freshway Logistics together employed 400 people, who could participate in a self-insured health plan.402 As Catholics, the Gilardi brothers opposed the coverage mandated by the HHS regulation, but failure to provide it to their employers would result in fines amounting to over $14 million annually.403 Judge Janice Rogers Brown first analyzed whether the corporate plaintiffs could state a claim under RFRA.404 She took note of the Hobby Lobby court’s opinion but explained that its analysis of the term “person,” relying on the Dictionary Act, was too narrow.405 Rather, she explained,   391. See Conestoga Wood, 724 F.3d at 387–88 (citing Stormans, 586 F.3d at 1120). 392. Id. 393. See id. 394. See id. 395. See id. at 388. 396. See id. 397. See id. 398. See id. 399. 733 F.3d 1208 (D.C. Cir. 2013). 400. See id. at 1214–15. 401. See id. at 1210. 402. See id. 403. See id. 404. See id. at 1211. 405. See id. 1990 FORDHAM LAW REVIEW [Vol. 82 the proper focus is on a “person’s exercise of religion”406 rather than “person” alone.407 The court therefore examined the full free exercise jurisprudence to determine the “nature, history, and purpose” of the Free Exercise Clause and whether it applied to a secular corporation.408 Noting that the clause protected “exercise” rather than merely “conscience,”409 the court found that the clause’s protection extended to conduct undertaken either individually or institutionally.410 Indeed, the clause regularly protected individuals and religious organizations.411 No Supreme Court case had yet held, however, that a secular corporation could exercise religion.412 The Gilardi court thus refused to extend the free exercise right directly to the secular corporations, even if corporations might receive that right in the future.413 Here, Judge Brown noted that Citizens United was the culmination of decades of case law.414 The free exercise cases, on the other hand, militated against extending the free exercise right directly to corporations.415 Like the Third Circuit, the D.C. Circuit rejected the Ninth Circuit’s pass- through theory416 as legally “dubious.”417 Rather, the court held that the Gilardis have standing to sue because they are shareholders of the corporation injured separately from the corporation, and because the corporation did not have the capacity to sue for relief separately.418 Although the government argued that incorporation always involves creating a distinct legal entity for which the owners forego certain rights, the court explained that an important part of this rights bargain is that corporations “can generally exercise some analogue of the forgone right.”419 In the case of free exercise, then, if the corporation cannot exercise that right, the shareholder should not give up the right upon incorporation.420 To hold otherwise would cause an important right to “disappear[] into the ether” depending on how a person ran his or her   406. RFRA defines the exercise of religion by referring to the Religious Land Use and Institutionalized Persons Act, which states that “‘religious exercise’ includes any exercise of religion, whether or not compelled by, or central to, a system of religious belief.” 42 U.S.C. § 2000cc-5(7)(A) (2006). 407. See Gilardi, 733 F.3d at 1211 (citing Rasul v. Myers, 512 F.3d 644, 668 (D.C. Cir. 2008)). 408. See id. at 1212. 409. Id. 410. See id. at 1212–13 (explaining that the word “religion” carries a connotation of a community of believers). 411. See id. at 1212–14 (collecting free exercise cases). 412. See id. at 1213. But see id. (“But that the Court has never seriously considered such a claim by a secular corporation or other organizational entity is not to say it never will.”). 413. Id. at 1214. 414. See id. 415. See id. 416. See id. at 1214–15. 417. See id. at 1215. 418. See id. at 1215–16. 419. See id. at 1218. 420. See id. 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1991 business.421 Judge Brown rejected the government’s argument because she could not believe that Congress intended free exercise rights to disappear when it instituted RFRA’s compelling interest balancing test.422 III. FINDING THE PROPER FRAMEWORK: PUTTING STATUTORY INTERPRETATION BEFORE CONSTITUTIONAL INTERPRETATION This Note proposes two approaches for the issue of whether secular corporations are “persons” protected by RFRA. First, agreeing with the Tenth and Seventh Circuits, it proposes that the absence of case law examining free exercise claims by for-profit corporations is not, as some suggest, dispositive of the cases currently under review in the federal courts.423 Based on the Dictionary Act’s “context” requirement and a proper Bellotti analysis, certain for-profit corporations should be able to state RFRA claims, and the federal courts should continue building a jurisprudence to determine the contours of such claims. Second, this Note proposes that even if the Supreme Court completely forecloses the possibility for any corporation to have rights under RFRA, the D.C. Circuit’s approach to allowing the shareholders to state a claim under RFRA is correct, because it comports with the nation’s broad protections of religious freedom in accordance with formal theories of corporate law.424 A. The Context of RFRA and the Nature, History, and Purpose of the Free Exercise Clause Do Not Preclude Corporate RFRA Claims RFRA is a “super-statute” implementing Congress’s interpretation of the Free Exercise Clause by incorporating a particular jurisprudence of the Supreme Court.425 Interpreters of the statute, then, must be careful not to intertwine the necessary statutory and constitutional analyses. Courts will properly take notice of pre-Smith jurisprudence and adjudicate the HHS mandate cases according to principles of substantial burden and compelling interests that are outside the scope of this Note.426 In terms of who can bring claims under the statute, however, RFRA’s terms must govern, and RFRA grants judicial relief to persons burdened in their religious exercise.427 Unless the government can rebut the Dictionary Act’s presumption that the word “person” includes corporations, the corporate plaintiffs should be able to directly state RFRA claims.428 This section explains why congressional intent, textual interpretation, and legislative history support corporations’ ability to state RFRA claims and concludes that the federal judiciary should begin developing a jurisprudence of corporate RFRA rights.   421. See id. 422. See id. at 1218–19. 423. See supra Part II.A. 424. See supra Part II.C. 425. See supra note 145 and accompanying text. 426. See supra note 128 and accompanying text. 427. See supra note 128 and accompanying text. 428. See supra note 224 and accompanying text. 1992 FORDHAM LAW REVIEW [Vol. 82 1. Context Matters: Congress’s Intent To Restore the Pre-Smith Regime Determining who are the “persons” exercising religion under RFRA requires a proper statutory analysis. This Note suggests that the analytic frameworks of the Seventh and Tenth Circuits and the Third Circuit present opposite forms of analysis, and that the former frames the issue correctly. The Hobby Lobby and Korte courts first approached the HHS mandate issue by determining what RFRA protected and then by analyzing its text and purpose.429 In contrast, the Conestoga court proceeded directly to the Free Exercise Clause, determined that the clause failed the Bellotti test for protecting corporations, and determined that corporations could receive neither constitutional nor statutory protection.430 The framework matters because RFRA appears to place a wider fence around religious liberty than the Smith Court did in its explanation of the Free Exercise Clause.431 In theory, this will help religious actors avoid clashes between their beliefs and the regulatory state.432 The context of a RFRA analysis should include an understanding of what the statute aimed to restore.433 From Sherbert to Smith, the courts engaged in an enterprise that looked similar to a common law adjudicative process434 that entertained individual claims, resulting in a jurisprudence that later courts could apply.435 Unlike a true common law system, however, the Sherbert line of cases carried the imprimatur of constitutional prescription.436 The Smith Court rejected the Sherbert compelling interest test in part because it believed that judges were not suited to make the type of case-by-case balancing determinations required by Sherbert.437 Using its own considered judgment of the Constitution, Congress enacted RFRA against the background of Smith precisely to instruct courts that they should make such determinations in the first instance, because Congress believed that Smith would not otherwise provide satisfactory protection of Americans’ religious liberty.438 To rectify the wrong it perceived, Congress’s legislation instructed courts to use a balancing test that measured the government’s compelling interest against the alleged burden on believers’ exercise of their religion.439 This concept of legislative accommodation has existed since colonial days440 and reinforces the   429. See supra Part II.A. 430. See supra Part II.B.1. 431. See supra notes 127–28 and accompanying text. But see discussion supra note 147 (explaining that whether Congress intended to expand or restore pre-Smith doctrine is a subject of debate that could affect the resolution of the merits of the HHS mandate cases). 432. See supra note 349. 433. See supra note 147. 434. See supra note 157 and accompanying text. 435. See supra Part I.B.1. 436. See supra note 88. 437. See supra note 113 and accompanying text. 438. See supra Part I.C. 439. See supra Part I.C. 440. See supra notes 23–25 and accompanying text. 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1993 American dedication to religious liberty beyond mere toleration.441 In addition, it mirrors the understanding—again dating from colonial times— that compelling government interests justify burdening religious exercise.442 RFRA thus restores not only the strict scrutiny regime articulated in Sherbert and Yoder, but also restores the common law model in which courts can and should examine particular claims in light of previous claims.443 This determination involves asking whether the new claim is similar enough to previous claims, and, if so, to extend the law’s protection.444 If it is not similar enough, a court can distinguish and dismiss the claim. Courts making such determinations should take account of cases in which courts granted exemptions,445 in addition to cases where courts found that a law was not a substantial burden or where the government satisfied the compelling interest test.446 2. “Person” v. “Person’s Exercise of Religion”: The Result Is the Same By understanding this background, it becomes clear that the Seventh and Tenth Circuits’ analysis of persons covered by RFRA is stronger than the Third Circuit’s approach. The analysis at this phase of the HHS mandate litigation requires statutory interpretation of RFRA rather than a discussion of the Free Exercise Clause’s contours. The key issue in each case is whether RFRA’s “person” exercising religion includes secular, for-profit corporations. Because the statute does not define this operative term, courts must analyze RFRA’s context to determine if the default definition447 that includes corporations, partnerships, trusts, and other associations is appropriate, in accordance with the Dictionary Act. Regardless of how broadly courts construe RFRA’s “context,” corporations arguably fall within RFRA’s reach. a. Most Narrow Interpretation: Purely Textual Analysis and the Dictionary Act At the most narrow level of interpretation, a court will look purely within the statute’s text.448 “Person” standing alone would clearly receive the Dictionary Act’s default definition, because nothing in the text explicitly disclaims application to corporations.449 The Court’s artificial person canon bolsters this position.450 As used in RFRA, however, the word person includes the modification “person’s exercise of religion,” so the   441. See supra note 29 and accompanying text. 442. See supra notes 34–35 and accompanying text. 443. See supra notes 148–51 and accompanying text. 444. See supra notes 150–51, 154 and accompanying text. 445. See supra Part I.B.1. 446. See supra notes 94–100 and accompanying text. 447. See supra note 215 and accompanying text. 448. See supra Part II.A.1.a. 449. See supra note 317 and accompanying text. 450. See supra note 215. 1994 FORDHAM LAW REVIEW [Vol. 82 Dictionary’s Act context requirement might entail a broader approach.451 The federal courts’ definition of exercise of religion is any conduct that is motivated by a religious belief,452 and the Free Exercise Clause undoubtedly protects both individual and institutional religious exercise.453 The corporations involved in this litigation pass this test through their actions, which include proselytization, charitable giving, closing on holy days, and providing health insurance plans that may withhold drugs and devices contrary to certain religious beliefs.454 These are religiously motivated actions that either for-profit or nonprofit corporations can take. In addition, protecting corporations generally fits within the purposes of RFRA: among other things, Congress intended to protect those who engaged in activities that a secular government would not deem “religious” but which might be important to the claimant acting in accordance with a belief.455 The obvious objection here is that the corporation itself does not have beliefs.456 This objection, however, fails to appreciate that a board of directors can direct—and many in this litigation have directed—the corporation’s bylaws, ethical statements, or statements of purpose to include religious tenets in accordance with which the corporation operates. This is similar to the free speech context, where a corporation’s “speech” comes from the direction of its officers and directors in their decisionmaking capacity.457 No special rules or laws govern corporate speech; it is the corporation itself that “speaks” at the direction of its board.458 Similarly, here, when corporate directors institute bylaws, statements, or guidelines, they define corporate beliefs upon which a corporation can act. This is true of secular corporations, such as Whole Foods, Chipotle, and Facebook, seeking to institute a specific moral culture, and it is true of faith-based corporations, such as Hobby Lobby, seeking to institute a specific religious culture.459 An imperfect analogy is that the directors and officers are the “conscience” of the corporation because they direct conduct in accordance with religious belief.460 b. Most Broad Interpretation: The Entire Free Exercise Jurisprudence and Bellotti Even at the broadest possible level of context—the Supreme Court’s entire free exercise jurisprudence—the argument that RFRA can include corporations succeeds. Because application of RFRA to for-profit   451. See supra notes 405–07 and accompanying text. 452. See supra notes 330–32 and accompanying text. 453. See supra note 410 and accompanying text. 454. See supra Part II. 455. See supra note 123. 456. See supra Part II.B. 457. See supra notes 220–21 and accompanying text. 458. See supra note 257 and accompanying text. 459. See supra notes 221, 240–43, 302 and accompanying text. 460. See supra notes 221, 242 and accompanying text. 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1995 corporations is a novel question, the best indication of how the Court would analyze this approach is the Bellotti test.461 Here, again, the Tenth and Seventh Circuits more fully captured the spirit of religious liberty than the Third Circuit. Bellotti instructs that application of a certain constitutional provision depends on whether the provision is “purely personal,” as measured by the nature, history, and purpose of the clause.462 The Third Circuit examined the history of the Free Exercise Clause and correctly found that the Supreme Court has never found that a secular corporation can exercise religion.463 This analysis, however, is incomplete because it fails to consider the nature and purpose prongs of Bellotti and relies almost exclusively on the history prong.464 This leads to a weak appreciation of instances in which individuals pursuing profit successfully petitioned courts for relief from laws that burdened their religious practice.465 In addition, the Third Circuit’s analysis of the nature and purpose of religious liberty is lacking, because it fails to appreciate that the nature of free exercise is to protect conduct more broadly than conscience.466 Moreover, additional purposes of religious liberty are to ensure that government does not encroach on religion467 and to maintain the vibrant pluralism that has been part of the American fabric since the nation’s founding.468 Instead, the Conestoga court simply held that no prior cases of constitutional corporate religious exercise469 meant no future cases of statutory corporate religious exercise.470 The Conestoga court’s rejection of Bellotti471 was premature because Bellotti contained language about corporate First Amendment rights generally, and not just about the Free Speech Clause.472 RFRA, in turn, explicitly instructs courts to engage in an assessment of free exercise claims according to pre-Smith jurisprudence, which includes the potential for a Bellotti analysis. The Third Circuit, therefore, missed a crucial part of the analysis by engaging in a purely constitutional and historical discussion and not engaging with RFRA’s text. The Hobby Lobby, Korte, and Gilardi courts provided a more robust analysis of the nature, history, and purpose of what the right to free exercise protects.473 Indeed, they addressed the issue in the manner that the Bellotti court instructed: by analyzing what the right protects, rather than whether a corporation can claim that right.474 The Conestoga court did exactly the opposite. A Bellotti analysis should take account of what Congress would   461. See supra notes 221, 242 and accompanying text. 462. See supra note 249 and accompanying text. 463. See supra Part II.B.1.a. 464. See supra Part II.B. 465. See supra Part I.E.2. 466. See supra note 42 and accompanying text. 467. See supra note 45 and accompanying text. 468. See supra Part I.A. 469. See supra Part II.B.1. 470. See supra Part II.B.2. 471. See supra note 382 and accompanying text. 472. See supra note 248 and accompanying text. 473. See supra Part II.A. 474. See supra note 248 and accompanying text. 1996 FORDHAM LAW REVIEW [Vol. 82 know in legislating RFRA: America’s commitment to religious liberty from colonial days,475 the fact that free exercise protects conduct over conscience,476 the long-standing definition of “persons” as including corporations unless otherwise specified,477 and past statutes that show Congress knows how to create corporate or religious exemptions.478 The Tenth and Seventh Circuits incorporate these principles and show how RFRA can and should cover at least some corporations. The government’s position includes distinguishing between for-profit and nonprofit corporations and calling that distinction determinative.479 The practice of allowing nonprofit corporations to state claims for violations of their free exercise of religion during the Sherbert regime, however, shows that the mere act of incorporation does not destroy religious liberty.480 Moreover, a profit motive cannot be determinative, as the Supreme Court has allowed individual business owners to state free exercise claims.481 In addition, as a normative matter, First Amendment issues can trump formal issues concerning the corporate form.482 Each of these points form a part of the pre-Smith jurisprudence that Congress restored with RFRA, and nothing in that jurisprudence expressly excludes for-profit corporations. Rather, Congress wanted courts to engage in a balancing act of RFRA’s contours, and it firmly offered its support to religious liberty by enacting a strict scrutiny test. This is the important context for Bellotti purposes and should inform any analysis of RFRA. 3. A Brief Note on Legislative History Some have noted that RFRA’s legislative history, such as its committee reports, does not mention its application to corporations.483 Few, however, have noted that prior versions of RFRA introduced in Congress did, in fact, define the persons the statute meant to protect.484 Prior legislative history is frequently an unreliable source of legislative intent,485 especially in the absence of materials explaining changes and amendments, but RFRA’s history may present a plausible lesson to a judge willing to engage in this form of analysis. At a minimum, the prior versions of the statute show that   475. See supra Part I.A. 476. See supra Part I.B. 477. See supra note 215 and accompanying text. 478. See supra notes 319–21 and accompanying text. 479. See supra notes 314–15 and accompanying text. 480. See supra Part I.E.2. 481. See supra Part I.E.1. 482. See supra notes 246–61 and accompanying text. 483. See Steven D. Smith & Caroline Mala Corbin, Debate, The Contraception Mandate and Religious Freedom, 161 U. PA. L. REV. ONLINE 261, 270 (2013), available at http://www.pennlawreview.com/online/161-U-Pa-L-Rev-Online-261.pdf. 484. See supra note 142. For others recognizing the definition of “persons” in proposed RFRAs, see Lloyd Hitoshi Mayer, Politics at the Pulpit: Tax Benefits, Substantial Burdens, and Institutional Free Exercise, 89 B.U. L. REV. 1137, 1211 (2009), and Caroline Mala Corbin, Corporate Religious Liberty (August 2013) (manuscript at 19–20), available at http://ssrn.com/abstract=2327919. 485. See supra note 142. 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1997 Congress at times contemplated defining “person.” In the initial draft, RFRA protected individuals and religious organizations, corporations, and associations.486 The next version omitted the religious modifier and, without any modification, protected individuals, corporations, organizations, associations, and other entities.487 This analysis yields the argument that successive versions of the proposed statute protected respectively larger categories of potential claimants. The initial version protected individuals and religious groups; the next version dropped the religious modifier, seemingly offering the proposed statute’s protection to a broader constituency. Indeed, the potential claimants in the second version would largely mirror those protected if the word “person” were not defined and the default Dictionary Act definition applied. Congress plausibly dropped the definition to avoid excess language where the Dictionary Act would apply. 4. The Corporate Form and Its Relevance to the HHS Mandate Notably, the Court’s corporate First Amendment jurisprudence has not settled on a theory of corporate personhood. Indeed, in 2010, the Citizens United Court appeared to rely on two different theories to reach its holding.488 RFRA could accommodate either theory. If the Court relies on the contractual theory that views a corporation as an association of shareholders, it could hold that a closely held corporation can exercise religion in much the same way it has allowed churches or religious groups to state RFRA and free exercise claims.489 The Court has not previously held that the mere act of incorporation restricts such a claim. If the Court uses the real entity theory of corporations, then corporate religious exercise, such as proselytizing through advertisements or refusing to fund contraception through insurance plans, is religious conduct performed directly by the corporation.490 The individuals who direct the corporation would elect to maintain such a religious entity.491 5. Why the Common Law Model Is Crucial Having explored whether RFRA’s context precludes corporations from stating RFRA claims, this Note returns again to the common law model Congress directed the courts to create. Two points will reinforce that this analysis of corporate RFRA rights has important limits.   486. See supra note 142. 487. See supra note 142. 488. See supra notes 259–61 and accompanying text. 489. See supra notes 259–61 and accompanying text. 490. See supra notes 259–61 and accompanying text. 491. See supra note 243 and accompanying text. 1998 FORDHAM LAW REVIEW [Vol. 82 a. Congress Has the Final Say First, if courts allow secular corporations to state RFRA claims, then Congress can react. It did, after all, expressly legislate a balancing test to replace the Supreme Court’s abandoned, constitutionally compelled Sherbert jurisprudence. Moreover, it seemingly did so in response to Smith’s invitation to be solicitous of religious liberty492 and in accordance with Boerne’s allowance for congressional action based on its own interpretation of the Constitution.493 Congress, however, retained final say over courts’ decisionmaking, at least for federal purposes, as it always does when courts interpret its laws.494 As enacted, RFRA appears to grant protection to corporations. If the Supreme Court holds this to be true and Congress disagrees, then Congress can amend the law accordingly. Conversely, if the Court denies standing under RFRA, then Congress can determine otherwise and adjust the law as needed. The important point is that the Court should examine this claim as a statutory matter and not a constitutional one. b. Courts Should Develop a Jurisprudence To Determine the Contours of Corporate RFRA Claims Second, RFRA allows the Court to develop a statutory jurisprudence. This is in contrast to the Sherbert regime, which was based in the Constitution. As Justice Sotomayor explained in her in-chambers opinion, the HHS mandate litigation presents a novel claim for religious liberty.495 The Court should not attempt to answer the RFRA question for all corporate forms496 in one fell swoop. Corporate free speech provides an analogue to this point. As the D.C. Circuit noted, Citizens United only emerged after decades of excruciating analysis of the corporate speech right.497 The Court did not allow corporations to claim the protections of the Free Speech Clause overnight. Similarly, courts addressing the HHS mandate cases should not define these cases as determining whether all—or even most—corporations have RFRA rights. The corporate plaintiffs in the cases percolating in the federal courts are organized as closely held corporations.498 The owners of such corporations also frequently tend to be the directors and managers, and they might make business decisions that subvert their desire for profit to follow the commands of their religion.499 For this reason, a closely held corporation might state a claim under RFRA if its directors and owners instruct it to follow religious conduct, and a law burdens that conduct. As Judge Sykes   492. See supra note 116 and accompanying text. 493. See supra note 177 and accompanying text. 494. See supra note 154 and accompanying text. 495. See supra note 192 and accompanying text. 496. See supra note 218. 497. See supra note 414 and accompanying text. 498. See supra Part II. 499. See supra notes 241–43 and accompanying text. 2014] CLOSE CORPORATIONS AND CONTRACEPTIVES 1999 indicated, the individual owners do not compartmentalize their lives into business and religion, so RFRA’s purposes could plausibly accommodate an expansion of existing law to cover certain business.500 In fact, the Court might find that allowing closely held corporations to state RFRA claims will encourage individual flourishing, support religious pluralism, and provide an important mediating layer between persons and government—all of which are purposes of religious liberty.501 For the same reasons, a multinational, publicly held corporation will likely struggle to have the same dedication to a religious belief and could very easily fall outside of RFRA’s protection.502 Its owners and directors likely will not present a unified religious face, and the profit-generating capacity of the business will act by necessity to compartmentalize the individual shareholders and directors’ religious and business lives. Simply put, a more diverse ownership will likely not tolerate a religious accommodation in its pursuit of profit. Moreover, such corporations are unlikely to be seen as promoting human flourishing or religious pluralism in the way that small, community-oriented businesses might be.503 Only after a developed jurisprudence emerges, however, will the full contours of this issue be visible. To cut such a nascent jurisprudence off now, however, would be an injustice to religious liberty and those religious believers who see their small businesses as an extension of their religious life. Corporations should have the ability to state RFRA claims, and the Court should allow the federal judiciary to engage in an adjudicative process that seeks to determine the contours between religious liberty and corporate form. B. If the Court Precludes All Corporations From RFRA, Then the D.C. Circuit Provides an Alternative Approach If the Supreme Court rejects the above analysis, it should affirm the D.C. Circuit’s shareholder-standing exception.504 Although the details of this standing rule are beyond the scope of this Note, the Gilardi court provided a persuasive reason for why a close corporation should be able to state the claims of its shareholders. Incorporation should not equal the disappearance of a constitutional or statutory right without a corporate analogue.505 If a sole proprietor or a nonprofit corporation may claim protection, then it is a perverse incentive to religious believers to withhold protection upon incorporation. This shareholder exception would allow owners to state claims that their corporations are otherwise precluded from litigating. Doing this would preserve the American tradition of protecting   500. See supra note 362 and accompanying text. 501. See supra note 239 and accompanying text. 502. See Willis, supra note 11, at 71–72. 503. Cf. supra note 239 (listing scholars and an activist group that reject the notion of rights for corporations). 504. See supra Part II.C. 505. See supra notes 421–22 and accompanying text. 2000 FORDHAM LAW REVIEW [Vol. 82 religious liberty while also maintaining a formal respect for the corporate form. CONCLUSION Some other aspect of the RFRA analysis might conceivably doom Hobby Lobby and other for-profit corporations in their quest for an exemption from the HHS mandate. Courts might find that providing the contraceptives to which they object may not be a substantial burden or that the government has a compelling interest to override the plaintiffs’ objections. This will undoubtedly be the source of much future litigation. The question of these corporations’ ability to exercise religion and their standing under RFRA, however, should not be the fatal aspect. The support given to religious liberty by Congress, the Supreme Court, the Founders, and, ultimately, the American people is simply too great for such a result to be satisfactory.