2. The expansion of the "fictive personhood" of privately-held corporations to include privileges to freely exercise religion under the First Amendment is no more problematic than the extension of free speech privileges involved in the Citizens United (558 U.S. 310 (2010)) decision. Both expansions in the legal standing of corporations need to be appraised in relation to the larger problems posed by balancing First Amendment privileges against diverse alternative public policy agendas (e.g. universal access to minimal health care coverage, maintenance of fair, transparent electoral institutions, etc.).
Numerous analysts of the Hobby Lobby decision have sought to emphasize the problematic character of an expansion of the privileges attendant to corporate "fictive" personhood. In point of fact, this question constitutes critical sections of both Justice Alito's majority opinion and Justice Ginsberg's dissent. Several distinct question need to be sorted out when addressing the issues involved in the redefinition of the rights and privileges of privately-held corporations as artificial persons. First, is it relevant that Hobby Lobby Stores, Conestoga Wood Specialty Products, and other corporations are for-profit enterprises when assessing what rights and privileges inhere to their status as "persons?" Second, do fundamental differences exist between for-profit, privately-held corporations and non-corporate, sole proprietary or partnership firms with respect to the assessment of rights and privileges, particularly with regard to the free exercise of religion under the First Amendment, augmented by RFRA? Where do publicly-held corporations fit within this broader landscape in the aftermath of the Hobby Lobby decision? Finally, what role might the authorizing governmental entities, chartering limited-liability corporations exercise in reigning in the process of rights extension to corporate entities? That is to say, if a corporation is, at its heart, a compact/contract existing between a state and a set of private investors, establishing, as a consequence, the foundation of an artificial person, then might states enjoy some capacity to alter the process of chartering corporate entities to reorganize or limit the extension of free exercise privileges in existing or newly formed corporate entities?
In arguing this case, the Obama administration/Department of Health and Human Services Secretaries Sebelius and Burwell made critical distinctions between the corporate firms engaged in this case relative to non-profit corporations and, specifically, non-profits motivated by religious beliefs, even to the extent that the work of such organizations does not involve traditional ecclesiastical or liturgical functions (e.g. health care systems operated by religious denominations). Such organizations had already been supplied with a waiver on the provision of contraceptive coverage under the ACA, through which the cost of providing contraceptive services/products would be charged to health insurers (as a lower cost alternative for insurers to paying for prenatal care or for an abortion procedure to deal with an unplanned pregnancy). Hobby Lobby and Conestoga, by contrast, are for-profit corporations, not charged with a religiously oriented mission per se (unless profit maximization can be deemed a religious pursuit). In this respect, there is a clear distinction involved here, although I am not sure how much weight should be assigned to the distinction. Ultimately, its relevance will come if and when private health insurers balk at the idea of paying for contraceptives for employees of a for-profit corporation when the corporation refuses to pay for such coverage on religious grounds. The other alternative resolution to such a problem might be for the federal government to pay for such coverage directly, but this raises fiscal issues that would have to be resolved in the halls of Congress where, at this time, complete dysfunction reigns!
Approaching the legal/constitutional contours on the question of for-profit corporate status, Justice Alito relies on the free exercise claim entertained by the Warren Court in Braunfeld v. Brown (366 U.S. 599 (1961)) for the Orthodox Jewish owners of non-corporate, for-profit businesses challenging Sunday closure laws in Pennsylvania. He, further, alludes to Gallagher v. Crown Kosher Super Market of Massachusetts (366 U.S. 617 (1961)), involving an incorporated, for-profit food store in Springfield, Massachusetts, challenging Massachusetts' Sunday closure laws. In the latter case, the Warren Court relied on the rationality-based grounds of its Braunfeld decision to dismiss the challenge to state Sunday closure laws. The plurality in the Gallagher decision, on the other hand, never approaches the question of standing for an incorporated for-profit business in making free exercise claims. For Justice Alito, this singular point is key - there is, emphatically, no precedent for dismissing the free exercise claims of a for-profit corporation because such entities lack standing to make such claims. In these terms, the well-reasoned dissent by Justice Ginsberg on Congressionally authorized religious accomodations in laws of general applicability notwithstanding, I cannot help but agree with the majority opinion. It does not follow that a manifest difference in the particular manner in which a religious-based exemption to contraceptive coverage may be resolved (to restore such coverage) should necessarily enforce a difference in the capacity of different business forms to invoke a claim on the free exercise of religion. The former condition simply means that it is going to be more difficult for the Obama administration and its Department of Health and Human Services to enforce a mandate for universal access to the most effective forms of birth control if it cannot persuasively make the case to insurers that it is in their best interests to pay for such coverage themselves.
The second question above, concerning differences between incorporated for-profit firms and unincorporated for-profit sole proprietorships and partnerships, is likewise dispelled by the Court majority as irrelevant for purposes of invoking a free exercise claim under RFRA and/or the First Amendment, per se. Here, again, Justice Alito relies on the precedent in Braunfeld, making the case that there is a precedent for recognizing free exercise claims from for-profit businesses. Moreover, the fact that the businesses concerned in Braunfeld lost their case before the Warren Court is irrelevant - the Court recognized that these business owners had the right to make a free exercise claim. The real question is whether the Court would similarly entertain a free exercise claim for a firm structured under state laws establishing limited civil liability to its officers, and, in this respect, Gallagher may afford a weak example, in which the Court did not explicitly determine that corporate enterprises lacked standing to make free exercise claims. Again, I cannot help but agree with Justice Alito's majority decision here.
A potential exists within the legal frameworks of incorporation at the state level to establish clear differences in the legal definition of artificial personhood constituted by the act of incorporating a business. In this sense, I will argue below that a potential may exist for withdrawing certain privileges from corporate business forms if state legislatures choose to redefine the corporation, as a compact/contract with the state. On the other hand, as traditionally understood through the lingering influence of English Common Law (e.g. Blackstone's Commentaries) and the legacy of existing state statutes on incorporation, the legal distinction between a firm that has incorporated and one that has not is strictly limited to the privileges of limited civil liability with respect to the personal property of corporate officers/owners/shareholders and liability for corporate taxation purposes. Neither of these areas strictly implicates the capacity of corporate owners/officers/shareholders to invoke a claim relative to free exercise of religion or, for that matter, relative to the exercise of free speech (i.e. capacity to contribute funds to advocate a political candidate or cause). A legal document of incorporation does not irrevocably transform a small business, run by polite, pious, and frugal hometown folks, into an evil corporate empire. There is a peculiar lapse of reasoning among critics of the Hobby Lobby decision who have chosen to make the expansion of privileges inherent to corporate personhood their battleground. They do not comprehend the overall lack of economic significance inherent to the corporate form as a legal specification, notwithstanding the various advantages for expanded capital accumulation inherent to the corporate form.
Before I move on to the argument that I believe critics of the majority opinion in the Hobby Lobby decision might mean to make (but have been unable to for diverse reasons), I want to speculate on two further issues regarding freedom of religion claims by corporate entities. First, is it theoretically possible that publicly-held corporations could make claims related to free exercise of religion? Relative to the Hobby Lobby decision, answering this question would constitute entirely new ground for the federal jurists. My answer, notwithstanding the complexities involved here, is "yes." Such a conclusion might reflect the distant fears of the Hobby Lobby decision's critics.
At stake here is the capacity of an organizational form to develop procedures in order to arrive at a democratic consensus on the moral and ethical precepts of the organization within its leadership. In this respect, the Court could not have ruled in favor of religious claims by the Hahns and the Greens in the Hobby Lobby case if it could not simultaneously conclude that the capacity to invoke free exercise claims rested inherently in the person of the corporation (i.e. in the hands of an artificial person, rather than in the real hands of the owners of the corporation, who could, under any circumstances, invoke free exercise claims as real persons). That is to say, the fact that the Hahns and the Greens opposed access to certain forms of birth control bore no relevance on the decision - it only mattered insofar as the Hahns and Greens could articulate such a position and contribute to the decisions on contraceptive coverage by the organization in accordance with the moral and ethical position of the organization, as an artificial person. As such, it does not really matter here that Hobby Lobby and Conestoga are closely held, private corporations, however much Justice Alito emphasizes this point in articulating the majority opinion. If artificial persons can invoke claims on the free exercise of religion here, then they can always invoke such claims, whether they are owned by a small handful of family members or by a small multitude of private investors, pension funds and other institutional investors, and a transient mass of day traders. The real difference is that the Greens as executives of Hobby Lobby do not need to call a meeting of the Board of Directors, solicit shareholder sentiment through a proxy vote, or weather the effects of shareholder discontent on stock prices (or a shareholder revolt against the Board) if their decision to act on their sincere and substantiated religious-based moral and ethical precepts does not conform to the general tenor of public opinion.
My final issue of concern in regard to the corporate form, as a state-sanctioned artificial person, involves the capacity of states, as licensing authorities for business entities embodying limited civil liability, to arrest the current judicial expansion of rights inhering to corporate personhood. Specifically, it would seem conceivable that state legislatures, concerned with the capacity of corporations to invoke free exercise claims or to exercise free speech by means of rampant partisan spending on elections, could amend their incorporation laws in order to specifically truncate the rights that corporations may claim under the U.S. Constitution. Such enactments would certainly raise a range of Constitutional issues, beginning with enforcement of the Equal Protection Clause of the Fourteenth Amendment against such actions by a state. Under current settled Constitutional jurisprudential standards, corporations enjoy equal protection under the laws, under the particular terms in which they are chartered by states. There may be a substantial amount of leeway here for state legislatures to craft legal standards for incorporation in order to define the particular rights and responsibilities of corporations, ensuring that such business entities can hold and alienate property, sue and be sued, and enter into contracts but denying to such entities the right to make political contributions or to object on religious grounds to particular public policies.
One point that seems emphatically clear on the possibilities for legislative truncation of the rights inhering corporate personhood is that such amendments at the state level cannot be retroactive - corporations that have already been chartered have entered into a legal compact/contract with a particular state for the purpose of exercising business with the blessings of the public. Going back to Dartmouth College v. Woodward (17 U.S. 518 (1819)), corporate charters cannot be amended at will by state legislatures. Moreover, given both the contemporary high fluidity of money capital and competition among states to house corporations through maintenance of liberal incorporation standards and lower or no corporate income taxes, it seems likely that state-level efforts to truncate corporate Constitutional rights may be strictly limited in their effects. Sadly, for all the advocates of a truncated conception of corporate personhood, there may be no easy answer on how to bring American corporations to heel.
In this regard, I will continue to argue that corporate personhood, as a legal manifestation with an increasingly prominent array of Constitutional rights/privileges, is not the real problem and, in any case, not the thing that is so viciously objectionable to advocates of an expanded array of reproductive health options for women under the ACA. Rather, as I suggested in the previous section of this post, we need to be vigilant against the efforts of both legislatures (e.g. RFRA passed by Congress) and federal jurists to subject public policy intitiatives that enjoy a strong democratic consensus to stricter scrutiny against particular Constitutional privileges of individuals. It matters little that a corporation enjoys a privilege to freely exercise religion unless we elevate free exercise privileges to such a degree that any valid claim of enfringement through a law or regulation of general applicability will force the government to prove that it is serving a compelling governmental interest and acting through the least intrusive means. A large part of the problem here, thus, continues to inhere to the particular ways in which free exercise privileges are being interpreted against the public policy initiatives of government.
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