55 Pages Posted: 4 Nov 2015 Last revised: 8 Jul 2016
Date Written: November 3, 2015
David Gans and Ilya Shapiro’s recent book probes the question of corporate constitutional and statutory rights. Advanced by a series of public debates, the book is entitled: Religious Liberties for Corporations?: Hobby Lobby, The Affordable Care Act and the Constitution. This manuscript delineates the facts, and legal arguments as well as the majority and dissenting opinions in Burwell v. Hobby Lobby. Gans emphasizes the Founders’ conception of corporations and offers predictions regarding the future trajectory of corporate rights beyond the narrow, yet clamorous, domain of religious liberty. Consistent with the weight of scholarly opinion and in sharp contrast to his co-author’s approach, Gans denies that for-profit corporations have free exercise rights. Whatever its merits, the Hobby Lobby opinion has provoked a wave of scholarship and a flurry of rancor. Gans’s contribution is part of this outpouring and confirms that corporate ontology is once against the focal point of academic and judicial commentary.
Equally true, the Hobby Lobby Court’s decision has generated a number of overlapping questions. First, since the Hobby Lobby plaintiff-firms are institutions characterized by the pursuit of profit, limited liability, and a legal separation from their shareholders, do those attributes either together or separately, bar them from asserting free exercise rights? Second, must the pragmatic or normative implications connected to the legal structure of for-profit corporations require them to maximize profits, in principle, or can such entities maximize other values as well, coherent with the deduction that religious exercise may take a corporate form for a wide spectrum of actions and purposes that include full involvement in the marketplace? Third, although Justice Douglas has cautioned us that “[g]eneralizations about standing to sue are largely worthless as such,” can the plaintiff-firms satisfy the “case and controversy” requirement because they suffered a concrete injury to their own interest within the domain of Article III or based on a derivative or third-party theory of prudential standing consonant with the view that they are more like partnerships, membership organizations or associations of individuals, rather than large publicly-held corporations? Finally, are the opponents of corporate free exercise correct in their presumption that free exercise claims are purely personal and individual as opposed to being the representative outworking of a voluntary collective group, so that profit pursuing corporations must be seen as non-religious entities lacking the anthropomorphic capacity necessary to practice religion?
These questions and their correlative answers are visualized through a nexus-of-contracts-entrepreneurial-choice investigation that originates in the law and economics of organizations, a scaffold, which encompasses closely-held firms, LLCs and other for-profit vehicles. Pertinent answers are then refracted through the prism of Professor Buccola’s organizational neutrality framework. The resulting analysis provides a basis to contest the weight of scholarly opinion. When viewed on a pragmatic or normative level, it is doubtful that the choice of the corporate form, a move that gives rise to both for-profit firms and nonprofit entities, should be relevant, in establishing a defendable boundary that cabins an institution’s ability to pursue free exercise exemptions.
Keywords: Burwell v. Hobby Lobby, constitutional law, corporate rights, corporation, employer, entrepreneurial choice, free exercise clause, natural person, organizational neutrality, Patient Protection and Affordable Care Act, ACA, Religious Freedom Restoration Act, RFRA, religious liberty, separateness
JEL Classification: K1, K22
Suggested Citation: Suggested Citation
Hutchison, Harry G., Religious Liberty for Employers as Corporations, Natural Persons or Mythical Beings? A Reply to Gans (November 3, 2015). Penn State Law Review, Vol. 120, No. 2, pp. 537-590, 2016; George Mason Law & Economics Research Paper 15-50. Available at SSRN: https://ssrn.com/abstract=2685872