Harvard Law Review Forum
Hobby Lobby, Corporate Law, and the Theory of the Firm
Why for-profit corporations are RFRA persons
Introduction
Sebelius v. Hobby Lobby Stores, Inc.1 is shaping up to be the blockbuster case of the Supreme Courtâs October 2013 Term. The 2010 Patient Protection and Affordable Care Act (âACAâ) requires most companies with fifty or more employees to provide such workers health insurance, including womenâs âpreventive care and screenings.â2 In August 2011, the Health Resources and Services Administration determined that such care includes â[a]ll Food and Drug Administration approved contraceptive methods [and] sterilization procedures,â3 including medications that some consider abortifacients. Over 300 plaintiffs who object to artificial contraception, abortion, or both have filed dozens of lawsuits challenging the contraception mandate under the Religious Freedom Restoration Act (âRFRAâ).4 Hobby Lobby Stores, Inc., is one such plaintiff.
RFRA provides that â[g]overnment shall not substantially burden a personâs exercise of religion even if the burden results from a rule of general applicability.â5 This protection is not absolute. Instead, RFRA allows the government to burden a personâs religious exercise when doing so is the least restrictive means of furthering a âcompelling governmental interest.â6 Hobby Lobby, a business co-owned by five family members, contends that the mandate to provide contraceptive care contravenes its ownersâ understanding of Christianity and thus substantially burdens religious exercise.
The case raises many issues. Does the mandate substantially burden Hobby Lobbyâs religious exercise? If so, is the requirement the least restrictive means of furthering a compelling interest? Questions like these are beyond the scope of this essay, which addresses a single issue: Do corporate law principles preclude a for-profit corporation like Hobby Lobby from qualifying as a RFRA âpersonâ? The Obama Administration contends that, for various reasons, Hobby Lobby is not a RFRA person.7 For instance, the Administration asserts that treating for-profit corporations as RFRA persons contravenes â[f]undamental [t]enets of American [co]rporation [l]aw.â8 One set of amici â forty-four corporate and criminal law scholars â elaborated on this latter argument.9 These scholars contend that treating corporations as RFRA persons that exercise their shareholdersâ religion contradicts basic principles of corporate law and would undermine that lawâs goals. In particular, they claim that corporations are distinct legal entities, protected from intrusion by shareholders who enjoy limited liability behind the corporate veil. These essential attributes of corporateness, they say, preclude shareholders from exercising their religion under the aegis of the corporate form.
This essay argues that these scholars are mistaken.10 In the real world, shareholders impose religiously motivated policies on corporations all the time. This is no surprise, given a theory of the firm that emphasizes the contractual nature of corporate law. That law, in turn, empowers shareholders to unify corporate ownership and control and thus exercise the ordinary prerogatives of business ownership themselves. There is simply no essence of corporateness that precludes shareholders with such prerogatives from employing for-profit corporations to exercise their religion.
We make three basic claims. First, corporate law does not discourage for-profit corporations from advancing religion. Second, such businesses do not undermine the goals of corporate law, nor would it undermine such goals to grant these firms religious exemptions from otherwise neutral laws in appropriate cases. Third, given the plausible reasons for protecting religious exercise by for-profit corporations, there is no reason to reject the most natural reading of RFRAâs text, namely that âpersonâ includes private corporations of all kinds. This does not mean, of course, that every RFRA claim by a for-profit corporation should be successful. In some cases there will be no substantial burden on religious practices, and in other cases the government may have a compelling reason for regulating corporations. RFRA, however, does not assign the task of weeding out such undesirable religious exemptions to the definition of âperson.â Rather, other statutory provisions do that work.11
Part I of this essay provides background on RFRA and the debate over for-profit corporations. Part II considers religious for-profit corporations and examines the claim that such corporations violate corporate law or undermine its goals. Part III explains why society should protect religious exercise by for-profit corporations.
I. RFRA Personhood, For-Profit Corporations, and the Scholarsâ Claims
As noted in the introduction, RFRA prevents unjustified interference with religious exercise by âpersons.â The most natural reading of the term âpersonâ in RFRA includes for-profit corporations. Congress passed RFRA in response to Employment Division v. Smith,12 which abandoned application of strict scrutiny to neutral laws burdening religious exercise.13 Because RFRA implements a previous constitutional rule, one could seek the meaning of âpersonâ in constitutional precedent. As Justice Brennan explained, âby 1871, it was well understood that corporations should be treated as natural persons for virtually all purposes of constitutional and statutory analysis.â14 Thus, the Supreme Court has repeatedly held that for-profit corporations are constitutional âpersons.â15 Furthermore, the so-called âDictionary Act,â which defines terms appearing in the U.S. Code, provides that, âunless the context indicates otherwise,â the term âpersonâ includes corporations, partnerships, and other entities, âas well as individuals,â without regard to whether such firms or individuals are engaged in profit-seeking activities.16
The Dictionary Actâs language allowing a different meaning when âthe context indicates otherwiseâ does not authorize judges to fashion optimal definitions of âpersonâ on a statute-by-statute basis. The Actâs presumption is stronger than that. Instead, the Supreme Court has characterized the âcontextâ caveat as a sort of escape hatch that courts may employ if, and only if, the Actâs definition of person âseems not to fitâ with the statute in question.17 In such cases, the Court has said, the context caveat and resulting departure from the Dictionary Actâs definition of person can save the courts from âforcing a square peg into a round hole.â18
Nonetheless, the Obama Administration and amici claim that âpersonâ does not include for-profit corporations.19 The scholars properly assume that Hobby Lobbyâs shareholders are the true source of religious exercise by the corporation.20 However, they contend that basic principles of corporate law distinguish corporations from other business enterprises and forestall shareholders from this use of the corporate form. The scholars emphasize that corporations are entities legally separate from their shareholders.21 This separate existence, they say, creates limited liability, an âimpermeab[le]â barrier protecting shareholdersâ personal assets from corporate creditors.22
Taken together, the scholars say, these fundamental attributes categorically preclude shareholders from using corporations for religious exercise.23 In fact, the scholars contend that Hobby Lobbyâs shareholders are trying to âhave it both ways.â24 By choosing to invest in a for-profit corporate enterprise, shareholders obtain benefits of the corporate form, including limited liability.25 However, these same shareholders seek to ignore the separateness of the corporation to use it as a conduit for their religious beliefs.26 Allowing shareholdersâ religion to âpass throughâ to the corporation, the scholars say, would create âan unprecedented and idiosyncratic tear in the corporate veil.â27 The Court should not, they contend, read RFRA to empower contÂŹrolling shareholders to âimpose their personal religious beliefsâ on corporations.28
The scholars do not address the Dictionary Actâs definition of âpersonâ or other federal laws granting for-profit corporations conscience rights.29 Rather, they suggest that RFRA coverage of for-profit corporations would burden commerce by encouraging intracorporation struggles over religious identity, struggles that would sometimes result in litigation, and thereby discourage investment.30
II. Religious Businesses and Corporate Law
The scholars claim that the legal attributes of corporations disable them from exercising the religion of their owners, who cannot âreverse veil pierc[e]â31 to impose their views on the firm. We take a different view. For-profit corporations embodying shareholdersâ religions are common, passing without corporate law objections. This is unsurprising given religious diversity in the United States and corporate lawâs enormous flexibility. The structure of corporate governance is contingent and contractual, enabling shareholders of closely held corporations to unify ownership and control and exercise the same prerogatives as owners of non-corporate businesses, such as partnerships. While such closely held firms retain limited liability and entity status, neither attribute justifies denying shareholders of such entities the right to advance religion while earning a profit. Treating such entities as RFRA persons âfit[s]â just fine within RFRA and does not âforc[e] a square peg into a round hole.â32
Some lower courts have asserted that âfor-profit, secular corporations cannot engage in religious exercise.â33 As an empirical matter, this claim is false. Shareholder-induced pursuit of religion is common. Religion infuses much of American commerce, âinclud[ing] a $4.6 billion Christian products industry, a $12.5 billion kosher food market, and a growing share of an $800 billion global sharia-compliant finance market.â34 Moreover, numerous mutual funds confine investments to firms whose activities reflect investorsâ religious precepts.35
Of course, not all religiously infused commerce reflects shareholdersâ imposition of religious beliefs. Some of that commerce, however, certainly does. Consider the following nonscientific sample. A kosher supermarket owned by Orthodox Jews challenged Massachusettsâ Sunday closing laws in 1960.36 For seventy years, the Ukrops Supermarket chain in Virginia closed on Sundays, declined to sell alcohol, and encouraged employees to worship weekly.37 A small grocery store in Minneapolis with a Muslim owner prepares halal meat and avoids taking out loans that require payment of interest prohibited by Islamic law.38 Chick-fil-A, whose mission statement promises to âglorify God,â is closed on Sundays.39 A deli that complied with the kosher standards of its Conservative Jewish owners challenged the Orthodox definition of kosher found in New Yorkâs kosher fraud law,40 echoing a previous challenge by a different corporation of a similar New Jersey law.41 Tyson Foods employs more than 120 chaplains as part of its effort to maintain a âfaith-friendlyâ culture.â42 New York City is home to many Kosher supermarkets that close two hours before sundown on Friday and do not reopen until Sunday.43 A fast-food chain prints citations of biblical verses on its packaging and cups.44 A Jewish entrepreneur in Brooklyn runs a gas station and coffee shop that serves only Kosher food.45 Hobby Lobby closes on Sundays and plays Christian music in its stores. The company provides employees with free access to chaplains, spiritual counseling, and religiously themed financial advice. Moreover, the company does not sell shot glasses, refuses to allow its trucks to âbackhaulâ beer, and lost $3.3 million after declining to lease an empty building to a liquor store.46
Nearly all of these corporations are owned by one or just a few shareholders, and their shares do not trade in public markets, with the result that they are considered âclosely held.â47 These shareholders nonetheless enjoy limited liability and each firm is a separate legal person. In each case (and presumably many others), shareholders have imposed their religious beliefs on the corporation. Tellingly, the scholarsâ brief does not cite a single case challenging such actions on corporate law grounds.
The role of religion in these and other corporations is not surprising. Americans are the most religious people in the developed world.48 Many religions emphasize âliving oneâs faith,â even in a business setting. With the rise of general incorporation statutes after the Civil War, any entrepreneur may use the corporate form. Corporations whose owners âimpose their personal religious beliefsâ on the firm are common.
The examples above are inconsistent with the claim that an impermeable barrier prevents shareholders from mixing commercial and religious objectives. The largely contractual nature of corporate law explains the existence of such businesses. Investors may alter default rules in various ways that contradict the essentialist version of the for-profit corporation invoked by the scholarsâ brief.
Classical economics assumes that firms unite ownership and control, concentrating decision-making authority and economic consequences in the same hands.49 The scholarsâ vision of the corporation rejects such unification, at least when it comes to religious exercise, by driving a wedge between owners and the corporation. Corporate owners, they say, simply lack the power to impose their religious views on the firm.50 This vision parallels the âstandardâ corporation, characterized by passive shareholders and management centralized in a board of directors.51 As others have explained, the success of such enterprises depends on a clear boundary between owners and managers.52 Such separation of ownership from control results in benefits from specialization that would be forgone if each shareholder of ExxonMobil, for instance, could seek to impose its individual preferences on the firm.
However, this variant of the corporation is just that: a variant. All corporations are not ExxonMobil. Indeed, the vast majority of corporations are closely held.53 Corporate law is not a set of immutable government commands issued on a take-it-or-leave-it basis to those who wish to incorporate. The most prevalent theory of the firm teaches that firms are nexuses of contracts among suppliers of labor, capital, and other inputs.54 Corporate law reflects this contractual vision. Thus, the law that facilitates the formation of large public corporations consists of default rules that parties can change in various ways.55 The same corporate law that facilitates the creation of ExxonMobil also facilitates formation and operation of the local bed and breakfast with a single shareholder.
Hobby Lobbyâs five shareholders manage the corporation âin a manner consistent with Biblical principlesâ they unanimously share.56 Courts and commentators have often characterized such a closely held corporation as a âchartered partnership,â âincorporated partnership,â or âa corporation de jure and a partnership de facto.â57 Indeed, some courts once resisted treating such enterprises as corporations at all, precisely because the shareholders ignored the separation of ownership from control and other attributes of corporate personality, instead behaving like co-partners.58 This resistance has collapsed, however, and corporate law now provides methods for contracting around the potential separation of ownership from control that characterizes large publicly held corporations. Far from excluding shareholders from control of an artificial entity, these tools grant shareholders the same prerogatives as owners of noncorporate enterprises like partnerships.
The most obvious vehicle for imposing shareholder views on the corporation is the corporate charter. Many charters empower the corporation to pursue any lawful business or purpose, and state laws provide this default option.59 However, those who set up the corporation may adopt a charter reflecting shareholder views about what business the firm conducts and how to conduct it.60 Under Delaware Law, for instance, the charter may include â[a]ny provision for the management of the business and for the conduct of the affairs of the corporation, and any provision creating, defining, limiting and regulating the powers of the corporation, the directors, and the stockholders, or any class of the stockholders.â61 The only exception is for provisions that are âcontrary to the laws of this State.â62
Thus, charters may presumably include provisions limiting what products the firm may sell (for example, only Halal or Kosher food, no tobacco, no alcohol, no armaments, only fair-trade products), where it may sell, and on what days it may operate (for example, the firm may not operate on the Sabbath).63 The charter could also include provisions requiring the firm to charge âreasonable pricesâ (as legislation creating corporations once did) or pay âfair wages.â64 Moreover, the charter may contain aspirational provisions, such as a requirement that the firm conduct business in a manner respectful of the environment or consistent with Godâs plan. Each would âimpose the viewsâ of the founding shareholders on the corporation. Some might even reduce profits.65 None of these provisions would contravene the laws of Delaware, which allow corporations to pursue any âlawful purpose.â66
The same may be said of charter provisions imposed midstream. Granted, directors must propose such changes before a shareholder vote.67 However, in closely held firms, directors and shareholders are often one and the same.68 Moreover, shareholders may simply elect directors who promise to propose such amendments. Here again, a straightforward application of garden-variety corporate law empowers shareholders to employ the corporation as a tool for furthering their religious beliefs.
Shareholders may accomplish the same objective by amending the bylaws on their own initiative. Such amendments may include âany provision, not inconsistent with law or with the certificate of incorporation, relating to the business of the corporation, the conduct of its affairs, and its rights or powers or the rights or powers of its stockholders, directors, officers or employees.â69
Indeed, shareholders in closely held corporations need not amend the charter or bylaws to implement their religious views. They may also enter shareholder agreements constraining the firm. Delaware, for instance, provides that such agreements are enforceable, even if they ârestrict or interfere with the discretion or powers of the board of directors.â70 Courts have enforced shareholder agreements that required unanimous shareholder consent for hiring employees,71 conducting âall corporate operations,â72 or entering particular types of agreements.73 An agreement that a restaurant will not open Sunday or not violate Kosher restrictions without unanimous consent would impose the shareholdersâ religious beliefs.74
Shareholders may also eliminate directors altogether and vest themselves with operational control over the corporation. Delawareâs close corporation statute, in a section entitled âManagement by stockholders,â expressly authorizes charter amendments providing âthat the business of the corporation shall be managed by the stockholders of the corporation rather than by a board of directors.â75 This provision allows firms to replicate the management and ownership structure of a partnership.76 Such manager-shareholders would still owe fiduciary duties, nominally to the corporation.77 However, we know of no authority (and the scholars cite none) holding that such a fiduciaryâs reliance on religious or other ethical considerations ipso facto breaches these duties. Indeed, religiously motivated decisions may sometimes increase profits, though some such decisions may reduce them.78 While some case law suggests that fiduciaries must unalterably maximize shareholder profits,79 we believe that shareholders can waive any such rule, like other default rules.80 No decision of which we are aware holds that managers must maximize profit over the unanimous objection of the shareholders, who can amend the charter to validate any such choice.81 Indeed, corporate law even empowers shareholders, by unanimous vote, to ratify alleged corporate waste.82
In sum, modern corporate law provides shareholders of closely held corporations with numerous tools for structuring the firm to mirror the allocation of responsibilities in other forms of business enterprises, including partnerships. Indeed, Delaware expressly empowers shareholders to employ these devices to âtreat the corporation as if it were a partnership or to arrange relations among the stockholders or between the stockholders and the corporation in a manner that would be appropriate only among partners.â83 Such devices obliterate any boundary between ownership and control. No fiduciary duties or other manifestations of corporate separateness constrain such shareholders from exercising the very same ownership prerogatives as members of a partnership. Instead, there is simply no distinction relevant to the exercise of religion between the nexus of contracts known as the partnership and that known as the closely held corporation.
To be sure, shareholders of such âincorporated partnershipsâ would still retain limited liability, unlike partners, and the firms themselves would continue to enjoy entity status for transactional or other purposes, unlike the partnerships they otherwise mimic. However, any claim that these attributes preclude use of the corporate form to further shareholdersâ religion does not withstand analysis, for two reasons. First, the argument proves too much. Many synagogues, churches, and mosques are also incorporated.84 Like for-profit corporations, they are âartificial legal entities.â85 Many also have members who, like shareholders, enjoy limited liability.86 Some even engage in commercial activity.87 Such entities possess First Amendment rights, and even the Obama Administration admits that non-profit âreligious corporation[s]â could be RFRA persons.88 The scholarsâ brief does not explain this anomaly but instead expressly declines to address the application of its logic to not-for-profits.89
Second, and more fundamentally, nothing about limited liability or entity status justifies stripping corporations, whether for-profit or non-profit, of their religious personhood. Take limited liability. Limited liability is a default rule. Corporations can amend their charters to eliminate it or redefine its extent.90 Moreover, market forces often induce shareholders in closely held firms to guarantee the firmâs debts.91 Indeed, unlimited liability by owners of non-corporate entities is also largely a default rule; partners sometimes pay higher interest rates in return for ânon-recourse loansâ that shelter personal assets from business creditors.92
Shareholdersâ ability to pursue their religious values via the corporate form should not turn on whether they have forsaken limited liability. As the scholars have explained, states adopt limited liability to encourage economic activity.93 While this policy may lose its force with respect to âincorporated partnerships,â that ship sailed long ago, as states granted limited liability regardless of size or governance structure chosen by shareholders. Nothing in the rationale for limited liability, furthermore, provides a reason for limiting the ability of a firmâs owner to use the corporation as a vehicle for religious activity. No one, for instance, claims that sole proprietors who bargained with all creditors for limited liability would thereby create a barrier that prevented them from using their business to further religion. Metaphors aside, whether a particular shareholderâs personal assets (if any) are available to satisfy the firmâs creditors seems normatively irrelevant to shareholdersâ ability to infuse corporations with their religious values.
Limited liability is of course an economic benefit to those shareholders who: (1) have significant personal assets; and (2) invest in firms whose activities could give rise to involuntary creditors.94 As such, limited liability is economically indistinguishable from other institutions that limit a debtorâs liability. Indeed, most Americans enjoy limited liability from tort victims in the form of homestead and other exemptions that often shield most individualsâ assets from creditors.95 Such individuals do not forfeit their right to exercise religion. Nor should limited liability deprive shareholders and corporations of rights under RFRA.
What about the corporationâs status as an artificial entity? As others have explained, entity status is simply a legal fiction that facilitates transacting and the assertion of legal rights by an enterprise that aggregates the capital of multiple investors.96 Thus, entity status mimics any number of institutional mechanisms that reduce transaction costs and thus facilitate commercial activity. The alternative, a grand bargain negotiated by the firmâs entire population of shareholders each time the firm transacted, would entail large and needless transaction costs. However, the stateâs creation of a useful institutional device does not forestall individuals from employing that device to exercise religion.
In short, the scholarsâ argument rests on an essentialist characterization of an institution defined by an immutable set of status relationships, relationships that categorically distinguish every corporation from partnerships and other business entities. This essentialist vision flies in the face of corporate lawâs contractual and enabling nature, as understood through the lens of the nexus-of-contracts theory of the firm. There is no single model of corporate governance and concomitant relationship between shareholder, managers, and creditors. Nor is there any fundamental distinction between closely held corporations (âincorporated partnershipsâ) and the partnerships or sole proprietorships they mimic. Instead, as the Supreme Court unanimously recognized over a century ago: âUnder the designation of âpersonâ there is no doubt that a private corporation is included. Such corporations are merely associations of individuals united for a special purpose and permitted to do business under a particular name and have a succession of members without dissolution.â97 Including corporations as RFRA persons is no more an anomaly than including partnerships, sole proprietorships, or other business enterprises.98 Absent some claim â which the scholars do not make â that (attempted) profit-making simpliciter deprives entities of RFRA personhood, for-profit corporations are, like non-profit corporations, RFRA persons.
By focusing on closely held corporations such as Hobby Lobby, we do not mean to suggest that publicly held firms cannot be RFRA persons. The Dictionary Act, after all, does not distinguish between closely held corporations, publicly held corporations, and those that may lie somewhere in between. Instead, the statute designates (all) âcorporationsâ as persons, suggesting a unitary result. Given that the vast majority of corporations are, like Hobby Lobby, closely held firms, the most logical result is RFRA personhood for all.99
Indeed, shareholders of firms that are publicly held and characterized by a nominal separation of ownership from control can nonetheless employ some of the mechanisms described above to ensure that firm policies reflect their religious beliefs. For instance, shareholders could approve amendments to the firmâs charter or alter the firmâs bylaws so as to mandate religiously motivated policies such as closing on Sunday. In the real world, of course, reliance on such mechanisms may be relatively rare. Shareholders of publicly held firms are likely quite diverse in their religious views (or lack thereof), and market pressure may deter large firms with diverse consumers and employees from adopting a particular religious stance. Still, while rare, we do not believe that such assertions are impossible.
To be sure, publicly held firms that do invoke RFRA in an effort to avoid regulation may face more obstacles than closely held corporations. It may, for instance, be more difficult for such firms to demonstrate that the asserted religious belief is sincere or that the challenged imposition is a substantial burden on the exercise of that belief.100 Moreover, regulation of large, public firms may more readily satisfy RFRAâs compelling interest test.101 Put another way, RFRA gives courts various tools for addressing any unique challenges posed by public corporations. There is thus no apparent rationale for categorically depriving such firms of RFRA personhood.
It would be strange to deal with any such unique challenges by adjusting RFRAâs definition of âpersonâ instead of invoking other doctrinal tools. When it comes to religious activity by natural persons, RFRA does not differentiate meritorious from non-meritorious claims by manipulating the statutory definition of person to exclude individuals with insincere claims or identify instances in which regulation advances a compelling government interest. Rather, courts treat individuals invoking RFRA as âpersonsâ for purposes of the statute and use other doctrinal tools to filter out baseless claims.102 In the same way, courts should resist any urge to exclude public corporations from RFRA personhood and rely upon other doctrinal tools to handle any special challenges arising from such firmsâ invocation of RFRA.
One might still argue that religious for-profit corporations undermine the goals of corporate law. The scholars claim that religion âcould make the raising of capital more challenging, recruitment of employees more difficult, and entrepreneurial energy less likely to flourish.â103 Elsewhere they suggest that injecting religion âwould invite contentious shareholder meetings, disruptive proxy contests, and expensive litigation regarding whether the corporations should adopt a religion and, if so, which one.â104 Likewise they claim that allowing such corporations to claim religious exemptions would create incentives to manufacture religious beliefs to avoid regulations.105 We find these arguments unconvincing.
As explained earlier, for-profit corporations have been asserting religious identities in the marketplace for decades.106 Likewise we need not leave entirely to speculation the probable results that will follow if corporations are found to be RFRA persons and thus not barred from seeking an exemption from generally applicable laws.
Federal law and the laws of some states already authorize some for-profit corporations to decline to perform or pay for certain medical procedures because of religious or moral objections.107 We also have experience with the application of strict scrutiny to religious for-profit corporations. In 1963, the Court held in Sherbert v. Verner108 that strict scrutiny applied to neutral laws burdening religious exercise.109 Until the Courtâs 1990 Smith decision, courts applied this standard as a matter of constitutional law.110 Corporations have long held rights under the First Amendment,111 including the Free Exercise Clause.112 For-profit corporations have sued on Free Exercise grounds both before and since Smith.113 The experience with state law is also instructive. In the wake of the Supreme Courtâs decision in City of Boerne v. Flores114 striking down RFRA as applied to state law, fifteen states passed their own state versions of RFRA.115 All of these statutes protect âpersons.â Only two states â Louisiana and Pennsylvania â explicitly limit persons to non-profit corporations,116 while South Carolina explicitly defines persons to include âan individual, corporation, [or] firm.â117 Courts in at least one state have entertained state RFRA claims by for-profit corporations.118 For over half a century, then, there has been no per se bar to free exercise claims by for-profit corporations, and the parade of horribles envisioned by the scholars has simply not materialized.119 For-profit corporations have been asserting religious identities in commercial and legal arenas for decades. Others have declined the opportunity to do so. There has been no flood of shareholder derivative suits challenging a firmâs adoption of a religious identity or failure to adopt such an identity. In fact, the scholars do not cite a single example of a corporate governance dispute connected to such decisions. In closely held corporations with a single shareholder, the structure for many religious businesses, the fear of such litigation is especially fanciful. Even if such decisions did lead to occasional litigation, the mere possibility of corporate conflict would provide no reason for prohibiting corporate religious exercise. On matters ranging from business plans to corporate social responsibility (or its absence), corporations often engage in controversial actions. These matters have resulted in reported cases.120 We do not prohibit, however, corporations from planning their business or from implementing corporate social responsibility programs. Rather, we provide firms with discretion and let people vote with their pocketbooks.
There remains the claim that religious firms might suffer difficulty raising capital, finding employees, or otherwise achieving entrepreneurial success. The first response to this claim is to ask, âSo what?â The survival of such firms in the market shows they are able to attract capital and labor. Hobby Lobby is apparently a thriving enterprise. Furthermore, corporate law does not punish behavior simply because it might increase costs.121 As one commercially sophisticated judge has observed, âThe courtroom . . . is not a boardroom. The judge is not a business consultant.â122 Firms engage in costly behavior such as closing on Sunday or alienating employees by refusing to provide contraception coverage,123 just as corporations may also choose to sell expensive âfair tradeâ goods or donate substantial sums to philanthropy.124
Furthermore, religion may sometimes solve economic problems. Religion can lower agency costs, a common problem in the corporate context.125 For example, commercial networks of coreligionists are common. Religious homogeneity generates the trust on which these networks depend. First, coreligionists monitor and informally sanction one another. For example, the diamond business depends on high-cost, low-margin transactions in goods that are extremely easy to steal. It requires enormous trust to function profitably. Orthodox Jews dominate the wholesale industry in America and depend heavily on religious sanctions to insure trustworthy behavior.126 Second, costly religious devotion often signals commitment to community norms.127 Counter-parties may rely on religious observance as a low-cost signal of trustworthiness. To be sure, the frequency of religious affinity fraud suggests that religion also can be used opportunistically, but in many situations it is sufficiently accurate to be a rational response to more expensive systems of sorting and monitoring. This does not mean that religious businesses are insincere. Rather, the role of religion in generating trust suggests that religious businesses may survive precisely because religion solves economic problems.
Finally, the scholarsâ brief raises the specter of corporations manufacturing fictitious religious identities to obtain regulatory exemptions. They write, âCompanies suffering a competitive disadvantage will simply claim a âRoad to Damascusâ conversion. A company will adopt a board resolution asserting a religious belief inconsistent with whatever regulation they find obnoxious . . . .â128
This concern has nothing to do with the corporate form. Natural persons can also make insincere religious claims.129 Sole proprietorships and partnerships may also desire regulatory exemptions. Some version of strict scrutiny has been applied to free exercise claims for over half a century, and courts considered the sincerity of religious beliefs even before that.130 The scholars suggest that it would be unprecedented for courts to inquire into whether challengers are engaging in religious practices in âgood faith,â citing the Supreme Courtâs decision in Thomas v. Review Board131 for the proposition that federal courts lack expertise in making such judgments.132 This, however, is a misstatement of the law. The courts have consistently held that they lack the competence to evaluate the truth of theological claims or the accuracy of a particular litigantâs interpretation of their faith.133 This task is entirely separate, however, from the question of whether a litigantâs asserted religious beliefs are sincerely held. Courts applying RFRA have not infrequently evaluated such sincerity.134 Insincerity is a good reason for denying a RFRA claim in particular cases. But the possibility of such insincerity does not justify categorically excluding for-profit corporations from RFRAâs reach.135
III. Religious Freedom and Corporations
One might object that it just makes no sense to apply RFRA to for-profit corporations, with the result that courts should not treat such entities as RFRA persons. Corporations arenât natural persons and religious freedom, properly understood, applies only to natural persons.136 There are two responses to this claim. The first is that corporations are instrumentalities by which people act in the world. When individuals act religiously using corporations they are engaged in religious exercise. When we regulate corporations we in fact burden the individuals who use the corporate form to pursue their goals. We often have very good reasons for doing so, but we should not be seduced by the fiction of corporate personality into imagining that when we regulate corporations we are not regulating individuals. The second response is that religious freedom is broader than an individualist concern with personal rights. Rather, it is about limiting the ability of the state to regulate a particular kind of conduct â religious exercise â even when corporate bodies engage in that conduct. Just as free speech is about restraining the government from regulating speech, even of for-profit corporate entities like The New York Times, so too religious freedom is about restraining the government from regulating religious conduct, including that by corporate entities.
Like the rules of contract law or the rules governing the alienability of property, corporate lawâs main purpose is facilitative. As Delaware puts it, a corporation can be formed for âany lawful business or purposes.â137 Corporations are a tool. They are a means for pursuing the ends chosen by their creators. Like any other legal tool, such as contract or property, corporations can be regulated by the state. These regulations burden the activity of those that choose to use corporations. For the sake of convenience or to pursue some discrete policy we often treat corporations as separate persons. This is a pragmatic decision, however. It is not because corporations belong to some category of things whose interests are divorced from the interests of natural persons.138 There is no reason Congress cannot selectively treat corporations as tools used by individuals rather than separate persons. Congress employs just such selective treatment in taxing S-corporations, ignoring the legal personality of corporations for tax purposes.139 Likewise, when it passed RFRA Congress did not limit the term âperson,â and it is perfectly reasonable to suppose that its failure to do so reflected a recognition that for-profit corporations are a way that people in our society do in fact pursue religious objectives.140
One might object that by definition people create for-profit corporations to make a profit and thus such corporations cannot be instrumentalities for religious exercise. As noted above, as an empirical matter this claim is false. A momentâs reflection also reveals its impoverished psychology. Peopleâs motives are mixed. Entrepreneurs wish to earn a profit, but they often have more grandiose ambitions to change the world. Itâs unsurprising that some people pursue a religious mission as part of their business. One might object that if profits are involved, the exercise cannot âreallyâ be religious. After all, didnât Jesus declare, âYou cannot serve God and mammonâ?141 As Professor Michael Helfand has observed, however:
This opposition of profit and religion â the claim, essentially, that religion ends where business begins â is deeply misguided. It may trace to a particular brand of Christian theology â a dogmatic view of what it means to ârender unto Caesar what is Caesarâsâ â that relegates religion to the narrow confines of the church and the inner life of the mind. Religion, on this account, simply does not apply in the marketplace or the boardroom.
Such a worldview is completely foreign to other faith traditions, notably the Jewish legal tradition. From the perspective of Jewish law, Judaismâs requirements apply equally in all spheres of human endeavor â from the synagogue to the workplace and everywhere in between.142
This worldview is also completely foreign to many non-Jewish traditions, including to many Christians.143
Some might object that religion is less central to a believerâs activities in the for-profit context, thus weakening the case for free exercise claims of businesses. This is likely true for many businesses. However, this is equally true of for-profit corporations and natural persons, who may engage in religious activity while trying to make a living. RFRA deals with such concerns by requiring that the burden on religion be âsubstantial,â not through the definition of âperson.â Likewise, one might argue that corporations, because they can allow individuals to amass wealth and power, present situations in which the need for regulation is particularly acute. This is also surely true. However, RFRA deals with such concerns through the âcompelling interestâ test, not the definition of âperson.â We have no doubt that regulations sometimes place only a minimal burden on religious exercise and that regulations sometimes advance compelling interests. Dealing with such cases, however, by expanding or contracting the definition of âpersonâ under the statute makes no sense. For example, it is true that sometimes natural persons will challenge laws that do not place a substantial burden on religious exercise or that serve a compelling government interest. In such cases it would make little sense to avoid the problem of granting religious exemptions by claiming that the plaintiffs are not âpersonsâ for purposes of RFRA. Rather, such concerns are dealt with elsewhere in the statute.144
When thinking about religious freedom it is easy to slip into the assumption that only individual rights matter. Religious freedom, however, need not end with such rights. There are numerous instances in our law where protecting religious freedom involves limiting government control over corporate entities.145 Most recently, for example, the Court held in Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC146 that the First Amendment prohibited the state from regulating the relationship between a religious corporation and its âministerialâ employees.147 Likewise, numerous statutory provisions exempt religious corporations from generally applicable laws.148 Given that religion is often an expression not only of individual conscience but also of religious communities, this is unsurprising. It points, however, toward an understanding of religious freedom that need not depend on individual rights.
Consider the analogy of freedom of speech.149 The New York Times is a for-profit corporation that enjoys legal protections under the Free Speech Clause of the First Amendment, even when publishing paid advertisements.150 We might strain to understand this entirely in terms of individual rights. Perhaps we limit the governmentâs ability to regulate what the Times publishes to vindicate the expressive rights of various individuals. On this view, we are only concerned about government regulation of the corporationâs speech because it might incidentally burden individuals. However, we can also think of speech as a valuable social activity. We are better off, as Holmes suggested, with a robust âmarketplace of ideasâ151 where matters of public concern are debated. Discussion is an inherently social activity. Its presence or absence doesnât hinge on the legal identity of the speakers. The New York Times is not valuable because its pages involve the individual exercise of expressive rights. Rather, it is valuable because it contributes to public discussion. On this view, public discussion is not a byproduct of individual rights. Rather, individual rights are one among several mechanisms â including free speech rights for corporations â by which we foster public discussion.152
Likewise, we can think of religious freedom as limiting government control over religious activity rather than as protecting only individual rights.153 On this view, what is important about religious activities by corporations is that they are religious. There are a number of reasons to limit the governmentâs control over religious activity. We proclaim âno official, high or petty, can prescribe what shall be orthodox in . . . religion.â154 It does not follow that our society should treat religion as irrelevant.155 Religion is a virtually universal human experience, even in secular milieus that define themselves in terms of the negation of religious claims.156 In a pluralistic society, people and communities need space in which to test differing modes of religious experience â including the religious experience of agnosticism and atheism. This experience becomes a collective social resource in trying to understand and structure our spiritual worlds. The piling up of such experience, however, is only possible if the government gives the religious marketplace the kind of breathing room that it gives to the free-speech marketplace of ideas.
It is also a brute social fact that people practice religion collectively. To protect religion only within the confines of personal conscience or individual action would do great violence to lived religion. It is not possible for a Catholic to be a Catholic wholly independent of the structures of the Catholic Church and its sacraments.157 Likewise, for an Orthodox Jew certain prayers can only be said in the context of a minyan consisting of ten adult Jewish men.158 The government cannot refuse to protect collective religious actions while protecting individual actions without favoring some religious traditions over others. Finally, to the extent that religious freedom is grounded purely in a pragmatic judgment that social peace is more likely to be maintained if the government avoids regulating religion, it cannot avoid the reality of corporate religious activity.
One might accept the importance of protecting religious activity but deny that for-profit corporations should receive such protections. We disagree. Many for-profit corporations are infused with religious values and religious missions.159 Some for-profit corporations are solely owned by churches. The owners of these corporations can feel called on to infuse their business activities with religious values.160 In other cases, businesses exist to fulfill explicit religious missions. Religious publishing houses devoted to propagating religious messages provide a good example.161 Finally, many believers deny that religion is sharply limited to the non-commercial realm. Islam, for example, prohibits riba, the taking of interest, and a multi-billion dollar industry exists to provide Muslim investors with sharia-compliant investment instruments.162 Likewise, the New Testament speaks about the treatment of debtors,163 the relationship between employers and employees,164 and the proper religious attitude toward money.165 Religion speaks to the totality of what constitutes a good and faithful life. In a liberal polity, we rightly wish the government to refrain from making spiritually ambitious claims, thus maintaining a space where others can work out such concerns without the heavy hand of the state.
Conclusion
For-profit corporations infused with their ownersâ religion are common. These businesses do no violence to corporate law, which is primarily contractual and facilitative, allowing firms, including those that are closely held, to adopt provisions best suited to their needs. There is no evidence that these businesses generate greater corporate dysfunction than their secular counterparts. It is true that society treats corporations as legally distinct persons for some purposes, but this is a pragmatic choice rather than a normative judgment that human concerns do not apply to such firms. Corporations are just means by which groups of people pursue common purposes, and acknowledging the exercise of religion by for-profit corporations is by no means a category mistake. Nor, given that corporations can be formed for âany lawful purpose,â do shareholders violate some social compact by accepting the benefits of the corporate form while pursuing both profits and religious values. Of course, granting religious exemptions from otherwise applicable laws raises the risk of opportunism and can undermine important governmental policies. These risks are present with natural persons as well, however. RFRA deals with these concerns not by narrowing the definition of âperson,â but instead by scrutinizing only those burdens on religious exercise that are substantial and allowing compelling interests to justify such burdens in appropriate cases. Simply put, corporate law provides no reason for excluding for-profit corporations from RFRA.
* Ball Professor of Law & Cabell Research Professor, William & Mary Law School.
** Professor of Law & Taylor Research Professor, William & Mary Law School. The authors wish to thank Darian Ibrahim, Michael Helfand, Jayne Barnard, and David Skeel for helpful comments on previous drafts. Conversations with Lan Cao, Tara Grove, Alli Orr Larsen and Hannah Smith were also helpful.
1. 723 F.3d 1114 (10th Cir. 2013), cert. granted, 134 S. Ct. 678 (2013).
2. Patient Protection and Affordable Care Act, Pub. L. No. 11-148, § 2713(a)(4), 124 Stat. 119, 131 (2010). It should be noted that some entities with more than fifty employees are nonetheless exempt from this mandate. See 42 U.S.C. § 18011(a)(2) (2006 & Supp. V 2011).
3. Womenâs Preventive Services Guidelines, HEALTH RES. AND SERVS. ADMIN., http://www.hrsa.gov/womensguidelines (last visited Apr. 25, 2014), archived at http://perma.cc/U8R4-VKSW.
4. See HHS Mandate Information Central, BECKET FUND FOR RELIGIOUS LIBERTY, http://www.becketfund.org/hhsinformationcentral (last visited Apr. 25, 2014), archived at http://perma.cc/KAW4-RWQR (summarizing various cases challenging the ACAâs contraception mandate).
5. 42 U.S.C. § 2000bb-1(a) (2006).
6. Id. § 2000bb-1(b).
7. Brief for the Petitioners at 15â22, Sebelius v. Hobby Lobby Stores, Inc., No. 13-354 (U.S. Jan. 10, 2014).
8. Id. at 23; see also id. 23â26.
9. See Brief for Corporate and Criminal Law Professors as Amici Curiae Supporting Petitioners, Hobby Lobby, No. 13-354 (U.S. Jan. 28, 2014) [hereinafter âLaw Professorsâ Briefâ].
10. We are not the only corporate scholars to take issue with the Law Professorsâ Brief. See, e.g., Stephen M. Bainbridge, Essay, A Critique of the Corporate Law Professorsâ Brief in Hobby Lobby and Conestoga Wood, 100 VA. L. REV. ONLINE 1 (2014). Professor Bainbridge critiques the briefâs application of the doctrine of reverse veil piercing. We do not address reverse veil piercing and, for reasons made clear below, we do not think that the viability of a for-profit corporationâs claim under RFRA turns on this doctrine.
11. See 42 U.S.C. § 2000bb-1(a)â(b) (requiring a substantial burden on religious exercise and allowing regulations creating such a burden in the case of a compelling government interest).
12. 494 U.S. 872 (1990).
13. Id. at 889; see also 42 U.S.C. § 2000bb(b)(1) (2006) (articulating Congressional purpose to restore strict scrutiny of neutral laws that substantially burden religious exercise); id. § 2000bb(a)(4) (finding that Smith nearly eliminated strict scrutiny of such laws).
14. Monell v. Depât of Soc. Servs., 436 U.S. 658, 687 (1978).
15. See, e.g., N.Y. Times Co. v. Sullivan, 376 U.S. 254 (1964) (unanimous treatment of corporation as a person); Chi., Burlington & Quincy R.R. Co. v. Chicago, 166 U.S. 226 (1897) (same); Pembina Consol. Silver Mining & Milling Co. v. Pennsylvania, 125 U.S. 181, 189 (1888) (same); Louisville, Cincinnati & Charleston R.R. Co. v. Letson, 43 U.S. (2 How.) 497 (1844) (holding that a corporation is a âcitizenâ within the meaning of Article III of the Constitution).
16. See 1 U.S.C. § 1 (2012) (â[T]he words âpersonâ and âwhoeverâ include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals . . . .â).
17. Rowland v. Cal. Menâs Colony, 506 U.S. 194, 200 (1993).
18. Id.
19. See supra notes 7â9 and accompanying text (recounting position by the Administration and amici that for-profit corporations are not RFRA persons).
20. See Law Professorsâ Brief, supra note 9, at 2â3.
21. Id. at 3â10.
22. Id. at 7 (invoking the âimpermeability of the corporate veilâ).
23. Id. at 13â16.
24. Id. at 14.
25. Id. at 6, 14.
26. Id. at 13â14.
27. Id. at 8.
28. Id. at 22.
29. See 42 U.S.C. § 300a-7(b)(2)(A) (2006) (protecting the rights of individuals and entities receiving public health funds to decline to perform abortions on âthe basis of religious beliefs or moral convictionsâ); 42 U.S.C. §§ 1395w-22(j)(3)(B)(i), 1396u-2(b)(3)(B)(i) (2006 & Supp. V) (managed care or Medicare+Choice organization may decline abortion coverage if it objects âon moral or religious groundsâ).
30. See Law Professorsâ Brief, supra note 9, at 19â22.
31. Id. at 17.
32. Cf. Rowland v. Cal. Menâs Colony, 506 U.S. 194, 200 (1993) (discussing definition of a âpersonâ under the Dictionary Act).
33. Conestoga Wood Specialties Corp. v. Secây of the U.S. Depât of Health & Human Servs., 724 F.3d 377, 381 (3d Cir. 2013), cert. granted, 134 S.Ct. 678 (2013).
34. Michael A. Helfand & Barak D. Richman, The Challenge of Co-Religionist Commerce, 64 DUKE L.J. (forthcoming Feb. 2015) (footnotes omitted).
35. See, e.g., Ronald J. Colombo, The Naked Private Square, 51 HOUS. L. REV. 1, 22â23 (2013) (describing such funds).
36. See Gallagher v. Crown Kosher Super Mkt. of Mass., Inc., 366 U.S. 617, 618 (1960) (âAppellees are Crown Kosher Super Market, a corporation whose four stockholders, officers and directors are members of the Orthodox Jewish faith . . . .â).
37. See James Leasure, Ukropâs Christian Values Out the Door with Sale to Ahold, RICHMOND EVANGELICAL EXAMINER (Jan. 22, 2010), http://www.examiner.com/article/ukrop-s-christian-values-out-the-door-with-sale-to-ahold, archived at http://perma.cc/EM5J-FREY; David Wilkinson, Ukropâs CEO Walks the Ethics Talk, ETHICS DAILY (Aug. 23, 2002, 12:00 AM), http://www.ethicsdaily.com/ukrops-ceo-walks-the-ethics-talk-cms-1446, archived at http://perma.cc/F2XM-U9RZ.
38. See Mark L. Rienzi, God and the Profits: Is There Religious Liberty for Moneymakers?, 21 GEO. MASON L. REV. 59, 75â76 (2013) (describing this business).
39. Frequently Asked Questions: Corporate Information, CHICK-FIL-A, http://www.chick-fil-a.com/FAQ#?category=2 (last visited Apr. 27, 2014), archived at http://perma.cc/372U-59V4 (describing firmâs mission â[t]o glorify Godâ and explaining why Chick-fil-A restaurants close on Sundays).
40. See Commack Self-Serv. Kosher Meats, Inc. v. Weiss, 294 F.3d 415, 419â20 (2d Cir. 2002).
41. See Ran-Davâs County Kosher, Inc. v. New Jersey, 608 A.2d 1353, 1355â56 (N.J. 1992).
42. Faith In the Workplace, TYSON FOODS, http://www.tysonfoods.com/Ways-We-Care/Faith-In-The-Workplace.aspx (last visited Apr. 27, 2014), archived at http://perma.cc/5X57-93FA.
43. See, e.g., Our Mission Statement, ARONâS KISSENA FARMS, http://www.kissenafarms.com/mission-statement.html (last visited Apr. 27, 2014), archived at http://perma.cc/CJS8-TLTS; see also Contact, EMPIRE KOSHER, http://www.empirekosher.com/contact (last visited Apr. 27, 2014), archived at http://perma.cc/4DAS-KMXD; THE KOSHER MARKETPLACE, http://www.thekoshermarketplace.com/Home.html (last visited Apr. 27, 2014), archived at http://perma.cc/SN6D-82C7.
44. See Lynn Arave, In-N-Out Serves Burger With a Side of Scripture, DESERET NEWS (Dec. 26, 2009, 12:15 AM), http://www.deseretnews.com/article/705379755/In-N-Out-serves-burgers-with-a-side-of-scripture.html, archived at http://perma.cc/GS24-HJPC.
45. See Rienzi, supra note 38, at 74â75.
46. Id. at 77â78; see also Hobby Lobby Stores, Inc., v. Sebelius, 723 F.3d 1114, 1122 (10th Cir. 2013), cert. granted, 134 S. Ct. 678 (2013) (describing ways that owners âallow their faith to guide business decisionsâ).
47. See ROBERT C. CLARK, CORPORATE LAW 24â25 (1986) (defining closely held corporations). One exception is Tyson Foods, which is publicly traded. See Investor FAQs, TYSON FOODS, http://ir.tyson.com/investor-relations/investor-overview/investor-faqs/default.aspx (last visited April 27, 2014), archived at http://perma.cc/WC6Z-83HA.
48. Matthew Hay Brown, U.S. is Most Religious in Industrialized World, BALT. SUN (Dec. 16, 2009, 4:28 PM), http://weblogs.baltimoresun.com/news/faith/2009/12/united_states_is_most_religiou.html, archived at http://perma.cc/L77G-J6KG.
49. Armen A. Alchian & Harold Demsetz, Production, Information Costs, and Economic Organization, 62 AM. ECON. REV. 777, 781â83 (1972).
50. See supra notes and 19â28 and accompanying text.
51. See CLARK, supra note 47, at 2; id. at 762 (referring to this âstandard modelâ of the corporation).
52. Id. at 2 (explaining how these attributes facilitate âthe efficient aggregation of very large amounts of capital from numerous investors and the efficient operation of a very large businessâ).
53. According to the United States Census Bureau, more than 5.8 million corporations filed federal tax returns in 2008. See BUREAU OF THE CENSUS, U.S. DEPâT OF COMMERCE, STATISTICAL ABSTRACT OF THE UNITED STATES: 2012, tbl. 745 (2012), archived at http://perma.cc/6NR6-QWHZ. Only a tiny fraction of these firms are publicly traded. See Dan Strumpf, U.S. Public Companies Rise Again, WALL ST. J. (Feb. 5, 2014, 3:43 PM), http://online.wsj.com/news/articles/SB10001424052702304851104579363272107177430 (last visited May 4, 2014), archived at http://perma.cc/M99A-XCBJ (reporting that the number of publicly traded American corporations peaked at 8884 in 1997); see also JAMES D. COX & THOMAS LEE HAZEN, I. CORPORATIONS § 1.20 (2d ed. 2003) (âMost of the incorporated enterprises in this country, perhaps 90 percent or more, are close corporations . . . .â).
54. See generally R. H. Coase, The Nature of the Firm, 4 ECONOMICA (n.s.) 386 (1937); Scott E. Masten, A Legal Basis for the Firm, 4 J.L. ECON & ORG. 181 (1988) (explaining how parties could replicate the various attributes of firms by contract).
55. See FRANK H. EASTERBROOK & DANIEL R. FISCHEL, THE ECONOMIC STRUCTURE OF CORPORATE LAW, 1â39 (1991).
56. Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114, 1122 (10th Cir. 2013) (internal quotation mark omitted).
57. F. HODGE OâNEAL & ROBERT THOMPSON, 1 CLOSE CORPORATIONS AND LLCS § 1.2 (rev. 3d ed. 2004) (quoting Juan L. Luna, Jr., Protection of Minority Interests Through Stockholdersâ Agreements: A Commentary on Section 9 of the New York Stock Corporation Law, 28 PHILIPPINE L.J. 506, 535 (1953)); CLARK, supra note 47, at 25 (â[L]awyers sometimes refer to [closely held corporations] as incorporated partnerships.â); Donahue v. Rodd Electrotype Co. of New England, Inc., 328 N.E.2d 505, 512 (Mass. 1975) (â[T]he close corporation bears striking resemblance to a partnership. Commentators and courts have noted that the close corporation is often little more than an âincorporatedâ or âcharteredâ partnership.â).
58. See OâNEAL & THOMPSON, supra note 57, § 4:4; see also Jackson v. Hooper, 75 A. 568, 571 (N.J. 1910) (âThe law never contemplated that persons engaged in business as partners may incorporate, with intent to obtain the advantages and immunities of a corporate form, and then, Proteus-like, become at will a copartnership or a corporation . . . . They cannot be partners inter sese and a corporation as to the rest of the world.â); RODMAN WARD, JR. ET. AL., 2 FOLK ON THE DELAWARE GENERAL CORPORATION LAW XIV-42 (4th ed. 2006) (reporting that shareholders in closely held firms often ignore requirement to elect a board of directors).
59. See DEL. CODE ANN. tit. 8, § 102(a)(3) (2014) (empowering corporations to adopt such provisions). We look to Delaware to inform our discussion because of the stateâs leading role in generating American corporate law. We also note that the law of Oklahoma, where Hobby Lobby is incorporated, sometimes replicates Delaware Law verbatim. See, e.g., OKLA. STAT. ANN. tit. 18, § 1006.A.3 (2013) (authority of the board of directors).
60. See DEL. CODE ANN. tit. 8, § 102(a)(3).
61. Id. § 102(b)(1); see also id. § 102(a)(3) (charter may impose âexpress limitationsâ on âlawful acts and activitiesâ).
62. Id. § 102(b)(1). Presumably the laws of Delaware include federal law, such as RFRA and the ACA. See Claflin v. Houseman, 93 U.S. 130, 136â37 (1876).
63. See OâNEAL & THOMPSON, supra note 53,( § 3.13 (suggesting that participants in âclosely held enterprisesâ may consider ânarrowly restricting the purpose of the corporationâ and âinserting . . . âself-denyingâ clauses to exclude the corporation from specified lines of activity or limit some of [its] powersâ).
64. Cf. The Slaughterhouse Cases, 83 U.S. (16 Wall.) 36, 59â60 (1873) (describing statute incorporating the Crescent City Live-Stock Landing and Slaughter-House Company and establishing maximum charges for each animal slaughtered).
65. See Aaron Blake, Obama Praises CVSâs Decision to Stop Selling Cigarettes, WASH. POST (Feb. 5, 2014, 7:26 AM), http://www.washingtonpost.com/blogs/post-politics/wp/2014/02/05/obama-praises-cvss-decision-to-stop-selling-cigarettes/, archived at http://perma.cc/Z6K9-UGRB.
66. DEL. CODE ANN. tit. 8 § 101(b) (2014).
67. See id. § 242(b).
68. See, e.g., Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114, 1122 (10th Cir. 2013), cert. granted, 134 S. Ct. 678 (2013) (identifying shareholders serving on firmâs board).
69. DEL. CODE ANN. tit. 8, § 109(b) (2014); see also Michael A. Schaeftler, The Purpose Clause in the Certificate of Incorporation: A Clause in Search of a Purpose, 58 ST. JOHNâS L. REV. 476, 477 (1984) (contending that shareholders may prefer bylaw changes to âlimit corporate activitiesâ).
70. E.g., DEL. CODE ANN. tit. 8, § 350 (2014); see also REVISED MODEL BUSINESS CORPORATION ACT § 7.32 (enforcing unanimous shareholder agreements).
71. See Klausman v. Rosenberg, 143 S.E.2d 164 (Ga. 1965).
72. Adler v. Svingos, 436 N.Y.S.2d 719, 720 (N.Y. App. Div. 1981).
73. See Zion v. Kurtz, 405 N.E.2d 681 (N.Y. 1980) (applying Delaware law).
74. Shareholders who enter such agreements accept whatever liability directors would incur for actions or omissions mandated by such agreements. See DEL. CODE ANN. tit. 8, § 350 (2014). We think it unlikely that unanimous agreements imposing religiously motivated policies would give rise to successful claims. See supra notes 71â73 and accompanying text. The sole exception may be for agreements that exacerbate a firmâs losses in or near insolvency, imposing financial costs on creditors.
75. DEL. CODE ANN. tit. 8, § 351 (2014).
76. See WARD, supra note 58, at XIV-42â43 (explaining operation of this provision and opining that it will be most attractive for family owned corporations); infra note 80 and accompanying text (discussing Delaware statute confirming that a corporate charter may properly confer on shareholders the management prerogatives of partners).
77. See DEL. CODE ANN. tit. 8, § 351.
78. See Mark Tushnet, Do For-Profit Corporations Have Rights of Religious Conscience?, 99 CORNELL L. REV. ONLINE 70, 77 (2013) (explaining that adherence to religion may increase a firmâs costs).
79. Dodge v. Ford Motor Co., 170 N.W. 668, 684 (Mich. 1919). But compare 1 AM. LAW INST., PRINCIPLES OF CORPORATE GOVERNANCE: ANALYSIS AND RECOMMENDATIONS § 2.01(b)(2) (1994) (corporations may implement âethical considerations that are reasonably regarded as appropriate to the responsible conduct of businessâ despite impact on profits).
80. See generally Einer Elhauge, Sacrificing Corporate Profits in the Public Interest, 80 N.Y.U. L. REV. 733 (2005).
81. Some readers of a previous draft suggested that the business judgment rule can bolster shareholdersâ ability to impose religiously motivated policies, by sheltering from judicial review any practice with a minimally plausible prospect of increasing profits. See Shlensky v. Wrigley, 237 N.E. 2d 776, 778â80 (Ill. App. Ct. 1968). We agree that directors who decide that a corporation will not provide particular health insurance benefits could readily avoid duty of care liability by claiming that such a decision reduces the cost of employee benefits. Cf. id. at 780 (rejecting duty of care challenge based upon judicial speculation about financial consequences of challenged practice). In the same way, a decision not to operate on Sunday could reduce costs and enhance the firmâs ability to recruit employees. Indeed, some religiously motivated practices that unquestionably increase costs could nonetheless survive business judgment scrutiny because they could plausibly differentiate the firmâs product and increase market demand for it. See Tushnet, supra note 78, at 78 (suggesting that adherence to religious norms may help a firm claim a market niche).
Nonetheless, we believe the business judgment rule is beside the point in this context. Neither shareholders nor directors need invoke pretextual commercial rationales to justify practices that are in fact motivated by religious beliefs. For, as explained in the text, modern corporate law empowers shareholders to induce corporations to pursue religious objectives overtly and regardless of whether the resulting policies maximize profits. Moreover, shareholders that induce corporations to adopt religiously motivated policies would presumably lack standing to challenge directorsâ adoption of such policies, thereby rendering the business judgment rule superfluous. Indeed, invocation of the business judgment rule âproves too muchâ from our standpoint, as the rule could in some cases protect directors who adopt policies contrary to the religious beliefs of shareholders, so long as such policies have some plausible connection to profit making. Finally, we note that a firmâs reliance on the business judgment rule and concomitant invocation of profit-oriented rationales for such practices could needlessly undermine subsequent assertions that such practices are in fact forms of sincere religious exercise protected by RFRA.
82. ROBERT S. WELCH, et al., FOLK ON DELAWARE GENERAL CORPORATION LAW 152â53 (2014).
83. DEL. CODE ANN. tit. 8, § 354 (2014).
84 See William W. Bassett, et al., Religious Organizations and the Law § 1:19 (2013); EEOC v. Hosanna-Tabor Evangelical Lutheran Church & Sch., 597 F.3d 769, 772 (6th Cir. 2010) (referring to Hosanna-Tabor as âan ecclesiastical corporationâ), revâd on other grounds, 132 S. Ct. 694 (2012)
85 See, e.g., 1A William Meade Fletcher, et al., Fletcher Cyclopedia of the Law of Corporations § 25 (âThe distinctness of the corporate entity applies equally to all kinds of corporations,â and ânonprofit corporations . . . like other corporations, are legal entities separate from their members.â).
86 Marilyn E. Phelan, Nonprofit Enterprises: Corporations, Trusts, and Associations § 4.01 (2004) (stating that limited liability for members of non-profit corporations âis a fundamental principle of the general law relating to corporationsâ).
87 See Cox & Hazen, supra note 53, § 1.18 (âMany non-profit organizations engage in profit-making activities.â).
88 See Brief for the Petitioners, supra note 7, at 17â21; see also, e.g., Church of Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520 (1993) (holding that local ordinance abridged non-profit corporationâs free exercise of religion); NLRB v. Catholic Bishop of Chi., 440 U.S. 490, 492 (1979) (construing National Labor Relations Act narrowly so as not to infringe free exercise rights of âthe Catholic Bishop of Chicago, a corporation sole . . . [and] the Diocese of Fort Wayne-South Bend, Inc.â); O Centro Espirita Beneficente Uniao Do Vegetal v. Ashcroft, 389 F.3d 973 (10th Cir. 2004) (en banc) (per curiam) (holding that ban on controlled substances violated rights of religious corporation and its members), affâd 546 U.S. 418 (2006); Primera Iglesia Bautista Hispana of Boca Raton, Inc. v. Broward County, 450 F.3d 1295 (11th Cir. 2006).
89 See Law Professorsâ Brief, supra note 9, at 1, n.2 (â[T]his brief does not specifically address non-profit corporations, limited liability companies or partnerships.â).
90 See Del. Code Ann. tit. 8, § 102(b)(6) (2014).
91 See Clark, supra note 47, at 25.
92 See Larry Ribstein, Limited Liability and Theories of the Corporation, 50 Md. L. Rev. 80, 112â13 (1991).
93 See Law Professorsâ Brief, supra note 9, at 5 (limited liability encourages âentrepreneurial activity by founders, investment by passive investors, and risk taking by corporate managersâ).
94 Shareholders in closely held firms internalize the impact of limited liability for voluntary corporate debts, as firms pay higher interest rates that reduce corporate earnings. To this extent, the âbenefitâ of limited liability is illusory.
95 See, e.g., Fla. Const. art. X, § 4 (exempting the entirety of an individualâs home, regardless of value, from the claims of creditors). Federal law similarly limits the ability of tort victims and other creditors to garnish wages, effectively conferring limited liability over exempt wages. See 15 U.S.C. § 1673(a) (2012) (limiting wage garnishment to twenty-five percent of disposable wages or the excess of disposable earnings above thirty times the Federal minimum hourly wage, whichever is less).
96 See Easterbrook & Fischel, supra note 55, at 11â12 (describing how entity status reduces the cost of transacting in the corporate context).
97 Pembina Consol. Silver Mining & Milling Co. v. Pennsylvania, 125 U.S. 181, 189 (1888).
98 To be sure, the absence of any meaningful difference between corporations and partnerships does not ipso facto establish that corporations are RFRA persons, absent some demonstration that partnerships are themselves RFRA persons. However, the Dictionary Act expressly defines partnerships as âpersons,â thus raising a presumption of RFRA personhood. United States v. A & P Trucking Co., 358 U.S. 121 (1958) (relying upon Dictionary Actâs definition of âwhoeverâ to impose criminal liability upon a partnership). Moreover, neither the scholars nor the Obama Administration identifies any attribute of partnerships qua partnerships that renders conferral of RFRA personhood on such entities âawkwardâ or analogous to âforcing a square peg into a round hole.â Cf. Rowland v. Cal. Menâs Colony, 506 U.S. 194, 200 (1993). All that remains is the argument, adumbrated by the Administration, but not made by the scholars, that attempting to make a profit deprives even sole proprietors of RFRA personhood. See Brief for the Petitioners, supra note 7, at 19â22. Pre-Smith law points in the other direction, however. See United States v. Lee, 455 U.S. 252 (1982) (entertaining free exercise claim by sole proprietor); Gallagher v. Crown Kosher Super Mkt. of Mass., Inc., 366 U.S. 617 (1960) (entertaining free exercise claim by for-profit corporation); infra note 112 (detailing various opinions in Crown Kosher). Assuming that for-profit entities can be RFRA persons, exclusion of for-profit corporations such as Hobby Lobby would be awkward and illogical.
99 See supra note 53 (explaining that the vast majority of corporations are closely held).
100 See 42 U.S.C. § 2000bb-1(a) (2006) (articulating RFRAâs âsubstantial burdenâ standard); infra notes 129â135 and accompanying text (describing decisions under both RFRA and the Free Exercise Clause determining whether a claimantâs religious belief was sincere).
101 See id. § 2000bb-1(b) (articulating RFRAâs compelling interest test).
102 See infra note 144 and accompanying text (explaining that courts should employ such tools to identify meritless claims).
103 Law Professorsâ Brief, supra note 9, at 8.
104 Id. at 9.
105 Id. at 25â28.
106 See Part II.A, supra.
107 See note 29, supra; see also, e.g., 18 Pa. Cons. Stat. § 3213(d) (2014) (âExcept for a facility devoted exclusively to the performance of abortions, no medical personnel or medical facility . . . shall be required against his or its conscience to aid, abet or facilitate performance of an abortion or dispensing of an abortifacient . . . .â).
108 374 U.S. 398 (1963).
109 See id. at 403.
110 See Employment Div. v. Smith, 494 U.S. 872, 899â900 (1990) (OâConnor, J. concurring in the judgment) (collecting numerous Supreme Court decisions applying strict scrutiny to facially neutral burdens on religion).
111 See N.Y. Times Co. v. Sullivan, 376 U.S. 254 (1964) (unanimously protecting free speech rights of for-profit corporation).
112 See, e.g., NLRB v. Catholic Bishop of Chi., 440 U.S. 490 (1979) (recognizing Free Exercise Clause as applying to a religious corporation); Kedroff v. Saint Nicholas Cathedral of Russian Orthodox Church, 344 U.S. 94 (1952) (same).
113 See Stormans, Inc. v. Selecky, 586 F.3d 1109 (9th Cir. 2009) (declining to decide whether for profit corporation could assert free exercise rights and rejecting free exercise arguments made by the corporation and its owners); EEOC v. Townley Engâg & Mfg. Co., 859 F.2d 610, 619 (9th Cir. 1988) (holding that defendant corporation was an âinstrumentâ through which its shareholders could exercise religion and assert free exercise claims). Indeed, in Gallagher v. Crown Kosher Super Market of Massachusetts, Inc., 366 U.S. 617 (1960), all nine Justices addressed the merits of the plaintiff corporationâs free exercise challenge to the stateâs Sunday closing law, in four different opinions. See id. at 618 (Warren, C.J., joined by Black, Clark, and Whittaker, JJ.); id. at 642 (Brennan and Stewart, JJ., dissenting) (concluding that the law abridged plaintiffsâ free exercise rights); McGowan v. Maryland, 366 U.S. 420, 459 (1960) (separate opinion of Frankfurter, J., joined by Harlan, J.); id. at n.â (noting that the opinion also applied to Crown Kosher Super Market, Inc.); McGowan, 366 U.S. at 561 (Douglas, J. dissenting) (concluding that law abridged plaintiffsâ free exercise rights); id. at n.*. No Justice suggested that the plaintiffâs status as a for-profit corporation deprived the firm of free exercise rights. See, e.g., Crown Kosher Super Mkt., Inc., 366 U.S. at 630â631 & 631 n.7 (declining to consider procedural objections to plaintiffâs challenge). Some intermediate state appellate courts have held, however, that for-profit corporations cannot assert rights under the Free Exercise Clause. See, e.g., Blanding v. Sports & Health Club, Inc., 373 N.W.2d 784 (Minn. Ct. App. 1985); Atlantic Depât Store, Inc. v. Stateâs Attây for Prince Georgeâs Cnty., 323 A.2d 617 (Md. Ct. Spec. App. 1974). Neither decision, it should be noted, mentions or discusses Crown Kosher Super Market, Inc..
114 521 U.S. 507 (1997).
115 See W. Cole Durham & Robert Smith, Religious Organizations and the Law § 2:63 (2013) (collecting statutory references).
116 See 71 Pa. Stat. Ann. § 2403 (2014) (ââPerson.â An individual or a church, association of churches or other religious order, body or institution which qualifies for exemption from taxation under [federal law].â); La. Rev. Stat. § 5234(1) (2013) (ââA personâ includes an individual and also includes a church, association of churches or other religious order, body or institution which qualifies for exemption from taxation under [federal law].â).
117 See S.C. Code Ann. § 1-32-20(3) (2014) (ââPersonâ includes, but is not limited to, an individual, corporation, firm, partnership, association, or organization.â).
118 See Morr-Fitz, Inc. v. Blagojevich, 901 N.E.2d 373 (Ill. 2008) (reversing a lower court dismissal of a for-profit corporationâs suit asserting claims under state RFRA, state conscience laws, and the Free Exercise Clause); Morr-Fitz, Inc. v. Quinn, 976 N.E.2d 1160 (Ill. App. Ct. 2012) (considering a challenge to a state law brought by a for-profit corporation on, inter alia, state RFRA grounds).
119 David Skeel, Corporations and Religious Freedom, Wall St. J., Dec. 2, 2012, archived at http://perma.cc/EB6F-FYBM (expressing doubt that a Supreme Court ruling in favor of Hobby Lobby will lead to âa massive wave of corporate religious freedom claimsâ).
120 See, e.g., A.P. Smith Mfg. Co. v. Barlow, 98 A.2d 581 (N.J. 1953) (upholding corporate charitable donation to a university); Shlensky v. Wrigley, 237 N.E.2d 776 (Ill. App. Ct. 1968) (rejecting challenge to boardâs refusal to schedule night games). Shlensky, of course, declined to interfere with the âhonest business judgmentâ of the directors. See id. at 778. As explained in note 81, supra, we disclaim any reliance upon the business judgment rule to support this essayâs arguments.
121 See Clark, supra note 47, at 136â40 (noting the discretion of managers under the deferential business judgment rule).
122 In re Colonial Ford, 24 B.R. 1014, 1016 (Bankr. D. Utah 1982) (quoting In re Curley Valley Associates, 14 B.R. 506, 511 (Bankr. D. Utah 1981)) (internal quotation marks omitted).
123 See, e.g., Why Weâre Closed on Sundays, Chik-fil-A, http://www.chick-fil-a.com/Company/Highlights-Sunday (last visited Apr. 25, 2014), archived at http://perma.cc/NAZ9-GY42; Igor Volsky, Many Catholic Universities, Hospitals Already Cover Contraception in Their Health Insurance Plans, thinkprogress.org (Feb. 7, 2012, 9:04 AM), http://thinkprogress.org/health/2012/02/07/420114/many-catholic-universities-hospitals-already-offer-contraception-as-part-of-their-health-insurance-plans/, archived at http://perma.cc/RQ9-JYAQ (noting Boston College âchose to meet the needs of the overwhelming majority of Catholic women and offer these much needed servicesâ); see also Tushnet, supra note 78, at 77â78 (concluding that adherence to cost-increasing religious norms may generate offsetting psychic income).
124 See, e.g., Fair Trade FAQ, Allegro Coffee, http://www.allegrocoffee.com/about/more-info/our-story#faq (last visited Apr. 25, 2014), archived at http://perma.cc/U6G5-Q8WQ (âAllegro offers Fair Trade certified coffee . . . .â); Jacquelyn Smith, Americaâs Most Generous Companies, Forbes, July 16, 2013, http://www.forbes.com/sites/jacquelynsmith/2013/07/16/americas-most-generous-companies/, archived at http://perma.cc/TA2U-7DWT (noting that in 2012 Wells Fargo donated $315,845,766 in cash while Walmart, Inc. donated $311,607,280 in cash and $755,868,381 in products to about 50,000 different charities).
125 See, e.g., Easterbrook & Fischel, supra note 55, at 11â12 (discussing the problem of agency costs in corporations).
126 See Barak D. Richman, How Community Institutions Create Economic Advantage: Jewish Diamond Merchants in New York, 31 L. & Soc. Inquiry 383 (2006) (discussing the role of religion in generating intra-industry trust in the diamond trade); Lisa Bernstein, Opting Out of the Legal System: Extralegal Contractual Relations in the Diamond Industry, 21 J. Legal Stud. 115 (1992) (discussing extralegal enforcement in part through religious sanctions in contracting in the American diamond industry).
127 See Laurence R. Iannaccone, Why Strict Churches are Strong, 99 Am. J. Sociology 1180 (1994) (arguing that strict religious behavior acts as a signal of commitment and prevents opportunism in religious communities).
128 Law Professorsâ Brief, supra note 9, at 27â28. We presume that the Scholars are not implying that Saint Paulâs conversion to Christianity was insincere. See Acts 9:1â6. Certainly the Romans who executed him believed that his conversion to Christianity had been sincere.
129 See infra note 134 (collecting cases).
130 See United States v. Ballard, 322 U.S. 78 (1944) (holding that a court could not judge the truth of theological beliefs but it could judge whether or not a person held those beliefs in good faith).
131 450 U.S. 707 (1981).
132 See Law Professorsâ Brief, supra note 9, at 27 n.12.
133 See Jones v. Wolf, 443 U.S. 595, 602 (1979) (â[T]he First Amendment prohibits civil courts from resolving church property disputes on the basis of religious doctrine and practice.â); Watson v. Jones, 80 U.S. 679, 733 (1871) (stating that civil courts lack jurisdiction to resolve theological questions).
134 See Tagore v. United States, 735 F.3d 324, 328 (5th Cir. 2013) (âThe sincerity of a plaintiffâs belief in a particular religious practice is an essential part of the plaintiffâs prima facie case under . . . RFRA.â); United States v. Quaintance, 608 F.3d 717 (9th Cir. 2010) (rejecting as insincere an individualâs claim to believe that marijuana was a deity entitling him to a RFRA exemption from criminal drug laws); United States v. Manneh, 645 F. Supp. 2d 98 (E.D.N.Y. 2008) (rejecting defendantâs RFRA challenge to ban on importation of parts of endangered primates after finding that defendantâs claimed religious need to eat âbushmeatâ was insincere).
135 The scholars also claim that divining sincerity in the corporate context is particularly difficult, pointing to Hobby Lobby as an example. See Law Professorsâ Brief, supra note 9, at 28 (âThe evidence [of religious belief] typically will be no more, and no less, than what is present in this case: the views of shareholders that the regulation burdens their personal beliefs and a board resolution adopting those beliefs as the corporationâs own.â) The facts in the case, however, belie this claim. See supra note 46 and accompanying text (summarizing Hobby Lobbyâs extensive religious activities).
136 See, e.g., 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. 1, 5 (2014) (â[I]t is claimed that the religious beliefs of the organization itself are violated by the Mandate. This argument fails because a business organization does not have religious beliefs. Rather, as it has been famously put, âa corporation has no soul.ââ); David Clay Johnston, Do Corporations Have Religious Beliefs?, Al-Jazeera America (Mar. 28, 2014, 7:00 AM), http://america.aljazeera.com/opinions/2014/3/hobby-lobby-firstamendmentreligiousrightsobamacare.html, archived at http://perma.cc/ASQ5-BU3G (arguing that âa corporation cannot exercise religion or have any beliefs because it is merely an inanimate vessel, a box, as it were, to contain liability for debts, for misconduct and even for criminality, thus shielding its ownersâ).
137 See Del. Code Ann. tit. 8 § 101(b) (2014).
138 See generally John Dewey, The Historic Background of Corporate Legal Personality, 35 Yale L.J. 655 (1926) (arguing that legal personality ought to be understood primarily as a pragmatic device rather than a metaphysical essence).
139 See 26 U.S.C. § 1363 (2012).
140 Several lower courts have suggested that standing doctrine precludes RFRA challenges to the regulation of corporations. See Autocam Corp. v. Sebelius, 730 F.3d 618, 621 (6th Cir. 2013) (âAs to the Kennedys, we agree with the government that they lack standing as individuals to bring RFRA claims arising from an obligation on their closely-held corporation.â); Conestoga Wood Specialties Corp. v. Secây of the U.S. Depât of Health & Human Servs., 724 F.3d 377, 387 (3d Cir. 2013), cert. granted, 134 S.Ct. 678 (2013) (holding that a corporation cannot assert the Free Exercise rights of its owners under the First Amendment). Some courts have concluded (erroneously) that for-profit corporations are not RFRA persons. However, even these courts concede that when a for-profit corporation claims that it has been regulated in violation of federal law, the corporation alleges an injury that would grant it standing under Article III, even if the court ultimately disagrees with the corporationâs interpretation of federal law. See, e.g., Autocam, 730 F.3d at 621 (â[W]e agree with the parties . . . that Autocam has Article III standing to assert RFRA claims.â). Some commentators have suggested that corporations may also have prudential third-party standing to assert the First Amendment or RFRA claims of their owners. See, e.g., Matthew I. Hall & Benjamin Means, Essay, The Prudential Third-Party Standing of Family-Owned Corporations, 162 U. Pa. L. Rev. Online 151 (2014). We do not believe, however, that Hobby Lobby presents any need for such involved standing analysis. RFRA rights are a creature of statute and thus conferred by an act of Congress. Congress conferred these rights on for-profit corporations by adopting the capacious definition of âpersonâ contained in the Dictionary Act and expressly authorizing such âpersonsâ to seek judicial relief. See 1 U.S.C. § 1 (2012); 42 U.S.C. § 2000bb-1(c) (2006). Article III presents no standing barrier when a corporation invokes such a statutory right to mount such challenges. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 580 (1992) (Kennedy, J., concurring) (âCongress has the power to define injuries and articulate chains of causation that will give rise to a case or controversy where none existed before . . . .â).
141 Matthew 6:24 (King James).
142 Michael A. Helfand, Obamacare and Religious Rights in a For-Profit World, L.A. Times (Mar. 18, 2014), http://articles.latimes.com/2014/mar/18/opinion/la-oe-helfand-hobby-lobby-supreme-court-religious-20140319, archived at http://perma.cc/J2ZD-DYCV.
143 See, e.g., Pontifical Council for Justice & Peace, Vocation of the Business Leader: A Reflection ¶ 10 (2012) (âDividing the demands of oneâs faith from oneâs work in business is a fundamental error . . . .â); Leonard J. Arrington, Feramorz Y. Fox & Dean L. May, Building the City of God 2 (2d ed. 1992) (describing Mormon teachings and practices aimed at âreorganizing . . . economic patterns of lifeâ in order to âbuild unity among a people fragmented by their individualistic search for economic well-beingâ).
144 See 42 U.S.C. § 2000bb-1(a)â(b) (2006) (requiring a substantial burden on religious exercise and allowing regulations creating such a burden in the case of a compelling government interest).
145 See, e.g., Corp. of the Presiding Bishop of the Church of Jesus Christ of Latter-day Saints v. Amos, 483 U.S. 327 (1987) (upholding the validity of the religious-institution exemption from Title VII as applied to a religious organizationâs secular activities); NLRB v. Catholic Bishop of Chi., 440 U.S. 490 (1979) (recognizing Free Exercise Clause as applying to a corporation); Kedroff v. Saint Nicholas Cathedral of the Russian Orthodox Church, 344 U.S. 94 (1952) (same).
146 132 S. Ct. 694 (2012).
147 Id. at 702â07.
148 See, e.g., 42 U.S.C. § 2000-e1 (2006 & Supp. V) (exempting any âreligious corporation, association, educational institution, or societyâ from certain applications of Title VII); 11 U.S.C. § 548(a)(2) (2012) (exempting certain charitable donations to religious organizations from the bankruptcy codeâs fraudulent conveyances statute); 42 U.S.C. §§ 2000cc et seq. (2006 & Supp. V) (The Religious Land Use and Institutionalized Persons Act of 2000); 26 U.S.C. § 501(c)(3) (2006 & Supp. V) (stating that âcorporations . . . operated exclusively for religious . . . purposesâ are exempt from income taxation).
149 For an argument that institutions play a key role in advancing free speech values, see Frederick Schauer, Towards an Institutional First Amendment, 89 Minn. L. Rev. 1256 (2005); see also Frederick Schauer, Institutions as Legal and Constitutional Categories, 54 UCLA L. Rev. 1747, 1749â50 (2007) (arguing that institutions should play a larger role in constitutional thinking).
150 See N.Y. Times Co. v. Sullivan, 376 U.S. 254, 265â66 (1964).
151 See Abrams v. United States, 250 U.S. 616, 630 (1919) (Holmes, J., dissenting) (arguing that the search for truth is best served by âthe competition of the marketâ between ideas).
152 Professor Jack Balkin, for example, has argued that â[f]reedom of expression . . . is part of something much larger: Letâs call it knowledge and information policy. The word âpolicyâ may be a misnomer, because people often oppose policy to rights and rights discourse. We donât have to do that, though.â Jack M. Balkin, Address at the Second Access to Knowledge Conference at Yale University, Two Ideas for Access to Knowledge: The Infrastructure of Free Expression and Margins of Appreciation (April 27, 2007) (transcript available at http://balkin.blogspot.com/2007/04/two-ideas-for-access-to-knowledge.html).
153 Several scholars have also argued that institutions should play a larger role in free exercise jurisprudence. See generally Paul Horwitz, Churches as First Amendment Institutions: Of Sovereignty and Spheres, 44 Harv. C.R-C.L. L. Rev. 79 (2009); Richard W. Garnett, Do Churches Matter? Towards an Institutional Understanding of the Religion Clauses, 53 Vill. L. Rev. 273 (2008).
154 See W. Va. State Bd. of Educ. v. Barnette, 319 U.S. 624, 642 (1943).
155 See, e.g., Stephen L. Carter, The Culture of Disbelief (1994) (criticizing the view that religion should be treated as an irrelevant or unimportant concern).
156 See, e.g., Charles Taylor, A Secular Age (2007) (arguing that secularity represents a continuation and adaptation of ultimately religious ideas).
157 See Catechism of the Catholic Church § 2030 (1994) (âIt is in the Church, in communion with all the baptized, that the Christian fulfills his vocation. From the Church he receives the Word of God containing the teachings of âthe law of Christ.â From the Church he receives the grace of the sacraments that sustains him on the âway.ââ (footnote omitted)).
158 See Lawrence A. Hoffman, The Way Into Jewish Prayer 46 (2009) (âThe Talmud rules that without a minyan of ten, those prayers that deal explicitly with the theme of sanctity must be omitted.â).
159 See supra Part II.A (discussing religiously infused businesses).
160 See, e.g., Mission Statement, Deseret Mgmt. Corp., http://deseretmanagement.com/mission-statement, archived at http://perma.cc/388N-KV3Z (stating that the for-profit corporations owned by the Church of Jesus Christ of Latter-day Saints seek to âhonor principles espoused by our owner in the products and services . . . provide[d]â).
161 See, e.g., The Tyndale Purpose, Tyndale House Publishers, http://www.tyndale.com/50_Company/tyndale_purpose.php, archived at http://perma.cc/5ZF5-UJDQ (noting that the company serves to âspread the Good News of Christ around the worldâ).
162 See generally Frank E. Vogel & Samuel L. Hayes, Islamic Law and Finance (1998).
163 See Matthew 6:12 (New International) (âForgive us our debts as we have forgiven our debtors.â).
164 See 1 Timothy 5:18 (King James) (âThe laborer is worthy of his hire.â).
165 See 1 Timothy 6:10 (King James) (âFor the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.â).