Wednesday, July 2, 2014

Hobby Lobby Is Not A Narrow Decision

It is déjà vu all over again. Two years ago, the Supreme Court ruled Obamacare constitutional and we had to endure commentary declaring it a victory for conservatism. It was not. Two years later, the Court rules in favor of Hobby Lobby and once again we have to endure commentary celebrating fiction. Frustrating.

It felt like having salt rubbed in one’s wounds. Conservative luminaries such as Charles Krauthammer heaping praise on Chief Justice John Roberts for his ‘constitutional finesse’ and for ‘reining in’ the Commerce Clause. George Will, much in the same vein, could barely contain his excitement in declaring that the Roberts Court had "reaffirmed the Constitution’s foundational premise: Enumerated powers are necessarily limited".

Of course, it was all nonsense. The Obamacare ruling did not rein in the Commerce Clause. It just maintained the status quo. There is no reining in of the Commerce Clause without reversing Wickard v. Filburn. And as far as Will’s point, there is no need to expand the Commerce Clause when the Taxing and Spending Clause can be used to tax both activity and non-activity. George Will's concept of limited is extremely expansive.

In the case of the Hobby Lobby ruling, the pervasive commentary is that it is a “narrow” decision.  (Don’t you just love how pundits fall in love with a word and repeated it ad nauseum? But I digress.)
Commentators point to the fact that the decision involved “closely held corporations.” No need to panic, they say. It won’t have much of an impact since it only affects certain types of corporations.

Closely held corporations account for 90% of all US companies. Moreover, a 2009 study showed that said companies account for 52% of private employment. In today’s terms that would mean 60.4 million workers could be affected by the ruling if corporate owners choose to object to the birth control mandate. A ruling that affects 90% of companies, 52% of the workforce is not narrow by any sane definition of the word.

Moreover, nothing in the decision impedes publicly traded corporations from claiming the same exemption. In the decision, Justice Alito states “numerous practical restraints would likely prevent that from occurring.” Unlikely is not the same as prohibited. Anyone who claims that this decision only applies to closely held corporation either hasn’t read the decision or does not comprehend the decision.

Pundits argue that the Hobby Lobby ruling is narrow since it only applies to the birth control mandate and cannot be used as a precedent for claiming religion exemption in the case of vaccinations, blood transfusion or to discriminate. After all, Justice Alito says so. He writes:
"This decision concerns only the contraceptive mandate and should not be understood to hold that all insurance-coverage mandates, e.g., for vaccinations or blood transfusions, must necessarily fall if they conflict with an employer’s religious beliefs. Nor does it provide a shield for employers who might cloak illegal discrimination as a religious practice."

For Alito to claim is either wishful thinking or outright deception. Perhaps he has forgotten a basic concept in common law: precedent. The DOMA decision was also deemed narrow since it only dealt with a federal statute. It did not address state bans or find that same sex marriage was a constitutional right. Yet the Windsor decision has been used to strike down more than a dozen state bans on same sex marriage.

The Hobby Lobby ruling has opened the door for all for profit corporations to seek exemptions based on the religious beliefs of their owners. Not only that, it has also created an incentive for corporations to do so. In her dissent, Justice Ginsburg writes:
“Compelling governmental interests in uniform compliance with the law, and disadvantages that religion-based opt-outs impose on others, hold no sway, the Court decides, at least when there is a “less restrictive alternative.” And such an alternative, the Court suggests, there always will be whenever, in lieu of tolling an enterprise claiming a religion-based exemption, the government, i.e., the general public, can pick up the tab.”

Imagine having the ability to sue and force the taxpayers to pick up the tab. That is a powerful and very tempting combination. And let’s face, despite all their talk about the virtues of free markets, American corporations have not been shy about seeking bailouts or corporate welfare. If a publicly traded corporation has the opportunity to stick the taxpayers with the tab, the “numerous practical restraints” mentioned by Alito will miraculously disappear.

Two years, two landmark rulings and in both instances pundits failed to understand the long term implications of the decisions. In Obamacare, they failed to comprehend that government was given the power to tax non-activity. In Hobby Lobby, they mindlessly babbled on about the narrowness of the decision without realizing that the Court has opened the door for all corporations to seek all kinds of exemptions and stick the taxpayers with the bill. Frustrating.