Dangling Threads: Hobby Lobby and Corporate Law Issues

By Callison, J. William | The University of Memphis Law Review, January 1, 2017 | Go to article overview

Dangling Threads: Hobby Lobby and Corporate Law Issues


Callison, J. William, The University of Memphis Law Review


The United States Supreme Court's decision in Burwell v. Hobby Lobby Stores, Inc.1 threw into question aspects of previously settled corporate law. These include issues of corporate personhood, corporate purpose, and the agency relationship between a corporation and its shareholders.

These issues are primarily matters of state law and, therefore, one can treat the Court's analysis as dictum to the extent it exceeds the ambit of federal statute. The Court surfaced powerful questions, and it is likely that state courts will respond. it is not clear what those responses will be.

I.The Hobby Lobby Decision

The issue in Hobby Lobby was simple: did governmental regulations implementing the Patient Protection and Affordable Care Act of 2010 ("ACA" or "Obamacare") violate the Religious Freedom Restoration Act of 1993 ("RFRA") by requiring three closely held corporations to provide health-insurance coverage for contraceptive methods that violated the sincerely held religious beliefs of the corporations' shareholders?2 The Court concluded that regulations pursuant to the ACA violated RFRA. First, the Court held that RFRA protects corporations since "the plain terms of RFRA make it perfectly clear that Congress did not discriminate . . . against men and women who wish to run their businesses as for-profit corporations in the manner required by their religious beliefs."3 In reaching this conclusion, the Court rejected arguments that use of the corporate form distinguishes closely held corporations from "sole proprietorships or general partnerships."4 Second, the Court held that the HHS regulations substantially burden the exercise of religion and do not constitute the least restrictive means for serving a compelling governmental interest.5 Thus, the HHS regulations, as applied to the appellee corporations, violated RFRA.6

The Court's decision that RFRA applies to corporations required consideration of questions about corporate personhood and corporate purpose. First, is a business corporation a person under RFRA? Second, assuming it is a person, can such a corporate person exercise religion?

The Court addressed the first question by noting that RFRA applies to "a person's" exercise of religion and that RFRA does not define "person."7 Therefore, the Court considered the Dictionary Act, which applies "in determining the meaning of any Act of Congress, unless the context requires otherwise."8 The Court decided that RFRA's context does not "indicate[] otherwise," and it ruled that, under the Dictionary Act, "the wor[d] 'person' includes corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals."9 The Court's context-indicatingotherwise analysis is somewhat mysterious. Rather than endeavoring to place RFRA's use of "person" into the religion-based context of RFRA, the Court simply accepted the government's concession that nonprofit corporations can be persons for RFRA purposes, and it stated that "[n]o known understanding of the term 'person' includes some but not all corporations."10 One wonders whether an objective analysis would have yielded a different result had the Government not conceded the nonprofit-corporation question. One also wonders what the Court's conclusion would have been if it had discussed the obvious question of whether an administrative agency has a valid basis for differentiating religiously based nonprofit corporations from other nonprofit and for-profit corporations, thereby creating a "known definition" even if one had not previously existed.11

The Court then focused on the government's primary argument that RFRA does not protect for-profit corporations because they cannot "exercise religion."12 The Court concluded that corporations can exercise religion, but rather than provide a positive basis for its conclusion that state corporate law permits corporate religious exercise, the Court debunked several straw arguments. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Dangling Threads: Hobby Lobby and Corporate Law Issues
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.