Cyril Korte v. HHS

In the

United States Court of Appeals

For the Seventh Circuit

No. 12-3841

CYRIL B. KORTE , JANE E. KORTE ,

and KORTE & LUITJOHAN

CONTRACTORS, INC .,

Plaintiffs-Appellants,

v.

KATHLEEN SEBELIUS, Secretary of

Health & Human Services, et al.,

Defendants-Appellees.

Appeal from the United States District Court

for the Southern District of Illinois.

No. 3:12-CV-01072-M JR — M ichael J. Reagan, Judge.

2 Nos. 12-3841 & 13-1077

No. 13-1077

WILLIAM D. GROTE , III;

WILLIAM DOMINIC GROTE , IV; WALTER F.

GROTE , JR.; MICHAEL R. GROTE ;

W. FREDERICK GROTE , III; JOHN R. GROTE ;

GROTE INDUSTRIES, LLC; and

GROTE INDUSTRIES, INC .,

Plaintiffs-Appellants,

v.

KATHLEEN SEBELIUS, Secretary of

Health & Human Services, et al.,

Defendants-Appellees.

Appeal from the United States District Court

for the Southern District of Indiana, New Albany Division.

No. 4:12-cv-00134-SEB-DM L — Sarah Evans Barker, Judge.

ARGUED MAY 22, 2013 — DECIDED NOVEMBER 8, 2013

Before FLAUM , ROVNER, and SYKES, Circuit Judges.

SYKES, Circuit Judge. These consolidated appeals challenge

the federal government’s “contraception mandate,” a regula-

tory requirement imposed by the Department of Health and

Human Services (“HHS”) to implement the terms of the 2010

Nos. 12-3841 & 13-1077 3

Patient Protection and Affordable Care Act. The mandate

requires employers to provide coverage for contraception and

sterilization procedures in their employee health-care plans on

a no-cost-sharing basis. Noncompliance carries heavy financial

penalties and the risk of enforcement actions.

The plaintiffs are two Catholic families and their closely

held corporations—one a construction company in Illinois and

the other a manufacturing firm in Indiana. The businesses are

secular and for profit, but they operate in conformity with the

faith commitments of the families that own and manage them.

The plaintiffs object for religious reasons to providing the

mandated coverage. They sued for an exemption on constitu-

tional and statutory grounds.

Center stage at this juncture is the Religious Freedom

Restoration Act of 1993 (“RFRA”), 42 U.S.C. §§ 2000bb et seq.,

which prohibits the federal government from placing substan-

tial burdens on “a person’s exercise of religion,” id.

§ 2000bb-1(a), unless it can demonstrate that applying the

burden is the “least restrictive means of furthering … [a]

compelling governmental interest,” id. § 2000bb-1(b). Focusing

primarily on their RFRA claims, the plaintiffs in each case

moved for a preliminary injunction. The district judges denied

relief, holding that the claims were not likely to succeed. We

provisionally disagreed and enjoined enforcement of the

mandate pending appeal.

The appeals have now been briefed and argued and are

ready for decision. Plenary review has confirmed our earlier

judgment. These cases—two among many currently pending

in courts around the country—raise important questions about

4 Nos. 12-3841 & 13-1077

whether business owners and their closely held corporations

may assert a religious objection to the contraception mandate

and whether forcing them to provide this coverage substan-

tially burdens their religious-exercise rights. We hold that the

plaintiffs—the business owners and their companies—may

challenge the mandate. We further hold that compelling them

to cover these services substantially burdens their religious-

exercise rights. Under RFRA the government must justify the

burden under the standard of strict scrutiny. So far it has not

done so, and we doubt that it can. Because the RFRA claims are

very likely to succeed and the balance of harms favors protect-

ing the religious-liberty rights of the plaintiffs, we reverse and

remand with instructions to enter preliminary injunctions

barring enforcement of the mandate against them.

I. Background

A. The Contraception Mandate

On March 23, 2010, Congress adopted the Affordable Care

Act, a sweeping legislative and regulatory overhaul of the

nation’s health-care system. The Act “aims to increase the

number of Americans covered by health insurance and

decrease the cost of health care.” Nat’l Fed’n of Indep. Bus. v.

Sebelius (“NFIB”), 132 S. Ct. 2566, 2580 (2012). One feature of

the Act is a requirement that employee health-care plans

governed by ERISA1 provide certain minimum levels of

coverage to plan participants and beneficiaries. See 29 U.S.C.

1

The Employment Retirement Income Security Act, 29 U.S.C. §§ 1001 et seq.

Nos. 12-3841 & 13-1077 5

§ 1185d (applying the requirements of part A of Title XXVII of

the Public Health Services Act as amended by the Affordable

Care Act to ERISA-governed group health plans). More

specifically, the Affordable Care Act establishes a general

requirement that employer-sponsored group health-care plans

cover “preventive care and screenings” for women on a

no-cost-sharing basis; Congress instructed HHS to fill in the

details:

A group health plan and a health insurance

issuer offering group or individual health insur-

ance coverage shall, at a minimum provide

coverage for and shall not impose any cost

sharing requirements for—

…

(4) with respect to women, such addi-

tional preventive care and screenings not

described in paragraph (1) as provided

for in comprehensive guidelines sup-

ported by the Health Resources and Ser-

vices Administration [“HRSA,” an agency

within HHS] for purposes of this para-

graph.

42 U.S.C. § 300gg-13(a); see also 29 U.S.C. § 1185d.

Before promulgating regulations pursuant to this statutory

directive, the HRSA sought advice from the Institute of

Medicine at the National Academy of Science about what

services to include in the preventive-care mandate. Based on

the Institute’s recommendations, the HRSA issued

6 Nos. 12-3841 & 13-1077

comprehensive guidelines requiring coverage of (among other

things) “[a]ll Food and Drug Administration [“FDA”] ap-

proved contraceptive methods, sterilization procedures, and

patient education and counseling for all women with reproduc-

tive capacity.” Health Res. & Servs. Admin., Women’s Preven-

tive Services Guidelines: Affordable Care Act Expands Prevention

Coverage for Women’s Health and Well-Being, http://www.hrsa.

gov/womensguidelines/ (last visited Nov. 7, 2013). These

include oral contraceptives (“the pill”), barrier methods,

implants and injections, emergency oral contraceptives

(“Plan B” and “Ella”), and intrauterine devices.2 On

February 15, 2012, HHS published final regulations incorporat-

ing the HRSA guidelines. See Group Health Plans and Health

Insurance Issuers Relating to Coverage of Preventive Services,

77 Fed. Reg. 8725 (Feb. 15, 2012). The agency made the

mandate effective in the first plan year on or after August 1,

2012.3 See 45 C.F.R. § 147.130(b)(1).

2

See FDA, B IR TH C O N TRO L : M ED IC IN ES TO H ELP Y O U , http://www.fda.gov/

ForConsumers/ByAudience/ForWomen/FreePublications/ucm313215.htm

(last visited Nov. 7, 2013).

3

In July the Treasury Department announced a one-year delay in the

implementation of the so-called employer mandate. See M ark J. M azur,

Continuing to Implement the ACA in a Careful, Thoughtful Manner, T REA SU RY

N O TES (July 2, 2013), http://www.treasury.gov/connect/blog/pages/

continuing-to-implement-the-aca-in-a-careful-thoughtful-manner-.aspx. The

announcement did not mention the contraception mandate, which was

already in effect. We assume that the postponement of the employer

mandate has no effect on the contraception mandate; the government has

not advised otherwise.

Nos. 12-3841 & 13-1077 7

Noncompliance with the contraception mandate is pun-

ished by steep financial penalties and other civil remedies. For

example, failure to provide the mandated coverage brings a tax

penalty of $100 per day per employee—$36,500 per year per

employee. See 26 U.S.C. § 4980D(a), (b)(1). If an employer

discontinues offering a health plan altogether, the penalty is

$2,000 per year per employee. See id. § 4980H(a), (c). In addi-

tion, noncomplying employers face potential enforcement

actions by the Secretary of Labor and plan participants and

beneficiaries under ERISA. See 29 U.S.C. §§ 1132, 1185d.

Like many of the other employer mandates in the Afford-

able Care Act, the contraception mandate applies to employers

with 50 or more full-time employees. See 26 U.S.C. § 4980H.

Smaller employers—those with fewer than 50 full-time

employees—are not required to provide a health plan for their

employees and apparently are not subject to the coverage

minimums, including the contraception mandate. See id. We

say “apparently” because it’s not entirely clear that the man-

date is categorically inapplicable to small employers; the

government takes the position that if a small employer not

otherwise required to provide an employee health-care plan

nonetheless chooses to do so, the regulatory scheme requires

inclusion of the mandated contraception coverage.

Health plans in existence when the Act was adopted are

“grandfathered” and do not need to comply with the coverage

minimums—including the contraception mandate—unless the

plan sponsor makes certain changes to the terms of the plan.

See 42 U.S.C. § 18011. Grandfathering is a transitional measure;

this category will shrink as employer-based plans existing

8 Nos. 12-3841 & 13-1077

prior to March 23, 2010, undergo changes. The government

estimates that the number of plans in grandfathered status will

dwindle fairly rapidly as older health-care plans are updated

and renewed. See Interim Final Rules for Group Health Plans

and Health Insurance Coverage Relating to Status as a

Grandfathered Health Plan, 75 Fed. Reg. 34,538, 34,552

(June 17, 2010).

Finally, some religious employers are exempt from the

contraception mandate, see 45 C.F.R. § 147.130(a)(1)(iv)(A), but

“religious employer” was initially defined quite narrowly:

[A] “religious employer” [for purposes of an

exemption from the contraception mandate] is an

organization that meets all of the following

criteria:

(1) The inculcation of religious values is

the purpose of the organization.

(2) The organization primarily employs

persons who share the religious tenets of

the organization.

(3) The organization serves primarily

persons who share the religious tenets of

the organization.

(4) The organization is a nonprofit organi-

zation as described in section 6033(a)(1)

and section 6033(a)(3)(A)(i) or (iii) of the

Internal Revenue Code of 1986, as amend-

ed [covering the tax status of churches

and their integrated auxiliaries,

Nos. 12-3841 & 13-1077 9

conventions or associations of churches,

and the exclusively religious activities of

religious orders].

Id. § 147.130(a)(1)(iv)(B).

B. The Religious-Employer Controversy

The contraception mandate was instantly controversial.4

The religious-employer exemption did not leave room for

conscientious religious objectors other than houses of worship,

their integrated affiliate organizations, and religious orders

acting as such. In other words, the definition of “religious

employer” was so circumscribed that it left out religious

colleges and universities; religious hospitals and clinics; reli-

gious charities and social-service organizations; other faith-

based nonprofits; and for-profit, closely held businesses

managed in accordance with a religious mission or creed.

HHS responded to the outcry from these left-out employers

by establishing a temporary “safe harbor” for certain nonprofit

religious organizations not covered by the exemption. See

Group Health Plans and Health Insurance Issuers Relating to

Coverage of Preventive Services, 77 Fed. Reg. at 8728. Eventu-

ally the agency proposed a revised definition of “religious

employer” and an “accommodation” of a broader class of

4

The mandate prompted a proliferation of lawsuits by employers seeking

exemptions on religious-liberty grounds. By one count more than 70 suits

challenging the mandate are currently pending. See The Becket Fund for

Religious Liberty, HHS Mandate Information Central, T H E B EC KET F UN D .O RG ,

http://www.becketfund.org/hhsinformationcentral.

10 Nos. 12-3841 & 13-1077

nonprofit religious organizations with objections to the

mandated coverage. The new rules were proposed in final

form on February 6, 2013, see Coverage of Certain Preventive

Services, 78 Fed. Reg. 8456, published in final form on July 2,

2013, see 78 Fed. Reg. 39,870, and became effective August 1,

2013, see id.

As revised, the exemption drops the first three require-

ments of the earlier definition of “religious employer,” but the

change is not intended to alter the exemption’s scope. “Reli-

gious employer” is now defined as “an organization that is

organized and operates as a nonprofit entity and is referred to

in section 6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code

of 1986, as amended.” 45 C.F.R. § 147.131(a). The cross-

reference is the tax exemption for churches and their integrated

auxiliaries, conventions or associations of churches, and the

exclusively religious activities of religious orders. See 26 U.S.C.

§ 6033(a)(3)(A)(i), (iii). HHS has explained that “the simplified

and clarified definition of religious employer does not expand

the universe of religious employers that qualify for the

exemption beyond that which was intended in the 2012 final

regulations.” Coverage of Certain Preventive Services, 78 Fed.

Reg. at 39,874. In other words, the exemption remains limited

to “[h]ouses of worship and their integrated auxiliaries.” Id.

Under the revised rule, certain nonprofit religiously

affiliated employers may receive an “accommoda-

tion”—essentially, an attempted workaround whereby the

objecting employer gives notice to its insurance carrier and the

insurer issues a separate policy with the mandated coverage.

Nos. 12-3841 & 13-1077 11

The accommodation is limited to organizations that meet the

following requirements:

(1) The organization opposes providing coverage

for some or all of any contraceptive services

required to be covered under § 147.130(a)(1)(iv)

on account of religious objections.

(2) The organization operates as a nonprofit

entity.

(3) The organization holds itself out as a religious

organization.

(4) The organization self-certifies, in a form and

manner specified by the Secretary, that it satisfies

the criteria in paragraphs (b)(1) through (3) of

this section … .

45 C.F.R. § 147.131(b). Notably for our purposes, neither the

final religious-employer exemption nor the accommodation

applies to for-profit employers with conscientious religious

objections to providing the mandated coverage.

C. The Plaintiffs

1. The Kortes and K & L Contractors

Cyril and Jane Korte own and operate Korte & Luitjohan

Contractors, Inc. (“K & L Contractors”), a construction com-

pany located in Highland, Illinois. K & L Contractors has

approximately 90 full-time employees, 70 of whom belong to

a union that sponsors their health-insurance plan. The com-

pany provides a health-care plan for the remaining 20 or so

12 Nos. 12-3841 & 13-1077

nonunion employees. Together, Cyril and Jane own about 87%

of the stock of the corporation and are its only directors. Cyril

is the president and Jane is the secretary of the company. As

officers and directors, they set all company policy.

The Kortes are Catholic and follow the teachings of the

Catholic Church regarding the sanctity of human life from

conception to natural death and the moral wrongfulness of

abortion, sterilization, and the use of abortifacient drugs and

artificial means of contraception. They seek to manage their

company in accordance with their faith commitments. In

August 2012 when the contraception mandate was finalized,

the Kortes discovered that their then-existing health plan

covered sterilization and contraception—coverage that they

did not realize they were carrying. Because providing this

coverage conflicts with their religious convictions, they began

to investigate alternative health-care plans with the intention

of terminating their existing plan and substituting one that

conforms to the requirements of their faith.

The contraception mandate stood in their way. The com-

pany’s existing health-care plan was set to renew on January 1,

2013, triggering the requirements of the mandate and the large

financial penalties and possible enforcement actions if they did

not comply. As the Kortes understand their religious obliga-

tions, providing the mandated coverage would facilitate a

grave moral wrong. On the other hand, following the teachings

of their faith and refusing to comply would financially devas-

tate K & L Contractors and the Kortes as its owners; at $100 per

day per employee, the monetary penalties would total $730,000

per year.

Nos. 12-3841 & 13-1077 13

The Kortes responded to the conflict between their legal

and religious duties in two ways. First, they promulgated

ethical guidelines for K & L Contractors memorializing the

faith-informed moral limitations on the company’s provision

of health-care benefits, including its inability to provide

insurance coverage for abortion, abortifacient drugs, artificial

contraception, and sterilization.5 Second, the Kortes and K & L

5

The company’s ethical guidelines are as follows:

1. As adherents of the Catholic faith, we hold to the

teachings of the Catholic Church regarding the sanctity of

human life from conception to natural death. We believe

that actions intended to terminate an innocent human life

by abortion, including abortion-inducing drugs, are

gravely sinful. We also adhere to the Catholic Church’s

teaching regarding the immorality of artificial means of

contraception and sterilization.

2. As equal shareholders who together own a control-

ling interest in Korte & Luitjohan Contractors, Inc., we

wish to conduct the business … in a manner that does not

violate our religious faith and values.

3. Accordingly, we and Korte & Luitjohan Contractors,

Inc. cannot arrange for, pay for, provide, facilitate, or

otherwise support employee health plan coverage for

contraceptives, sterilization, abortion, abortion-inducing

drugs, or related education and counseling, except in the

limited circum stances where a physician certifies that

certain sterilization procedures or drugs commonly used

as contraceptives are being prescribed with the intent to

treat certain medical conditions, not with the intent to

prevent or terminate pregnancy, without violating our

religious beliefs.

14 Nos. 12-3841 & 13-1077

Contractors filed suit in the Southern District of Illinois for a

religious exemption from the mandate.

2. The Grotes and Grote Industries

The Grote Family owns and manages Grote Industries, Inc.,

a manufacturer of vehicle safety systems headquartered in

Madison, Indiana.6 Like the Kortes, the members of the Grote

Family are Catholic and they manage Grote Industries in

accordance with their religious commitments, including

Catholic moral teaching regarding the sanctity of human life

and the wrongfulness of abortion, abortifacient drugs, artificial

contraception, and sterilization.

Grote Industries has 1,148 full-time employees at various

locations, including 464 in the United States. The company

provides a health-care plan that is self-insured and renews

annually on the first of every year. Consistent with the Grote

Family’s Catholic faith, prior to January 1, 2013, the employee

health-care plan did not cover contraception and sterilization

6

The Grote Family includes individual plaintiffs William D. Grote, III;

William Dominic Grote, IV; Walter F. Grote, Jr.; M ichael R. Grote;

W. Frederick Grote, III; and John R. Grote. Together with other family

members not named as plaintiffs, they fully own Grote Industries, Inc.,

which in turn is the managing mem ber of Grote Industries, LLC, the

manufacturing firm. For ease of reference, we refer to the two companies

as “Grote Industries.” William D. Grote, III is Chairman and CEO; William

Dominic Grote, IV is President and Chief Operating Officer; Walter F.

Grote, Jr. is a board member; M ichael R. Grote is the A ssistant Treasurer;

W. Frederick Grote, III is the Secretary; and John R. Grote is the A ssistant

Secretary.

Nos. 12-3841 & 13-1077 15

procedures. Starting on that date, however, the requirements

of the contraception mandate kicked in.

Like the Kortes and K & L Contractors, the Grote Family

and Grote Industries object on religious grounds to providing

coverage for contraception, abortion-inducing drugs, and

sterilization procedures. But with its large full-time workforce,

the company faced an annual penalty of almost $17 million if

it did not comply with the mandate. The Grotes and Grote

Industries filed suit in the Southern District of Indiana for a

religious exemption from the mandate.

D. The Litigation

Both complaints name the Secretaries of HHS, Labor, and

the Treasury as defendants and seek declaratory and injunctive

relief against the contraception mandate. Both sets of plaintiffs

allege that the mandate violates their rights under RFRA; the

Free Exercise Clause, the Establishment Clause, and the Free

Speech Clause of the First Amendment; and the Administrative

Procedure Act. The Grote complaint adds a due-process claim.

In both cases the plaintiffs moved for a preliminary injunction

the day after filing suit, focusing primarily though not exclu-

sively on their RFRA claims.

In Korte the district court in Southern Illinois denied the

motion, concluding that the Kortes and K & L Contractors had

not demonstrated a likelihood of success on the merits.

Regarding the RFRA claim in particular, the judge held that

although the Kortes and K & L Contractors are “persons”

within the meaning of RFRA and may invoke the statute’s

16 Nos. 12-3841 & 13-1077

protection, the contraception mandate does not substantially

burden their religious-exercise rights. This is so, the judge held,

because the link between the mandated coverage and the acts

condemned by the Kortes’ religion is too attenuated. In other

words, the burden on religious exercise is insubstantial because

the compelled provision of contraception coverage is too far

removed from the independent decisions by plan participants

and beneficiaries to use contraception. The court also found the

free-exercise claim unlikely to succeed.

In Grote the district court in Southern Indiana likewise

denied the motion, also concluding that the plaintiffs were not

likely to succeed on their RFRA claim. Unlike her colleague in

Southern Illinois, however, the Indiana judge doubted that a

secular, for-profit corporation like Grote Industries has

religious-exercise rights under RFRA. The judge did not decide

the question, however, concluding instead that any burden on

the Grotes or Grote Industries is insignificant because too many

independent decisions separate the provision of the mandated

coverage and the practices deemed immoral by the Catholic

Church. The court also found the constitutional and Adminis-

trative Procedure Act claims unlikely to succeed.

The case from Southern Illinois reached us first, just before

the January 1, 2013 deadline for compliance with the mandate.

The plaintiffs sought an injunction pending appeal. In a brief

order and based on our early review of the merits, we provi-

sionally held that the RFRA claim is likely to succeed and the

balance of harms weighs in favor of the religious-liberty rights

of the plaintiffs. See Korte v. Sebelius, No. 12-3841, 2012 WL

6757353, *4–5 (7th Cir. Dec. 28, 2012). We enjoined enforcement

Nos. 12-3841 & 13-1077 17

of the mandate pending appeal. Id. at *5. Our colleague

dissented. Id. at *5–6 (Rovner, J., dissenting).

On the strength of our provisional decision in Korte, the

Grotes and Grote Industries returned to the district court in

Southern Indiana and asked for reconsideration. The judge

acknowledged the similarity between the two cases but

declined to reconsider because our order in Korte had no

precedential effect. The plaintiffs appealed and asked for an

injunction pending appeal. Tracing our analysis in Korte, we

granted the request and enjoined enforcement of the mandate

pending appeal. Grote v. Sebelius, 708 F.3d 850, 853–55 (7th Cir.

2013). Again, our colleague disagreed, filing a thoughtful

dissent explaining her contrary position. Id. at 855–67

(Rovner, J., dissenting).

The appeals proceeded to full briefing, and we heard

argument at the end of May. Since then, four circuits have

reached decision in similar cases. The Tenth Circuit held that

two closely held, for-profit businesses and their owners are

likely to succeed on a claim for an exemption from the

mandate under RFRA. Hobby Lobby Stores, Inc. v. Sebelius,

723 F.3d 1114 (10th Cir. 2013). The Sixth and Third Circuits

disagree. Autocam Corp. v. Sebelius, 730 F.3d 618 (6th Cir. 2013);

Conestoga Wood Specialties Corp. v. Sec’y of the U.S. Dep’t of

Health & Human Servs., 724 F.3d 377 (3d Cir. 2013). The D.C.

Circuit recently held that the owners of two closely held, for-

profit businesses are likely to succeed on a RFRA challenge to

the mandate, although their companies are not. Gilardi v. U.S.

Dep’t of Health & Human Servs., No. 13-5069, 2013 WL 5854246

(D.C. Cir. Nov. 1, 2013).

18 Nos. 12-3841 & 13-1077

II. Analysis

These cases come to us on appeals from orders denying

preliminary injunctive relief. See 28 U.S.C. § 1291. To win a

preliminary injunction, the moving party must demonstrate

that (1) it has no adequate remedy at law and will suffer

irreparable harm if a preliminary injunction is denied; and

(2) there is some likelihood of success on the merits of the

claim. See Ezell v. City of Chicago, 651 F.3d 684, 694 (7th Cir.

2011). If the moving party meets this threshold burden, the

court weighs the competing harms to the parties if an injunc-

tion is granted or denied and also considers the public interest.

See Planned Parenthood of Ind., Inc. v. Comm’r of the Ind. State

Dep’t of Health, 699 F.3d 962, 972 (7th Cir. 2012); Ezell, 651 F.3d

at 694. This equitable balancing proceeds on a sliding-scale

analysis; the greater the likelihood of success on the merits, the

less heavily the balance of harms must tip in the moving

party’s favor. See Planned Parenthood, 699 F.3d at 972. The aim

is to minimize the costs of a wrong decision. See Stuller, Inc. v.

Steak N Shake Enters., Inc., 695 F.3d 676, 678 (7th Cir. 2012). Our

review proceeds on a split standard of review: We review legal

conclusions de novo, findings of fact for clear error, and

equitable balancing for abuse of discretion. Ezell, 651 F.3d at

694.

Here, the analysis begins and ends with the likelihood of

success on the merits of the RFRA claim. On the strength of

that claim alone, preliminary injunctive relief is warranted;

there is no need to remand for the district courts to weigh the

injunction equities. Although the claim is statutory, RFRA

protects First Amendment free-exercise rights, and “in First

Nos. 12-3841 & 13-1077 19

Amendment cases, ‘the likelihood of success on the merits will

often be the determinative factor.’ ” ACLU of Ill. v. Alvarez,

679 F.3d 583, 589 (7th Cir. 2012) (quoting Joelner v. Village of

Washington Park, Ill., 378 F.3d 613, 620 (7th Cir. 2004)). “This is

because the ‘loss of First Amendment freedoms … unquestion-

ably constitutes irreparable injury … .’ ” Id. (quoting Elrod v.

Burns, 427 U.S. 347, 373 (1976) (plurality opinion)). Moreover,

once the moving party establishes a likelihood of success on

the merits, the balance of harms “normally favors granting

preliminary injunctive relief” because “ ‘injunctions protecting

First Amendment freedoms are always in the public interest.’ ”

Id. at 590 (quoting Christian Legal Soc’y v. Walker, 453 F.3d 853,

859 (7th Cir. 2006)). The government hasn’t addressed equita-

ble balancing, conceding the point to the plaintiffs. So the

appeals turn entirely on whether the plaintiffs’ RFRA claims

are likely to succeed.

Two legal questions are contested: (1) is a secular, for-profit

corporation a “person” under RFRA; and (2) does the contra-

ception mandate substantially burden the religious-exercise

rights of any of the plaintiffs, individual or corporate? If the

answer to these questions is “yes,” the government must

discharge its burden of justifying the mandate under strict

scrutiny. We conclude as follows: The corporate plaintiffs are

“persons” under RFRA and may invoke the statute’s protec-

tion; the contraception mandate substantially burdens the

religious-exercise rights of all of the plaintiffs; and the govern-

ment has not carried its burden under strict scrutiny.

First, however, we clear away some possible jurisdictional

objections.

20 Nos. 12-3841 & 13-1077

A. Jurisdiction

Although the government never challenged jurisdiction,

either in the district court or here, we have an independent

obligation to satisfy ourselves that jurisdiction is secure before

proceeding to the merits. See Minn-Chem, Inc. v. Agrium Inc.,

683 F.3d 845, 853 (7th Cir. 2012) (en banc); Carroll v. Stryker

Corp., 658 F.3d 675, 680 (7th Cir. 2011). There are two arguable

jurisdictional issues lurking here: standing and the

Anti-Injunction Act.7

7

Just before oral argument, the government filed a “Notice of Supplemental

Briefing on Jurisdictional Issues,” drawing our attention to a brief it filed

in response to a jurisdictional order from the Tenth Circuit in Hobby Lobby.

The plaintiffs moved to strike this “notice.” Although the government’s

approach is unorthodox, we have reviewed its supplemental brief in the

Tenth Circuit case. In it the government argued that the corporate plaintiffs

in Hobby Lobby have standing but the owners of the corporations do not.

Supplemental Brief for Appellees at 3–9, Hobby Lobby Stores, Inc. v. Sebelius,

723 F.3d 1114 (10th Cir. 2013), 2013 W L 1790515 at *3–9. The government

also took the position that the Anti-Injunction Act does not apply. Id. at

12–15, 2013 W L 1790515 at *12–15. The Tenth Circuit, sitting en banc,

unanimously held that the corporations have standing and that the

Anti-Injunction Act does not apply; four members of the court also

concluded that the individual plaintiffs have standing. See Hobby Lobby,

723 F.3d at 1121, 1126 (Tymkovich, J.); id. at 1154–56 (Gorsuch, J., concur-

ring); id. at 1184–89 (M atheson, J., concurring in part and dissenting in part).

We have conducted our own jurisdictional analysis and find no jurisdic-

tional impediments to reaching the merits. Accordingly, the government’s

“Notice of Supplemental Briefing” is inconsequential, and we deny the

plaintiffs’ motion to strike.

Nos. 12-3841 & 13-1077 21

1. Standing

Article III of the Constitution limits the judicial power to

“Cases” and “Controversies,” U.S. CONST . art. III, § 2, cl. 1;

Clapper v. Amnesty Int’l USA, 133 S. Ct. 1138, 1146 (2013), a

limitation understood to confine the federal courts to “the

traditional role of Anglo-American courts, which is to redress

or prevent actual or imminently threatened injury to persons

caused by private or official violation of law,” Summers v. Earth

Island Inst., 555 U.S. 488, 492 (2009). The doctrine of standing

enforces this limitation. Id.; Lujan v. Defenders of Wildlife,

504 U.S. 555, 560 (1992). To invoke the authority of a federal

court, a litigant must have “an injury that is concrete, particu-

larized, and actual or imminent; fairly traceable to the defen-

dant’s challenged action; and redressable by a favorable

ruling.” Horne v. Flores, 557 U.S. 433, 445 (2009).

The contraception mandate inflicts a concrete and particu-

larized injury on all of the plaintiffs.8 The mandate operates

directly on K & L Contractors and Grote Industries, forcing

them to provide contraception coverage in their employee

health-care plans on pain of onerous financial penalties and the

possibility of enforcement actions by federal regulators

8

We note that “[w]here at least one plaintiff has standing, jurisdiction is

secure and the court will adjudicate the case whether the additional

plaintiffs have standing or not.” Ezell v. City of Chicago, 651 F.3d 684, 696 n.7

(7th Cir. 2011) (citing Village of Arlington Heights v. Metro. Hous. Dev. Corp.,

429 U.S. 252, 264 (1977)).

22 Nos. 12-3841 & 13-1077

charged with implementing the Affordable Care Act.9 The

threat of financial penalty and other enforcement action is

easily sufficient to establish standing to challenge the mandate

prior to its enforcement. The companies need not violate the

mandate and risk enforcement of the regulatory scheme before

bringing suit. See Wis. Right to Life State Political Action Comm.

v. Barland, 664 F.3d 139, 147 (7th Cir. 2011). The “existence of a

statute implies a threat to prosecute, so pre-enforcement

challenges are proper [under Article III] because a probability

of future injury counts as ‘injury’ for purposes of standing.”

Bauer v. Shepard, 620 F.3d 704, 708 (7th Cir. 2010).

The Kortes and Grotes also have Article III standing,

although this conclusion requires a bit more elaboration. The

contraception mandate injures the individual plaintiffs in two

concrete ways. First, because corporate ownership is closely

held, the mandate’s indirect effect on the financial interests of

the Kortes and Grotes as controlling shareholders is a concrete

injury sufficient to support Article III standing under Supreme

Court and circuit precedent. See Franchise Tax Bd. of Calif. v.

Alcan Aluminum Ltd., 493 U.S. 331, 336 (1990) (indirect sole

shareholders have Article III standing to challenge taxes

assessed against their wholly owned subsidiaries); Rawoof v.

Texor Petroleum Co., 521 F.3d 750, 756 (7th Cir. 2008) (sole share-

holder of a corporation operating a branded petroleum

9

W hether the corporate plaintiffs are “persons” with religious-exercise

rights within the meaning of RFRA is a merits question, not a jurisdictional

question. See Chafin v. Chafin, 133 S. Ct. 1017, 1024 (2013); Steel Co. v. Citizens

for a Better Env’t, 523 U.S. 83, 102–03 (1998); Minn-Chem, Inc. v. Agrium Inc.,

683 F.3d 845, 852–53 (7th Cir. 2012) (en banc).

Nos. 12-3841 & 13-1077 23

franchise has Article III standing to challenge franchisor’s

termination of the franchise under the Petroleum Marketing

Practices Act).

Second, the Kortes and the Grotes face an intangible but no

less concrete injury to their religious-exercise rights. It is

axiomatic that organizational associations, including corpora-

tions, act only through human agency. See Reich v. Sea Sprite

Boat Co., 50 F.3d 413, 417 (7th Cir. 1995) (“incorporeal abstrac-

tions act through agents”). As owners, officers, and directors

of their closely held corporations, the Kortes and Grotes set all

company policy and manage the day-to-day operations of their

businesses. Complying with the mandate requires them to

purchase the required contraception coverage (or self-insure

for these services), albeit as agents of their companies and

using corporate funds. But this conflicts with their religious

commitments; as they understand the requirements of their

faith, they must refrain from putting this coverage in place

because doing so would make them complicit in the morally

wrongful act of another.

Compelling a person to do an act his religion forbids, or

punishing him for an act his religion requires, are paradigmatic

religious-liberty injuries sufficient to invoke the jurisdiction of

the federal courts. See, e.g., Gonzales v. O Centro Espirita

Beneficente Uniao Do Vegetal, 546 U.S. 418, 428 (2006); Church of

the Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520 (1993);

United States v. Lee, 455 U.S. 252 (1982); Thomas v. Review Bd. of

the Ind. Emp’t Sec. Div., 450 U.S. 707 (1981); Wisconsin v. Yoder,

406 U.S. 205 (1972); Sherbert v. Verner, 374 U.S. 398 (1963).

24 Nos. 12-3841 & 13-1077

Finally, we note that the shareholder-standing rule does not

block the Kortes and Grotes from challenging the mandate.

The rule is an aspect of third-party standing doctrine, which

implements the general principle that litigants may not sue in

federal court to enforce the rights of others. See Franchise Tax

Bd., 493 U.S. at 336; Warth v. Seldin, 422 U.S. 490, 498 (1975);

Rawoof, 521 F.3d at 757; MainStreet Org. of Realtors v. Calumet

City, 505 F.3d 742, 745 (7th Cir. 2007). Subject to certain

exceptions, the rule “holds that a shareholder generally cannot

sue for indirect harm he suffers as a result of an injury to the

corporation.” Rawoof, 521 F.3d at 757 (citing Franchise Tax Bd.,

493 U.S. at 336).

Like other rules of third-party standing, however, the

shareholder-standing rule is a prudential limitation and does

not affect the court’s authority to hear the case. “Prudential-

standing doctrine ‘is not jurisdictional in the sense that

Article III standing is.’ ” Id. at 756 (quoting MainStreet Realtors,

505 F.3d at 747). Unlike true jurisdictional rules, prudential

limitations on standing can be waived. See G & S Holdings LLC

v. Cont’l Cas. Co., 697 F.3d 535, 540 (7th Cir. 2012); MainStreet

Realtors, 505 F.3d at 747. By failing to raise the shareholder-

standing rule in the district court or here, the government

waived it. Although we have the discretion to overlook the

waiver, see Rawoof, 521 F.3d at 756–57; MainStreet Realtors,

505 F.3d at 747, doing so here would be pointless. A well-

established exception allows “a shareholder with a direct,

personal interest in a cause of action to bring suit even if the

corporation’s rights are also implicated.” Franchise Tax Bd.,

493 U.S. at 336. The Kortes and the Grotes fall comfortably

within the exception; they have a direct and personal interest

Nos. 12-3841 & 13-1077 25

in vindicating their individual religious-liberty rights, even

though the rights of their closely held corporations are also at

stake.

2. The Anti-Injunction Act

The Anti-Injunction Act provides that “no suit for the

purpose of restraining the assessment or collection of any tax

shall be maintained in any court by any person, whether or not

such person is the person against whom such tax was

assessed.” 26 U.S.C. § 7421(a). The Act “protects the Govern-

ment’s ability to collect a consistent stream of revenue[] by

barring litigation to enjoin or otherwise obstruct the collection

of taxes.” NFIB, 132 S. Ct. at 2582; see also Hibbs v. Winn,

542 U.S. 88, 103 (2004); Bob Jones Univ. v. Simon, 416 U.S. 725,

736 (1974); Enochs v. Williams Packing & Navigation Co., 370 U.S.

1, 7 (1962). By operation of the Act, a tax ordinarily may be

challenged only in a suit for a refund after it is paid. NFIB,

132 S. Ct. at 2582; Bob Jones Univ., 416 U.S. at 736–37.

The Anti-Injunction Act does not apply here.10 These are

not suits “for the purpose of” restraining the assessment or

collection of a tax. The suits seek relief from a regulatory

mandate that exists separate and apart from the assessment or

collection of taxes. The contraception mandate is not itself a tax

10

The A nti-Injunction Act is generally assumed to be a jurisdictional bar.

See Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 6–8 (1962). That

m ay be incorrect. See Hobby Lobby, 723 F.3d at 1157–59 (Gorsuch, J.,

concurring).

26 Nos. 12-3841 & 13-1077

provision; its location within the United States Code and

corresponding HHS regulations underscores as much.

The mandate was promulgated by HHS pursuant to

authority delegated to it by a section of the Affordable Care

Act that amends the Public Health Services Act. See 42 U.S.C.

§ 300gg-13(a)(4). The statutory component of the mandate

imposes a general preventive-care requirement on all group

health-care plans (including employer-sponsored plans) and

issuers of individual and group health-insurance policies. See

id. The mandate is situated in the public-welfare title of the

Code of Federal Regulations—more specifically, in the part

containing regulations governing the group and individual

health-insurance markets. See 45 C.F.R. § 147.130. The mandate

is backed by stiff tax penalties against employers that fail to

comply, see 26 U.S.C. §§ 4980D, 4980H, but there are additional

consequences for noncompliance, including ERISA enforce-

ment actions by the Secretary of Labor and plan participants

and beneficiaries, see 29 U.S.C. §§ 1132, 1185d. Noncompliant

health insurers are subject to the enforcement authority of the

Secretary of HHS as well as the states in which they operate.

See 42 U.S.C. § 300gg-22.

It should be clear from this description that the contracep-

tion mandate is not structured as a predicate to the imposition

of a tax but is instead an independent regulatory mandate.

These lawsuits target the mandate itself.

It is true that the complaints name the Treasury Secretary

as a defendant in addition to the Secretaries of HHS and Labor,

and the plaintiffs have asked the court to enjoin the enforce-

ment of the mandate by any of them. If the plaintiffs win an

Nos. 12-3841 & 13-1077 27

exemption from the mandate, they will not be liable for the tax

penalty under § 4980D and will be insulated from other means

of enforcement as well. In that sense these lawsuits, if success-

ful, will incidentally affect the corporate plaintiffs’ tax liability.

But the Anti-Injunction Act does not reach “all disputes

tangentially related to taxes.” Cohen v. United States, 650 F.3d

717, 727 (D.C. Cir. 2011); see also Pendleton v. Heard, 824 F.2d

448, 451–52 (5th Cir. 1987) (restraining the assessment or

collection of a tax must be the primary purpose of the lawsuit,

not an incidental effect of it, for the Anti-Injunction Act to

apply); Linn v. Chivatero, 714 F.2d 1278, 1282 (5th Cir. 1983)

(same).

Still, there is no doubt that § 4980D, a provision in the

Internal Revenue Code, is implicated in the remedial sweep of

these cases, so we think it best to address whether it is properly

classified as a “tax” within the meaning of the Anti-Injunction

Act. It is not.

We acknowledge that Congress used the term “tax” in the

text of § 4980D (and also in § 4980H, the alternative “shared

responsibility payment” for employers that drop or otherwise

go without an employee health-care plan). The language

Congress uses to describe an exaction is ordinarily the best

evidence of whether it meant the Anti-Injunction Act to apply.

See NFIB, 132 S. Ct. at 2582–83. But Congress also called the

payment specified in § 4980D a “penalty.” The statute was

originally adopted as part of the Health Insurance Portability

and Accountability Act of 1996, Pub. L. No. 104-191, 110 Stat.

1936, and was titled “Penalty on Failure to Meet Certain Group

Health Plan Requirements,” see id. § 402, 110 Stat. 1936, 2084

28 Nos. 12-3841 & 13-1077

(emphasis added). The language Congress used is contradic-

tory and thus inconclusive.

Other features of § 4980D confirm that the provision is

meant to penalize employers for noncompliance with the

various mandates in the Affordable Care Act and its imple-

menting regulations. The sheer size of the required payment

fairly screams “penalty.” Any failure to provide the mandated

minimum coverage—no matter how significant the deviation—

costs the employer a whopping $100 per day per employee. See

26 U.S.C. § 4980D(b). Exacting such a high price for noncompli-

ance suggests that the congressional objective is punitive. See

Empress Casino Joliet Corp. v. Balmoral Racing Club, Inc., 651 F.3d

722, 729 (7th Cir. 2011) (“[A] tax might be so totally punitive in

purpose and effect that, since nomenclature is unimportant, it

should be classified as a fine rather than a tax.”) (applying the

parallel Tax Injunction Act, which protects the collection of

state taxes).

When Congress regulates private conduct and makes

noncompliance painful by exacting severe and disproportion-

ate monetary consequences, the primary purpose of the

scheme must be understood as regulatory and punitive rather

than revenue raising. See Robertson v. United States, 582 F.2d

1126, 1128 (7th Cir. 1978) (the Anti-Injunction Act does not

apply to “the exaction of a purely regulatory tax”). The

obvious aim of § 4980D is not to raise revenue but to achieve

broad compliance with the regulatory regime through deter-

rence and punishment. This is so even though the exaction

generates some revenue because “deterrence is never perfect.”

Empress Casino, 651 F.3d at 728–29; see also Retail Indus. Leaders

Nos. 12-3841 & 13-1077 29

Ass’n v. Fielder, 475 F.3d 180, 189 (4th Cir. 2007) (the Tax

Injunction Act does not apply to a challenge to Maryland’s

“Fair Share Act” requiring a minimum level of spending on

employee health-care benefits).

The statute also contains several exceptions based on the

employer’s scienter, see 26 U.S.C. § 4980D(c), a key indication

that the payment is a penalty, not a tax. See NFIB, 132 S. Ct. at

2595 (“[S]cienter requirements are typical of punitive statutes,

because Congress often wishes to punish only those who

intentionally break the law.”); Bailey v. Drexel Furniture Co.

(Child Labor Tax Case), 259 U.S. 20, 37 (1922) (“Scienter[] [is]

associated with penalties, not with taxes.”). Finally, the

$100-per-day-per-employee formula is repeated verbatim in

42 U.S.C. § 300gg-22(b)(2)(C)(ii), which authorizes the Secretary

of HHS to impose the same sort of penalty on noncompliant

insurers that § 4980D(b)(1) imposes on noncompliant employ-

ers.

Together, these aspects of the regulatory scheme all point

in the same direction: Section 4980D is a penalty for noncom-

pliance with the regulatory mandates on employer-based

health-care plans. It is not a tax for purposes of the Anti-

Injunction Act. By parallel reasoning the same is true of the

alternative payment in § 4980H. This conclusion comports with

the Supreme Court’s decision in NFIB, which held that the

Affordable Care Act’s “shared responsibility payment” for

noncompliance with the individual insurance mandate is not

a tax for purposes of the Anti-Injunction Act. 132 S. Ct. at

2582–84. Here, as in NFIB, the Anti-Injunction Act does not

block a decision on the merits.

30 Nos. 12-3841 & 13-1077

B. The RFRA Claim

In Employment Division, Department of Human Resources of

Oregon v. Smith, 494 U.S. 872, 883–90 (1990), the Supreme Court

held that the religious freedom guaranteed by the Free Exercise

Clause of the First Amendment does not require religious

exemptions from facially neutral laws of general applicability.11

Smith altered the then-prevailing standard of Sherbert v. Verner,

374 U.S. at 406–07, and Wisconsin v. Yoder, 406 U.S. at 220–21,

which applied strict scrutiny to laws that had the effect of

burdening religious practices. Under Sherbert and Yoder, a

substantial burden on religious exercise—even one arising

from the application of a religion-neutral, generally applicable

law—was unconstitutional unless the government could show

that the burden was the least restrictive means of furthering a

compelling public interest. Smith changed that understanding

of the free-exercise right. The Court held that neutral laws of

general applicability need only satisfy the basic test for

rationality that applies to all laws; if a law incidentally burdens

the exercise of religion, the Constitution does not require an

exemption. Smith, 494 U.S. at 878–79, 888–90.

Congress responded to this shift in free-exercise doctrine by

enacting RFRA, “a statutory rule comparable to the constitu-

tional rule rejected in Smith.” O Centro Espirita, 546 U.S. at 424;

see also Cutter v. Wilkinson, 544 U.S. 709, 714–15 (2005); City of

Boerne v. Flores, 521 U.S. 507, 512 (1997). RFRA creates a broad

11

The First Amendment provides, in pertinent part: “Congress shall make

no law respecting an establishment of religion, or prohibiting the free

exercise thereof … .” U.S. C O N ST . amend. I.

Nos. 12-3841 & 13-1077 31

statutory right to case-specific exemptions from laws that

substantially burden religious exercise even if the law is neutral

and generally applicable, unless the government can satisfy the

compelling-interest test. RFRA represents a congressional

judgment that the rule of Smith is insufficiently protective of

religious liberty.12 Congress filled the gap by expressly

12

Congress’s findings and purposes in enacting RFRA are as follows:

(a) Findings

The Congress finds that—

(1) the framers of the Constitution, recog-

nizing free exercise of religion as an unalien-

able right, secured its protection in the First

Amendment to the Constitution;

(2) laws “neutral” toward religion may

burden religious exercise as surely as laws

intended to interfere with religious exercise;

(3) governments should not substantially

burden religious exercise without compelling

justification;

(4) in Employment Division v. Smith,

494 U.S. 872 (1990)[,] the Supreme Court

virtually eliminated the requirement that the

government justify burdens on religious

exercise imposed by laws neutral toward

religion; … .

(b) Purposes

The purposes of this chapter are—

(1) to restore the compelling interest test

(continued...)

32 Nos. 12-3841 & 13-1077

“requir[ing] accommodation rather than neutrality.” O’Bryan v.

Bureau of Prisons, 349 F.3d 399, 401 (7th Cir. 2003).

RFRA’s general rule is as follows:

Free exercise of religion protected

(a) In general

Government shall not substantially burden a

person’s exercise of religion even if the burden

results from a rule of general applicability,

except as provided in subsection (b) of this

section.

42 U.S.C. § 2000bb-1. The exception is as follows:

(b) Exception

Government may substantially burden a

person’s exercise of religion only if it demon-

strates that application of the burden to the

person—

12

(...continued)

as set forth in Sherbert v. Verner, 374 U.S. 398

(1963)[,] and Wisconsin v. Yoder, 406 U.S. 205

(1972)[,] and to guarantee its application in all

cases where free exercise of religion is sub-

stantially burdened; and

(2) to provide a claim or defense to per-

sons whose religious exercise is substantially

burdened by government.

42 U.S.C. § 2000bb.

Nos. 12-3841 & 13-1077 33

(1) is in furtherance of a compelling

governmental interest; and

(2) is the least restrictive means of

furthering that compelling governmental

interest.

Id.13 Any “person whose religious practices are burdened in

violation of RFRA ‘may assert that violation as a claim or

defense in a judicial proceeding and obtain appropriate

relief.’ ” O Centro Espirita, 546 U.S. at 424 (quoting 42 U.S.C.

§ 2000bb-1(c)).

RFRA applies retrospectively and prospectively to “all

Federal law, and the implementation of that law, whether

statutory or otherwise, and whether adopted before or after”

its effective date. 42 U.S.C. § 2000bb-3(a). Prospective applica-

tion is qualified by the rule that “statutes enacted by one

Congress cannot bind a later Congress, which remains free to

repeal the earlier statute, to exempt the current statute from the

earlier statute, to modify the earlier statute, or to apply the

earlier statute as modified.” Dorsey v. United States, 132 S. Ct.

2321, 2331 (2012). RFRA accounts for this principle too; the

statute does not apply to a subsequently enacted law if it

13

In City of Boerne v. Flores, 521 U.S. 507, 532–36 (1997), the Supreme Court

held that as applied to the States, RFRA exceeded Congress’s legislative

authority under § 5 of the Fourteenth Amendment. This did not call into

question Congress’s authority to “determine how the national government

will conduct its own affairs,” O’Bryan v. Bureau of Prisons, 349 F.3d 399, 401

(7th Cir. 2003), so RFRA remains in full force against the federal govern-

ment, see Gonzales v. O Centro Espirita Beneficente Uniao Do Vegetal, 546 U.S.

418 (2006); see also O’Bryan, 349 F.3d at 401.

34 Nos. 12-3841 & 13-1077

“explicitly excludes such application by reference to this

chapter.” 42 U.S.C. § 2000bb-3(b). We note the qualifier only to

explain how RFRA works; it has no bearing here. The Afford-

able Care Act does not explicitly exclude application of RFRA.

* * *

Congress’s protective stance in favor of religious accommo-

dation could not be clearer. RFRA’s statement of purpose

explicitly reaffirms our national commitment to the “free

exercise of religion as an unalienable right,” id. § 2000bb(a)(1),

existing prior to and above ordinary law. RFRA is structured

as a “sweeping ‘super-statute,’ cutting across all other federal

statutes (now and future, unless specifically exempted) and

modifying their reach.” Michael Stokes Paulsen, A RFRA Runs

Through It: Religious Freedom and the U.S. Code, 56 MONT. L. REV .

249, 253 (1995). It is “both a rule of interpretation” and “an

exercise of general legislative supervision over federal agen-

cies, enacted pursuant to each of the federal powers that gives

rise to legislation or agencies in the first place.” Douglas

Laycock & Oliver S. Thomas, Interpreting the Religious Freedom

Restoration Act, 73 TEX. L. REV . 209, 211 (1994); see also Nicholas

Quinn Rosenkranz, Federal Rules of Statutory Interpretation,

115 HARV . L. REV . 2085, 2110 (2002) (explaining the function of

generally applicable statutory rules of interpretation).

In short, RFRA operates as a kind of utility remedy for the

inevitable clashes between religious freedom and the realities

of the modern welfare state, which regulates pervasively and

touches nearly every aspect of social and economic life. See

Thomas C. Berg, What Hath Congress Wrought? An Interpretative

Nos. 12-3841 & 13-1077 35

Guide to the Religious Freedom Restoration Act, 39 VILL. L. REV . 1,

25–26 (1994). Judges are assigned the task of mediating these

conflicts. RFRA makes that role clear, “mandating consider-

ation, under the compelling interest test, of exceptions to rules

of general applicability.” O Centro Espirita, 546 U.S. at 436

(internal quotation marks and alteration marks omitted).

Congress has instructed the judiciary to hold the entire federal

regulatory apparatus to the standard of Sherbert, unless a

statute specifically says otherwise.

* * *

Once a RFRA claimant makes a prima facie case that the

application of a law or regulation substantially burdens his

religious practice, the burden shifts to the government to

justify the burden under strict scrutiny. O Centro Espirita,

546 U.S. at 428. “Congress’s express decision to legislate the

compelling interest test indicates that RFRA challenges should

be adjudicated in the same manner as constitutionally man-

dated applications of the test … .” Id. at 430. Thus, in RFRA liti-

gation, as in First Amendment litigation, “the burdens at the

preliminary injunction stage track the burdens at trial.” Id. at

429.

1. For-Profit Corporations as RFRA “Persons”

RFRA’s general rule prohibits the federal government from

placing substantial burdens on “a person’s exercise of religion”

absent compelling justification, and only then if the burden is

the least restrictive means of furthering the compelling

36 Nos. 12-3841 & 13-1077

governmental objective. As originally enacted, RFRA defined

“exercise of religion” as “the exercise of religion under the First

Amendment to the Constitution.” Pub. L. No. 103-141, § 5,

107 Stat. 1488, 1489 (1993). Congress amended the definition in

2000 with the enactment of the Religious Land Use and

Institutionalized Persons Act (“RLUIPA”), 42 U.S.C. §§ 2000cc

et seq., making the definitions in the two statutes uniform. The

term “exercise of religion” in RFRA is now defined by cross-

reference to the definition of “religious exercise” in RLUIPA:

“The term ‘religious exercise’ includes any exercise of religion,

whether or not compelled by, or central to, a system of

religious belief.” Id. §§ 2000cc-5(7)(A), 2000bb-2(4). This defini-

tion is undeniably very broad, so the term “exercise of reli-

gion” should be understood in a generous sense.

RFRA does not define “person.” This brings the Dictionary

Act into play.14 The definition there expressly includes corpora-

tions: “In determining the meaning of any Act of Congress,

unless the context indicates otherwise[,] … the word[]

‘person’ … include[s] corporations, companies, associations,

firms, partnerships, societies, and joint stock companies, as

well as individuals … .” 1 U.S.C. § 1 (emphasis added). By

operation of this omnibus definition, the term “person” in

RFRA includes corporations, unless the context indicates

otherwise.

14

The Dictionary Act is notable for its breadth. It contains general defini-

tions and rules of construction that apply across the United States Code,

prospectively and retrospectively unless otherwise indicated. See Nicholas

Quinn Rosenkranz, Federal Rules of Statutory Interpretation, 115 H A RV . L. R EV .

2085, 2110 (2002).

Nos. 12-3841 & 13-1077 37

To determine whether the context “indicates otherwise,”

the Supreme Court has instructed us not to stray too far from

the statutory text. See Rowland v. Calif. Men’s Colony, Unit II

Men’s Advisory Council, 506 U.S. 194, 199–200 (1993). “ ‘Context’

here means the text of the Act of Congress surrounding the

word at issue, or the texts of other related congressional

Acts … .” Id. at 199. The inquiry basically asks whether the

definition in the Dictionary Act is a “poor fit” with the text of

the statute:

Where a court needs help is in the awkward case

where Congress provides no particular defini-

tion, but the definition in 1 U.S.C. § 1 seems not

to fit. There it is that the qualification “unless the

context indicates otherwise” has a real job to do,

in excusing the court from forcing a square peg

into a round hole.

The point at which the indication of particu-

lar meaning becomes insistent enough to excuse

the poor fit is of course a matter of judgment … .

Id. at 200.

Nothing in RFRA suggests that the Dictionary Act’s

definition of “person” is a “poor fit” with the statutory scheme.

To use the Supreme Court’s colloquialism, including corpora-

tions in the universe of “persons” with rights under RFRA is

not like “forcing a square peg into a round hole.” Id. A corpo-

ration is just a special form of organizational association. No

one doubts that organizational associations can engage in

religious practice. The government accepts that some corpora-

tions—religious nonprofits—have religious-exercise rights

38 Nos. 12-3841 & 13-1077

under both RFRA and the Free-Exercise Clause. As evidence of

this, the contraception mandate exempts a class of religious

organizations—i.e., churches and their integrated auxiliaries,

see 45 C.F.R. § 147.131(a)—whether or not they conduct their

activities in the corporate form (as many of them do). HHS also

extends its “accommodation” to a broader set of religiously

affiliated nonprofit corporations. See id. § 147.131(b).

Indeed, the Supreme Court has enforced the RFRA rights

of an incorporated religious sect, see O Centro Espirita, 546 U.S.

at 439, aff’g 389 F.3d 973, 973 (10th Cir. 2004) (en banc) (identi-

fying the plaintiff church as “a New Mexico corporation”), and

the free-exercise rights of an incorporated church, see Lukumi,

508 U.S. at 525, 547. The church corporations in these cases

were not in court solely asserting the rights of their members

based on associational standing; they were asserting their own

rights, too.15 Accordingly, we take it as both conceded and

noncontroversial that the use of the corporate form and the

associated legal attributes of that status—think separate legal

personhood, limitations on owners’ liability, special tax

treatment—do not disable an organization from engaging in

the exercise of religion within the meaning of RFRA (or the

Free Exercise Clause, for that matter).

The government draws the line at religiously affiliated

nonprofit corporations. That line is nowhere to be found in the

15

For the rules of associational standing, see United Food & Commercial

Workers Union Local 751 v. Brown Group, Inc., 517 U.S. 544, 553 (1996); Hunt

v. Washington State Apple Advertising Commission, 432 U.S. 333, 343 (1977);

and Ezell v. City of Chicago, 651 F.3d 684, 696 (7th Cir. 2011).

Nos. 12-3841 & 13-1077 39

text of RFRA or any related act of Congress. Nor can it be

found in the statute’s broader contextual purpose, assuming

we were to venture beyond the textual inquiry envisioned by

the Supreme Court for resolving Dictionary Act questions. The

government argues that a religious/nonprofit limitation can be

found by implication from judicial interpretations of two

unrelated employment-discrimination statutes—namely,

Title VII and the Americans with Disabilities Act (“ADA”)—

both of which contain targeted exemptions for religious

employers. We are not convinced.

Title VII of the Civil Rights Act of 1964 prohibits

employment discrimination on the basis of religion. See

42 U.S.C. § 2000e-2. Certain religious employers are exempt

from this part of Title VII and may take religion into account in

making employment decisions: “This subchapter shall not

apply … to a religious corporation, association, educational

institution, or society with respect to the employment of

individuals of a particular religion … .” Id. § 2000e-1(a). The

ADA, which prohibits employment discrimination on the basis

of disability, contains a similar exemption for religious employ-

ers. See id. § 12113(d)(1)–(2). Some lower courts have developed

multifactor tests to determine when Title VII’s religious-

employer exemption applies; the nonprofit status of the

employer is considered a relevant factor. See, e.g., Spencer v.

World Vision, Inc., 633 F.3d 723, 727 (9th Cir. 2011) (en banc)

(per curiam); LeBoon v. Lancaster Jewish Cmty. Ctr. Ass’n,

503 F.3d 217, 226 (3d Cir. 2007); Univ. of Great Falls v. NLRB,

278 F.3d 1335, 1343–44 (D.C. Cir. 2002) (applying a religious-

employer exemption implied by the Supreme Court as a matter

of constitutional avoidance to limit the reach of the National

40 Nos. 12-3841 & 13-1077

Labor Relations Act); Killinger v. Samford Univ., 113 F.3d 196,

198–99 (11th Cir. 1997); EEOC v. Townley Eng’g & Mfg. Co.,

859 F.2d 610, 618–19 (9th Cir. 1988). Relying on this line of

cases, the government argues that Congress “carried forward”

a nonprofit limitation when it enacted RFRA.

Never mind that much of this caselaw postdates the

enactment of RFRA. The more important point is that a

handful of lower-court decisions applying an interpretive gloss

to Title VII’s religious-employer exemption hardly implies that

Congress meant to limit RFRA in the same way. As the Tenth

Circuit noted in Hobby Lobby, the government asks us to infer

from congressional silence that a “similar narrowing construc-

tion[] should be imported into” RFRA. 723 F.3d at 1130. The

Tenth Circuit found this argument “strained,” id., and so do

we. If Congress intended a nonprofit limitation in RFRA,

surely there would be some hint of it in the statutory text.

The government also relies on the Supreme Court’s

decision in Corporation of the Presiding Bishop of the Church of

Jesus Christ of Latter-day Saints v. Amos, 483 U.S. 327 (1987). We

do not understand why. Amos rejected an Establishment

Clause challenge to Title VII’s religious-employer exemption.

Id. at 335–39. The case does not advance the government’s

position here.

To the contrary, the church labor-relations cases illuminate

a fundamental flaw in the government’s argument—its failure

to recognize that RFRA protects religious liberty more broadly

than the religious-employer exemptions in Title VII and the

ADA. To see how, it’s helpful to return to some first principles

of free-exercise doctrine.

Nos. 12-3841 & 13-1077 41

It’s well understood that the Free Exercise Clause protects

“first and foremost, the right to believe and profess,” but also

the right to engage in religiously motivated conduct. Smith,

494 U.S. at 877. (“The ‘exercise of religion’ often involves not

only belief and profession but the performance of (or absten-

tion from) physical acts … .”); see also Bob Jones Univ. v. United

States, 461 U.S. 574, 603 (1983) (“[T]he Free Exercise Clause

provides substantial protection for lawful conduct grounded

in religious belief … .”); Cantwell v. Connecticut, 310 U.S. 296,

303 (1940) (The “[First] Amendment embraces two con-

cepts[]—[the] freedom to believe and freedom to act.”). This

doctrine reflects the original understanding of the right. See

Michael W. McConnell, The Origins and Historical Understanding

of Free Exercise of Religion, 103 HARV . L. REV . 1409, 1488 (1990)

(“[T]he term ‘free exercise’ makes clear that the clause protects

religiously motivated conduct as well as belief.”).

The right to believe and profess is absolute. See Bob Jones

Univ. v. United States, 461 U.S. at 603 (the Free Exercise Clause

is “an absolute prohibition against governmental regulation of

religious beliefs”); Sherbert, 374 U.S. at 402 (“The door of the

Free Exercise Clause stands tightly closed against any govern-

mental regulation of religious beliefs as such … .” (emphasis

added)); W. Va. State Bd. of Educ. v. Barnette, 319 U.S. 624, 642

(1943) (“If there is any fixed star in our constitutional constella-

tion, it is that no official, high or petty, can prescribe what shall

be orthodox in politics, nationalism, religion, or other matters

of opinion or force citizens to confess by work or act their faith

therein.”). Religiously motivated conduct is necessarily subject

to some regulation for the essential public good. Sherbert,

374 U.S. at 403 (religiously motivated conduct may be

42 Nos. 12-3841 & 13-1077

regulated to prevent “substantial threat[s] to public safety,

peace or order”).

Free-exercise problems usually arise when a law, regula-

tion, or some action of a public official interferes with a

religiously motivated practice, forbearance, or other conduct.

These claims present in distinct ways, reflecting different

dimensions of the right. See generally Douglas Laycock, Towards

a General Theory of the Religion Clauses: The Case of Church Labor

Relations and the Right to Church Autonomy, 81 COLUM . L. REV .

1373, 1388–89 (1981); Eugene Volokh, A Common-Law Model for

Religious Exemptions, 46 UCLA L. REV . 1465, 1505–08 (1999).

One obvious and intuitive aspect of religious liberty is the

right of conscientious objection to laws and regulations that

conflict with conduct prescribed or proscribed by an adherent’s

faith. Sherbert, Yoder, and Thomas are the paradigm cases in this

category. In Sherbert a Seventh-day Adventist was denied

unemployment compensation benefits after she lost her job for

refusing to work on her Sabbath day. 374 U.S. at 399–400. In

Yoder Amish families challenged the application of a state

compulsory-education law requiring their children to attend

public school through age 16. 406 U.S. at 207–09. In Thomas a

Jehovah’s Witness was denied unemployment compensation

benefits after he was fired for declining a job transfer to a

department that produced war materials. 450 U.S. at 709–12. In

all three cases, the claimants asserted a conscientious objection

to legal burdens placed on their religiously motivated conduct.

In all three the Supreme Court held that the Free Exercise

Clause required an exemption. See id. at 718–19; Yoder, 406 U.S.

at 234–36; Sherbert, 374 U.S. at 398–99.

Nos. 12-3841 & 13-1077 43

A different aspect of religious liberty protects, broadly

speaking, the autonomy of the church. As the Supreme Court

explained in Hosanna-Tabor Evangelical Lutheran Church &

School v. EEOC, 132 S. Ct. 694, 706 (2012), this strand of

religious-liberty doctrine “gives special solicitude to the rights

of religious organizations” as religious organizations, respect-

ing their autonomy to shape their own missions, conduct their

own ministries, and generally govern themselves in accordance

with their own doctrines as religious institutions. Id. at 704–06.

The paradigm cases in this category are Hosanna-Tabor itself,

which recognized the right of churches to choose their own

ministers (broadly understood) and adopted a constitutional

ministerial exception to laws regulating employment discrimi-

nation, see id. at 705–06, and the church-property cases, see

Serbian E. Orthodox Diocese for the U.S. & Can. v. Milivojevich,

426 U.S. 696 (1976); Presbyterian Church in the U.S. v. Mary

Elizabeth Blue Hull Mem’l Presbyterian Church, 393 U.S. 440

(1969); Kedroff v. St. Nicholas Cathedral of Russian Orthodox

Church in N. Am., 344 U.S. 94 (1952).

The church-autonomy doctrine respects the authority of

churches to “select their own leaders, define their own doc-

trines, resolve their own disputes, and run their own institu-

tions” free from governmental interference. Laycock, Towards

a General Theory of the Religion Clauses, supra, at 1389. This

dimension of religious liberty has a foothold in both Religion

Clauses, see Hosanna-Tabor, 132 S. Ct. at 702, and is perhaps best

understood as marking a boundary between two separate

polities, the secular and the religious, and acknowledging the

prerogatives of each in its own sphere. For example, in

Milivojevich, a church-property case, the Court explained that

44 Nos. 12-3841 & 13-1077

the First Amendment “permit[s] hierarchical religious organi-

zations to establish their own rules and regulations for internal

discipline and government, and to create tribunals for adjudi-

cating disputes over these matters.” 426 U.S. at 724. When a

church tribunal or other religious authority decides an internal

dispute, “the Constitution requires … civil courts [to] accept

th[at] decision[] as binding.” Id. at 725; see also Richard W.

Garnett, A Hands-Off Approach to Religious Doctrine: What Are

We Talking About?, 84 NOTRE DAME L. REV . 837, 861 (2009)

(explaining that the church-autonomy doctrine recognizes that

secular tribunals “lack the power to answer some ques-

tions—religious questions—whose resolution is, under an

appropriately pluralistic political theory, left to other institu-

tions”).

Two related principles are at work in these cases. First, civil

authorities have no say over matters of religious governance;

and second, secular judges must defer to ecclesiastical authori-

ties on questions properly within their domain. These limita-

tions arise from the justification for the different aspects of

religious liberty secured by the Religion Clauses. See Douglas

Laycock, Church Autonomy Revisited, 7 GEO . J.L. & PUB . POL ’Y

253, 260–65 (2009). As the Supreme Court explained in

Hosanna-Tabor:

Requiring a church to accept or retain an un-

wanted minister, or punishing a church for

failing to do so, intrudes upon more than a mere

employment decision. Such action interferes with

the internal governance of the church, depriving

the church of control over the selection of those

Nos. 12-3841 & 13-1077 45

who will personify its beliefs. By imposing an

unwanted minister, the state infringes the Free

Exercise Clause, which protects a religious

group’s right to shape its own faith and mission

through its appointments. According the state

the power to determine which individuals will

minister to the faithful also violates the Establish-

ment Clause, which prohibits governmental

involvement in such ecclesiastical decisions.

132 S. Ct. at 706.

In this way the Religion Clauses work together to protect

the institutional freedom of the church “for itself, and not

simply as a proxy for the religious-liberty rights of individu-

als,” in light of the Constitution’s ordering of the relationship

between religion and government. Richard W. Garnett,

Standing, Spending, and Separation: How the No-Establishment

Rule Does (and Does Not) Protect Conscience, 54 VILL . L. REV . 655,

674 (2009); see also Paul Horwitz, Churches as First Amendment

Institutions: Of Sovereignty and Spheres, 44 HARV . C.R.-C.L. L.

REV . 79, 116–22 (2009).16

16

See also Thomas C. Berg, The Voluntary Principle and Church Autonomy,

Then and Now, 2004 BYU L. R EV . 1593 (2004); Gerard V. Bradley, Church

Autonomy in the Constitutional Order: The End of Church and State?, 49 L A . L.

R EV . 1057 (1989); Kathleen A. Brady, Religious Organizations and Free

Exercise: The Surprising Lessons of Sm ith, 2004 BYU L. R EV . 1633 (2004);

Richard W. Garnett, D o Churches Matter? Towards an Institutional Under-

standing of the Religion Clauses, 53 V ILL . L. R EV . 273 (2008); Christopher C.

Lund, In Defense of the Ministerial Exception, 90 N.C. L. R EV . 1 (2011);

Howard M . Wasserman, Prescriptive Jurisdiction, Adjudicative Jurisdiction, and

(continued...)

46 Nos. 12-3841 & 13-1077

The religious-employer exemptions in Title VII and the

ADA are legislative applications of the church-autonomy

doctrine. By their terms the exemptions are limited to reli-

giously affiliated employers, a limitation that makes sense in

light of the rationale for the rule. The exemption is categorical,

not contingent; there is no balancing of competing interests,

public or private. In other words, where it applies, the church-

autonomy principle operates as a complete immunity, or very

nearly so. Such a strong hands-off principle isn’t justified for

organizational associations that are not religiously affiliated.

In contrast, the judicial remedy in RFRA is both broader

and more flexible. It covers religious organizations as such, but

it does not stop there. The remedy is available to any sincere

religious objector—individuals and organizations alike—and

its organizational applications are not limited to religiously

affiliated organizations. The exemption is comprehensive in

that it applies across the United States Code and Code of

Federal Regulations and restrains the conduct of all federal

officials. But it can be overridden by a sufficiently strong

governmental interest.

For these reasons, the cases interpreting the Title VII and

ADA exemptions do not shed light on the scope of the RFRA

exemption. The government’s proposed exclusion of secular,

for-profit corporations finds no support in the text or relevant

context of RFRA or any related statute.

16

(...continued)

the Ministerial Exemption, 160 U. P A . L. R EV . PENN U M BRA 289 (2012).

Nos. 12-3841 & 13-1077 47

* * *

That’s enough to resolve the matter, but it’s worth briefly

exploring whether RFRA’s animating purpose provides a clue

that it is not meant to apply to secular, for-profit corporations.

Congress was clear that RFRA codifies pre-Smith free-exercise

jurisprudence—in particular, the rule of Sherbert and Yoder—so

if the Supreme Court’s pre-Smith free-exercise cases categori-

cally excluded secular, for-profit corporations, then perhaps

RFRA should be understood that way, too.

We begin by reiterating two doctrinal points we made a

moment ago: (1) the Free Exercise Clause protects not just

belief and profession but also religiously motivated conduct;

and (2) individuals and organizations—whether incorporated

or not—can exercise religion. It’s common ground that

nonprofit religious corporations exercise religion in the sense

that their activities are religiously motivated. So unless there is

something disabling about mixing profit-seeking and religious

practice, it follows that a faith-based, for-profit corporation can

claim free-exercise protection to the extent that an aspect of its

conduct is religiously motivated.

We acknowledge the novelty of the question; the Supreme

Court has never considered whether a for-profit corporation

may assert a free-exercise claim. See Hobby Lobby Stores, Inc. v.

Sebelius, 133 S. Ct. 641, 643 (Sotomayor, Circuit Justice 2012)

(“This Court has not previously addressed similar RFRA or

free exercise claims brought by closely held for-profit corpora-

tions and their controlling shareholders … .”). But the Court

has on several occasions addressed the free-exercise rights of

individuals engaged in commercial or profit-making activity.

48 Nos. 12-3841 & 13-1077

We have already mentioned Thomas and Sherbert, both of

which involved claimants who lost their jobs for refusing to

work on days or in ways that would violate their faith. See

Thomas, 450 U.S. at 709–11; Sherbert, 374 U.S. at 399–400. The

cases challenged the denial of unemployment compensation

benefits, but the background facts involved the loss of remu-

nerative employment at a foundry and a mill. In other words,

Eddie Thomas and Adell Sherbert were working for money yet

they retained their free-exercise rights and were permitted to

assert them against the denial of unemployment benefits. The

Court held that Thomas and Sherbert could not be compelled

to choose between their livelihoods and their faith. See Thomas,

450 U.S. at 717 (“Here, as in Sherbert, the employee was put to

a choice between fidelity to religious belief or cessation of

work; the coercive impact on Thomas is indistinguishable from

Sherbert … .”); Sherbert, 374 U.S. at 404 (“The [unemployment

compensation] ruling forces [Adell Sherbert] to choose

between following the precepts of her religion and forfeiting

benefits, on the one hand, and abandoning one of the precepts

of her religion in order to accept work, on the other hand.”). If

the government is correct that entering the marketplace and

earning money forfeits free-exercise rights, then Thomas and

Sherbert would have been decided differently.

In Braunfeld v. Brown, 366 U.S. 599, 600–02 (1961), Jewish

merchants brought a free-exercise challenge against Pennsylva-

nia’s Sunday-closing law, which put them at a competitive

disadvantage based on their Sabbath. Again, if profit-making

alone was enough to disqualify the merchants from bringing

the claim, the Court surely would have said so. It did not.

Nos. 12-3841 & 13-1077 49

Instead, the Court addressed and rejected their free-exercise

claim on the merits. Id. at 608–09.

In United States v. Lee, 455 U.S. 252 (1982), an Amish farmer

sought a religious exemption from the obligation to withhold

and pay Social Security taxes for his employees, coreligionists

who worked on his farm and in his carpentry shop. Id. at

254–55. The Amish religion holds that members of the religious

community must provide for their own needy and elderly. Id.

The Social Security system exempts self-employed religious

objectors but not employers, so the farmer asserted a constitu-

tional right to an exemption. Id. at 255–56. The Court held that

“compulsory participation in the social security system

interferes with the[] free exercise rights” of the Amish. Id. at

257. But the Court concluded that the strong public interest in

the financial soundness of the Social Security system was

enough to defeat the farmer’s claim for an exemption:

The tax system could not function if denomina-

tions were allowed to challenge the … system

because tax payments were spent in a manner

that violates their religious belief[s]. … Because

the broad public interest in maintaining a sound

tax system is of such a high order, religious belief

in conflict with the payment of taxes affords no

basis for resisting the tax.

Id. at 260.

Like the merchants in Braunfeld, the Amish farmer in Lee

was engaged in farming and furniture-making not for subsis-

tence but for profit. If moneymaking were enough to foreclose

50 Nos. 12-3841 & 13-1077

the claim, the Court would not have addressed the burden on

his free-exercise rights or the public interest in the sound

administration of the Social Security system. Instead, the Court

gave the claim plenary review and found a compelling reason

to deny an exemption.

These cases show that far from categorically excluding

profit-seekers from the scope of the free-exercise right, the

Supreme Court has considered their claims on the merits,

granting exemptions in some and not others based on the

compelling-interest test.

The government relies on a concluding statement in Lee as

support for its position that profit-making is incompatible with

free-exercise rights:

Congress and the courts have been sensitive

to the needs flowing from the Free Exercise

Clause, but every person cannot be shielded

from all the burdens incident to exercising every

aspect of the right to practice religious beliefs.

When followers of a particular sect enter into com-

mercial activity as a matter of choice, the limits they

accept on their own conduct as a matter of conscience

and faith are not to be superimposed on the statutory

schemes which are binding on others in that activity.

Id. at 261 (emphasis added).

The government apparently reads this passage as foreclos-

ing all religious-exercise claims arising in the course of

commercial activity merely because the context is commercial.

That reading is both unsound and extraordinary. Unsound

Nos. 12-3841 & 13-1077 51

because it would nullify the rest of the Court’s opinion, which

considered the Amish farmer’s claim on the merits even

though his activities were for profit; the commercial context

did not defeat the claim. And extraordinary because it would

leave religious exercise wholly unprotected in the commercial

sphere. At bottom, the government’s argument is premised on

a far-too-narrow view of religious freedom: Religious exercise

is protected in the home and the house of worship but not

beyond. Religious people do not practice their faith in that

compartmentalized way; free-exercise rights are not so

circumscribed.

If the government’s view is correct, commonplace religious

practices normally thought protected would fall outside the

scope of the free-exercise right. The Jewish deli is the usual

example. On the government’s understanding of religious

liberty, a Jewish restaurant operating for profit could be denied

the right to observe Kosher dietary restrictions. That cannot be

right. There is nothing inherently incompatible between reli-

gious exercise and profit-seeking. The better reading of the

concluding dictum in Lee is that it foreshadowed the coming

holding in Smith eight years later. The references to “incidental

burdens” and “statutory schemes binding on others” suggest

as much.

In short, nothing in the Supreme Court’s free-exercise

jurisprudence prior to Smith categorically forecloses RFRA

claims by profit-seeking entities.

* * *

52 Nos. 12-3841 & 13-1077

For the sake of completeness, we note as well that nothing

in the Court’s general jurisprudence of corporate constitutional

rights suggests a nonprofit limitation on organizational free-

exercise rights. Prior to Smith, and continuing to the present

day, the Court has held that corporations may claim some but

not all constitutional rights. See Darrell A. H. Miller, Guns, Inc.:

Citizens United, McDonald, and the Future of Corporate Constitu-

tional Rights, 86 N.Y.U. L. REV . 887, 908–11 (2011) (collecting

cases).

For example, long before Citizens United reinvigorated the

political-speech rights of corporations, see Citizens United v.

FEC, 558 U.S. 310 (2010), the Court confirmed that corporations

have free-speech rights, see, e.g., Bd. of Trs. of the State Univ. of

N.Y. v. Fox, 492 U.S. 469 (1989); Pac. Gas & Elec. Co. v. Pub. Utils.

Comm’n of Cal., 475 U.S. 1, 8 (1986) (plurality opinion); Central

Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S.

557 (1980); First Nat’l Bank of Bos. v. Bellotti, 435 U.S. 765, 776

(1978); N.Y. Times Co. v. Sullivan, 376 U.S. 254 (1964). Prior to

Smith the Court held that the Fourth Amendment protected

corporations from unreasonable searches and seizures. See

Silverthorne Lumber Co. v. United States, 251 U.S. 385, 392 (1920);

Hale v. Henkel, 201 U.S. 43, 76 (1906), overruled on other grounds

by Murphy v. Waterfront Comm’n of N.Y. Harbor, 378 U.S. 52

(1964). Corporations qualify as persons for at least some

purposes under the Due Process and Equal Protection Clauses

of the Fourteenth Amendment. See Grosjean v. Am. Press Co.,

297 U.S. 233, 244 (1936); Covington & Lexington Tpk. Rd. Co. v.

Sandford, 164 U.S. 578, 592 (1896). But see Nw. Nat’l Life Ins. Co.

v. Riggs, 203 U.S. 243, 255 (1906) (“The liberty referred to in

Nos. 12-3841 & 13-1077 53

th[e] [Fourteenth] Amendment is the liberty of natural, not

artificial, persons.”). On the other hand, prior to Smith the

Court excluded corporations from the Fifth Amendment

privilege against self-incrimination, see Wilson v. United States,

221 U.S. 361, 383–84 (1911), and the emerging right of privacy,

see United States v. Morton Salt Co., 338 U.S. 632, 652 (1950).

These cases do not yield a unifying theory of corporate

constitutional rights, but Bellotti contains some language that

might be read to suggest a general decisional approach:

“Certain ‘purely personal’ guarantees, such as the privilege

against compulsory self-incrimination, are unavailable to

corporations and other organizations because the ‘historic

function’ of the particular guarantee has been limited to the

protection of individuals.” 435 U.S. at 778 n.14 (quoting United

States v. White, 322 U.S. 694, 698–701 (1944)). And this: “Wheth-

er or not a particular guarantee is ‘purely personal’ or is

unavailable to corporations for some other reason depends

upon the nature, history, and purpose of the particular

constitutional provision.” Id. But the Court has never elabo-

rated.

Ultimately, we don’t need to parse the cases on corporate

constitutional rights too finely. We are confronted here with a

question of statutory interpretation. Our task is to determine

whether prior to Smith it was established that a closely held,

for-profit corporation could not assert a free-exercise claim. It

was not so established. We conclude that K & L Contractors

54 Nos. 12-3841 & 13-1077

and Grote Industries are “persons” within the meaning of

RFRA.17

2. Substantial Burden

Our next question is whether the contraception mandate

substantially burdens the plaintiffs’ exercise of religion. Recall

that “exercise of religion” means “any exercise of religion,

whether or not compelled by, or central to, a system of religious

belief.” 42 U.S.C. § 2000cc-5(7)(A) (emphases added). At a

minimum, a substantial burden exists when the government

compels a religious person to “perform acts undeniably at

odds with fundamental tenets of [his] religious beliefs.” Yoder,

406 U.S. at 218. But a burden on religious exercise also arises

when the government “put[s] substantial pressure on an

adherent to modify his behavior and to violate his beliefs.”

Thomas, 450 U.S. at 718; see also Nelson v. Miller, 570 F.3d 868,

878 (7th Cir. 2009); Koger v. Bryan, 523 F.3d 789, 799 (7th Cir.

2008). Construing the parallel provision in RLUIPA, we have

held that a law, regulation, or other governmental command

17

We deal here with two corporations that are both closely held and

managed by the families that own them. As we have explained, the Kortes

and Grotes as controlling shareholders and directors set all company policy

and personally direct the activities of their corporations; as such, they are

in a position to operate their businesses in a manner that conforms to their

religious commitments. The same normally will not be the case when it

comes to large publicly traded corporations, two hallmarks of which are the

separation of ownership from control and multimember boards of directors.

See 1A W ILLIA M M EA D E F LETC H ER , F LETC H ER C YC LO PED IA O F TH E L AW O F

C O RPO RATIO N S § 70.10 (2006 rev.).

Nos. 12-3841 & 13-1077 55

substantially burdens religious exercise if it “bears direct,

primary, and fundamental responsibility for rendering [a]

religious exercise … effectively impracticable.” Civil Liberties for

Urban Believers v. City of Chicago, 342 F.3d 752, 761 (7th Cir.

2003). The same understanding applies to RFRA claims.

Importantly, the substantial-burden inquiry does not invite

the court to determine the centrality of the religious practice to

the adherent’s faith; RFRA is explicit about that. And free-

exercise doctrine makes it clear that the test for substantial

burden does not ask whether the claimant has correctly

interpreted his religious obligations. See Lee, 455 U.S. at 257;

Thomas, 450 U.S. at 715–16. Indeed, that inquiry is prohibited.

“[I]n this sensitive area, it is not within the judicial function

and judicial competence to inquire whether the [adherent

has] … correctly perceived the commands of [his] … faith.

Courts are not arbiters of scriptural interpretation.” Thomas,

450 U.S. at 716. It is enough that the claimant has an “honest

conviction” that what the government is requiring, prohibiting,

or pressuring him to do conflicts with his religion. Id.; see also

id. at 715 (“Thomas drew a [religious] line, and it is not for us

to say that the line he drew was an unreasonable one.”).

Checking for sincerity and religiosity is important to weed

out sham claims. The religious objection must be both sincere

and religious in nature. Cf. United States v. Seeger, 380 U.S. 163,

184–86 (1965) (military-conscription exemption applies only to

objections based on sincerely held religious beliefs as opposed

to philosophical views or a personal moral code). These are

factual inquiries within the court’s authority and competence.

But we agree with our colleagues in the Tenth Circuit that the

56 Nos. 12-3841 & 13-1077

substantial-burden test under RFRA focuses primarily on the

“intensity of the coercion applied by the government to act

contrary to [religious] beliefs.” Hobby Lobby, 723 F.3d at 1137.

Put another way, the substantial-burden inquiry evaluates the

coercive effect of the governmental pressure on the adherent’s

religious practice and steers well clear of deciding religious

questions.

On this understanding of substantial burden, there can be

little doubt that the contraception mandate imposes a substan-

tial burden on the plaintiffs’ religious exercise. K & L Contrac-

tors and Grote Industries must pay $100 per day per employee

if they do not include coverage for contraception and steriliza-

tion in their employee health-care plans. The Kortes and the

Grotes as corporate owners and managers must arrange for

their companies to provide the mandated coverage. They

object on religious grounds to doing so, explaining that

providing this coverage would make them complicit in a grave

moral wrong and would undermine their ability to give

witness to the moral teachings of their church. No one ques-

tions their sincerity or the religiosity of their objection.18

18

The Catholic Church’s teaching on the sanctity of human life and the

moral wrongfulness of contraception, abortion-inducing drugs, and sterili-

zation is well docum ented, as is its doctrine of moral complicity and the

requirements of Christian witness. See Pope John Paul II, Evangelium Vitae

[The Gospel of Life] ¶¶ 58–62 (1995), available at http://www.vatican.va/

holy_father/john_paul_ii/encyclicals/documents/hf_jp-ii_enc_25031995_

evangeliumvitae_en.html; C ATEC H ISM O F TH E C ATH O LIC C H U RC H ¶¶ 2258,

2270–75, 2284–87, 2366, 2370, 2399 (2d ed. 1997); Pontifical Council for

Justice and Peace, Compendium of the Social Doctrine of the Church ¶¶ 62–64,

(continued...)

Nos. 12-3841 & 13-1077 57

In short, the federal government has placed enormous

pressure on the plaintiffs to violate their religious beliefs and

conform to its regulatory mandate. Refusing to comply means

ruinous fines, essentially forcing the Kortes and Grotes to

choose between saving their companies and following the

moral teachings of their faith. This is at least as direct and

substantial a burden as the denial of unemployment compensa-

tion benefits in Sherbert and Thomas, and the obligation to

withhold and pay Social Security taxes in Lee.

The government takes a different tack on this question,

arguing that the mandate’s burden on religious exercise is

insubstantial because an employee’s decision to use her

insurance coverage to purchase contraception or sterilization

services “cannot be attributed to” the Kortes or Grotes. In a

different twist on the same argument, the government also

insists that any burden on the plaintiffs’ religious exercise is

too “attenuated” to count as “substantial” because the provi-

sion of contraception coverage is several steps removed from

an employee’s independent decision to use contraception. For

support the government relies on Zelman v. Simmons-Harris,

536 U.S. 639 (2002), and Board of Regents of the University of

Wisconsin System v. Southworth, 529 U.S. 217 (2000). Neither

case is relevant here.

18

(...continued)

66–68, 230–33 (2005), available at www.vatican.va/roman_curia/pontifical_

councils/justpeace/documents/rc_pc_justpeace_doc_20060526_compendio-

dott-soc_en.html.

58 Nos. 12-3841 & 13-1077

Zelman upheld Ohio’s school-voucher program against an

Establishment Clause challenge because the public funds

flowed to religious schools only through the private choice of

the students’ parents. 536 U.S. at 651–52. Southworth rejected a

free-speech challenge to a public university’s student-activity

fee because the funds collected were allocated to student

groups on a viewpoint-neutral basis, removing “ ‘any mistaken

impression that the [student groups] speak for the

[u]niversity’ ” or the objecting student. 529 U.S. at 233 (quoting

Rosenberger v. Rector & Visitors of Univ. of Va., 515 U.S. 819, 841

(1993)). These cases raised questions about governmental

endorsement of religion (Zelman) and unwanted speech

(Southworth). The degree of separation between the govern-

ment and the use of the funds was important to the constitu-

tional analysis in each case, but it’s not a relevant consideration

here.19

Aside from its misplaced reliance on Zelman and

Southworth, the government’s insistence that the burden is

trivial or nonexistent simply misses the point of this religious-

19

At oral argument the government suggested for the first time that grant-

ing a preliminary injunction against the contraception mandate might create

Establishment Clause concerns. That was far too late in the litigation to raise

the argument. The Supreme Court has rejected a facial Establishment

Clause challenge to RLUIPA, the parallel—albeit narrower— statutory

religious exemption applicable to the States. See Cutter v. Wilkinson, 544 U.S.

709, 720 (2005) (“[W ]e hold that § 3 of RLUIPA fits within the corridor

between the Religion Clauses: On its face, the Act qualifies as a permissible

legislative accommodation of religion that is not barred by the Establish-

m ent Clause.”). The government has not advanced an argument that

applying RFRA in this context violates the Establishment Clause.

Nos. 12-3841 & 13-1077 59

liberty claim. The government focuses on the wrong thing—the

employee’s use of contraception—and addresses the wrong

question—how many steps separate the employer’s act of

paying for contraception coverage and an employee’s decision

to use it.

To the first point: Although the plaintiffs object on religious

grounds to the use of contraception, abortifacient drugs, and

sterilization, it goes without saying that they may neither

inquire about nor interfere with the private choices of their

employees on these subjects. They can and do, however, object

to being forced to provide insurance coverage for these drugs

and services in violation of their faith. As we explained in our

order granting an injunction pending appeal, “[t]he religious-

liberty violation at issue here inheres in the coerced coverage of

contraception, abortifacients, sterilization, and related services,

not—or perhaps more precisely, not only—in the later purchase

or use of contraception or related services.” Korte, 2012 WL

6757353, at *3.

The government’s “attenuation” argument posits that the

mandate is too loosely connected to the use of contraception to

be a substantial burden on religious exercise. Because several

independent decisions separate the employer’s act of providing

the mandated coverage from an employee’s eventual use of

contraception, any complicity problem is insignificant or

nonexistent. This argument purports to resolve the religious

question underlying these cases: Does providing this coverage

impermissibly assist the commission of a wrongful act in

violation of the moral doctrines of the Catholic Church? No

civil authority can decide that question.

60 Nos. 12-3841 & 13-1077

To repeat, the judicial duty to decide substantial-burden

questions under RFRA does not permit the court to resolve

religious questions or decide whether the claimant’s under-

standing of his faith is mistaken. Lee, 455 U.S. at 257; Thomas,

450 U.S. at 715–16. The question for us is not whether compli-

ance with the contraception mandate can be reconciled with

the teachings of the Catholic Church. That’s a question of

religious conscience for the Kortes and the Grotes to decide.

They have concluded that their legal and religious obligations

are incompatible: The contraception mandate forces them to do

what their religion tells them they must not do. That qualifies

as a substantial burden on religious exercise, properly under-

stood.

The plaintiffs have established a prima facie case under

RFRA. The government must justify the mandate under the

compelling-interest test.

3. Compelling-Interest Test

RFRA requires the government to shoulder the burden of

demonstrating that applying the contraception mandate “is the

least restrictive means of furthering [a] compelling governmen-

tal interest.” 42 U.S.C. § 2000bb-1(b). The Supreme Court has

instructed us to look beyond “broadly formulated interests

justifying the general applicability of government mandates”

and “scrutinize[] the asserted harm of granting specific

exemptions to particular religious claimants.” O Centro Espirita,

546 U.S. at 431. In other words, under RFRA’s version of strict

scrutiny, the government must establish a compelling and

specific justification for burdening these claimants.

Nos. 12-3841 & 13-1077 61

The compelling-interest test generally requires a “high

degree of necessity.” Brown v. Entm’t Merchs. Ass’n, 131 S. Ct.

2729, 2741 (2011). The government must “identify an ‘actual

problem’ in need of solving, and the curtailment of [the right]

must be actually necessary to the solution.” Id. at 2738 (cita-

tions omitted). In the free-exercise context, “only those inter-

ests of the highest order and those not otherwise served can

overbalance legitimate claims to the free exercise of religion.”

Yoder, 406 U.S. at 215. “[I]n this highly sensitive constitutional

area, only the gravest abuses, endangering paramount inter-

ests, give occasion for permissible limitation … .” Sherbert,

374 U.S. at 406 (internal quotation marks and alteration

omitted). The regulated conduct must “pose[] some substantial

threat to public safety, peace[,] or order.” Id. at 403. Finally, “a

law cannot be regarded as protecting an interest of the highest

order … when it leaves appreciable damage to that supposedly

vital interest unprohibited.” Lukumi, 508 U.S. at 547 (internal

quotation marks omitted).

The government identifies two public interests—“public

health” and “gender equality”—and argues that the contracep-

tion mandate furthers these interests by reducing unintended

pregnancies, achieving greater parity in health-care costs, and

promoting the autonomy of women both economically and in

their reproductive capacities. This argument seriously misun-

derstands strict scrutiny. By stating the public interests so

generally, the government guarantees that the mandate will

flunk the test. Strict scrutiny requires a substantial congru-

ity—a close “fit”—between the governmental interest and the

means chosen to further that interest. Stating the governmental

interests at such a high level of generality makes it impossible

62 Nos. 12-3841 & 13-1077

to show that the mandate is the least restrictive means of

furthering them. There are many ways to promote public

health and gender equality, almost all of them less burdensome

on religious liberty.

We will translate a bit. The apparent aim of the mandate is

to broaden access to free contraception and sterilization so that

women might achieve greater control over their reproductive

health. We accept this as a legitimate governmental interest.

Whether it qualifies as an interest of surpassing importance is

both contestable and contested.

In Lee the Supreme Court held that the sound financial

administration of the Social Security system was a sufficiently

compelling interest to override a religious objection to with-

holding Social Security taxes. 455 U.S. at 260. The government

has not explained why free contraception deserves to be

ranked as a governmental interest akin to the Social Security

system in order of importance to the public good. Let’s assume

for the sake of argument that it is. Even with that generous

assist, the government has not come close to carrying its

burden of demonstrating that it cannot achieve its policy goals

in ways less damaging to religious-exercise rights.

Indeed, the government has not even tried to satisfy the

least-restrictive-means component of strict scrutiny, perhaps

because it is nearly impossible to do so here. The regulatory

scheme grandfathers, exempts, or “accommodates” several

categories of employers from the contraception mandate and

does not apply to others (those with fewer than 50 employees).

Since the government grants so many exceptions already, it can

Nos. 12-3841 & 13-1077 63

hardly argue against exempting these plaintiffs.20 Moreover,

there are many ways to increase access to free contraception

without doing damage to the religious-liberty rights of

conscientious objectors. The plaintiffs have identified a few:

The government can provide a “public option” for contracep-

tion insurance; it can give tax incentives to contraception

suppliers to provide these medications and services at no cost

to consumers; it can give tax incentives to consumers of

contraception and sterilization services. No doubt there are

other options.

The government has no real response to this argument. It

has not made any effort to explain how the contraception

mandate is the least restrictive means of furthering its stated

goals of promoting public health and gender equality. We

noted this shortcoming in our orders granting injunctions

pending appeal. See Grote, 708 F.3d at 855; Korte, 2012 WL

6757353, at *4. In light of this observation, we might have

expected a better effort in the government’s merits briefing. We

did not get it. The best the government could do was to insist

that the least-restrictive-means test “has never been interpreted

to require the government to subsidize private religious

practices.”

That’s just an evasion of RFRA. Lifting a regulatory burden

is not necessarily a subsidy, and it’s not a subsidy here. The

plaintiffs are not asking the government to pay for anything.

20

In contrast, in Lee the Social Security exemption for self-employed reli-

gious persons was extremely narrow. See United States v. Lee, 455 U.S. 252,

255–56 (1982).

64 Nos. 12-3841 & 13-1077

They are asking for relief from a regulatory mandate that

coerces them to pay for something—insurance coverage for

contraception—on the sincere conviction that doing so violates

their religion. They have made a strong case that RFRA entitles

them to that relief.

Our conclusion aligns us with the Tenth Circuit majority

and Judge Jordan in dissent in the Third Circuit, Hobby Lobby,

723 F.3d at 1137–44; Conestoga Wood Specialties, 724 F.3d at

407–15 (Jordan, J., dissenting), and in some respects with the

majority opinion in the D.C. Circuit, Gilardi, 2013 WL 5854246,

at *7–15. The Third Circuit analyzed the identical issues very

differently, concluding that “a for-profit, secular corporation

cannot engage in the exercise of religion,” and its owners “do

not have viable claims” against the contraception mandate

because the mandate “does not actually require [them] to do

anything.” Conestoga Wood Specialties, 724 F.3d at 388–89. The

Sixth Circuit reached a similar conclusion. Autocam, 730 F.3d at

624 (“The decision to comply with the mandate falls on

Autocam, not the Kennedys.”); id. at 627 (“Congress did not

intend the term ‘person’ to cover entities like Autocam when

it enacted RFRA.”). For reasons that should be obvious by

now, we respectfully disagree.

III. Conclusion

For the foregoing reasons, we REVERSE and REMAND with

instructions to enter preliminary injunctions barring enforce-

ment of the contraception mandate against the plaintiffs.

Nos. 12-3841 & 13-1077 65

ROVNER, Circuit Judge, dissenting. The court’s holding in

these cases is as remarkable for its reasoning as for its result.

The Kortes and the Grotes are business owners: Korte &

Luitjohan Contractors is a construction firm, and Grote

Industries manufactures motor vehicle turn signals, reflectors,

emergency lighting, and other safety systems. Neither com-

pany has a declared religious purpose or mission. Both are

subject to the full range of regulatory demands and constraints

that government imposes on all such businesses. These include

the Affordable Care Act’s (ACA’s) requirement that employers

provide comprehensive health insurance to their employees

that includes fully subsidized access to contraceptive care for

women who choose to use it. The Kortes and the Grotes are

Catholic and, consistent with the teachings of their religion,

view the use of contraceptives as immoral. Invoking the

Religious Freedom Restoration Act of 1993, 42 U.S.C. § 2000bb-

1 (“RFRA”), they object to the contraception mandate of the

ACA as a substantial burden on their right to the free exercise

of religion.

In exempting (preliminarily) the two corporations from the

contraception mandate, the court equates the business activi-

ties of these secular, for-profit firms with the religious exercise

of its owners. Because the Kortes and the Grotes declare that

they run the corporations in a manner consistent with their

religious beliefs, the court views the burdens that government

imposes on the corporations and the company health plans as

burdens on the religious consciences and exercise of the

individual owners. Not only that: the court attributes to the

corporations religious exercise rights of their own, rights that

the companies themselves can assert, as informed by the

66 Nos. 12-3841 & 13-1077

religious beliefs of their owners. Because the Kortes and the

Grotes oppose the use of contraception, the companies’

obligation to include contraceptive coverage in their workplace

health insurance plans is understood as a burden on the

owners’ free exercise rights and in turn on the companies’ free

exercise rights. The court declares off-limits any inquiry into

the nature and degree of the burden imposed on these rights;

instead, rewriting both the terms of RFRA and free exercise

clause jurisprudence, the court declares it sufficient that the

ACA compels the two corporations to comply with a require-

ment to which its owners object on religious grounds. Thus

reasoning that the contraceptive mandate substantially

burdens the free exercise rights of the individuals and their

companies, the court then subjects the mandate to strict

scrutiny and concludes that it fails that demanding standard.

So it is that, in the name of free exercise of religion, the

court has relieved two secular corporations from a statutory

obligation to provide health insurance to their employees that

includes coverage of contraceptive care for the companies’

female employees. Realistically, the only religious interests at

stake are those of the corporations’ owners—their faith is the

source of the objection to contraception. Yet the Affordable

Care Act in no way imposes on their beliefs, their worship

activities, or the conduct of their personal lives. They need not

use, endorse, or dispense contraception; they remain free to

speak out against the use of contraception whenever and

wherever they wish. In short, their own exercise of religion is

wholly undisturbed. It is the corporations, as employers, which

shoulder the obligations imposed by the ACA; and they need

not say or do anything with respect to contraception beyond

Nos. 12-3841 & 13-1077 67

including it among the countless other medical goods and

services covered by their employee health plans. The plaintiffs

nonetheless object to this as facilitating the use of contracep-

tion. I would characterize it as facilitating an employee’s choice

to use contraception. An employee’s choice may be inconsis-

tent with the owners’ religious beliefs, but it is not the owners’

choice, and it does not substantially burden the exercise of

their religious freedoms.

My esteemed colleagues have made the best case possible

for the notion that the contraception mandate interferes with

the plaintiffs’ free exercise rights; but I believe the court’s

holding and rationale represent an unprecedented and

unwarranted re-conception of both what the free exercise of

religion entails and what constitutes a substantial burden on

that exercise. The court extends a highly personal right to a

secular corporation, a man-made legal fiction that has no

conscience enabling belief or worship. It then deems a corpora-

tion’s duty to cover contraceptive care as an impermissible

burden on the religious rights of both the corporation and its

owners. It does so without considering the directness and

degree of the burden on the plaintiffs’ right to the free exercise

of their religion, in contravention of the plain terms of RFRA,

which proscribes only substantial burdens on that right. And

it permits the plaintiffs to invoke their free exercise rights

offensively rather than defensively, in a way that circumscribes

the rights Congress has given to employees, by permitting the

corporate employers to rewrite the terms of the statutorily-

mandated health plans they provide to their employees. As a

result, employees are left without a highly important form of

insurance coverage that Congress intended them to have.

68 Nos. 12-3841 & 13-1077

1.

In order to place today’s decision and its import in a

broader perspective, I want to begin my analysis by posing

several hypotheticals illustrating how the court’s ruling in this

case might play out in other factual scenarios. Part of our

responsibility as an appellate court is to consider the ramifica-

tions our precedents will have for other cases and litigants.

Contraception is the current focus of nationwide litigation

challenging the ACA’s employer mandate; and because the

duty to include coverage for contraceptives in employee health

plans implicates women, sexuality, and reproduction as well

as religion, one might be tempted to assume that the issues

raised in this case and the court’s holding are confined, if not

to the facts in this case, then to a narrow range of circum-

stances. But, as the court points out, RFRA applies to “all

Federal law, and the implementation of that law, whether

statutory or otherwise, and whether adopted before or after”

RFRA’s effective date. 42 U.S.C. § 2000bb-3(a); ante at 33. The

court’s holding today has the potential to reach far beyond

contraception and to invite employers to seek exemptions from

any number of federally-mandated employee benefits to which

an employer might object on religious grounds. The following

three hypotheticals are intended to show why I think this

might be so. The names and facts in these hypotheticals are of

my own invention; the legal provisions are not.

1. Tom Smith is the sole owner and chief executive officer

of TS-Co, a software company that employs more than 50

people and is therefore subject to the ACA. TS-Co sponsors a

self-insured health care plan for its employees. Joe Wilson is an

employee of TS-Co who suffers from Amyotrophic Lateral

Nos. 12-3841 & 13-1077 69

Sclerosis, or ALS, commonly known as Lou Gehrig’s Disease.

ALS is a progressive neurodegenerative disease that affects

nerve cells in the brain and spinal cord; the disease destroys

motor neurons and with them the ability of the brain to initiate

and control muscle function. Eventually, the disease leads to

total paralysis. Most people with ALS die of respiratory failure

or pneumonia, typically within three to five years of the onset

of symptoms.

From another TS-Co employee, Smith learns that Wilson

has been accepted into a clinical trial testing the effectiveness

of an embryonic stem-cell therapy on ALS. Smith is a devout

Methodist who shares the United Methodist Church’s disap-

proval of research and therapies based on stem cells derived

from human embryos. Smith does not wish to manage his

company’s benefit plan in a way that conflicts with his reli-

gious beliefs; although he is concerned for Wilson’s health, he

is adamantly opposed to facilitating the use of embryonic stem

cells in any way. He thinks it unlikely that the company health

plan will pay for the care Wilson will receive during his

participation in the clinical trial, but when he raises the issue

with the plan administrator, he learns that under section 1201

of the ACA (which in turn created a new section 2709 of the

Public Health Service Act (“PHA”)), the health plan must cover

the costs of routine patient care associated with clinical trials

involving treatments for cancer and other life-threatening

conditions. See 42 U.S.C. § 300gg-8. In this way, the ACA was

meant to expand patient access to and participation in such

70 Nos. 12-3841 & 13-1077

clinical trials.1 Although the plan would cover only the costs of

Wilson’s routine care associated with the stem cell therapy,

and not the costs of the stem cell therapy itself, Smith believes

that by covering Wilson’s routine care, the company plan

would be facilitating his participation in a practice to which he

objects on religious grounds.

Smith brings suit under RFRA a seeking declaratory and

injunctive relief relieving the company of the obligation to

comply with section 2709 of the PHA, insofar as it requires the

coverage of costs associated with clinical trials employing

embryonic stem cell therapies. Smith argues that requiring his

company’s health plan to cover the costs of any medical care

associated with a treatment to which he objects on religious

grounds interferes with his wish to run the company in a

manner consistent with his religious convictions. Based on the

court’s decision today, Smith and TS-Co would have a color-

able argument that the coverage required by section 2709

imposes a substantial burden on their free exercise rights.

Although the government might have an argument that section

2709 is supported by a compelling interest in the development

of effective therapies for life-threatening conditions such as

ALS, based on this court’s least-restrictive means analysis, a

court might conclude that the government itself, in lieu of

objecting employers, could pay for all costs associated with an

1

See American Cancer Society, Cancer Action Network, Fact Sheet:

Affordable Care Act: Clinical Trials (“Nearly 20% of cancer patients are eligible

for participation in cancer clinical trials, but enrollment among adults

consistently ranges between 3-5%.”), available at http://http://

acscan.org/pdf/healthcare/implementation/factsheets/hcr-clinical-trials.pdf

(last visited Nov. 7, 2013).

Nos. 12-3841 & 13-1077 71

individual’s participation in a clinical trial. In the meantime,

granting TS-Co an exemption from the PHA would mean that

Wilson’s workplace insurance would not cover any costs

associated with his participation in the clinical trial; and that,

as a practical matter, might render Wilson unable to participate

in the trial.

2. Bill Blasdell is the sole owner and chief executive officer

of Get Out!, a corporation which operates a small chain of three

outdoor-gear stores. Prior to enactment of the ACA, the

company did not provide health insurance to its employees;

but with 75 employees, Get Out! is now subject to the ACA’s

employer mandate. Blasdell has been a life-long member of the

Church of Christ, Scientist. Christian Science dogma postulates

that illness is an illusion or false belief that can only be ad-

dressed through prayer which realigns one’s soul with God.

Consistent with that view, Christian Science historically has

disapproved of most forms of conventional medicine. None-

theless, in practice, many Christian Scientists have availed

themselves of conventional medical treatments, and in recent

years, the church itself has become more tolerant of conven-

tional medicine. See, e.g., Paul Vitello, Christian Science Church

Seeks Truce With Modern Medicine, New York Times A20 (Mar.

24, 2010).

Earlier in his life, Blasdell was among those Christian

Scientists who embraced traditional medicine. But after

witnessing his wife suffer through a brutal treatment regimen

for breast cancer at a premier medical center, only to die as a

result of complications from the treatment and missteps by the

medical staff, Blasdell came to believe, consistent with the

teachings of his church, that conventional medicine does far

72 Nos. 12-3841 & 13-1077

more harm than good. His belief was reinforced in the year

following his wife’s death, when his ulcerative colitis went into

remission during prayer-centered treatment at a Christian

Science nursing center.

As a result of his religious convictions, Blasdell is ada-

mantly opposed to facilitating the use of conventional medical

care by his employees. He is willing for Get Out! to sponsor an

employee health plan that pays for care at Christian Science

nursing centers, but he believes that his company’s compliance

with the ACA’s mandate to cover traditional medical care

would be a violation of his religious principles.

After Get Out!’s request for an exemption from the em-

ployer mandate is denied, Blasdell and the company bring suit

under RFRA contending that the employer mandate is a

substantial burden on the free exercise of their religious beliefs.

Pursuant to the court’s decision today, both Blasdell and Get

Out! would have a colorable argument that compliance with

the employer mandate, by facilitating company employees’ use

of conventional medical treatments to which Blasdell is

opposed on religious grounds, represents a substantial burden

on his religious freedom and that of the corporation. And

although the government, again, would no doubt urge that it

has a compelling interest in pursuing universal access to

healthcare, Blasdell and his firm could invoke this court’s

decision for the argument that the ACA’s exemptions belie that

interest, and that, in any event, the government could pursue

its goal through publicly-funded healthcare, individual tax

credits, or other means that do not require employers to

subsidize employee healthcare that is inconsistent with their

own religious beliefs.

Nos. 12-3841 & 13-1077 73

3. Red Pie, Inc., sells and ships to consumers nationwide a

variety of frozen, specialty pizzas. Bill and Betty Ann Bowers

and their three children own and operate the firm, which has

over 100 full-time employees. The Bowers belong to a church

which is affiliated with the Southern Baptist Convention. The

Convention’s position on marriage and sexuality may be

summarized as follows:

We affirm God’s plan for marriage and sexual

intimacy—one man, and one woman, for life. Ho-

mosexuality is not a “valid alternative lifestyle.” The

Bible condemns it as sin. It is not, however, unfor-

givable sin. The same redemption available to all

sinners is available to homosexuals. They, too, may

become new creations in Christ.

Southern Baptist Convention, Position Statement on Sexuality,

available at http://www.sbc.net/aboutus/pssexuality.asp (last

visited Nov. 7, 2013). The Bowers’ local congregation endorses

and promotes the same view; in the past several years, the

pastor of their church has given several sermons condemning

same-sex marriage, adoption by gay and lesbian parents, and

the repeal of the military’s “Don’t Ask, Don’t Tell” policy. The

Bowers accept and follow their church’s teaching on homosex-

uality. When same-sex marriage was recently legalized in their

state as a result of a court decision, the Bowers, knowing that

they had a number of gay and lesbian individuals in their

employ and in keeping with their religious beliefs, amended

the Red Pie employee benefits plan to make clear that spousal

insurance benefits are not available to the same-sex spouses of

Red Pie employees; as their state does not prohibit employ-

ment discrimination on the basis of sexual orientation, and

74 Nos. 12-3841 & 13-1077

because the ACA does not require employers to provide

insurance coverage to employee spouses, this change was

legally permitted.

Mr. and Mrs. Bowers become alarmed when they learn that

one of their employees, Stan Jones, has submitted a request to

take three weeks of unpaid leave under the Family and

Medical Leave Act (FMLA) so that he and his husband may

attend the expected birth of their child via surrogacy in

California, bring the baby home, and bond with the child. See

29 U.S.C. § 2612(a)(1). The Bowers view the idea of two gay

men conceiving a child by surrogacy and bringing that child

into their home as an abomination to the Lord. They instruct

their office manager to deny Jones’ leave request and inform

him that neither they nor their company can in any way

recognize or facilitate such an immoral arrangement; Jones in

turn protests the denial, citing his FMLA rights. After thinking

about the matter further, they decide the Bowers are so

troubled that they can no longer keep Jones in their employ.

The next day, they fire him.

After Jones contacts the Wages and Hours Division of the

Department of Labor, the Department files suit against Red Pie

under the FMLA contending that Jones was both wrongfully

denied his right to parental leave under the statute and fired in

retaliation for having requested FMLA leave. See 29 U.S.C.

§§ 2615(a)(1), 2617(b)(2). Red Pie invokes RFRA as a defense to

the Department’s suit, contending that the FMLA as applied to

Red Pie in this instance would constitute a substantial burden

on the free exercise rights of the corporation and its owners, as

it would force them either to recognize and facilitate a parental

arrangement they view as sinful or suffer substantial penalties

Nos. 12-3841 & 13-1077 75

under the FMLA for refusing to do so.2 The leave mandated by

the FMLA is, of course, unpaid, and to that extent it would

arguably constitute no more than a minimal burden on Red

Pie’s asserted free exercise rights;3 but Red Pie could readily

invoke this court’s decision for the proposition that the

substantiality of the burden turns not on the degree of interfer-

ence imposed on the company’s religious exercise but rather

2

Whether RFRA may be invoked as a defense in a suit between private

individuals is a developing issue which has produced a split among the

circuits. Compare Hankins v. Lyght, 441 F.3d 96, 103–04 (2d Cir. 2006) (2–1

decision) (holding that RFRA may be invoked in such a suit), with id. at

114–15 (Sotomayor, J., dissenting); Gen. Conference Corp. of Seventh-Day

Adventists v. McGill, 617 F.3d 402, 410–12 (6th Cir. 2010); Tomic v. Catholic

Diocese of Peoria, 442 F.3d 1036, 1042 (7th Cir. 2006), abrogated on other

grounds by Hosanna-Tabor Evangelical Lutheran Church & Sch. v. E.E.O.C., 132

S. Ct. 694, 709 n.4 (2012); and Sutton v. Providence St. Joseph Med. Ctr., 192

F.3d 826, 834, 837–43 (9th Cir. 1999) (all holding that RFRA may not be

invoked in such a suit). There is no doubt, however, that RFRA may be

invoked as a defense in litigation with the government. See 42 U.S.C.

§ 2000bb-1(c) (“A person whose religious exercise has been burdened in

violation of this section may assert that violation as a claim or defense in a

judicial proceeding and obtain appropriate relief against a government.”);

Tomic, 442 F.3d at 1042.

3

This is not to say that an employer incurs no costs as a result of the leave.

Although FMLA leave is unpaid, an employer is required to continue

providing health coverage to the absent employee on the same terms and

conditions that would apply if he were still working, 29 U.S.C. § 2614(a)(2),

and of course, the employer must bear the cost of having someone else fill

in for the employee on leave even as he holds a position open for the

employee in anticipation of his return from leave, § 2614(a)(1). In both

respects, the employer lends considerable assistance to the employee taking

leave.

76 Nos. 12-3841 & 13-1077

solely on the coercive nature of the FMLA—compliance with

which is mandatory on pain of litigation and significant

penalties for the failure to do so. Ante at 56–57; see 26 U.S.C.

§§ 4980D(a) & (b)(1), 4980H(a) & (c).

The Department of Labor potentially might fair better at the

next, strict-scrutiny phase of the analysis. Certainly, in terms of

the least restrictive means of supporting and promoting

families, the Department would have a strong argument that

there is no substitute for granting leave time to parents at

critical times when their presence is most needed by their

children. But that point aside, would a court deem the interests

underlying the FMLA sufficiently compelling to constitute

“interests of the highest order,” Wisconsin v. Yoder, 406 U.S.

205, 215 , 92 S. Ct. 1526, 1533 (1972), or “paramount interest[s]”

jeopardized by “the gravest abuses,” Sherbert v. Verner, 374 U.S.

398, 406, 83 S. Ct. 1790, 1795 (1963), such that Jones’ rights

under the FMLA would trump the asserted religious interests

of the corporation? And, in considering whether the govern-

ment has “establish[ed] a compelling and specific justification

for burdening these claimants,” ante at 60 (emphasis in origi-

nal), would a court assess the strength of the government’s

interest in promoting familial relationships generally, or its

interest in promoting the bonds between same-sex parents and

their children, as that is the interest which Red Pie contends is

irreconcilable with its religious interests? And if the latter,

would that more specific interest qualify as a compelling

interest? The outcome of that analysis is far from clear to me

under today’s precedent.

These hypotheticals illustrate the uncertainty that the

court’s expansive interpretation and application of RFRA

Nos. 12-3841 & 13-1077 77

brings to a number of statutory schemes in which Congress has

accorded specific rights to employees (not to mention other

parties), the recognition and accommodation of which a

corporation, in addition to its owners, can now say burden

their religious interests. By casting the mandatory provision of

benefits to an employee as a substantial burden on the free

exercise rights of a closely-held corporation and its owners,

without considering whether compliance with the mandate

directly interferes with the free exercise of religion or is at most

a modest burden on a plaintiff’s free exercise rights, the court’s

rationale subjects a potentially wide range of statutory pro-

tections to strict scrutiny, one of the most demanding stan-

dards known in our legal system. In some ways, this is

reminiscent of the Lochner era, when an employer could claim

that the extension of statutory protections to its workers

constituted an undue infringement on the freedom of contract

and the right to operate a private, lawful business as the owner

wished. And by exempting employers from extending to

employees the rights specified by statute, the government is

forced to pick up the slack and take compensatory action to

protect the rights of those employees; short of that, the em-

ployee of the religiously-motivated employer is left with no

right at all. I doubt that this is what Congress intended when

it enacted RFRA.

2.

I begin my discussion of the specific legal points presented

by this appeal with where my colleagues and I agree. First, I

agree that the Anti-Injunction Act poses no bar to this action.

This is not a suit aimed at restraining the collection of a tax—in

this case, the penalties for non-compliance with the ACA.

78 Nos. 12-3841 & 13-1077

Rather, it is a direct challenge to a substantive provision of the

ACA: the contraception mandate.

I am also in accord with my colleagues on standing. The

government has not contested the standing of any of the

plaintiffs in these cases, and I agree with my colleagues that

both the corporations and their owners indeed do have

standing. Because the burden of the contraception mandate

falls directly on the two corporations as employers, and

because the corporations contend that they have their own

right to free exercise of religion which is burdened by the

mandate, they have standing to challenge the mandate. See

generally Clapper v. Amnesty Int’l U.S.A., 133 S. Ct. 1138, 1147

(2013). And the Kortes and the Grotes, who as the owners of

these closely-held corporations assert that they express their

religious beliefs in the way in which they run these corpora-

tions, have standing to assert that their own free exercise rights

are burdened by the contraception mandate notwithstanding

the general rule against shareholder standing. See Franchise Tax

Bd. v. Alcan Aluminium Ltd., 493 U.S. 331, 336, 110 S. Ct. 661,

665 (1990) (exception to shareholder standing rule “allow[s] a

shareholder with a direct, personal interest in a cause of action

to bring suit even if the corporation’s rights are also impli-

cated”); see also Gilardi v. U.S. Dep’t of Health & Human Servs.,

2013 WL 5854246, at *6–*7 (D.C. Cir. Nov. 1, 2013) (op of

Brown, J.); id. at *19–*22 (Edwards, J., concurring in part &

dissenting in part).

This is not to say that I believe that the respective interests

of the corporations and their owners are congruent. The fact

that the obligations imposed by the mandate fall upon the

corporation, whereas it is the individual owners—and only the

Nos. 12-3841 & 13-1077 79

individuals, in my view—who hold free exercise rights,

matters a great deal to whether those rights are substantially

burdened. But that is a point that goes to the merits of this

lawsuit rather than the standing of either set of plaintiffs, as the

court points out. Ante at 22 n.9; see also Gilardi, 2013 WL

5854246, at *19 (Edwards, J., concurring in part & dissenting in

part). And that is why, as I proceed to explain, the plain-

tiffs—both corporate and individual—are unlikely to prevail

on the merits of their RFRA claim.

3.

I turn first to the free exercise rights of the corporations.

One premise underlying the RFRA claims advanced in these

cases is that the interests, rights, and obligations of a closely-

held corporation are identical to those of their owners. In fact,

as I have argued previously, they are distinct. In electing to do

business through the corporate form, the Kortes and the Grotes

have separated themselves from their companies: the corpora-

tions are independent legal entities with legal rights and

obligations independent of their individual owners. Grote v.

Sebelius, 708 F.3d 850, 857 (7th Cir. 2013) (dissent). That is the

point of incorporation: to create a separate legal person to

shoulder some of the burdens of the business. See Cedric

Kushner Promotions, Ltd. v. King, 533 U.S. 158, 163, 121 S. Ct.

2087, 2091 (2001) (“[I]ncorporation’s basic purpose is to create

a distinct legal entity, with legal rights, obligations, powers,

and privileges different from those of the natural individuals

who created it, who own it, or whom it employs.”); see also

Autocam Corp. v. Sebelius, 730 F.3d 618, 623–24 (6th Cir. 2013),

pet’n for cert. filed (U.S. Oct. 15, 2013) (No. 13-482); Conestoga

Wood Specialties Corp. v. Sec’y U.S. Dep’t of Health & Human

80 Nos. 12-3841 & 13-1077

Servs., 724 F.3d 377, 387–88 (3d Cir. 2013), pet’n for cert. filed, 82

U.S.L.W. 3139 (U.S. Sep. 19, 1993) (No. 13-356). What that

means here is that it is the two corporations which, as employ-

ers covered by the ACA, must provide health insurance to

their employees that covers contraceptives. That, in turn, puts

meaningful distance between the Kortes and the Grotes and

the company health plans and undercuts the notion that the

ACA forces the Kortes and the Grotes to facilitate a prac-

tice—the use of contraception—to which they object on

religious grounds.

The distinction between a corporation and its owners

explains why the plaintiffs have argued, and today the court

holds, that a secular, for-profit corporation possesses its own

right to the free exercise of religion. That novel idea is a way to

get past the problem that the people whose faith leads them to

object to the contraception mandate are not legally responsible

for complying with the mandate: endow the corporate

“persons” with their own right to exercise religion which they

may invoke in conscientious objection to the mandate. It is an

unprecedented holding, and one I believe is without legal or

logical support.

I concede, as I must, that the Supreme Court has not

restricted the invocation of free exercise rights solely to

individuals, but has allowed—albeit with very little discus-

sion—houses of worship, including those which have incorpo-

rated, to assert such rights. See ante at 38, citing Gonzales v. O

Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 126 S.

Ct. 1211 (2006), and Church of the Lukumi Babalu Aye, Inc. v. City

of Hialeah, 508 U.S. 520, 113 S. Ct. 2217 (1993); see also Gilardi,

2013 WL 5854246, at *4 (op. of Brown, J.) (coll. cases); cf. Harris

Nos. 12-3841 & 13-1077 81

v. McRae, 448 U.S. 297, 321, 100 S. Ct. 2671, 2690 (1980) (noting

that a free exercise claim is “one that ordinarily requires

individual participation”).4 Permitting a religious organization,

incorporated or not, to invoke the Free Exercise Clause makes

sense as a matter of pragmatism if not legal theory. A religious

association is often as well if not better situated as the individ-

uals who make up the association to assert the relevant

religious interests: the association can speak on behalf of all of

its members; it likely has resources to pursue legal relief that

individual members do not; it can speak authoritatively on

matters of religious dogma; it may be the association that owns

property and other assets affected by the challenged govern-

ment action; and in many instances, the law or other govern-

ment action being challenged intrudes directly on the collective

worship activities of the association itself. E.g., Church of the

Lukumi Babalu Aye, 508 U.S. at 534–35, 113 S. Ct. at 2227–28

(challenged ordinances restricted practices which were central

to worship service); see also Primera Iglesia Bautista Hispana of

Boca Raton, Inc. v. Broward Cnty., 450 F.3d 1295, 1304 (11th Cir.

2006) (incorporated church had standing to assert, inter alia,

4

Of the cases cited by this court and by the District of Columbia Circuit in

Gilardi, only Tony & Susan Alamo Found. v. Sec’y of Labor, 471 U.S. 290, 105

S. Ct. 1953 (1985), actually says anything about standing. In a footnote, the

Court in Alamo Found. said simply, “The Foundation also has standing to

raise the free exercise claims of the associates, who are members of the

religious organization as well as employees under the Act.” Id. at 303 n.26,

105 S. Ct. 1962 n. 26. The Court was thus plainly relying on the doctrine of

associational standing rather than on any notion that the Foundation

possessed independent free exercise rights. The Court’s citation to

N.A.A.C.P. v. Alabama ex rel. Patterson, 357 U.S. 449, 458–59, 78 S. Ct. 1163,

1169–70 (1958), removes any doubt in that regard.

82 Nos. 12-3841 & 13-1077

free exercise clause challenge to local zoning ordinance which

interfered with church’s relocation); In re Young, 82 F.3d 1407,

1416 (8th Cir. 1996) (church had standing to assert free exercise

rights of debtors in challenge to bankruptcy court order which

directed church to return funds debtors had donated to church

prior to declaring bankruptcy; debtors were not party to

adversary proceeding seeking return of funds and could not

assert their free exercise rights in another forum, and interests

of church and its members were sufficiently similar that church

could effectively represent their free exercise rights), judgment

vacated & remanded on other grounds, 521 U.S. 1114, 117 S. Ct.

2502 (1997), judgment reinstated, 141 F.3d 854 (8th Cir. 1998);

Presbyterian Church (U.S.A.) v. United States, 870 F.2d 518,

521–23 (9th Cir. 1989) (church had standing to pursue free

exercise challenge to government surveillance of its member-

ship); Peyote Way Church of God, Inc. v. Smith, 742 F.2d 193, 199

(5th Cir. 1984) (incorporated church had personal stake in free

exercise challenge to statute proscribing possession and use of

peyote, “because enforcement of that statute will directly affect

the freedom with which its members may fulfill their professed

religious commitment”); Church of Scientology of California v.

Cazares, 638 F.2d 1272, 1279–80 (11th Cir. 1981) (church had

standing to assert free exercise rights of its membership in civil

rights suit alleging town mayor had unlawfully harassed

church and its members).

Still, although a religious organization enjoys associational

standing to represent the free exercise rights of its members, see

United Food & Commercial Works Union Local 751 v. Brown

Group, Inc., 517 U.S. 544, 551–53, 116 S. Ct. 1529, 1534 (1996);

Hunt v. Washington State Apple Adver. Comm’n, 432 U.S. 333,

Nos. 12-3841 & 13-1077 83

342–44, 97 S. Ct. 2434, 2441–42 (1977); Warth v. Seldon, 422 U.S.

490, 511, 95 S. Ct. 2197, 2211 (1975), I question whether it has

free exercise rights of its own. Would a defunct church that no

longer has any members but still owns property and other

assets be able to claim free exercise rights in its own right, for

example? The Supreme Court, while allowing incorporated

religious bodies to assert free exercise rights, has yet to fully

explain why, let alone delineate what types of corporations, if

any, can independently assert free exercise rights. There are

reasons to doubt that a corporation, whatever its nature, has

such rights.

Not all rights that the Constitution accords to a person are

extended to corporations. The Supreme Court has recognized

that “[c]orporate identity has been determinative in several

decisions denying corporations certain constitutional rights,

such as the privilege against compulsory self-incrimination.”

First Nat’l Bank of Boston v. Bellotti, 435 U.S. 765, 778 n.14, 98 S.

Ct. 1407, 1416–17 n.14 (1978). Bellotti went on to explain:

[C]ertain “purely personal” guarantees … are

unavailable to corporations and other organizations

because the “historic function” of the particular

guarantee has been limited to the protection of

individuals. United States v. White, 322 U.S. 694,

698–701, 64 S. Ct. 1248, 1251–52 (1944). Whether or

not a particular guarantee is “purely personal” or is

unavailable to corporations for some other reason

depends on the nature, history, and purpose of the

particular constitutional provision.

84 Nos. 12-3841 & 13-1077

Ibid; see also Browning-Ferris. Indus. of Vt., Inc. v. Kelco Disposal,

Inc., 492 U.S. 257, 284–85, 109 S. Ct. 2909, 2925–26 (1989).

I have been struck in reviewing the handful of decisions

granting corporations free exercise rights (and for that matter,

the plaintiffs’ briefs in this case) by how wanting they are in

articulating a substantive, affirmative explanation for why any

type of corporation, let alone a secular, for-profit corporation,

should be accorded religious rights. E.g., Hobby Lobby Stores,

Inc. v. Sebelius, 723 F.3d 1114, 1135 (10th Cir. 2013) (“[W]e

cannot see why an individual operating for-profit retains Free

Exercise protections but an individual who incorporates—even

as the sole shareholder—does not, even though he engages in

the exact same activities as before.”), pet’n for cert. filed, 82

U.S.L.W. 3139 (U.S. Sep. 19, 2013) (No. 13-354). My colleagues

see no reason to think that Congress meant to preclude such

corporations from asserting rights under RFRA, ante at 53–54,

but I think this gets things backward. Given that the Supreme

Court has never recognized that secular corporations have free

exercise rights, I think it is more accurate to say that there is no

reason to think Congress meant to take the novel step of

extending free exercise rights to such corporations when it

enacted RFRA.

Perhaps the best argument in favor of according free

exercise rights to corporations is that the right to free speech

already has been recognized as among those rights that

corporations enjoy. Citizens United v. Fed. Election Comm’n, 558

U.S. 310, 342, 130 S. Ct. 876, 899–900 (2010) (coll. cases); Bellotti,

435 U.S. at 780–81, 98 S. Ct. at 1417–18 (coll. cases). But beyond

the fact that the free exercise clause, like the free speech clause,

resides in the First Amendment, I find little, if anything, in the

Nos. 12-3841 & 13-1077 85

speech cases that speaks to the nature of religion and why

corporations, as a matter of history and logic, should be able to

assert free exercise rights. See Conestoga Wood Specialties, 724

F.3d at 386 (noting distinct treatment of free speech and free

exercise clauses in Supreme Court jurisprudence); Gilardi, 2013

WL 5854246, at *5 (op. of Brown, J.); Autocam, 730 F.3d at

627–28. Corporations, because they have property, financial,

and political interests, of course have a free speech interest in

protecting and promoting those interests and in pursuing their

agendas, be their stated goals charitable, religious, political, or

profit-making. See Cent. Hudson Gas & Elec. Corp. v. Pub. Serv.

Comm’n of N.Y., 447 U.S. 557, 561–62, 100 S. Ct. 2343, 2349

(1980) (commercial speech); Riley v. Nat’l Fed. of the Blind of

N.C., Inc., 487 U.S. 781, 787–89, 108 S. Ct. 2667, 2672–73 (1988)

(charitable solicitation); Watchtower Bible & Tract Soc’y of N.Y.,

Inc. v. Vill. of Straton, 536 U.S. 150, 160–61, 122 S. Ct. 2080,

2086–87 (2002) (religious speech); Citizens United, 558 U.S. at

342–43, 130 S. Ct. at 900 (political speech). Beyond those

parochial interests, Bellotti (which struck down a law prohibit-

ing a corporation from making expenditures to influence the

outcome of any public referendum other than one which

directly affected the property, business, or activities of the

corporation), stressed the core First Amendment interest in a

robust dialogue on issues of public concern, an interest which

extends beyond a particular speaker’s wish to express his

views to include the public’s right to hear his views and those

of others. 435 U.S. at 776–77, 98 S. Ct. at 1415–16. The Court

added that “[t]he inherent worth of the speech in terms of its

capacity for informing the public does not depend upon the

identity of its sources, whether corporation, association, union,

86 Nos. 12-3841 & 13-1077

or individual.” Id. at 777, 98 S. Ct. at 1416. Decisions recogniz-

ing the speech rights of corporations thus rest “not only on the

role of the First Amendment in fostering individual self-

expression but also on its role in affording the public access to

discussion, debate, and the dissemination of information and

ideas.” Id. at 783, 98 S. Ct. at 1419.

Religion, by contrast, is a personal undertaking. Conestoga

Wood Specialties, 724 F.3d at 385, 388. Certainly there is a

collective societal interest in protecting religious liberty, and

religion can and has influenced the public sphere in positive

ways. See Lynch v. Donnelly, 465 U.S. 668, 674–78, 104 S. Ct.

1355, 1360–61 (1984) (recognizing longstanding role of religion

in American life). But religious faith is, by its nature, an

intensely individual experience, and for the reasons that

follow, I believe it likely is one of those “purely personal”

constitutional rights that the Supreme Court will not extend to

corporations—certainly not to secular, for-profit corporations.

The fact that a corporation qualifies as a person under the

Dictionary Act, 1 U.S.C. § 1, see ante at 36; Hobby Lobby Stores,

723 F.3d at 1129, 1132, is by no means dispositive. RFRA

bestows its protection upon “[a] person whose religious exercise

has been burdened.” § 2000bb-1(c) (emphasis mine). Thus, “the

focus on personhood is too narrow; instead, we must construe

the term ‘person’ together with the phrase ‘exercise of reli-

gion.’” Gilardi, 2013 WL 5854246, at *2 (op. of Brown, J.); see also

Autocam, 730 F.3d at 626. In other words, we must consider

whether it is possible for a corporation to exercise religion.

The First Amendment, of course, does not define “religion.”

More than a century ago, the Supreme Court said that “[t]he

Nos. 12-3841 & 13-1077 87

term ‘religion’ has reference to one's views of his relations to

his Creator, and to the obligations they impose of reverence for

his being and character, and of obedience to his will.” Davis v.

Beason, 133 U.S. 333, 342, 10 S. Ct. 299, 300 (1890), abrogated on

other grounds by Romer v. Evans, 517 U.S. 620, 634, 116 S. Ct.

1620, 1628 (1996); see also Cnty. of Allegheny v. A.C.L.U. Greater

Pittsburgh Chapter, 492 U.S. 573, 109 S. Ct. 3086 (1989) (Stevens,

J., concurring in part & dissenting in part) (noting that

“religion” as used in establishment clause was “understood

primarily to mean ‘[v]irtue, as founded upon reverence of God,

and expectation of future rewards and punishments,’ and only

secondarily ‘[a] system of divine faith and worship as opposite

to others.’” (quoting S. Johnson, A DICTIONARY OF THE ENGLISH

LANGUAGE (7th ed. 1785)). In Fleischfresser v. Dirs. of Sch. Dist.

200, 15 F.3d 680, 688 n.5 (7th Cir. 1994), we set forth a “general

working definition of religion” for purposes of the free exercise

clause that includes “any set of beliefs addressing matters of

ultimate concern occupying a place parallel to that filled by

God in traditionally religious persons.” (quoting Welsh v.

United States, 398 U.S. 333, 340, 90 S. Ct. 1792, 1796 (1970))

(internal quotation marks and ellipsis omitted). I note that the

Second Circuit, in attempting to define the same term, invoked

the renowned philosopher, psychologist, and professor

William James, who described religion as “the feelings, acts,

and experiences of individual men in their solitude, so far as

they apprehend themselves to stand in relation to whatever

they may consider the divine.” United States v. Moon, 718 F.2d

1210, 1227 (2d Cir. 1983) (quoting Wm. James, THE VARIETIES OF

RELIGIOUS EXPERIENCE: A STUDY IN HUMAN NATURE 31 (1910));

see also Patrick v. LeFevour, 745 F.2d 153, 158 (2d Cir. 1984). Each

88 Nos. 12-3841 & 13-1077

of these definitions references an individual’s understanding

of his relationship to a divine being, a necessarily personal and

subjective viewpoint. In that regard, they are consistent with

the views of both James Madison, a drafter of the First Amend-

ment, and Thomas Jefferson, who drafted its predecessor,

Virginia’s Bill for Religious Freedom, in 1779 (the bill was

eventually adopted by the Virginia Assembly in 1786). Madi-

son, in his 1785 Memorial and Remonstrance Against Religious

Assessments, wrote that he opposed Patrick Henry’s proposed

Virginia bill to levy a tax for the support of religion on fifteen

grounds, the first of which being:

1. Because we hold it for a fundamental and undeni-

able truth, “that religion or the duty which we owe

to our Creator and the Manner of discharging it, can

be directed only by reason and conviction, not by

force or violence. The Religion then of every man

must be left to the conviction and conscience of

every man; and it is the right of every man to exer-

cise it as these may dictate. This right is in its nature

an unalienable right. It is unalienable, because the

opinions of men, depending only on the evidence

contemplated by their own minds cannot follow the

dictates of other men: It is unalienable also, because

what is here a right towards men, is a duty towards

the Creator. It is the duty of every man to render to

the Creator such homage, and such only, as he

believes to be acceptable to him. This duty is prece-

dent, both in order of time and in degree of obliga-

tion, to the claims of Civil Society. Before any man

can be considered as a member of Civil Society, he

Nos. 12-3841 & 13-1077 89

must be considered as a subject of the Governour of

the Universe: And if a member of Civil Society, who

enters into any subordinate Association, must

always do it with a reservation of his duty to the

general authority; much more must every man who

becomes a member of a particular Civil Society do it

with a saving of his allegiance to the Universal

Sovereign … .

See Everson v. Bd. of Educ. of Ewing Twp., 330 U.S. 1, 64, 67 S. Ct.

504, 535 (1947) (App. to dissent of Rutledge, J.) (quoting 2 THE

WRITINGS OF JAMES MADISON 183-91 (Gaillard Hunt ed. 1901)),

also available at http://religiousfreedom.lib.virginia.edu/

sacred/madison_m&r_1785.html (last visited Nov. 7, 2013).

Madison’s articulation of religion as something that must be

“left to the conviction and conscience of every man” obviously

describes a highly personal experience of thought and belief.

Likewise, Jefferson, in his 1802 letter to the Danbury Baptists,

described religion in terms of individual conscience:

Believing with you that religion is a matter which

lies solely between man and his God, that he owes

account to none other for his faith or his worship,

that the legitimate powers of government reach

actions only, and not opinions, I contemplate with

sovereign reverence that act of the whole American

people which declared that their legislature should

“make no law respecting an establishment of reli-

gion, or prohibiting the free exercise thereof,” thus

building a wall of separation between church and

State. Adhering to this expression of the supreme

will of the nation in behalf of the rights of con-

90 Nos. 12-3841 & 13-1077

science, I shall see with sincere satisfaction the

progress of those sentiments which tend to restore to

man all his natural rights, convinced he has no

natural right in opposition to his social duties.

Letter from President Thomas Jefferson to Nehemiah Dodge,

et al., Danbury Baptist Association (Jan. 1, 1801), reproduced

in Braunfeld v. Brown, 366 U.S. 599, 604, 81 S. Ct. 1144, 1146

(1961) (quoting 8 WORKS OF THOMAS JEFFERSON 113 (A.

Lipscomb & A. Bergh eds. 1905)), also available at http://press-

pubs.uchicago.edu/founders/documents/amendI_

religions58.html (last visited Nov. 7, 2013).

Such remarks are consistent with the historical underpin-

nings of the free exercise clause. Neither the congressional

record underlying the enactment of the First Amendment nor

the records of the state legislatures which subsequently ratified

the amendment provide any help in ascertaining what legisla-

tors meant by “religion” and the free exercise thereof. See

Michael W. McConnell, The Origins & Historical Understanding

of Free Exercise of Religion, 103 HARV. L. REV. 1409, 1481, 1483,

1485 (1990); Vincent Phillip Muñoz, The Original Meaning of the

Free Exercise Clause: The Evidence from the First Congress, 31

HARV. J. L. & PUB. POL. 1083 (2008). But there are two reference

points that reinforce the notion that religion was understood to

be a matter of personal conscience.

First, by 1789, the constitutions of all thirteen states, save

Connecticut, included religious liberty provisions, and many

referenced the right as the freedom to worship one’s God

according to the dictate’s of one’s conscience. See McConnell,

Origins & Historical Understanding, 103 HARV. L. REV. at 1457 n.

Nos. 12-3841 & 13-1077 91

242 (reproducing text of state provisions); City of Boerne v.

Flores, 521 U.S. 507, 553–54, 117 S. Ct. 2157, 2180 (1997)

(O’Connor, J., dissenting) (discussing examples of such

provisions). New Hampshire’s 1784 constitution, for example,

provided that “[e]very individual has a natural and unalien-

able right to worship GOD according to the dictates of his own

conscience, and reason”; and the constitutions of Delaware,

Massachusetts, New Jersey, North Carolina, Pennsylvania, and

Virginia all contained very similar language. See McConnell,

Origins & Historical Understanding, 103 HARV. L. REV. at 1456,

1457 n. 242. Other constitutions—those of New York and South

Carolina—separately described the protected freedom of

religion and then referred to the “liberty of conscience” thereby

guaranteed. See id. “Conscience” was used in still other ways

by the provisions of other state constitutions. See id.

These state provisions set the stage for the drafting, debate,

and adoption of the First Amendment’s free exercise clause.

The clause as proposed and adopted by the House of Repre-

sentatives incorporated language recognizing “freedom of

conscience”; but the version adopted by the Senate, by the

ensuing conference committee, and which was submitted to

and ratified by the States, omitted that language. See

McConnell, Origins & Historical Understanding, 103 HARV. L. R.

at 1481–84. It is not clear why “conscience” was omitted from

the adopted version of the free exercise clause, but it is doubt-

ful that the elimination was meant to signify a diff

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