Chevron and the Hobby Lobby Decision

Posted by:
Category: Business Regulation, Public, Religion & Law, U.S. Supreme Court
4 Comments »

Hobby Lobby logoThe majority opinion in the Supreme Court’s decision in the Hobby Lobby case is founded on the Religious Freedom Restoration Act (RFRA) and the restrictions it places on the Secretary of Health and Human Services (HHS) when she regulates and enforces the Affordable Care Act (ACA). While the issues raised by Justice Ruth Bader Ginsburg’s dissenting opinion as to the battle of interests protected by the Constitution are significant, an important practical legal issue that was not addressed in the Hobby Lobby case is the power of HHS to interpret the meaning of the ACA. Considering the majority’s reliance on two terms that go undefined by the Court — “sincere religious belief” and “closely held corporation” [see page 29 of the slip opinion and footnote 28] — and the fact that none of the other Hobby Lobby opinions address the meaning of these terms, it is essential that these terms be defined as they fit into the ACA context.

The Court’s failure to address how HHS might interpret the meaning of these terms is reasonable considering that HHS has not acted to interpret the meaning of a “sincere religious belief” or a “closely held corporation” in the context of the ACA. In fact, the majority states explicitly that courts will be able to separate those with “sincere religious beliefs” from those who do not. However, despite the majority’s reference to the ability, and impliedly the power, of courts to interpret the terms “sincere religious beliefs” and “closely held corporations,” terms such as these have been regularly interpreted by federal agencies as they apply to the statutes these agencies enforce.

HHS interpretations of the terms “sincere religious beliefs” and “closely held corporation” as it attempts to apply the Hobby Lobby decision to the ACA could have a significant practical effect. For example, if HHS adopts a rule that narrowly (or broadly) interprets the meaning of these terms the number of corporations or other individuals with the power to separate from the application of the ACA might be small (or great). Since the HHS has primary responsibility for the regulation and enforcement of the ACA and has been delegated the power to make adjudications and rules as they apply to this Act, HHS’s interpretation of these terms in the exercise of its adjudicatory and/or rulemaking powers should receive Chevron deference. Indeed, the failure by the majority in Hobby Lobby to address the meaning of these terms is a virtual invitation for HHS to interpret. Thus, the net effect of HHS following this course of rulemaking action (or setting interpretation through adjudications) would place the meaning of these terms not in the hands of a court but rather in the hands of the agency.

This is in keeping with the Court’s traditional view of deference to agency action since at least the Chevron decision. When one considers the historical breadth that has been given to agencies such as selective service boards to interpret matters that relate to terms such as a “sincere religious belief” and agencies regulating corporate activities that address the term “closely held corporation” it seems only natural that the courts would be bound to follow those interpretations established through adjudication and/or rulemaking procedures unless the interpretations were not “reasonable.” Moreover, a number of judicial decisions have clarified that even if a court has previously interpreted a term the agency is not bound to follow a court’s prior interpretation if the agency chooses to reinterpret that term. As long as the agency does not choose an interpretation that is unconstitutional or unreasonable the courts will defer to the agency interpretation. This is in keeping with the understanding that the agency has the expertise and experience to best apply the law. It appears that the Court has unwittingly left it to HHS to determine who has a “sincere religious belief” and when a corporation is “closely held.” All we know is that Hobby Lobby and its fellow plaintiffs met the standards of the Court. Still, if HHS establishes the meaning of the terms, one must presume that the courts will not be interested in reviewing every factual determination by HHS that decides whether a party has a “sincere religious belief” and is a “closely held corporation”.

Print Friendly

You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

AddThis Social Bookmark Button

4 Responses to “Chevron and the Hobby Lobby Decision”

  1. A very interesting article. It is nice to see a legal analysis of this case beyond its shocking majority opinion. I could define those terms easily. “Sincere religious belief” means if you believe there is some supreme being at the moment you file your lawsuit or challenge a law. A “closely held corporation” is any that is not public. It’s hard to envision any standards that are easier to meet.

    Going to what Justice Ginsburg wrote, I am adding Hobby Lobby to my pantheon of the Court’s worst decisions. It will fit nicely next to Dred Scott, Korematsu, Bush v. Gore and Citizens United. I may have to make more room as this Court is far from done engaging in mischief.

  2. michael waxman Says:

    Nick,

    Thank you very much for leaving your comment. Although your definitions of the terms might be acceptable to some and rejected by others, government agencies have many times taken a much narrower view of these terms. For example, during the Vietnam War era, selective service took a very narrow interpretation when addressing claims as to qualifying for conscientious objector status due to sincerely held religious beliefs. The analysis was often based on the sincerity and continuity of beliefs. Moreover, since these were factual assessments the courts generally deferred to agency conclusions.

    As for “closely held corporations” many government financial regulatory agencies (e.g. SEC and state agencies) as well as corporation law commentators have used the term indiscriminately. Once again, there would seem to be that there are rather broad choices of meanings (and applications) available to HHS.

    Of course, because the agency would be interpreting judicially created and applied terms, HHS would try initially to insure that the meanings selected would be within the ken of the prior interpretations by agencies.

  3. Deborah Darin Says:

    On Tuesday, the Court granted cert in 3 other cases, including the 6th Circuit’s decision in Eden Foods v. Burwell, which brings the issue for all forms of contraception. Given Justice Alito’s “invitation” in Hobby Lobby, maybe HHS should consider full, government-funded coverage for contraception, and other preventive mandates like vaccines (before the Christian Scientists and Church of Scientology get into the fray).

  4. Melissa Greipp Says:

    Here is a link to Katie Couric’s interview of Justice Ginsburg, where Justice Ginsburg discusses her dissent in Hobby Lobby.

Leave a Reply