The Uneasy Relationship of Hobby Lobby, Conestoga
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SAINT LOUIS UNIVERSITY SCHOOL OF LAW THE UNEASY RELATIONSHIP OF HOBBY LOBBY, CONESTOGA WOOD, THE AFFORDABLE CARE ACT, AND THE CORPORATE PERSON: HOW A HISTORICAL MYTH CONTINUES TO BEDEVIL THE LEGAL SYSTEM MALCOLM J. HARKINS III* TABLE OF CONTENTS I. INTRODUCTION .............................................................................. 203 II. BACKGROUND ................................................................................ 212 A. The Corporate Person in Historical Context ................................. 212 B. The Supreme Court’s Seminal Decisions: The Corporate Person and the Fourteenth Amendment: County of San Mateo v. Southern Pacific Railroad Co. and County of Santa Clara v. Southern Pacific Railroad Co. .............................. 215 1. Round One: San Mateo in the Circuit .................................... 215 2. Round Two: Santa Clara in the Circuit ................................... 227 3. Round Three: San Mateo in the Supreme Court ...................... 234 a. The Conspiracy Theory of the Fourteenth Amendment .................................................................... 234 b. The Supreme Court Punts ................................................. 240 * Malcolm J. Harkins is a partner at the Washington, D.C. office of Proskauer Rose, LLP. He serves as an Adjunct Professor in the Health Law Center of the St. Louis University School of Law as well as the School of Public Health and Health Services, and Department of Health Services Management and Leadership of The George Washington University. This article is published with gratitude to Randall M. Miller and F. Graham Lee and to the memory of Gerald T. Dunne, great teachers, mentors, role models and friends whose love of ideas, critically examined, is infectious. With thanks also to the “Girl Detective”, Carla M. Evans whose extraordinary research skills, especially her ability to locate the old and arcane, were of immeasurable value. Finally, with very special thanks to Rosemary H. Brennan who (repeatedly) put the threads together, for without her dedication, patience and skill this article could not have been produced. 201 SAINT LOUIS UNIVERSITY SCHOOL OF LAW 202 SAINT LOUIS UNIVERSITY JOURNAL OF HEALTH LAW & POLICY [Vol. 7:201 4. Round Four: Santa Clara in the Supreme Court ...................... 245 5. The Supreme Court Reporter’s Mulligan: The Erroneous Headnote that Became Law .................................. 247 C. The Constitutional Person After San Mateo and Santa Clara: Field Ipse Dixit Embeds the Corporate Person in the Constitution..................................................................... 258 D. With a Little Help from His Friends ............................................. 271 E. At the End of the Day ................................................................ 274 III. WHAT NOW? ................................................................................. 276 A. Were the Justices in Agreement with Field that “Persons” as Used in the Fourteenth Amendment Included Corporations .............................................................. 276 B. Was Field Authorized to Speak for the Court When He Asserted that the Existence of the Constitutional Corporate Person Had Been Settled ........................................... 278 C. What are the Current Implications of Santa Clara and its Progeny? ............................................................................. 293 D. The Conestoga Wood and Hobby Lobby ACA Challenges .............................................................................. 295 1. The Third Circuit’s Conestoga Wood Decision ....................... 297 2. The Tenth Circuit’s Hobby Lobby Decision ............................. 298 E. The Problem of the Corporate Person and What the Supreme Court Should Do ......................................................... 299 IV. CONCLUSION ................................................................................ 306 SAINT LOUIS UNIVERSITY SCHOOL OF LAW 2014] THE UNEASY RELATIONSHIP 203 I. INTRODUCTION On November 26, 2013, the Supreme Court of the United States agreed to hear two cases — Sebelius v. Hobby Lobby Stores, Inc.,1 and Conestoga Wood Specialties v. Sebelius2 — challenging the validity of the Affordable Care Act’s (ACA) mandate that employer-sponsored health plans cover all FDA-approved contraceptives (the Contraceptive Mandate). In each case, closely held plaintiff corporations contend that the Contraceptive Mandate illegally infringes upon the corporation’s freedom to exercise religion. The cases attract attention because the Supreme Court agreed to hear yet another challenge to the validity of the ACA’s provisions, but it has been less noticed that both cases, and others like them, implicate a fundamental question that the Supreme Court has never decided: on what basis, if any, is a corporation a “person” entitled to assert the constitutional and statutory rights of natural persons? Without denying the significance of the challenge to the ACA’s Contraceptive Mandate, the Supreme Court’s failure to define a principled corporate person theory has had — and continues to have — far more important and pervasive implications for the American legal system. Typically, legal concepts creating and regulating societal rights and obligations, like the corporate personhood concept, come into being incrementally in an extended evolutionary process. That evolutionary process is characterized by a dialectic give and take in which the principles justifying — or precluding — application of a legal concept in a variety of different factual scenarios are gradually clarified, defined, and developed through a series of judicial decisions. Familiarity with such precedents and with the reasoning underlying the courts’ application of the concept allows courts, lawyers, and policy-makers to assess whether proposed legislation or regulatory changes are sufficiently analogous to prior precedents that the legal viability of the proposal can be determined by reference to the principles that courts previously have relied upon to determine the applicability of the concept in other situations. The problem confronting the Supreme Court as it takes up the Hobby Lobby and Conestoga Wood cases is that the concept of corporate personhood did not develop gradually or in an evolutionary process in which the meaning of the concept was developed and refined. Instead, the concept of the corporate person was imposed on the law ipse dixit, that is, 1. 870 F. Supp. 2d 1278 (W.D. Okla. 2012), rev’d and remanded for further proceedings, 723 F.3d 1114 (10th Cir. 2013), cert. granted, 82 U.S.L.W. 3139 (U.S. Nov. 26, 2013) (No. 13–354). 2. 917 F. Supp. 2d 394, aff’d, 724 F.3d 377 (3d Cir. 2013), cert. granted, 82 U.S.L.W. 3139 (U.S. Nov. 26, 2013) (No. 13–356). SAINT LOUIS UNIVERSITY SCHOOL OF LAW 204 SAINT LOUIS UNIVERSITY JOURNAL OF HEALTH LAW & POLICY [Vol. 7:201 by judicial fiat and without definition, in a series of late nineteenth century Supreme Court cases decisions. Those opinions all were written by Supreme Court Justice Stephen J. Field, who, if not beholden to railroad interests, was certainly a devoted friend of the railroads. Moreover, Field had no occasion to explain the reasons that corporations possessed the rights of natural persons because, in every one of those cases, the Supreme Court held that, person or not, the corporations had no viable claim for relief. As a result, the concept of the corporate person lacks a principled definition and, therefore, seems to expand, or contract, depending on the circumstances and on the personal predilections of the speaker. The resultant confusion about the meaning of corporate personhood makes application of the concept troublesome in any case, but it is particularly problematic in the context of statutes, like the ACA, which attempt to fundamentally change basic aspects of societal structure and, therefore, implicate divisive questions — here, contraception and abortion — grounded in deeply-held and profoundly personal beliefs. As Conestoga Wood and Hobby Lobby illustrate, the undefined and ubiquitous corporate person provides little guidance to those who must assess the legal viability of statutes like the ACA and, equally problematic, results in polarization and politicization of already difficult matters, thereby preventing or impeding implementation of ground-breaking reforms, like the ACA. Individuals concerned with health policy would be well-advised to follow Hobby Lobby and Conestoga Wood closely because the question whether an entity — corporate or natural — is a “person” able to claim protected legal rights cannot be easily cabined to corporations or to the ACA. It happens that the plaintiffs in Hobby Lobby and Conestoga Wood are corporations, but the next case to implicate the meaning of legal “personhood” could just as easily involve a different type of entity. In addition, legal principles are rarely confined to discrete pigeon holes. Rather, the law seeks to identify unifying principles that can be applied in a variety of analogous contexts. Thus, resolution of the legal issue in Hobby Lobby and Conestoga Wood will not necessarily be limited to the meaning of corporate personhood. The more fundamental question the cases raise is what attributes entitle any entity — whether artificial or natural — to claim the status of a legal person protected by the Constitution and statutes of the United States. The answer to that broader question, should the Supreme Court choose to address it, has