THE BLOG
08/15/2012 01:32 pm ET Updated Oct 15, 2012

The Temple of Hercules Industries, Inc.

It was one thing for the Supreme Court to declare that private, for-profit corporations have a Constitutional right to speak. But recently, a Federal District Judge in Colorado went significantly further in anthropomorphizing corporations by issuing a ruling based on the premise that for-profit corporations also have the ability to exercise religious beliefs.

The case, Newland v. Sebilius, was brought by Hercules Industries, Inc., a Colorado corporation engaged in the manufacture and distribution of heating, ventilation and air conditioning equipment. Hercules Industries, Inc. has four principal owners who are Catholic and, according to the court, "seek to run Hercules in a manner that reflects their sincerely held religious beliefs." On Friday, July 27, the judge issued a temporary injunction exempting Hercules Industries, Inc. from the Affordable Health Care Act's requirements that private employers provide their employees as part of their insurance plan with access to contraceptives as well as "patient education and counseling for women with reproductive capacity." Although the case is at an early stage of litigation, the judge ruled that Hercules Industries, Inc., would likely succeed on the merits of its assertion that such a requirement substantially burdens its "exercise of religion."

The judge accepted the argument that requiring the corporation to include contraception coverage in its employee's health insurance would likely violate the Religious Freedom Restoration Act (RFRA), which states that, in most cases, the Federal Government may not "substantially burden a person's exercise of religion." The most troubling feature of the Court's ruling is its unprecedented treatment of a for-profit corporation as a "person."

Significantly, RFRA does not say that "person" means anything other than a living, breathing, human life form. Undoubtedly, Congress has frequently stated explicitly that a particular statue refers to both corporations and people. For example, Congress made it a crime for a "person" to remove labels indicating the safety ratings of a new car, and stated that for purposes of that specific statute, "The term 'person' means an individual, partnership, corporation, business trust, or any organized group of persons." Even through Congress has similarly explicitly treated corporations like people almost 150 times, it did not do so in RFRA.

The reason is that the exercise of religion is uniquely linked to what the Framers used to term "liberty of conscience." A person's actions, such as not working on Sunday or wearing a yarmulke, only becomes an exercise of religion if the actions are a reflection of that person's religious beliefs. A private, for-profit corporation is incapable of having beliefs of any kind, let alone deeply help religious beliefs.

Certainly the people who own a corporation, such as those who own Hercules Industries, Inc., may hold religious beliefs, but the actions of their corporations cannot be viewed to be the same as their own personal actions. That distinction, in fact, is the prime reason corporations exist at all. The corporate entity is created to protect its individual owners from personal liability arising from the activities of the corporation. When the actions of the corporation cause it to owe money to creditors or be sued for damages by injured customers, the owners are shielded from responsibility, since the corporation's actions are considered distinct from the persons who own it.

Likewise, the actions of a corporation in paying for an employee's health care should be seen as distinct form the actions of its human owners. The requirement that a corporation provide contraception coverage can no more be considered a burden on its individual owners than the requirement that a corporation repay a contractual debt.

There is another important reason why conferring the right of free exercise of religion on private, for-profit corporations is dangerous. The Supreme Court has consistently held that religious organizations have the power to decide for themselves, free from governmental interference, matters of internal discipline and governance. Thus, the courts are barred from stepping in to settle a dispute over which of two religious factions is the rightful owner of particular church property. Judges may not question a church's interpretation of its own internal documents.

If such rights were extended to for-profit corporations, much of modern corporate law would have to be discarded. By describing their internal structure as one of a religious hierarchy, those running a corporation could engage in all manner of manipulation free from the fear of governmental oversight or judicial review. Many private employees would be vulnerable, for the first time since the passage of the Civil Rights Act of 1964, to discriminatory treatment due to the religious preferences of their employers.

The special protection that is given to religious organizations so that they are free to perform their religious functions cannot logically or properly be ripped from its rightful context and applied to secular, for-profit corporations.