Friday, February 15, 2013

Corporations aren't Religions

In the wake of the passage of the Affordable Care Act (commonly referred to as Obamacare), many groups and institutions have sought to have themselves exempted from various provisions of the law. One of the most common concerns is the requirement that large companies that offer healthcare to their employees must also cover birth control. Many religious groups (Catholics in particular) have sought exemptions from the law on religious grounds, claiming that their First Amendment right to the free-exercise of religion is violated by a law that requires them to do something they consider immoral.

Now in the case of churches, this exemption to the law is generally granted, but many other non-church groups have sought a similar exemption. In a recent case in the Federal Court of Appeal for the Third Circuit, the justices ruled against Conestoga Wood Specialties Corporation, who had sought an exemption from the ACA on the grounds that it violated the religious freedom of the organization. In effect, the Plaintiffs were arguing that because their organization was owned by religious individuals, the private, for-profit corporation was itself a religious entity and therefore entitled to an exemption from the ACA on First Amendment grounds.

I don't want to go into all the details of the case, but I am particularly interested in the concurring opinion (PDF) written by Judge Leonard Garth. There, Judge Garth makes the following argument:
Conestoga further claims that it should be construed as holding the religious beliefs of its owners. This claim is belied by the fact that, as the District Court correctly noted, “‘[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’ . . . . It would be entirely inconsistent to allow the Hahns to enjoy the benefits of incorporation, while simultaneously piercing the corporate veil for the limited purpose of challenging these regulations.” Contestoga, 2013 WL 140110 at *8 (quoting Cedric Kushner Promotions, Ltd. v. King, 533 U.S. 158, 163, 121 S.Ct. 2087, 150 L.Ed.2d 198 (2001)).
In effect, the Judge is arguing that Conestoga is guilty of committing the Fallacy of Composition. This is a fallacy in which one argues that something true of the members of a group is also true of the group as a whole. Here, the Hahn family, owners of Conestoga, are arguing that because they are all religious, that therefore the corporation formed by them is also religious. And the court rejected that argument by noting that religiosity is not a property that crosses the corporate veil.

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