March 24, 2014
Hobby Lobby: Form versus Substance
Posted by Steve Bainbridge

My thanks to Gordon et al, for inviting me to join them in discussing the upcoming contraception mandate cases. I've been blogging extensively about them over at my usual haunt,, and have published two law review articles on the case.

What's a nice corporate law guy like myself doing in this constitutional law arena? My interest in the contraception mandate cases was piqued when a friend sent me a transcript of a hearing held by U.S. District Court Judge Reggie Walton in the Tyndale House Publishers, Inc. v. Sebelius case, which raises issues similar to those in Hobby Lobby and Conestoga Wood

At one point, there was  a telling colloquy between Judge Walton and U.S. Department of Justice lawyer Benjamin Berwick. Berwick argued that employers who chose to incorporate their business are precluded from raising First Amendment free exercise of religion-based objections to regulations affecting their business. In response, Judge Walton posed the following hypothetical:

[M]y wife has a medical practice. She has a corporation, but she’s the sole owner and sole stock owner. If she had strongly-held religious belief and she made that known that she operated her medical practice from that perspective, could she be required to pay for these types of items if she felt that that was causing her to violate her religious beliefs?

Berwick replied that the corporation and its shareholders are separate legal persons. The judge thereupon summarized his understanding of the government’s position as being that his wife would “have to go as an individual proprietor with no corporation protection in order to assert her religious right.” Berwick did not contest that characterization.

In effect, Berwick wanted the judge to elevate form over substance. Corporate law often elevates form over substance, of course, but not always. The question in every context thus must be asked: Is this an appropriate case for form to triumph or is this one in which substance should prevail?

As a corporate law matter, that's the basic issue in these cases.

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