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Thursday, August 08, 2013

What's "Obvious" About Corporate Free Exercise?

Rick Garnett suggested recently in this space that it is “obvious” (Rick’s word) that legal entities have Free Exercise rights, and Will Baude has written a bit more cautiously that churches “or the real parties in interest behind them” probably can assert their own first amendment claims.    Now, I’m just an unfrozen caveman tax lawyer, but I did once flip through a copy of “First Amendment Institutions” (and write two articles about nonprofit organizations in politics).  And I think the “obvious” examples are just intuition pumps.  Will argues churches very likely have their own sets of rights, while Rick says that anti-kosher laws would violate the rights of firms selling kosher products. 

[UPDATE: Rick points out (see the comments) that his post doesn't quite claim that entities have FE rights qua entities, though his phrasing of that distinction may be too subtle for duller readers (ahem).  So substitute for "Rick," with some modest amendment, "Adler," or "Bainbridge" or others, such as this piece by Scott Gaylord of Elon.]

I would say it’s obvious that regulation of churches or religious practices can interfere with individual rights to free exercise.  If my religious beliefs include shared worship with a community of likeminded believers, certainly direct restrictions on church (or other religious community) activity can interfere with my exercise of those beliefs.  But why does the organization itself need to be able to assert its own claims?  Corporations (including nonprofit corporations, such as most churches) can only sue by virtue of state laws giving them that power.  Are Will & Rick claiming it is “obvious” that states are constitutionally obligated to give legal personhood to abstract entities?

This may seem a fine distinction, but asserting that law is concerned with the rights of entities, not just the people in them, elides an important element of individual choice.   Believers who choose to invest their money in a highly regulated industry can reasonably be presumed to go in with their eyes open to the possibility that regulation will impose a variety of burdens.  If they don’t like that, they should take their money elsewhere.  That’s a very different thing than a total prohibition on some key religious practice, as in Rick’s kosher example.  The degree of imposition is just much smaller in my example, because the government leaves open many alternative avenues for religious expression.  Is it zero burden?  Of course not, but this is a balancing test, isn’t it?

Of course, SCOTUS also makes this same overly-easy substitution in Citizens United.  Why is the right of political expression a right of the entity, not its members?  Can’t the members express their political views individually (at least absent some special meaning to speaking together as a legally-recognized group)?  Maybe forming a collective facilitates speech.  But then the issue is to what extent it is permissible for government to reduce its prior commitments to facilitating expression.  That field is treacherous, to be sure.  But by simply assuming that the entity embodies its members’ rights, we dodge what ought to be at the center of the debate.

Posted by BDG on August 8, 2013 at 09:11 AM in Constitutional thoughts, Corporate, First Amendment | Permalink


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I'm glad Professor Bainbridge spoke up, because I think his reverse veil-piercing idea is important in this discussion. If corporations cannot assert FE claims on their own, then there may be no standing for anyone since the individual members/shareholders would face the corporate veil as an obstacle. If I remember correctly, one of the courts hearing an HHS Mandate case threw out the individual plaintiffs for this precise reason.

My own research on the Supreme Court's corporate jurisprudence suggests that the Court has historically had no problem giving corporations constitutional rights, usually basing those decisions on the Court's view that a corporation is nothing but a group of individuals. The anomaly, it turns out, is actually the few cases where the Court has denied corporations constitutional rights (such as the Fifth Amendment privilege), and those cases were decided on decidedly narrow grounds. Forgive my shameless plug, but my research is on SSRN here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2338538

Posted by: Andrew B. Kartchner | Oct 11, 2013 3:56:48 PM

Brian - While I obviously share your skepticism, I am not sure why Adler is on your list too since in the link he writes: " I am not sure that private, for-profit corporations can avail themselves of RFRA in the same way as avowedly religious institutions., even when privately held by religiously devout individuals, nor am I aware of any case law that would clearly establish this point (but see below)." I think most acknowledge that while it may, intuitively, seem to flow from CU, it is, as you say, complicated. I am on record as opposing this interpretation but I am not optimistic that if and when it reaches SCOTUS the Court's majority will see it the same way.

Posted by: Tamara Piety | Aug 12, 2013 8:04:39 AM

Did you notice that my post said "If the 10th Circuit majority's approach takes hold ...."? My post simply reported the 10th Circuit decision. I did not say that I thought corporations have FE rights. Indeed, it's precisely because of the uncertainty in the law that I proposed using reverse veil piercing as a way to resolve the issue.

In addition, did you not notice that my post made clear that I believe the root problem is that "the Supreme Court's corporate personhood jurisprudence is entirely lacking in anything remotely resembling a coherent theory"? I don't think there is anything "obvious" about these issues.

Posted by: Steve Bainbridge | Aug 11, 2013 10:03:06 PM

Brian -- I think what I wrote, when I used the term "obvious" -- was this: "It seems equally obvious that some regulations of corporations -- including for-profit corproations -- can burden religious exercise . . . and so can (but might not) violate RFRA or the First Amendment." (It does not seem to me that you disagree with this.) And I did so, I thought, precisely to move away from the formulation that you attribute to me, i.e., "it is 'obvious' (Rick’s word) that legal entities have Free Exercise rights[.]" (I also think it is the case that legal and constitutional rights do and should sometimes belong to groups, associations, societies, institutions, communities, corporations, etc., but I don't think I said that it is "obvious" that they do and should.)

Posted by: Rick Garnett | Aug 8, 2013 1:58:34 PM

William Baude: "The Third Circuit held that neither the corporation nor the real people behind it could bring free exercise claims. I'm currently agnostic about which of them (or both) should get to bring the claim, I don't think it can be "neither." I take it that as to church corporations, you'd agree?"

IANAL, but I believe that the basis of the decision is that the corporation in question is just that - a corporation, legally separate from the owners in most ways.

Posted by: Barry | Aug 8, 2013 1:53:01 PM

Will, I'd agree with your phrasing of the issue. If you shift it a bit to whether there is a "substantial burden" on RFRA rights, maybe not. The last time I thought about this carefully (writing a brief about RFRA issues in a tax prosecution against defendants asserting a religious liberty defense), I concluded there is an Article III issue with RFRA, and would have avoided that constitutional problem by reading "substantial burden" in a way that largely parallels Free Exercise doctrine. (And no, my supervisors did not go for putting that one in the brief, but I published a piece of the argument in a long, unreadable 2005 article.) So for me Smith would pretty much end the story. But that's a 12(b)(6) issue; for sure individual plaintiffs at least should "get to bring the claim," i.e., survive 12(b)(1).

Posted by: BDG | Aug 8, 2013 1:37:01 PM


The Third Circuit held that neither the corporation nor the real people behind it could bring free exercise claims. I'm currently agnostic about which of them (or both) should get to bring the claim, I don't think it can be "neither." I take it that as to church corporations, you'd agree?

Posted by: William Baude | Aug 8, 2013 12:55:55 PM

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