Conestoga Wood Specialties Corp. v. Secretary of the United States Department of Health & Human Services
724 F.3d 377
3rd Cir.2013Background
- Conestoga Wood Specialties is a closely held, for‑profit Pennsylvania corporation wholly owned by the Hahn family; the Hahns are devout Mennonites who oppose certain contraceptives as morally impermissible.
- The ACA (and HRSA/IOM guidelines implemented by HHS) require non‑exempt group health plans to cover FDA‑approved contraceptives (the "Mandate"); employers face statutory penalties for noncompliance.
- Conestoga challenged the Mandate in district court, alleging violations of the Free Exercise Clause and the Religious Freedom Restoration Act (RFRA); the district court denied a preliminary injunction.
- On appeal the Third Circuit considered whether a for‑profit, secular corporation may assert Free Exercise or RFRA claims, and whether the Hahns could press claims directly or through the corporation.
- The panel majority held that for‑profit, secular corporations cannot engage in religious exercise for purposes of the Free Exercise Clause or RFRA, and that the Hahns could not assert their owners’ religious rights against the Mandate through or apart from the corporation; it affirmed denial of a preliminary injunction.
- A vigorous dissent argued the corporation and owners can make Free Exercise and RFRA claims, that the Mandate substantially burdens their religion, and that strict scrutiny and other injunction factors favor relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a for‑profit, secular corporation can exercise religion under the Free Exercise Clause | Conestoga (and dissent): corporate actor can exercise religion; First Amendment protections extend to corporations and to religious exercise | HHS (and majority): Free Exercise historically protects individuals and religious organizations; for‑profit secular corporations were not treated as religious actors | Held: No — the majority concluded for‑profit secular corporations cannot engage in religious exercise under Free Exercise |
| Whether a for‑profit, secular corporation can assert RFRA claims | Conestoga: RFRA protects a "person’s exercise of religion" and corporations can be persons who exercise religion | HHS: RFRA targets religious exercise of persons; corporations lack that exercise so RFRA does not apply | Held: No — because corporation cannot exercise religion, it cannot bring RFRA claim (court did not need to decide whether corporation is a RFRA "person") |
| Whether owners’ religious rights may "pass through" to a closely held corporation (or be asserted by owners directly) | Hahns: as sole owners of a closely held corporation they may assert their religious objections through the company or in their individual capacity | HHS: corporate form creates distinct legal obligations; Mandate binds the corporation, not the owners individually | Held: No — majority refused the "passed‑through" theory and held owners cannot avoid corporate separateness to press Free Exercise/RFRA claims here |
| Whether preliminary injunction should issue (likelihood of success on merits) | Plaintiffs: likely to succeed on Free Exercise and RFRA claims; Mandate substantially burdens sincere religious exercise and fails strict scrutiny | Government: plaintiffs unlikely to succeed; alternative protections and exemptions undermine claimed burdens | Held: Denied — majority concluded appellants unlikely to succeed on the merits and affirmed denial of preliminary injunction (did not resolve other injunction factors) |
Key Cases Cited
- Citizens United v. Federal Election Comm’n, 558 U.S. 310 (2010) (First Amendment protection extends to corporations in free‑speech context)
- First Nat’l Bank of Boston v. Bellotti, 435 U.S. 765 (1978) (corporate identity relevant to which constitutional guarantees apply; some rights are "purely personal")
- Sherbert v. Verner, 374 U.S. 398 (1963) (substantial burden and Sherbert/Yoder strict‑scrutiny framework protecting free exercise)
- Wisconsin v. Yoder, 406 U.S. 205 (1972) (compulsory laws that force religious adherents to choose between faith and penalties can constitute substantial burden)
- Employment Div., Dep’t of Human Res. v. Smith, 494 U.S. 872 (1990) (neutral, generally applicable laws do not trigger strict scrutiny under Free Exercise)
- Church of the Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520 (1993) (non‑neutral or underinclusive laws burdening religion require strict scrutiny)
- Corp. of Presiding Bishop v. Amos, 483 U.S. 327 (1987) (recognized free exercise claims by corporate religious entities)
- Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418 (2006) (RFRA requires the government to show compelling interest as applied to the particular claimant)
- United States v. Lee, 455 U.S. 252 (1982) (recognized substantial‑burden concerns for a for‑profit employer with religious objections to certain tax obligations)
- EEOC v. Townley Eng’g & Mfg. Co., 859 F.2d 610 (9th Cir. 1988) (passed‑through theory: Ninth Circuit allowed a corporation to assert owners’ free exercise rights)
- Stormans, Inc. v. Selecky, 586 F.3d 1109 (9th Cir. 2009) (applied Townley passed‑through reasoning)
- Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114 (10th Cir. 2013) (en banc) (contrasting circuit view: held that closely held for‑profit corporations can raise RFRA/free‑exercise claims in certain circumstances)