SCOTUSblog: Burwell v. Hobby Lobby Stores, Inc. (consolidated with Conestoga Wood Specialties Corp. v. Burwell)
abortifacients, the use of which is contrary to their faith. The employers grounded their claims in the Free Exercise Clause of the First Amendment, and the Religious Freedom Restoration Act (RFRA), a federal law aimed at preventing laws that substantially burden a person's free exercise of their religion. The Tenth Circuit ruled that Hobby Lobby and Mardel were "Persons Exercising Religion" Under RFRA, and thus entitled to bring their claims. On the other hand, the Third Circuit ruled that for-profit, secular corporations like Conestoga Wood Specialties could not engage in religious exercise, and as a result, were not entitled to protection under the Free Exercise Clause of the First Amendment and the RFRA.
The question before the Court in Conestoga Wood Specialties is whether the religious owners of a family business, or their closely held, for-profit corporation, have free exercise rights that are violated by the application of the contraceptive-coverage mandate of the Affordable Care Act.
Holding: In a 5-4 decision, the Supreme Court ruled that, as applied to closely held corporations, the HHS regulations implementing the contraception mandate violate the RFRA. It is important to note the distinction that the holding in this case does not apply to all corporations, just those that are defined as closely-held. The IRS defines a closely-held corporation as one in which more than 50% of the value of its outstanding stock owned (directly or indirectly) by 5 or fewer individuals at any time during the last half of the tax year; and is not a personal service corporation.