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07/14/2014

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Jonathan

Prof. Shiffrin:

You mention:

"I am not sure whether it was part of the record that the Hobby Lobby’s 401 (k) plan has $73 million invested in mutual funds that invest in the very contraceptives to which they morally object! See here. I would like to hear an explanation of why the owners are morally precluded from offering insurance that includes certain contraceptives, but not precluded through their investments from making money off the sale of those contraceptives."

I think the distinction is this:

1. Most companies - and I do not think HL is an exception - contract with a third-party provider to provide investments. In other words, there is a Fidelity, a Schwab, or a Lynch behind the 401(k) that takes funds from the employees and invests them.

Are there "responsible" funds that refuse to invest in companies that produce birth control / abortifacient drugs? There are, but it is very difficult (and one suspects, more costly) to meet one's imposed fiduciary duty only offering such funds.

2. In the case of 401(k) funds, and even matching funds, they are given to employees and employees invest. The closer analogy here would be if HL gave their employees funds, and the employees bought their own insurance, with or without contraceptive coverage. However, while HL doesn't choose how its employees invest, it does purchase some (all?) of their health coverage.

3. In terms of the actual mutual fund investments, I believe that the $73 million is the amount overall invested, with some of it purchasing mutual funds that have some of their holdings in such companies. Snopes has a good article on this (http://www.snopes.com/info/news/hobbylobby.asp) as do other sites - and, here is a reply to Ungar on Forbes: http://www.forbes.com/sites/ryanellis/2014/07/01/hobby-lobby-owners-can-have-a-401k-and-first-amendment-rights/

Steve Shiffrin


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Thank you for the comment. I think the links you supply are worth reading (though the second seems overargued) and they complicate the picture. I could imagine
some employers saying that the fiduciary obligation as applied (on your understanding) to offer choices of mutual funds that are not socially responsible creates a religious burden.
Steve

Tamara Piety

Steve I guess it depends on your definition of "liberal." In the crude political terms of today's discourse I am a liberal, and I am definitely secular, but I don't find regulating or banning any of those things you describe problematic. So I not sure which part is the sticking point - the "secular" or the "liberal", but I don't know that we can sweep that broadly. And as you know I don't have much use for corporate social responsibility efforts since I think the evidence suggests they are, in the main, PR efforts to promote the company and not serious, moral undertakings. In the main business corporations are only as responsible as the law requires them to be, and even then they far too often decide that it is cheaper to disobey the law and suffer the fine than to comply. Adding conscience into the mix seems to me to be a bad idea.

But my main quibble with a Hobby Lobby is that the language in the opinion is fairly unequivocal that it is somehow illegitimate to distinguish between types of corporations, no matter how many times the opinion used the words "close corporation." It is is assuredly not a limited opinion in terms of the reasoning.

The idea that it is some how invidious discrimination to make a distinction between different types of organizational forms as to what sorts of powers, rights and obligations they may have is hard to square with the fact that they are creatures of law, not organic, moral subjects, and that such distinctions are rife in the law, starting with the tax code. All sorts of different rules apply to closely-held corporations compared to public corporations.

I think what is terribly dangerous about the opinion is not that it permitted a for-profit corporation to "exercise" religion (when, in contrast to a church, or a religious non-profit, that is not its organizational purpose), although I think that is likely to prove very difficult for corporate law, but rather the perpetuation of this anti discrimination meme. Already claims have been made in several court that this or that fairly pedestrian regulation or ordinance violates Equal Protection because it singles out a particular types of corporation for different treatment. If you take that argument seriously (as a judge in Missouri did) it is difficult to know what regulation of commerce might not be vulnerable. That seems to me very bad indeed. The Missouri judge compared some St. Louis ordinance which attempted to limit what sort of vendors the City could deal with on the basis of their energy policies as as akin to Romer v. Evans.

I am less impressed with the Greens' sincerity given, as you say, I think it emerged from a corrupt process, the rabid, anti-Obama sentiment. For instance, this business of closing on Sundays apparently only started in 2000, even though the business was founded in the 70s. Now that does not preclude the possibility that the Greens are just growing in their faith and learning new ways to express it. But the Sunday closing thing seems to have been used as a marketing tool as well.

Should we condemn doing well by doing good? Not necessarily. But I think the women who have seen their constitutionally protected right burdened and a benefit of a validly enacted law of general application, one that as you say would provide them with a critical element of reproductive control that might otherwise be priced out of reach, disregarded inclines me to think that even if we concede their sincerity and the burden that the Greens' burden is less than that they are imposing on their female employees. I don't think the employment relationship should grant as much power to employers as it currently does. But I don't think it should add birth control decisions to the mix.

Steve Shiffrin


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Tamara
Terrific comment. As you probably would guess, I agree with most of what you say and think it is very well argued. Just a few comments.

In using the term liberal, I may be concentrating too much on the ACLU and the majority of First Amendment scholars. I think of my position on free speech and
yours as a position of the left rather than liberal , but I recognize that some would characterize this as a dispute among liberals.


As to my position on free exercise, I regard that as part of a dispute in liberal politics (despite the fact that most supporters of Hobby Lobby are on the
right People like Tom Berg, Susan Stabile, Perry Dane are certainly not associated with the right); I do not think of my position as likely shared by many people who are ordinarily left of liberals.

I entirely agree with your view of corporate social responsibility.

I also strongly agree with your argument that the anti-discrimination theme in Hobby Lobby re distinguishing between corporations is indefensible and should
arouse some concern that it will find resonance in problematic ways.

But I do not think the constitutional rights of woman are burdened by the Hobby Lobby decision. I also think they will have statutorily guaranteed insurance
for contraceptives (which under a just constitution would be a constitutional right). If I did not think so, we would be on the same side on this issue.


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