Last month, the Supreme Court heard oral arguments in Sebelius v. Hobby Lobby Stores, Inc., and Conestoga Wood Specialties Corp., two highly anticipated cases that deal with the Affordable Care Act (“ACA”), religious freedom, and women’s access to contraception.

Hobby Lobby and Conestoga, each a closely-held family-owned corporation, have challenged the ACA’s preventive care requirement mandating coverage of all FDA-approved contraceptive drugs, devices, and related services.  Although the companies’ owners do not object to most contraceptives, they oppose emergency contraception and certain devices on religious grounds.  They contend that the required coverage of certain contraceptives violates their rights under the Religious Freedom Restoration Act (“RFRA”) and the Free Exercise Clause of the First Amendment. Generally, the RFRA is aimed at providing exceptions to laws that substantially burden a person’s free exercise of his or her religion. The question before the Court was whether secular for-profit companies can exercise religion.

While it will be a few months before a decision is issued, the dialogue during oral arguments posed many compelling questions.  Justice Sotomayor asked Paul D. Clement, who represented the corporations, how courts are to determine whether a corporation holds a particular religious belief:  whose beliefs control, the majority of shareholders; the corporate officers; what happens to the minority?  She and Justice Kagan asked how far corporation’s religious objections might extend.  Would blood transfusion and vaccines be objectionable?  What should occur if other employers in the future claim that they have religious objection to sex discrimination laws, minimum wage laws, family leave, and child labor laws?  Clement responded that the Courts are able to evaluate free exercise claims.

Justice Kennedy asked Clement whether an employer’s religious belief should trump an employee’s belief and whether employers should be required to pay for abortions. Justices Kagan and Ginsburg also asked about balancing third party interests.  Justice Alito queried whether there are ways of accommodating the interests of the employees without imposing a substantial burden on the employer who has the religious objections. Clement responded that, in this case, it is a matter of who pays for the services and suggested that the government could pay.

Donald B. Verilli, the Solicitor General, argued on behalf of the Federal Government. He opened his argument by quoting Justice Robert Jackson’s statement that limitations on religious freedom begin to operate whenever activities collide with the liberties of others and that adherence to this principle is what makes possible the harmonious functioning of a society in which people of every faith live and work side by side. Justices Roberts challenged this statement as inconsistent with RFRA and stated that the purpose of RFRA was to provide exceptions to laws which would otherwise infringe on the religious beliefs of proprietors and individuals.  General Verilli responded that “in any RFRA case, including this one, you have to consider the impact on third parties.” Justice Scalia stated that there is no reference to third party interests in RFRA at all.

Justice Roberts suggested that Congress could have crafted an exception to RFRA if it was not intended to extend its protection to corporations. General Verilli noted that a for-profit corporation has never been successful in seeking the protections of RFRA, to which Justice Roberts essentially replied that there is no case law on this point.

The arguments and the Justices’ questions touched on several issues, including whether a corporation is a “person” within the meaning of RFRA; whether a corporation can have religious beliefs; the complexities of judicial review in this area, balancing the rights of the religious objectors and the rights of third parties; and the consequences of a decision, either way, on other issues that are touched by religious belief.

It appears that the court is divided, with Justice Kennedy potentially being the deciding  vote. The decision is expected by Summer 2014.