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Hawaii Appeals Court Says Religious B&B Owner May Not Reject Same-Sex Couples as Customers

Posted on: February 24th, 2018 by Art Leonard No Comments

Hawaii Appeals Court Says Religious B&B Owner May Not Reject Same-Sex Couples as Customers

The Intermediate Court of Appeals of Hawaii has affirmed a ruling by the state’s 1st Circuit Court that the operator of an owner-occupied Bed & Breakfast violated the state’s public accommodations law by refusing to rent a room to a lesbian couple from California who were seeking vacation accommodations.  The opinion for a three-judge panel of the court by Chief Judge Craig Nakamura rejected the defendant’s argument that this application of the law violates her constitutional rights, and also rejected an argument that because the B&B is owner-occupied it is entitled to an exemption under a law governing residential real estate transactions.  Cervelli v. Aloha Bed & Breakfast, No. CAAP-13-0000806 (Feb. 23, 2018).

Diane Cervelli emailed Aloha Bed & Breakfast to determine whether a room was available for a planned vacation trip, then following up in a phone call with the owner, Phyllis Young, about making a room reservation for herself and her partner, Taeko Bufford.  Everything went well on the telephone until Cervelli mentioned that she was reserving for herself and another woman.  Young asked if Cervelli and the other woman were lesbians.  When Cervelli answered “Yes,” Young said, “We’re strong Christians.  I’m very uncomfortable in accepting the reservation from you.”  Young hung up on Cervelli.  Bufford then called and received the same treatment.  “Apart from Plaintiff’s sexual orientation,” wrote Judge Nakamura, “there was no other reason for Young’s refusal to accept Plaintiffs’ request for a room.”

Each of the women filed a complaint with the Hawaii Civil Rights Commission, alleging a violation of the state’s public accommodations law.  The Commission found “reasonable cause” to believe that Aloha B&B had violated the statute, but bowed to the plaintiffs’ desire to file a court action rather than pursue the matter administratively, issuing them a “right to sue letter.”  After the lawsuit was filed in the Circuit Court, the Commission intervened as a co-plaintiff.

The law’s definition of “public accommodation” includes “an inn, hotel, motel, or other establishment that provides lodging to transient guests,” and lists “sexual orientation” as a prohibited ground for discrimination. A different statute, governing residential leases, provides an exemption from anti-discrimination requirements for “the rental of a room or up to four rooms in a housing accommodation by an owner or lessor if the owner or lessor resides in the housing accommodation.”  Aloha B&B argued that it was entitled to the owner-occupied premises exemption, but both the circuit court and the court of appeals disagreed.  They found that the exemption was intended to govern residential leases creating a landlord-tenant relationship in which the tenant moves in and resides in the premises for an extended period of time, not for “transient” customers who generally stay for a few days at best and are not establishing their residence in the rented rooms.

The court said that it was “clear based on the plain statutory language that Aloha B&B is a ‘place of public accommodation,’” and noted that the defendant had admitted in its pretrial statement that “it offers bed and breakfast services to the general public.” Reviewing the defendant’s advertising practices, and the data showing that the overwhelming majority of its customers – running up to 100 or more individuals a year – stay for only a few days, the court found Aloha’s claimed exemption inapplicable.  The court noted that Aloha generally rented rooms to anybody who applied, denying services only to gay people and smokers.

Aloha raised three constitutional defenses.

First, it argued that requiring it to rent a room to this lesbian couple violated Young’s right of privacy. “Aloha B&B argues that the right of privacy is ‘the right to be left alone,’” wrote Judge Nakamura.  “However, to the extent that Young has chosen to operate her bed and breakfast business from her home, she has voluntarily given up the right to be left alone.  In choosing to operate Aloha B&B from her home, Young, for commercial purposes, has opened up her home to over one hundred customers per year, charging them money for access to her home.  Indeed, the success of Aloha B&B’s business and its profits depend on members of the general public entering Young’s home as customers.  In other words, the success of Aloha B&B’s business required that Young not be left alone.”

“The privacy right implicated by this case is not the right to exclude others from a purely private home,” continued Nakamura, “but rather the right of a business owner using her home as a place of public accommodation to use invidious discrimination to choose which customers the business will serve. We conclude that Young’s asserted right to privacy did not entitle her to refuse to provide Plaintiffs with lodging based on their sexual orientation.”

Next, Young claimed a violation of her right of “intimate association,” but the court rejected this claim as well. “The relationship between Aloha B&B and the customers to whom it provides transient lodging is not the type of intimate relationship that is entitled to constitutional protection against a law designed to prohibit discrimination in public accommodations,” wrote Nakamura, again taking note of the large volume of customers passing through the premises for short stays over the course of a year.  “The hundreds of customer relationships Aloha B&B forms through its business is far from the ‘necessarily few’ family-type relationships that are subject to constitutional protection,” he wrote.  “With respect to the purpose for which the relationship is formed, Aloha B&B forms relationships with its customers for commercial, business purposes, and it is only the commercial aspects of the relationship” that the public accommodations law regulates.

Young had testified that the “primary purpose” of the B&B is to “make money,” wrote Nakamura, and, “She also admitted that if she could not make money by running Aloha B&B, she ‘wouldn’t operate it.’ Young does not operate Aloha B&B for the purpose of developing ‘deep attachments and commitments’ to its customers.”

Finally, Young made a “free exercise of religion” claim. This was doomed to fail under the federal Constitution, since the Supreme Court has held that individuals and businesses do not enjoy a constitutional exemption from complying with a “valid and neutral law of general applicability on the ground that the law proscribes (or prescribes) conduct that his religion prescribe (or proscribes).”  See Employment Division v. Smith, 494 U.S. 872 (1990).  Thus, Young sought instead to locate her argument in the Hawaii constitution, arguing that the court should depart from federal constitutional precedents and “impose a compelling state interest requirement, and apply strict scrutiny in deciding its free exercise claim under the Hawaii Constitution.”

The court was unwilling to take the bait, stating, “We need not decide whether a higher level of scrutiny should be applied to a free exercise claim under the Hawaii Constitution than the United States Constitution. This is because we conclude that [the public accommodations law] satisfies even strict scrutiny as applied to Aloha B&B’s free exercise claim.”  That is, the court concluded that the state of Hawaii “has a compelling interest in prohibiting discrimination in public accommodations,” and that the law is “narrowly tailored to achieve Hawaii’s compelling interest” in prohibiting such discrimination.

The court’s ruling affirmed the circuit court’s decision granting summary judgment in favor of the plaintiffs and the Civil Rights Commission on the liability phase of the case. Unless the case goes up to the Hawaii Supreme Court, the next step would be to send it back to the circuit court for a determination of damages for the plaintiffs.

The plaintiffs are represented by Lambda Legal staff attorney Peter C. Renn and local Hawaii counsel Jay Handlin and Linsay N. McAneeley of Carlsmith Ball LLP. Robin Wurtzel, Shirley Naomi Garcia and April L. Wilson-South represented the Civil Rights Commission in the case.  And, no surprise, Aloha B&B is represented by attorneys from Alliance Defending Freedom, a litigation organization that opposed LGBT rights at every opportunity.

9th Circuit Rejects Religious Freedom Challenge to California Law Banning Conversion Therapy for Minors

Posted on: August 24th, 2016 by Art Leonard No Comments

California’s S.B. 1172, which prohibits state-licensed mental health providers from engaging in “sexual orientation change efforts” (commonly known as “conversion therapy”) with minors, withstood another 1st Amendment challenge in a new decision by the San Francisco-based U.S. Court of Appeals for the 9th Circuit in the case of Welch v. Brown, 2016 U.S. App. LEXIS 15444, 2016 WL 4437617, announced on August 23.

A unanimous three-judge panel of the court of appeals affirmed a ruling by U.S. District Judge William B. Shubb that the law does not violate the religious freedom rights of mental health providers who wish to provide such “therapy” to minors or of their potential patients.

In a previous ruling, the court had rejected the plaintiffs’ claim that the law violated their free speech rights. They had argued that such therapy mainly involves talking, making the law an impermissible abridgement of freedom of speech. The court had countered that this was a regulation of health care practice, which is within the traditional powers of the state.  As such, the court found that the state had a rational basis for imposing this regulation, in light of evidence in the legislative record of the harms that such therapy could do to minors.

In this case, the plaintiffs were arguing that their 1st Amendment religious freedom claim required the court to apply strict scrutiny to the law, putting the burden on the state to show that the law was narrowly-tailored to achieve a compelling state interest.  They contended that the law “excessively entangles the State with religion,” but the court, in an opinion by Circuit Judge Susan P. Graber, said that this argument “rests on a misconception of the scope of SB 1172,” rejecting the plaintiffs’ claims that the law would prohibit “certain prayers during religious services.”  Graber pointed out that the law “regulates conduct only within the confines of the counselor-client relationship” and doesn’t apply to clergy (even if they also happen to hold a state mental health practitioner license) when they are carrying out clerical functions.

“SB 1172 regulates only (1) therapeutic treatment, not expressive speech, by (2) licensed mental health professionals acting within the confines of the counselor-client relationship,” she wrote, a conclusion that “flows primarily from the text of the law.” Under a well-established doctrine called “constitutional avoidance,” the court was required not to interpret the statute in the manner suggested by the plaintiffs.  This conclusion was bolstered by legislative history, ironically submitted by the plaintiffs, which showed the narrow application intended by the legislature.  Thus, “Plaintiffs are in no practical danger of enforcement outside the confines of the counselor-client relationship.”

Plaintiffs also advanced an Establishment Clause argument, contending that the measure has a principal or primary purpose of “inhibiting religion.” Graber countered with the legislature’s stated purpose to “protect the physical and psychological well-being of minors, including lesbian, gay, bisexual and transgender youth, and to protect its minors against exposure to serious harm cause by” this “therapy.”  The court found that the “operative provisions” of the statute are “fully consistent with that secular purpose.”  A law that has a secular purpose with a possible incidental effect on religious practice is not subject to strict scrutiny under Supreme Court precedents.  Again, the court pointed out, religious leaders acting in their capacity as clergy are not affected by this law.

The court also rejected the contention that a minor’s religiously-motivated intent in seeking such therapy would be thwarted by the law, thus impeding their free exercise of religion. The court pointed out that “minors who seek to change their sexual orientation – for religious or secular reasons – are free to do so on their own and with the help of friends, family, and religious leaders.  If they prefer to obtain such assistance from a state-licensed mental health provider acting within the confines of a counselor-client relationship, they can do so when they turn 18.”

The court acknowledged that a law “aimed only at persons with religious motivations” could raise constitutional concerns, but that was not this law. The court said that the evidence of legislative history “falls far short of demonstrating that the primary intended effect of SB 1172 was to inhibit religion,” since the legislative hearing record was replete with evidence from professional associations about the harmful effects of SOCE therapy, regardless of the motivation of minors in seeking it out.  Referring in particularly to an American Psychiatric Association Task Force Report, Judge Graber wrote, “Although the report concluded that those who seek SOCE ‘tend’ to have strong religious views, the report is replete with references to non-religious motivations, such as social stigma and the desire to live in accordance with ‘personal’ values.”  Thus, wrote the court, “an informed and reasonable observer would conclude that the ‘primary effect’ of SB 1172 is not the inhibition (or endorsement) of religion.”

The court also rejected the argument that the law failed the requirement that government be “neutral” concerning religion and religious controversies. It also rejected the argument that prohibiting this treatment violates the privacy or liberty interests of the practitioners or their potential patients, quoting from a prior 9th Circuit ruling: “We have held that ‘substantive due process rights do not extend to the choice of type of treatment or of a particular health care provider.’”

Attorneys from the Pacific Justice Institute, a conservative legal organization, represent the plaintiffs. The statute was defended by the office of California Attorney General Kamala D. Harris.  Attorneys from the National Center for Lesbian Rights, with pro bono assistance from attorneys at Munger, Tolles & Olson LLP, filed an amicus brief defending the statute on behalf of Equality California, a state-wide LGBT rights political organization.

Discharged Atlanta Fire Chief Strikes Back in Federal Lawsuit

Posted on: December 24th, 2015 by Art Leonard No Comments

Kelvin J. Cochran, who was discharged as Chief of the Atlanta, Georgia, Fire and Rescue Department (AFRD) after he self-published a book asserting negative views about homosexuality and same-sex marriage based on his religious beliefs, has struck back at the City and Mayor Kasim Reed with a lawsuit claiming a violation of his constitutional rights.  On December 16, U.S. District Judge Leigh Martin May issued a ruling dismissing some of Cochran’s claims, but allowing others to go forward.  Cochran v. City of Atlanta, 2015 WL 9244523 (N.D. Ga., Dec. 16, 2015).

Cochran became the Atlanta Fire Chief in 2008.  He left for ten months in 2009 to serve as Administrator of the U.S. Fire Administration in Washington, D.C., but returned and continued in the Atlanta position until he was suspended as a result of the controversy surrounding his book and ultimately discharged on January 6, 2015.

Cochran, self-described as a devout evangelical Christian and an active member of Atlanta’s Elizabeth Baptist Church, wrote and self-published a book titled “Who Told You That You Were Naked?: Overcoming the Stronghold of Condemnation.”  The book grew out of a men’s Bible study group at his church, and was intended as a guide to men to help them “fulfill God’s purpose for their lives.”  One of those purposes, according to Cochran’s book, is to avoid any sexual activity outside of a traditional heterosexual marriage, expressing the view that homosexual activity and same-sex marriage are immoral and inconsistent with God’s plan.

Cochran consulted the City’s Ethics Officer about whether a city official could write a “non-work-related, faith-based book,” and was told he could do that “so long as the subject matter of the book was not the city government or fire department,” but he did not obtain a written ruling.  He later asked the Ethic Officer if he could identify himself in the book as Atlanta Fire Chief, and she responded in the affirmative.  Cochran placed the book for sale on, and distributed free copies to various individuals, including Mayor Reed, some members of the city council, and various Fire Department employees whom he considered to be Christians (some of whom knew he was writing the book and had requested copies).

A Fire Department employee who saw the book and objected to its statements about sexual morality contacted City Councilmember Alex Wan to complain, which led Wan to initiate discussions at the City’s “upper management” level.  This led to a meeting of top City officials with Mayor Reed.  On November 24, 2014, Cochran received a letter informing him that he was suspended without pay for 30 days while the City determined what to do.  Among other things, the City cited an ordinance prohibiting city officials from engaging in outside employment for pay without written permission from the Ethics office.  At the same time, Mayor Reed went public about disagreeing with Cochran’s views expressed in the book, stating “I profoundly disagree with and am deeply disturbed by the sentiments expressed in the paperback regarding the LGBT community” and disassociating his administration from those views.  Councilmember Wan released a statement to the local newspaper that “I respect each individual’s right to have their own thoughts, beliefs and opinions, but when you’re a city employee, and those thoughts, beliefs and opinions are different from the city’s, you have to check them at the door.”  Cochran’s suspension and statements by Reed, Wan and other city officials led to extensive media coverage.  On January 6, 2015, Cochran was informed of his discharge.

Atlanta has had local legislation banning sexual orientation discrimination for many years, and has long provided benefits for same-sex partners of city employees.  At the time this controversy arose late in 2014, a federal district court had ruled against the constitutionality of Georgia’s ban on same-sex marriage, but the matter was still pending on appeal in the courts.  Atlanta government leaders had openly supported the litigation for marriage equality.  Cochran’s views expressed in the book were apparently out of synch with the views of the City’s elected leadership.  However, Cochran claimed in his federal complaint that he has never been accused of discriminating as Fire Chief on the basis of sexual orientation.

Cochran’s lawsuit poses a classic and recurring policy question: to what extent can a state or local government require public officials to refrain from publicizing their views on controversial public issues when those views conflict with official policies as articulated by politically-accountable officials?  The U.S. Supreme Court has issued a series of important decisions since first addressing this issue in 1968 in Pickering v. Board of Education.  That case involved a public high school teacher who was discharged after publishing a letter in a local newspaper that was critical of the board of education’s budget proposals (which had been twice rejected by local voters).  The Court held that public employees are protected by First Amendment free speech rights when expressing views on matters of public concern when they are speaking in their capacity as private citizens, but such protection is not absolute: the court must conduct a balancing test weighing the employee’s free speech rights against the employer’s legitimate concerns about being able to carry out governmental functions.  Speech that results in disruption of those functions may lose its constitutional protection.  Subsequent rulings have clarified that when a public employee is speaking in an official capacity, he is speaking for the government and can be disciplined or discharged when his speech contradicts government policy.

Cochran filed a nine-count complaint against the city and Mayor Reed, raising various claims under the 1st and 14th Amendments.  Although Judge May dismissed some of those claims, and ultimately found that Mayor Reed enjoyed qualified immunity from personal liability to Cochran, she concluded that his complaint alleged facts sufficient to maintain several of his 1st Amendment claims as well as one of his 14th Amendment Due Process claims.

Cochran’s complaint leads off with a claim that he was fired in retaliation for constitutionally protected speech.  Judge May determined that Cochran’s speech satisfied the requirement that it be on a matter of public concern and that he was speaking as a private citizen (even though his book’s “About the Author” section identifies him as Atlanta’s Fire Chief), making his claim subject to the Supreme Court’s Pickering balancing test.  The City argued that the AFRD has a “need to secure discipline, mutual respect, trust and particular efficiency among the ranks due to its status as a quasi-military entity different from other public employers,” and thus that Cochran’s “interest in publishing and distributing a book ‘containing moral judgment about certain groups of people that caused at least one AFRD member enough concern to complaint to a City Councilmember'” could not outweigh the City’s interests in securing discipline and efficiency.

However, Judge May pointed out that on a motion to dismiss she is to evaluate the complaint based solely on the plaintiff’s allegations, and Cochran had alleged that his book did not threaten the City’s ability to administer public services and was not likely to do so.  Cochran claimed that the book did not interfere with AFRD internal operations, and that he had not told any AFRD employee that complying with his teachings or even reading his book “was in any way relevant to their status or advancement” within the Department.  Thus, Judge May could not find at this stage in the case as a matter of law “that Defendants’ interests outweigh Plaintiff’s First Amendment freedom of speech interests.  However,” she continued, “the factual development of this case may warrant a different conclusion.”

Cochran’s second count claims unconstitutional viewpoint discrimination, focusing particularly on a section of the City Code that requires department heads to obtain prior written approval from the city’s Board of Ethics before “engaging in the provision of services for private interests for remuneration,” which he had not done.  Cochran protested the self-publication of a book did not come within this policy. The City claimed he had no standing to challenge this provision since he had never applied for written permission, but Judge May disagreed, rejecting the City’s motion to dismiss this count on the basis of standing.

Cochran’s third count alleges violation of his religious liberty rights, claiming he was terminated because he expressed his religiously-based viewpoint.  The City’s response was that he failed to allege that his religion compelled him to publish his views while serving as Fire Chief without obtaining prior written approval or to distribute the book to various city employees.  Judge May ruled that such allegations were not necessary to state a religious liberty claim, and that Cochran’s allegations “raise a plausible inference that Plaintiff sincerely held the religious beliefs that he contends were the reason for his firing,” so this claim would not be dismissed.  Similarly, Judge May found that Cochran adequately alleged facts to support his fourth claim, that the city’s action violated his 1st Amendment right to freedom of association “by terminating him for expressing religious beliefs in association with his church.”  However, May found insufficient Cochran’s allegations to support his claim of a violation of the 1st Amendment Establishment Clause, stating that at the hearing on the motion to dismiss “it became clear that although the Complaint contains an Establishment Clause claim, the exact contours of that claim. . . are unclear,” and that it appeared to be duplicative of other claims.  Although May dismissed this claim, she granted leave to Cochran to file an amended claim appropriately raising Establishment Clause issues.

Turning to Cochran’s Equal Protection Claim under the 14th Amendment, May found that Cochran had failed to allege sufficient facts to sustain this claim.  Most significantly, he had failed to identify a “comparator” in order to establish discrimination.  A “comparator” is somebody similarly situated to the Plaintiff who had articulated the opposite point of view without incurring adverse action from the City.  Cochran pointed to Mayor Reed, who had publicly articulated opposition to Cochran’s views, but the judge pointed out that Reed, as the elected chief executive of the city, was not similarly situated to Cochran, an appointed department head.  “As the Mayor,” wrote Judge May, “Reed is Plaintiff’s superior. . .  As the City’s ultimate decision-maker, Reed could not be similarly situated to Plaintiff, who is subject to Reed’s decision-making power.”  She also pointed out that Reed had not “ever tried to publish a book on morality that was approved by the City or even that Reed is from a different religious group from Plaintiff.  At bottom, the Court finds that Reed is too dissimilar to serve as a similarly situated comparator for numerous reasons.”  It was not sufficient for Cochran to allege that “numerous City employees” who were similarly situated to him were treated differently in this regard.  It appears that he is the only appointed City department head who had published a work of this kind.

Judge May dismissed Cochran’s claim that the City’s policy about outside work by city officials that was cited in support of his discharge was unduly vague, pointing out that prior similarly challenges to the policy had been rejected by the 11th Circuit Court of Appeals, which is binding on Georgia federal courts.  She also found that the public comments by Mayor Reed in connection with this controversy were not sufficiently personally “stigmatizing” of Cochran to sustain a “liberty interest” claim under the Due Process Clause.  However, she refused to dismiss a procedural due process claim, finding that the ordinances cited by the City in its briefs “do not establish that Plaintiff lacks a property interest in his employment.”  Under the 14th Amendment, the Courts have held that a public employee with a property interest in his job may not be deprived of that job in the absence of fair procedures, which Cochran claims he was not accorded in this case, where the decision to fire him was made unilaterally by the mayor.

As to personal liability by Mayor Reed, the ultimate decision-maker on Cochran’s discharge, Judge May found that it would not necessarily be clear to the Mayor that his actions were unconstitutional while exercising the discretionary function to discharge his Fire Chief, since the ultimate determination of that will rest on the court’s application of the Pickering balancing test.  Depending how that weighing turns out, the City may be held liable, but a municipal official in the position of the Mayor exercising a discretionary function of his office would not unless the outcome was clearly established as a matter of law.  The courts have developed this qualified immunity doctrine to avoid stifling the ability of public officials to exercise discretionary functions in situations where there is not a definite constitutional ban in place.

Ultimately, the question confronting Judge May is whether the Atlanta city administration is required to keep in office an appointed department head who has published views that are out of synch with the City’s policies.  If Cochran were a rank and file employee, he might well win some of his claims.  But as a department head with supervisory authority over a major public safety agency, he will confront significant difficulty in arguing that the elected officials responsible to the voters are constitutionally required to keep him in office, as Judge May intimated in ruling on his first free speech claim.

The Colorado Wedding Cake Case

Posted on: December 8th, 2013 by Art Leonard No Comments

A Colorado Administrative Law Judge ruled on December 6, 2013, that a bakery had violated the state’s public accommodations law when its owner refused to sell a wedding cake to a gay male couple on July 19, 2012.

Colorado does not have same-sex marriage, and only enacted a civil union law open to same-sex couples early in 2013.  Back in 2012, however, Coloradans Charlie Craig and David Mullins planned to get married in Massachusetts and then have a big celebration event for family and friends back home.  Accompanied by Charlie’s mom, they went to Masterpiece Cakeshop, which sells wedding cakes, and sat down with the proprietor, Jack Phillips, at the “cake consulting table.”  According to the factual findings in the opinion by ALJ Robert N. Spencer, “They introduced themselves as ‘David’ and ‘Charlie’ and said that they wanted a wedding cake for ‘our wedding.'”  Phillips immediately said no, he doesn’t make wedding cakes for same-sex weddings.  “I’ll make you birthday cakes,” he said, “shower cakes, sell you cookies and brownies, I just don’t make cakes for same-sex weddings.”  Without any further discussion, David and Charlie and Charlie’s mom got up and left, went to another bakery, and make their cake arrangements without incident.  The next day, Charlie’s mom called Phillips, who told her that he refused to make a wedding cake for David and Charlie because of his religious beliefs and because Colorado does not recognize same-sex marriages.

Although Charlie and David got their wedding cake, they felt humiliated by their experience with Phillips and decided to file a discrimination complaint to establish that his actions were unlawful.  The Civil Rights Commission sided with Charlie and David, ruling that Phillips violated their statutory rights.  When Phillips rejected that ruling, the case was referred for trial before an administrative judge.   As an administrative judge, Spencer does not have authority to declare statutes unconstitutional, but he does have authority to determine whether the application of a statute in a particular case violates the constitutional rights of the defendant.

Judge Spencer found, based on Phillips’ testimony, that he is a practicing Christian who believes that “the Bible is the inspired word of God, that its accounts are literally true, and that its commands are binding on him.”  He finds in the story of Adam and Eve and in a passage from Mark 10:6-9 (NIV) that only different-sex couples can marry.  “Phillips also believes,” wrote Spencer, “that the Bible commands him to avoid doing anything that would displease God, and not to encourage sin in any way.  Phillips believes that decorating cakes is a form of art and creative expression, and that he can honor God through his artistic talents.  Phillips believes that if he uses his artistic talents to participate in same-sex weddings by creating a wedding cake, he will be displeasing God and acting contrary to the teachings of the Bible.”

Phillips did not contest that his bakery is a public accommodation subject to the state’s anti-discrimination law, but he argued in defense that the law could not be applied in such a way as to violate his 1st Amendment rights of freedom of speech and free exercise of religion.  His bakery is incorporated but wholly owned by him, and he claims for his business the same 1st Amendment rights that he enjoys.  Judge Spencer pointed out that at least for now in the states comprising the federal 10th Circuit, which includes Colorado, family-owned closely-held corporations do enjoy 1st Amendment free exercise of religion rights (as a result of a 10th Circuit decision that the Supreme Court recently agreed to review), and the Supreme Court held several years ago in the notorious Citizens United case that corporations have 1st Amendment free speech rights.  Thus, Phillips argued, he should enjoy immunity from this discrimination charge on 1st Amendment grounds.  In effect, Phillips was arguing that the 1st Amendment protects businesses and individuals from having to comply with anti-discrimination laws if their personal beliefs based on religion would be violated by compliance with the law.

In addition, Phillips argued that he did not actually discriminate because of David and Charlie’s sexual orientation, and thus could not be found to have violated the statute.  He said that he would be happy to do business with them, so long as it didn’t involve a wedding cake for a same-sex wedding.  He testified he would also refuse to sell a wedding cake to a same-sex couple to celebrate a civil union, so his ground of objection is not really that Colorado does not recognize same-sex marriages, but rather that he feels that selling a cake for any celebration of a same-sex relationship would be state-compelled speech that violates his freedom of speech, as well as forcing him to act in conflict with his religious beliefs.

Judge Spencer first rejected Phillips’ argument that his refusal to sell the wedding cake was not sexual orientation discrimination.  “The salient feature distinguishing same-sex weddings from heterosexual ones is the seuxla orientation of its participants,” he wrote.  “Only same-sex couples engage in same-sex weddings.  Therefore, it makes little sense to argue that refusal to provide a cake to a same-sex couple for use at their wedding is not ‘because of’ their sexual orientation.”  Drawing a telling analogy, he wrote, “If Respondents’ argument was correct, it would allow a business that served all races to nonetheless refuse to serve an interracial couple because of the business owner’s bias against interracial marriage,” but this kind of theory was refuted by the Supreme Court in 1983 in Bob Jones University v. United States, where the Court upheld the IRS action in revoking the university’s tax exempt status because it denied admission to interracial couples in violation of laws forbidding discrimination because of race.

On the free speech claim, Spencer rejected Phillips’ argument that “preparing a wedding case is necessarily a medium of expression amounting to protected ‘speech,’ or that compelling Respondents to treat same-sex and heterosexual couples equally is the equivalent of forcing Respondents to adhere to ‘an ideological point of view.'”  Spencer distinguished between wedding cakes and “saluting the flag, marching in a parade, or displaying a motto,” all forms of conduct that have been found to constitute protected speech.  Spencer noted that Phillips refused to do business with David and Charlie without any discussion about how the cake would be decorated or what might be written on it.  “For all Phillips knew,” wrote Spencer, “Complainants might have wanted a nondescript cake that would have been suitable for consumption at any wedding.”  In a footnote, Phillips mentioned that the cake they had eventually obtained from another bakery had a “filling with rainbow colors,” but questioned whether that could be seen as some sort of endorsement of same-sex marriage by the baker.  Spencer characterized Phillips’ attempt to elevate making a wedding cake to the symbolic level of a compelled flag salute as an argument that “trivializes the right to free speech.”

Finally, Spencer rejected Phillips’ free exercise of religion argument.  He said that this case is not about the government trying to regulate what Phillips believes, but rather a regulation of commercial conduct.  “The types of conduct the United States Supreme Court has found to be beyond government control typically involve activities fundamental to the individual’s religious belief, that do not adversely affect the rights of others, and that are not outweighed by the state’s legitimate interests in promoting health, safety and general welfare,” Spencer commented, and cited a list of Supreme Court cases upholding neutral laws that incidentally regulate conduct, where the conduct involves some religious belief.  “Respondent’s refusal to provide a cake for Complainants’ same-sex wedding is distinctly the type of conduct that the Supreme Court has repeatedly found subject to legitimate regulation,” he asserted, mentioning that the Supreme Court itself had ruled that laws prohibiting sexual orientation discrimination by public accommodations have specifically been mentioned by the Supreme Court as legitimate.   The Supreme Court has ruled that a valid law that is neutral with respect to religion and generally applicable will be upheld if it is rationally related to a legitimate government interest.  The Colorado public accommodations law meets that test.

As an administrative judge, Spencer does not have authority to impose fines or penalties.  Upon finding that Masterpiece Cakeshop and Phillips had violated the law, his remedy was to issue a “cease and desist order” and take such other corrective action as is deemed appropriate by the Colorado Civil Rights Commission.  If Phillips appeals this ruling, it might get to a stage where he would incur financial liability, however.

The ACLU LGBT & AIDS Project and the ACLU Foundation of Colorado and attorneys from King & Greisen, LLC, represented the complainants at the hearing before ALJ Spencer.  Phillips enjoys legal support from Alliance Defending Freedom, a law firm that specializes in opposing gay rights under the guise of preserving the 1st Amendment rights of those who discriminate against gay people.   Given ADF’s participation, it is likely this ruling will be appealed.

The Colorado bakery case is one of only several contesting the applicability of public accommodation laws to businesses that want to avoid providing goods and services for same-sex ceremonies.  In Washington State, litigation proceeds against a florist shop, and in New Mexico, the state Supreme Court ruled earlier this year that a wedding photographer had violated the state’s public accommodations law by declining to provide photographic services for a same-sex commitment ceremony.  The Supreme Court has received a petition to review the New Mexico case.

Another Circuit Court Rules against Free Exercise of Religion Claim by a Business Corporation

Posted on: September 18th, 2013 by Art Leonard No Comments

A third federal circuit court of appeals has weighed in on the question whether for-profit business corporations have a right under the 1st Amendment to free exercise of religion, and thus to claim a religious exemption from compliance with a valid general law.  As in Hobby Lobby Stores, Inc. v. Sebelius, 2013 WL 3216103 (10th Cir., June 27, 2013), and Conestoga Wood Specialties Corp. v. Sec’y of U.S. Dep’t of Health & Human Servs., 2013 WL 3845365 (3rd Cir., July 26, 2013), the case of Autocam Corp. v. Sebelius, 2013 U.S. App. LEXIS 19152 (6th Cir., Sept. 17, 2013), arises in the context of implementation of the Affordable Care Act regulations requiring that employer-provided health insurance plans include coverage for contraception for women.  The spreading circuit splits will likely lead to Supreme Court review of the underlying constitutional question, which would be significant for enforcement of laws banning discrimination by businesses.

As in the earlier cases, the corporate defendants are not publicly-traded, but rather are closely held corporations owned entirely by individuals or groups of individuals whose religious beliefs deem contraception to be immoral.  In Autocam, a 6th Circuit panel lines up with the 3rd Circuit in finding that such a business corporation cannot claim a right to free exercise of religion, either under the 1st Amendment directly or under the Religious Freedom Restoration Act (RFRA), which was passed by Congress in reaction to the Supreme Court’s 1990 ruling in Employment Division v. Smith, 494 U.S. 872, which had upheld the right of legislators to pass a “valid and neutral law of general applicability” outlawing conduct or requiring conduct that may be contrary to the teachings of a particular religion.

Both the 1st Amendment and RFRA speak in terms of protecting the right of “persons” to free exercise of religion, and the 3rd and 6th Circuits construe that to mean that neither the 1st Amendment nor RFRA protect business corporations from having to comply with valid general laws that contradict the religious beliefs of their shareholders.

The 10th Circuit, by contrast, holds that as for-profit corporations are treated as “persons” for purposes of due process, equal protection, and freedom of speech, they should also be treated as persons who are capable of exercising the practice of religion.  See, e.g., Citizens United v. Federal Election Commission, 558 U.S. 310 (2010), holding that corporations are protected by the 1st Amendment from restrictions on their expenditures in political campaigns under the Freedom of Speech Clause.

The Autocam court stated its agreement with the Obama Administration’s position, presented in this case by the Justice Department, that preliminary injunctive relief against implementation of the statutory requirement should not be granted and that claims asserted by the owners of Autocam Corporation under RFRA should be dismissed.

While acknowledging that the Supreme Court has recognized free speech rights for corporations under the 1st Amendment, Circuit Judge Julia Smith Gibbons wrote for the court, “No analogous body of precedent exists with regard to the rights of secular, for-profit corporations under the Free Exercise Clause prior to the enactment of RFRA.  The Free Exercise Clause and the Free Speech Clause of the First Amendment have historically been interpreted in very different ways.  Therefore, the Court’s recognition of rights for corporations like Autocam under the Free Speech Clause nearly twenty years after RFRA’s enactment does not require the conclusion that Autocam is a ‘person’ that can exercise religion for purposes of RFRA.”  The court noted that Congress had specifically stated that it did not intend by enacting RFRA to expand 1st Amendment free exercise rights beyond what they had been prior to the ruling in Employment Division v. Smith, and no prior Supreme Court ruling had found any corporate exemption from compliance with general laws due to the religious beliefs of the corporation’s owners.

We previously suggested that it was likely that the Supreme Court would grant certiorari in one or more of these cases, since the Court has never previously ruled on the question presented here:  Whether somebody who has decided to run their sole proprietor or family-owned business as a for-profit corporation may assert his or her individual free exercise of religion rights through the control of the corporation to avoid the requirements of a valid general statute.  The question has great importance for LGBT legal rights, of course, since recognition of a right of business corporations to avoid complying with general laws based on the religious beliefs of their owners could undermine the application of enforcement against such corporations of laws forbidding discrimination in employment, housing and public accommodations, such as, for example, the recent New Mexico Supreme Court decision in  Elane Photography, LLC v. Willock, 2013 N.M. LEXIS 284, 2013 WL 4478229 (August 22, 2013), holding that the owner of a wedding photography business did not enjoy a religious exemption from the state’s public accommodations law based on the owner’s religious objection to same-sex commitment ceremonies.

Circuit Split May Take Religious Exemption Issue to Supreme Court

Posted on: July 31st, 2013 by Art Leonard No Comments
A divided panel of the U.S. Court of Appeals for the 3rd Circuit ruled on July 26 that a for-profit business corporation has no right to free exercise of religion under the 1st Amendment, rejecting a contrary doctrine that had been adopted by the 9th and 10th Circuits and setting up the possibility that the Supreme Court may intervene on a question that has become very salient in the context of marriage equality: Can business owners with religious objections to providing particular services claim an exemption from statutory requirements to provide those services? 

The 3rd Circuit ruling came in one of several challenges that have been filed by businesses to the requirement under the Affordable Care Act that health insurance plans provided to employees include coverage for prescription contraceptives for women.  Business owners who have religious objections to providing such coverage have asserted 1st Amendment free exercise claims.  In Conestoga Wood Specialties Corp. v. Secretary of Health and Human Services, 2013 WL 3845365, the 3rd Circuit panel voted 2-1 to affirm District Judge Mitchell S. Goldberg’s denial of a preliminary injunction to the plaintiff.  Conestoga is a corporation wholly owned by members of the Hahn family, who are all Mennonites who are opposed to any contraceptive that acts in effect as an abortifacient by preventing the development of a fertilized egg.  Two such medications are included in the formulary required under regulations promulgated by the Department of Health and Human Services to be covered under employee group health insurance.  Conestoga became subject to this requirement as of January 1, 2013, and due to the denial of preliminary injunctive relief, the company has been providing this coverage.

The Hahns rely heavily on the Supreme Court cases finding that corporations have 1st Amendment free speech rights, as well as 5th and 14th Amendment Due Process and Equal Protection rights, but the panel majority found that the Supreme Court has never ruled that corporations, across the board, are entitled to every constitutional right enjoyed by individuals.  In particular, Circuit Judge Cowen wrote for the court, the Supreme Court’s recognition of religious free exercise rights for corporations has been limited to religious corporations, and has never been extended to business corporations based on the religious beliefs of their owners.  Cowen pointed out that the Supreme Court has stated that the purpose of the Free Exercise Clause is to “secure religious liberty in the individual,” and stated, “We do not see how a for-profit ‘artificial being, invisible, intangible, and existing only in contemplation of law,’ that was created to make money could exercise such an inherently ‘human’ right.” 

The ruling brings the 3rd Circuit into conflict with the 10th Circuit’s recent ruling in Hobby Lobby Stores, Inc. v. Sebelius, 2013 WL 3216103 (10th Cir., June 27, 2013), which held that a family-owned corporation that wanted an exemption from the ACA requirements on religious grounds could maintain a Free Exercise claim.  There is also a conceptual conflict with the 9th Circuit’s rulings in EEOC v. Townley Engineering & Manufacturing Co., 859 F.2d 610 (9th Cir. 1988) and Stormans, Inc. v. Selecky, 586 F.3d 1109 (9th Cir. 2009), that adopted the so-called “pass through” theory under which a closely-held corporation whose small proprietor group had religious objections to a statutory requirement could assert their individual free exercise claims on behalf of their corporation.  The 3rd Circuit specifically rejected the reasoning of the 9th Circuit cases, finding that once business people have adopted the corporate form of business, they have created an entity distinct and apart from themselves, which should be subject to commercial regulations of the civil rights laws as well as such public welfare regulations as the insurance requirements.

Similar arguments are now playing out in various cases where businesses are claiming that they should not be required to provide services to same-sex couples for commitment ceremonies or weddings, due to the business owners’ religious objections to same-sex marriage.  The significance of recognizing corporate free exercise privileges to evade statutory rights of gay couples prompted amicus participation in these cases, including briefs filed by the ACLU and Lambda Legal.