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Earlier this week, I wrote a diary on Mike Huckabee's comments about Hobby Lobby. In that diary, I analyzed some of the reasons why ascribing Christianity onto inanimate objects is logically untenable. The commenters on my work tend to open my eyes to new angles of analysis, even when I believe I've hit my best points the hardest. That's what happened with my Huckabee diary, and it led me to consider some of the legal arguments against Hobby Lobby's position.

Hobby Lobby's owners are currently arguing that Hobby Lobby - the corporate entity - should not be required to violate its religious convictions by providing certain forms of contraception in health insurance plans. As I noted in my previous diary, the central problem here is easy to figure out. These people are importing their own religious obligations onto a corporation that is independent of them.

This started me thinking - why do people incorporate? And it took me back to some of the grimmest days of my law school career - Gavin Clarkson's Business Organizations class.

Hobby Lobby Stores, Inc. is based in Oklahoma City, and as its name indicates, it is a registered corporation. Companies do not have to incorporate, you see. It's perfectly possible for a business owner to run his business without ever adding that colorful "Inc." to the end of his company's moniker. But David Green incorporated his picture frames business at some point during its formative years.

Just why did he choose to do that? The reasons are many, and they lie at the heart of why David Green is dead wrong in his current line of argumentation. Any second year law student can identify the first reason for incorporation. That's the protection of the business owner's personal assets from liability. When a company is incorporated, the business's owners are protected by a corporate veil of sorts. In the vast majority of instances, they cannot be sued personally for a host of things that might bite into corporate profits. If a person slips and falls at a Hobby Lobby store, he might seek a judgement from the company, but he will not be able to sue David Green personally. If the company goes bankrupt, chances are good that a creditor will not be able to go after David Green's personal riches.

This is important for David Green, too. This God-fearing Christian is worth $4.5 billion according to Forbes. By availing himself to a corporate designation, Green shields himself from any liability beyond that incurred by the company.

Incorporation also affords the company a sort of perpetual existence. When the owner of a sole proprietorship dies, the company is buried with him. If the business is incorporated, it outlives its original founder. This designation provides a level of independence for the company, giving it a legal identity that's distinct from the identity of its owner. In addition, incorporation allows a company to sustain itself through periods of leadership turnover. Steve Jobs was once booted out of the company he started. This couldn't happen if he operated his computer business without a corporate structure.

A more schooled tax attorney or corporate lawyer might also explain the tax advantages of incorporation. Business owners like David Green benefit immensely from the ability to pass money through places like Hobby Lobby.

What is the point of this exercise? It's to point out two very important things. First, laws surrounding incorporation are designed specifically to separate the business owner as a legal entity from the business as a legal entity. Second, these laws are in place mostly for the benefit of the business owner. David Green is willing to avail himself to the standard protections of the corporate legal structure though he is unwilling to comply with the other requirements of operating a business.

When it comes time for the latest slip and fall plaintiff to file his lawsuit, he cannot pierce the corporate veil to get to David Green personally. If the time comes when an unsecured creditor wants to make a claim against Green in lieu of his bankrupt business, Green will hide like a matador behind his crimson red veil. The legal distinction between business owner and incorporated business is fine by Green when it cuts in his favor to provide a shield for his personal wealth. When it comes to his company complying with federal law to provide contraception to employees, though, Green sheds the veil, arguing for a sort of perverse legal intercourse between business and business owner.

This is the petulant operation of a pariah who wants more than just to have his cake and eat it, too. He also wants a well-maintained waist line when he gets done with that cake. Green and business owners like him take full advantage of the ability to participate in a diverse, secular, and regulated marketplace. They succeed for a number of reasons, including savvy ownership, strong fiscal fundamentals, and creative ideas. But they also succeed because of the protections offered by the structure of the business world. Is there any question that David Green would cease to run 500 craft stores if every slip and fall could mean a lawsuit that he would have to personally appear for? If this man continues to take full advantage of the corporate structure which draws a distinct legal separation between him and his business, then he must recognize the severance between his own religious beliefs and the religious "beliefs" of his company. Green must come to understand that his company lacks the spiritual soul that he believes in, and as a result, it's not bound by the religious obligations of his Bible and it's not going to be judged by the gatekeepers of either heaven or hell.

And as I wrote before - if he's uncomfortable with this truth, then he has a very real option. He can take his ball and go home. If his religious "morality" overruns his greed, then maybe he should choose to run no business at all. Or perhaps he should run a business that's not incorporated, where his religion can mate with his business but his riches would be fair game for potential claimants? I've read the Bible, and Jesus told people like David Green that following heavenly commands wouldn't be easy.

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Comment Preferences

  •  I Know This Is Dumbing It Down (4+ / 0-)
    Recommended by:
    Alexandra Lynch, Youffraita, a2nite, Sylv

    But didn't you hit on the point, incorporation shields you from liability.

    When opportunity calls pick up the phone and give it directions to your house.

    by webranding on Sun Dec 30, 2012 at 12:11:31 AM PST

  •  Oh Just An Aside (10+ / 0-)

    I am an atheist, but I'd fight and die for your right to believe something I don't. I just ask the same in return. I don't get why a business owner would want to impose their views on them. I'd rather have happy, healthy employees!

    When opportunity calls pick up the phone and give it directions to your house.

    by webranding on Sun Dec 30, 2012 at 12:23:56 AM PST

    •  but...but...but... (8+ / 0-)

      corporations are people too!


      To make the argument that the media has a left- or right-wing, or a liberal or a conservative bias, is like asking if the problem with Al-Qaeda is do they use too much oil in their hummus. Al Franken

      by Youffraita on Sun Dec 30, 2012 at 12:43:00 AM PST

      [ Parent ]

      •  I Can't Believe I Will Give A Shout Out (8+ / 0-)

        to Piers Morgan. But watching him interview Rick Warren. It just hurts my head. He is trying to explain how the Bible says that a man can love a man, but they can't have sex. I swear I am not making that up. Just as with religion I say do your own thing. I might be straight but I don't care what you do in your bedroom. Really none of my business.

        Back to the topic of the Diary. I have run a few businesses. I want my employees to be happy. Healthy. Would I like them to view the world as I do, sure that would be nice. But alas not something I would force on them.

        When opportunity calls pick up the phone and give it directions to your house.

        by webranding on Sun Dec 30, 2012 at 12:51:25 AM PST

        [ Parent ]

        •  If it makes your head hurt less, consider: (9+ / 0-)

          JESUS never, ever, ever, said two men in love could not have sex.  It's not in any book that quotes Jesus.  Paul -- the goyish tax collector -- maybe says something about it, and certainly it's in Leviticus.  But Leviticus also says it's an abomination to eat shrimp and crab and bacon.

          There's a whole TON of stuff that the evangelicals and fundies say Jesus opposes that...simply are not there.

          Really, when did they learn to not read but repudiate?

          To make the argument that the media has a left- or right-wing, or a liberal or a conservative bias, is like asking if the problem with Al-Qaeda is do they use too much oil in their hummus. Al Franken

          by Youffraita on Sun Dec 30, 2012 at 01:43:48 AM PST

          [ Parent ]

          •  Not to mention mixing textiles... (5+ / 0-)

            I mean, how Gay is THAT?

            (Visualize The Almighty Being as Fabulous Fashion Critic...)

            "Ronald Reagan is DEAD! His policies live on but we're doing something about THAT!"

            by leftykook on Sun Dec 30, 2012 at 07:21:40 AM PST

            [ Parent ]

          •  An interesting take on the other fake (1+ / 0-)
            Recommended by:

            religious issue exploited by the GOP:

            This is one of several points.

            The anti-abortion movement—spearheaded, of course, by the same Christians who would have you believe every word of the Bible is law—go to great lengths to ignore the one specific law concerning the death of fetuses. In the section of Exodus that sets out legal codes regarding injury, death and slavery, we find the following:

            “And if men struggle and strike a woman with child so that she has a miscarriage, yet there is no further injury, he shall be fined as the woman’s husband may demand of him, and he shall pay as the judges decide. But if there is any further injury, then you shall appoint as a penalty life for life, eye for eye, tooth for tooth, hand for hand, foot for foot, burn for burn, wound for wound, bruise for bruise.”
            Exodus 21:22-25

            This is a telling passage. The law commands that if a woman is accidentally injured and miscarries, the responsible party will pay a fine to her husband. But killing a woman’s fetus is not a serious enough crime to require capital punishment. Only if the woman herself dies does the “eye for eye” law apply. The aborted fetus is treated as a property concern, not a murder. It is not considered a person, therefore its death does not need to be avenged.


            “The future depends entirely on what each of us does every day.” Gloria Steinem

            by ahumbleopinion on Sun Dec 30, 2012 at 10:58:06 AM PST

            [ Parent ]

  •  I don't think a sole proprietor can escape (9+ / 0-)

    the regulations under Obamacare either. Depending on how many employees he/she has, he/she must provide health insurance (I don't remember the number; perhaps 50). And only businesses whose main business is religion, i.e. churches have been exempted. Even Catholic hospitals and universities are not exempt. That being said, your explanation of the separation of a corporation from its largest (only) shareholder makes the government's case even stronger.

  •  So Ma and Pa Kettle... (1+ / 0-)
    Recommended by:

    ...shouldn't be able to incorporate their little hardware store on Oak Street?  Better for them to go bankrupt from a lawsuit if someone steps on a nail on their property?

    Preparing for the Mayan doomsday prophecy by hastily trying to get in the good graces of snake-bird god Q’uq’umatz

    by dov12348 on Sun Dec 30, 2012 at 02:45:42 AM PST

  •  Considering the cost of child birth (1+ / 0-)
    Recommended by:

    these days, from prenatal to postnatal care - one would think the insurance companies would be giving away birth control for free - but that is another argument.

    Another "protection" incorporation affords the ownership - against criminal, labor, and discrimination lawsuits.

    Including those that "raid" companies for all their cash, file bankruptcy, and hide away with their ill gotten gains - paid for by former employees.

    If not us ... who? If not here ... where? If not now ... when?

    by RUNDOWN on Sun Dec 30, 2012 at 06:27:06 AM PST

  •  Hobby Lobby's employment application (8+ / 0-)

    Hobby Lobby stores feature a rack of employment applications at the front of each store.  So I picked up a copy the other day.  Took it home and read it.  As I suspected, there is nothing in the employment application referring to religion.  There is, however, a very lengthy legal disclosure statement which the applicant is required to sign which states that the employee agrees to arbitration in lieu of a lawsuit in any dispute with the company.  Very Christian indeed.  

    There is a sign on the front door indicating that the store is closed on Sundays so that employees can have family and worship time.  Also noticeable is the prevalence of Christian themed merchandise throughout the store most of the merchandise would be described as secular in nature.  I shopped the marked down Christmas items and noticed that there were no Hannukah or Kwanzaa items though you could get plenty of Santa, penguin, snowman or other general winter-themed stuff.  Also of note is that I saw no wine bottle gift bags.  Oh, and one more thing.  All of the stuff was made in God-less China.

    •  Kind of takes the fun out of hand crafted doesn't (3+ / 0-)
      Recommended by:
      Sylv, stormicats, corvaire

      it.  I have started thinking we need a movement to buy hand crafted from the hands that crafted it.  It's not fun to think of slave hands crafting my knicknacks. I think it's bad luck to have those idols made with tears in my home.  I want love in every stitch and am willing to pay for it.

    •  You forgot the music ... mostly syrupy Christian (1+ / 0-)
      Recommended by:

      I always hated going in becasue of the music but since JoAnne's opened this summer and I read about the politics of the company ...

      Also, most of the employees are very part time (less then 20 hours a week) so the whole heath thing does not really apply.  Of course, most of the employees are female ... so maybe Green thinks this could cost a bundle.  However, I think it is more about control and imposing ideas and beliefs on people.

      "Life without liberty is like a body without spirit. Liberty without thought is like a disturbed spirit." Kahlil Gibran, 'The Vision'

      by CorinaR on Sun Dec 30, 2012 at 08:34:32 AM PST

      [ Parent ]

  •  certainly a religious corporation can have (2+ / 0-)
    Recommended by:
    nextstep, Justanothernyer

    religious beliefs, so to speak, so why couldn't this corp?

    so, if the first amendment protects, say, a synagogue incorporated under NY's religious.corporation statute, it would seem to be a counterexample to your thesis that corps ipso facto can't have religious belief.

    •  False equivalency (3+ / 0-)
      Recommended by:
      Sylv, misslegalbeagle, BusyinCA

      A synagogue exists for specifically religious purposes, not as a profit-making concern. Indeed, the synagogue is almost certainly a non-profit for tax purposes. In contrast, Hobby Lobby, as the diarist points out, is incorporated for the financial and legal advantages of incorporation for a for-profit business.  

      In both cases, ascribing religious belief to the corporation is a legal fiction. But for the synagogue, the fiction is far closer to reality than for Hobby Lobby. The First Amendment protects Green's right to practice his religion, not his legal strategy to maximize his profits and shield himself from liability.

      See the children of the earth who wake to find the table bare, See the gentry in the country riding out to take the air. ~~Gordon Lightfoot, "Don Quixote"

      by Panama Pete on Sun Dec 30, 2012 at 08:12:16 AM PST

      [ Parent ]

      •  what difference does it make that (2+ / 0-)
        Recommended by:
        nextstep, Justanothernyer

        one is a not-for-profit and one is for-profit?  certainly the first amendment doesn't make that distinction, so how can it be justified?

        re liability: religious corps are just as shielded.from liability, so your point is jibberish.

        •  I think you can argue (1+ / 0-)
          Recommended by:
          Panama Pete

          that the synagogue, in your example, exists only to ensure the free exercise of its members.  I suppose my premise here is that if a synagogue is forced to operate as a general partnership, that undermines the free exercise rights of its members.  

          The same isn't true for a regular corporation.  It has no free exercise rights because it has no coherent religious belief or purpose of its own.  As a policy matter, whose religious beliefs are going to represent the beliefs of the corporation?  The unanimous vote of shareholders, the majority of shareholders, the board?  

          Basically, it isn't that we attach free exercise rights whenever there's a corporation, but that we allow religious groups to incorporate to protect the free exercise rights (of constituent individuals) that they already have.  

    •  The synagogue isn't a job. It can say you should (2+ / 0-)
      Recommended by:
      Sylv, BusyinCA

      or you shouldn't, but can't back that up at the drugstore.

  •  This is good but (3+ / 0-)
    Recommended by:
    88kathy, Sylv, BusyinCA

    in my view, misses the larger point, a for profit business, whether incirporated or not, is not engaged in religious exercise.

    The ACA imposes certain neutral obligations on businesses, whether incorporated or not.

    This is plainly constitutional.

    In my series of posts taking issue with E.J. Dionee, I explained my view of why accepting the idea of religious accomodation was a mistake and why it inevitably leads to claims like Hobby Lobbies.


  •  Being religious is not an excuse for (3+ / 0-)
    Recommended by:
    a2nite, Sylv, Armando

    breaking the law.

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