Reason #1 SCOTUS Will Regret Hobby Lobby

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Thursday July 03, 2014 · 2:22 PM PDT

2014/07/03 · 14:22

After oral arguments in the Hobby Lobby case, I wrote a very misnamed but widely read diary in which I echoed Attorney and Ring of Fire radio host Mike Papantonio's argument that the SCOTUS would never rule in favor of Hobby Lobby for a really Big Business reason: It pierces the corporate veil.

If Hobby Lobby's owners can give their Corporation religion, their religion gives Hobby Lobby's owners--and any other owner, shareholder, officer, whatever--liability for the actions of the corporation. Mr. Papantonio, who happens to be one of America's preeminent trial lawyers, sees it as an opportunity to sue owners for the company's negligence.

Some other people, it turns out, agree with his assessment and expand on what it means....

On the other side of the orange magic corporate underwear squiggle thing that is.

That separation is what legal and business scholars call the "corporate veil," and it's fundamental to the entire operation. Now, thanks to the Hobby Lobby case, it's in question. By letting Hobby Lobby's owners assert their personal religious rights over an entire corporation, the Supreme Court has poked a major hole in the veil. In other words, if a company is not truly separate from its owners, the owners could be made responsible for its debts and other burdens.

So says Alex Park, writing in Salon today.

"If religious shareholders can do it, why can’t creditors and government regulators pierce the corporate veil in the other direction?" Burt Neuborne, a law professor at New York University, asked in an email.
That's a question raised by 44 other law professors, who filed a friends-of-the-court brief that implored the Court to reject Hobby Lobby's argument and hold the veil in place. Here's what they argued:

Allowing a corporation, through either shareholder vote or board resolution, to take on and assert the religious beliefs of its shareholders in order to avoid having to comply with a generally-applicable law with a secular purpose is fundamentally at odds with the entire concept of incorporation. Creating such an unprecedented and idiosyncratic tear in the corporate veil would also carry with it unintended consequences, many of which are not easily foreseen.

This is definitely going to complicate things for the religious extremists on the SCOTUS and empire wide as these lawsuits inevitably proliferate. Putting on the popcorn....now.

Fri Jul 04, 2014 at 2:08 PM PT: Thanks for all the love. Really feels good to write something that gets read, especially by this community. Sorry I haven't been able to keep up with the comments. First, excellent discussion. Way more than I had considered. And second, I'm in cancer treatments right now (I'll be fine) so it's really hard for me to concentrate for long without getting dizzy. Thanks for all of your thoughts on this topic.

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Reason #1 SCOTUS Will Regret Hobby Lobby

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