Key Takeaways From the Masterpiece Cakeshop Decision

by Manatt, Phelps & Phillips, LLP
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On June 4, 2018, the Supreme Court issued its opinion in Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, Case No. 16-111. The case addresses the conflict between the right to be free from discrimination and the right to freedom of expression and free exercise of religion, a core legal issue for faith-based healthcare providers. (For background information, see our May “Health Update” article on conscience rights vs. civil rights.)

Masterpiece Cakeshop was decided on narrow grounds and, therefore, does not resolve the key constitutional questions. However, on closer review, the decision holds substantial importance for faith-based healthcare providers. The decision frames the key legal issues in potentially new and helpful ways, and strongly suggests the need for a careful balancing of the rights of faith-based objectors against the rights of protected groups to be free from discrimination.

The Masterpiece Cakeshop Decision

In Masterpiece Cakeshop, a devout Christian baker challenged the decision of the Colorado Civil Rights Commission and the Colorado Court of Appeals that the baker could not refuse to create a wedding cake for a same-sex couple based on the baker’s religious objection to same-sex marriage. The baker contended that baking the cake would violate his right to free speech by compelling him to express a message with which he disagreed and which would violate his right to free exercise of religion by compelling him to act in a manner that he concluded was forbidden by his religion.

The unexpected 7-2 majority decision authored by Justice Kennedy did not confront head-on the Court’s prior holding in Employment Division, Department of Human Resources of Oregon v. Smith, 494 U.S. 872 (1990), under which a neutral law of general application that conflicts with an individual’s religion is likely to survive judicial scrutiny. Id. at 879. Instead, Masterpiece Cakeshop finds that the baker was denied his constitutional right to free exercise of religion because the Colorado Civil Rights Commission exhibited overt hostility to the baker’s religion and did not act in the neutral and respectful manner that the Constitution requires.

Important Takeaways From the Decision

There are several important takeaways from the decision:

  • The courts must take religious objections to compliance with antidiscrimination laws very seriously. The direct holding of Masterpiece Cakeshop is that the constitutional right to free exercise of religion demands that the government proceed in a manner that is “neutral and tolerant” of religious beliefs in connection with the enactment and enforcement of antidiscrimination laws. Failure to do so will allow courts to reject claims of discrimination that result from a defendant’s free exercise of religion.
  • The government has no role in deciding (or even suggesting) whether the religious ground for a conscience objection is legitimate or illegitimate.
  • The constitutionality of state laws that impact the free exercise of religion, such as the refusal of faith-based hospitals to allow certain procedures, may not be easily determined even where those laws are in fact neutral and generally applicable because there is a “delicate question of when the free exercise of . . . religion must yield to an otherwise valid exercise of state power.” (emphasis added).
  • The Supreme Court’s decision in Smith does not mean that a law neutral on its face will always be upheld in any application that burdens religious freedom. The invasion of religious freedom may be sufficiently serious that it outweighs the interest of the state in seeking to protect; therefore, the particular application of state law must yield to the defendant’s right of free exercise of religion.
  • The courts may uphold a faith-based hospital’s refusal to provide certain services based upon religious beliefs where the factors identified by Justice Kennedy are present. For example, the refusal may be upheld where it is based upon sincerely held religious beliefs, is narrowly limited to certain procedures, is not targeted at members of protected classes, would be reasonably understood as an “exercise of religion” even by those who would otherwise be protected (such as same-sex couples) and would not lead to “community-wide stigma.”
  • Courts may be inclined to identify and more broadly interpret exceptions for religious organizations in antidiscrimination laws based upon a constitutional mandate for the government to act in a manner that is neutral and tolerant of religious beliefs.
  • The Masterpiece Cakeshop decision may be helpful in supporting a broad interpretation of existing religious exceptions to antidiscrimination laws to cover the actions of faith-based hospitals following religious doctrine.

Background on the Masterpiece Cakeshop Case

Masterpiece Cakeshop arose after a same-sex couple filed a discrimination complaint against a bakery in Lakewood, Colorado, alleging that the owner, Jack Phillips, refused to create a wedding cake for the couple due to his religious objections to same-sex marriage. Phillips asserted that an order compelling him to bake the cake would violate his First Amendment right to free exercise of religion, as well as his free speech rights, by compelling him to express a message contrary to his religious beliefs.

Following an investigation, which found that Phillips had refused to design wedding cakes for other same-sex couples, the Colorado Civil Rights Division found there was probable cause to refer the matter to the Colorado Civil Rights Commission for a formal hearing before an administrative law judge (ALJ). The ALJ ruled in favor of the couple, finding that Phillips violated the Colorado Anti-Discrimination Act (CADA).1 That decision was affirmed after further hearings by the Colorado Civil Rights Commission and by the Colorado Court of Appeals. After the Colorado Supreme Court refused to hear the case, the United States Supreme Court granted review.

Analysis of the Supreme Court’s Majority Opinion

The majority opinion authored by Justice Kennedy largely focuses on the Colorado Civil Rights Commission’s actions, as well as the commissioners’ comments, during public administrative hearings. The decision places less emphasis than anticipated on Phillips’ arguments regarding the alleged infringement of his constitutional rights that would occur if Phillips were required to create the wedding cake. For example, Justice Kennedy noted the state commission’s “hostility” toward Phillips’ religious beliefs and that one of the commissioners “even went so far as to compare Phillips’ invocation of his sincerely held religious beliefs to defenses of slavery and the Holocaust.”

The majority opinion notes that no other commissioners objected to these comments and found that “[t]his sentiment is inappropriate for a Commission charged with the solemn responsibility of fair and neutral enforcement of Colorado’s antidiscrimination law—a law that protects against discrimination on the basis of religion as well as sexual orientation.” Additionally, the Court noted that the Colorado Civil Rights Division had repeatedly upheld the rights of other bakers who refused to create cakes with images that disapproved of same-sex marriage and included religious text. The Court observed that the treatment of those other conscience-based objections contrasted sharply with the Commission’s treatment of Mr. Phillips’ conscience-based objections.

Justice Kennedy’s focus on the state commission’s overt hostility to the baker’s religious views likely played a key role in garnering a 7-2 majority for the decision, because it allowed Justice Kennedy to avoid directly confronting the conflict between the right to be free from discrimination and the right to free expression and free exercise of religion.

Instead, the Court relied on its decision in Church of Lukumi Babalu Aye, Inc. v. Hialeah, 508 U.S. 520 (1993), which considered the constitutionality of a Florida city’s ordinances that prohibited the practice of animal sacrifice. Rather than treating the ordinances as a neutral, generally applicable law that would survive scrutiny under the Court’s holding in Smith, in Church of Lukumi, the Court applied strict scrutiny because it found that the city’s laws were not neutral and generally applicable, but were targeted at prohibiting animal sacrifice practiced as part of the Santeria religion. Referring in Masterpiece Cakeshop to his earlier decision in Church of Lukumi, Justice Kennedy said that the Court there held that the Constitution’s guarantee of free exercise of religion precludes the government from imposing non-neutral “regulations that are hostile to the religious beliefs of affected citizens and cannot act in a manner that passes judgment or presupposes the illegitimacy of religious beliefs or practices.”

By focusing on this admittedly narrow precedent, Justice Kennedy was able to avoid considering the much broader potential impact of the Court’s prior decision in Smith, which has been understood to mean that neutral laws of general applicability, including antidiscrimination laws, will generally survive judicial scrutiny because there is a valid government purpose. The Masterpiece Cakeshop decision deliberately avoided that issue, opting instead to decide the case based in part on evidence that neither party even referred to in the Supreme Court briefs.

The Potential Importance of the Masterpiece Cakeshop Decision

Although the Court ruled on a narrower basis than anticipated, the decision still holds promise for faith-based objectors, including healthcare providers, in pending and future cases.

First, the decision suggests that the Court has some doubt about the continued viability of the Smith decision in the more typical case that pits a generally neutral public accommodations law against a sincerely held religious objection, without any evidence of overt state hostility to the religious objection. While Smith may not be overturned in the future, Masterpiece Cakeshop may open the way for a more critical and nuanced application of the Smith decision, which has appeared to be a formidable barrier to tolerance of religious views potentially at odds with antidiscrimination laws.

Second, the decision provides guidance regarding the considerations that the Court may find important in reaching a more nuanced decision. For example, Justice Kennedy framed the issue as, on the one hand, a matter of dignity and respect for the worth of gay people (and by extension, other protected groups) and, on the other hand, a matter of tolerance for sincerely held religious beliefs. Justice Kennedy made it clear that both interests had significance under the Constitution and within our society.

Third, the decision appears to endorse the view that there are a wide range of factual circumstances that may be viewed very differently based on the reasonable impact of the alleged conduct on the dignity and worth of members of the protected class. For example, Justice Kennedy observed that a “member of the clergy who objects to gay marriage on moral and religious grounds could not be compelled to perform a same-sex wedding ceremony without denial of his or her right to free exercise of religion.” Such “a refusal would be well understood in our constitutional order as an exercise of religion, an exercise that gay persons could recognize and accept without serious diminishment to their own dignity and worth.” (emphasis added). On the other hand, Justice Kennedy said that “if that exception were not confined,” then a long list of others might refuse to provide services for gay persons, resulting in “community-wide stigma inconsistent with the history and dynamics of civil rights laws that ensure equal access to goods, services, and public accommodations” (emphasis added).

Fourth, the decision may be helpful to faith-based healthcare providers who generally offer services to all patients regardless of their membership in a protected class, but who simply cannot offer a particular service based on the provider’s sincere religious objection. Such conduct tends to belie the existence of discriminatory intent, while also emphasizing that a sincere religious objection is the only reason for denying the particular service.

Fifth, by focusing on the importance of state neutrality and respect for religious beliefs, the decision strengthens the argument that the exceptions found in state and federal antidiscrimination laws should be interpreted in a manner that would permit the observance of religious belief where the invasion of the right to free exercise of religion is significant and the state’s interest in preventing discrimination is less significant.

The Next Case to Watch

The Supreme Court is expected to decide soon whether to grant review in Arlene’s Flowers, Inc. v. Washington, Case No. 17-108, a similar case in which a florist refused to provide flowers to a same-sex couple for their wedding. Following the Masterpiece Cakeshop decision, the parties in Arlene’s Flowers have submitted briefing regarding whether Masterpiece Cakeshop indicates that Arlene’s Flowers should be remanded to determine whether the government acted in a hostile manner that violated the right to free expression of religion. If the Supreme Court does hear the case, the decision could address the larger constitutional questions that were not answered in the Masterpiece Cakeshop opinion.

Conclusion

Justice Kennedy pointedly ended the Masterpiece Cakeshop opinion by stating that “[t]he outcome of cases like this in other circumstances must await further elaboration in the courts, all in the context of recognizing that these disputes must be resolved with tolerance, without undue disrespect to sincere religious beliefs, and without subjecting gay persons to indignities when they seek goods and services in an open market.” Assuming that the views of the Masterpiece Cakeshop majority ultimately hold sway, the key question for the later cases may be how the line will be drawn along the spectrum of activities that has at one end a member of the clergy performing a wedding ceremony and at the other an ordinary commercial business refusing service to a person in a protected group.

Given the long history of respect for churches, religious ministries and associated nonprofits, including hospital systems, there is ample historical precedent for drawing the line in such a way that a faith-based hospital’s right of free exercise of religion and free expression would be protected, and it would not be forced to perform procedures that are antithetical to its religious convictions.

1. CADA is a general antidiscrimination law similar to other laws across the United States prohibiting discrimination on the basis of sexual orientation or gender identity in places of public accommodation. As of 2016, 22 states have laws prohibiting discrimination on the basis of sexual orientation or gender identity in areas of public accommodation. CADA is similar in many respects to antidiscrimination laws such as the Unruh Act, California Civil Code § 51 et seq.; Oregon’s law prohibiting discrimination, ORS § 659,400 et seq.; and the Washington Law Against Discrimination, RCW § 49.60 et seq.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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