Author Archive | Boohunney

Hobby Lobby and Piercing the Corporate Veil…

Definition of the Corporate Veil…

A legal concept that separates the personality of a corporation from the personalities of its shareholders, and protects them from being personally liable for the company’s debts and other obligations.

In other words, people form corporations to protect the business owners’ and shareholders’ personal assets from creditors…

Because corporations exist in order to put up a barrier between a business and its owners, that means that the religious liberty of the owners cannot be violated by anything the corporation is compelled, by law, to do. Business owners want to benefit from the doctrine of corporate separateness when creditors want their money, and start acting like Paulie from “Goodfellas” (i.e., “$@*% you, pay me!”). When that happens, the owners want to be able to throw up their hands and say, “Sorry, that’s not me, that’s the business.” Piercing that corporate veil is supposed to be difficult. But all of a sudden, the Roberts Five is agreeing with business owners who want to turn around and say—when it comes to their interpretation of religion—that the business is the owners. They can’t have it both ways.

This may explain why groups that would normally have opinions on such important cases regarding corporations did not file amicus briefs with the Supreme Court opining on the Hobby Lobby case …

Not one Fortune 500 company filed a brief in the case. Apart from a few isolated briefs from companies just like Hobby Lobby and Conestoga Wood, the U.S. business community offered no support for the claim that secular, for-profit corporations are persons that can exercise religion.

Perhaps most significant, the U.S. Chamber of Commerce—by far the most powerful and successful voice on behalf of corporations before the Supreme Court—remained on the sidelines in the case as well. The chamber touts itself as the world’s largest business federation. It regularly participates in major Supreme Court litigation, and its views often carry significant weight with the conservative justices on the Roberts Court. In fact, it’s been widely reported that since Chief Justice John Roberts and Justice Samuel Alito joined the court, the chamber has had a success rate of more than 70 percent. Yet here, the chamber decided not to support the claim that secular businesses can exercise religion…

Just like the chamber, the National Federation of Independent Business (NFIB) —a group that prides itself on being “the voice for small businesses in the nation’s courts”—also chose not to participate in the Hobby Lobby appeal…Yet, like the chamber, NFIB took a pass on Hobby Lobby’s big challenge to the part of Obamacare that helps ensure that women can protect their health and control their reproductive lives.

Hobby Lobby and its supporters have made much of the fact that a large majority of friend-of-the-court briefs were filed on their side, but the only noteworthy corporate voices to weigh in—the U.S. Women’s Chamber of Commerce and the National Gay and Lesbian Chamber of Commerce—actually came down against them.

Hobby Lobby did have many supporters filing briefs in their support, but, these briefs came from conservative political groups, religious groups, religious “celebrities,” and mostly conservative members of Congress.

So, why is there a quiet, implied split of opinion amongst business parties and religious interests that usually agree on corporate personhood issues like “Hobby Lobby” and “Citizens’ United?” Because this ruling may legally, in the future, take away the “Corporate Veil” that protects business owners and shareholders from creditors and other liabilities…

Burt Neuborne of the Brennan Center for Justice at New York University Law School, a co-author of one of the amicus briefs filed in support of the government’s contraception mandate, foresees possible consequences to this “piercing of the corporate veil” that recall an old adage: Be careful what you wish for.

If owners indicate that they are not entirely separate from their corporation — by denying corporation employees’ birth control coverage based on their personal religious beliefs — the case could be made in future state-court litigation that they have waived their right to be shielded from responsibility for corporate financial liabilities.

Plaintiffs may seek to have owners personally cover a corporate debt when a business goes bust, for example, or to hold a corporation responsible when an owner doesn’t have the money to pay their personal bills.

That could be a huge business risk for the Green family’s closely-held corporation. This is just another part of the Pandora’s Box in this very awful and activist decision.

 

 

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