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tv   Politics and Public Policy Today  CSPAN  April 1, 2016 11:00am-1:01pm EDT

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can be taken, usually within minutes or longer for the platform to resolve that issue in some way. now, compare that to some jurisdictions and their attempt to overcome issues in noncompliance. you have the dctc at one point. i think they had a backlog of 18 months to resolve issues. if you have a problem in uber, typically it's resolved in 30 minutes to an hour, sometimes a little longer, but typically about that long, compared to the traditional regulatory environment which would require you to wait year and a half to know whether or not you've been overcharged perhaps $5 or $6. it's really putting consumers in a position where they're empowered in a way they have never been before in particular in taxis. now, i mentioned chicago and new york city. there was a study recently done by scott wallace at georgetown looking at the publicly available data from the new york
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city taxi and limousine commission as well as chicago's. what we found is the number of taxi complaints per ride drastically decreased when uber and lift entered the market. now, keep in mind this wasn't just long hauls. these were things like broken air conditioning, rudeness, radio too loud, or not loud enough, issues that, for example, if you've rid en in a taxi in d.c., they have the taxicab rider's bill of rights. these things have all been mandated, but whether or not they're being achieved is left up to debate, but the entry of these new competitors is certainly forcing the current incumbents to become better. but it's also providing an alternative for consumer who is might not otherwise choose to ride in a taxi or unhappy with the current offerings, it gives them something different and something more. the second point. there are real issues of fairness. dean will speak about that as well. i do want to note one thing. when it comes to state and local
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regulators, there's essentially one of three options available when it comes to providing fairness within the market between new entrants and current incumbents. and that is in ride sharing, for example, you could extend the current model to all new entrants so you could treat all ride sharing companies as taxis and just extend the taxi regulations to include everyone. there's a real fairness issue in that insofar as are these even taxis? they seem somewhat beyond. they are on-demand transportation, but are they taxis per se? it doesn't seem that they are. but also extending that model to these new services, just extend the types of barriers to entry that made it difficult for someone to penetrate the taxi market for the better part of the 20th century. you could also create new classifications. this seems to be what most states and localities are leaning toward is to create this
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transportation network company mod well regulations specific to ride sharing. now, there are real fairness issues on this on two fronts. the first is it leaves the taxis ham strung with these outmoded, outdated regulations, and allows these new competitors to compete on a broader, let's say, wider basis than the taxis can. so there's a real fairness issue with that, but also in virginia, for example, it's $100,000 to get a license to be a tnc. you won't see a start-up transportation company popping out of richmond because that's a huge barrier to entry for the next round of innovators. third is a hard reset on the system all together. reboot the taxi regulations and think critically about every step of the process so you can take into account changes in the market, you know, new york taxi laws were signed by mayor laguardia. so the world has really changed since the 1930s in new york city. and it's high time to really
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rethink those systems. so you have one of three options here which would take me to my third point, which is this provides state and local regulators with an opportunity to get it right for the future. it isn't just about harmonizing today's competitors with yesterday's incumbent, but it's also keeping in mind that this is not the end of innovation. and you will have another round of ride sharing or another round of on-demand transportation sometime probably in the near future. again, i think you all heard about innovation in cars, you know, coming just down the road here. and you think that most of the transportation network company laws are written on a human driver paradigm. so as soon as these ride sharing companies roll out driverless cars, this entire debate starts again. so it's -- it's a great opportunity for regulators to think long and hard about the
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approaches that have been taken, learn lessons from the past, and provide a new approach for the future that empowers both consumers and enables innovators to provide a better service today, tomorrow, and into the future. thank you. [ applause ]. >> thank you for having me here. i appreciate christopher's remarks. i'm going to agree with much of the spirit. i don't know if we hammered out details we'd be on the same page. but this is a story you see a lot of places. clearly off great innovation and to a large extent that's what, you know, uber, lift, air bnb and the other sharing economy companies are about. they're innovative. there's also a big question of regulatory arbitrage. what i want to make sure, and we'll see if christopher and i are on the same page, we don't want companies profiting from regulatory or tax arbitrage. my favorite example. amazon. not knocking it.
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i use it. but they still don't collect sales taxes in somewhere close to that have states. i can think of no argument that says if i get a tv at my neighborhood store, i pay sales tax, i get it from amazon, i don't. that makes zero sense. that should have been dealt with long ago. it still has not. and in fact the amount of money that amazon has avoided by not collecting sales tax exceeds its cumulative profits. so it's been very big in its growth. we can wharg you think of amazon, this or that. it doesn't make sense to have a mom and pop retail store collecting sales tax and amazon says you don't have to, you ordered this over the web. that's the issue i see with uber, air bnb, other economy sharing companies. we want symmetric regulation. this comes up in different contexts. consumer organization, i do a lot of stuff on labor, what about the drivers? are they entitled to be treated as workers?
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minimum wage laws, overtime laws, workers' comp. are they covered by insurance when they're driving? the initial taxi industry isn't any better. often treated as independent contractors there as well. that's a bad situation pip think they're effectively employees. this sort of thing can be dealt with. one of my points is i think there's a lot of bad faith here and i'm going to beat up on someone i really like, a good economist, alan krueger. he studied what uber drivers make on average. he got data from uber. and he calculates what their gross pay was per hour. he goes, but we can't calculate net pay because we don't have data on miles driven. i go, that's too bad. wait a second. uber has data on miles driven. so this was a totally bogus comparison. looking at the gross pay, what do i get as an uber driver, then i have to pay for my gas, my insurance, for any tolls, depreciation on the car, and
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he's comparing that to the net of a cabdriver. that tells you zero because uber chose not to share the data with him. that's just bad faith. there are issues there. they could be dealt with if you deal with it honestly. on the issue of consumer protection, again, we want to make sure that consumers have insurance that, you know, when you're in the cab you're protected adequately. uber has a policy. is it adequate? might well be. that should be subject to some regulation. it might be just, hey, we do this, look it over, is that fine? is it a good driver? i always pull out my 84-year-old mother for this. picking on her. wonderful person. she should not be driving an uber. she has a washington state driver's license. cab drives have to get special chauffeur driver's lie senses but i want you to be a good driver. criminal records. they have to go through extensive background check, fbi checks. maybe that's too much. but, again, the point is there should be something.
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someone should have a reasonably dood goode protection. obviously nothing is 100% foolproof, but the person driving your cab is not a convicted criminal who got out of jail yeld. you don't want that. uber may do that, but there should be some assurance they are. universal service. i have a friend who did an analysis of the time it takes, and one of the issues, known record discrimination. a lot of african-americans have difficulty being picked up by a cab. uber is a great advantage. you sit there, they don't know you're african-american. great thing. he did some analysis looking at how quickly people got back and forth to underserved, minority communities. they found uber was better than traditional cabs. i said what if you don't have a smartphone and a credit card? they got angry at me. that's a serious question. a lot of people still don't have smartphone and credit cards. and they do take cabs. there's a lot of older people, poor people, they do their shopping once a month, they go to visit, you know, family member, loved one in the
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hospital, they need to take a cab. and if they don't have a smartphone, they don't have a credit card, we have to make sure they have a way to get there. so if you have a story, uber drives out the traditional surveillance or down sizes enough, that's very difficult to get a traditional cab, that's a big issue. the medallions issue. i think there's an interesting question here. i'm not sympathetic to the people who speculate on medallions, but two points here. one, there are a lot of cities that have recently auctioned off medal i don't knlions and i don it's good practice for the government to take money from people on a false pretext. a medallion has value because you're limiting the number so, if we sell off 20, 50, 100 medallions, then the next week you go, ub kerr do whatever they want, you kind of rip people off. and i just don't think that's a good practice from government. if you bought the thing 30, 60 years ago, some did, less concern. the other point about the medallions, there is actually a logic to limiting the number of
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vehicles. there are places certainly downtown manhattan that are seriously congested. michael bloomberg, when he was mayor, had the right strategy. you simply charge a congestion fee. he was prevented from doing that. the state passed a law prohibiting that. taxis, himming the number of taxi or taxi-like vehicles may well be a second best. i would hold that out as a possibility. not defending the medallion system, but we may want to do that. reasonable question to ask depending how much congestion is due to cabs, how much could you stop by saying we only have x number of cabs. reasonable questions. point i would make in general is we want a standard set of rules. as christopher said, we want that to level the playing field between the incumbent industry and uber but we also want someone else to come in and compete with uber. you shouldn't have to hire president obama's chief political adviser in order to compete in the taxi industry. clear rule, here's what you do, and you don't have to be politically connected to compete. those are some of the issues
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there. let me quickly run through some of the ones with air bnb, again, a comparable sort of story. first off, safety issues. we have extensive regulations. this hotel has to comply with and sure if there's a fire, we can get out quickly. what about the units rented through air b nshgbnb? well, air bn sbsh nshgsbnb is n them. is it safe? air bn bcs does not do that now. air bnb people are violating leases. you can't sublet. in that apartment building i can't let out my bedroom five days a week or whatever it might be. your neighbors have a right. they didn't pay to live in a hotel. same thing with condo associations. these are real issues. i think that, you know, it's appropriate to say air bnb has to be held responsible.
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also rent control. you may not like rent control, but it's crazy to say we're only to let you charge $1,000 for this unit but if you want to rent out an air bnb you can charge $1,000 a night. you have to have a uniform set of regulations here. taxes, you know, originally air bnb took no responsibility for ensuring that people paid their income tax in many cities, certainly d.c., there's a special hotel tax. again, that's the sort of thing that air bnb should be held responsible for. are they handicap accessible? well, you know, again, you don't expect -- someone's not going to make -- they're renting out their apartment two weeks a year, if it's not otherwise handicap accessible, they're not going to make it handicap accessible. but that's a legitimate concern that we want to make sure people in wheelchairs can get access to hotels. again, they could come here. this hotel subject to all sorts of rules on that. if air bnb -- again, this isn't a hard thing to do, air bnb can
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know what percent of its units are handicap accessible. if they don't need that, you tax them to subsidize people that are handle cap accessible. a last point along those lines, chris discrimination, race, other issues. it may be the case, i don't know, i think there were some studies the other way, people less likely to rent from an african-american household, but, you know, do african-americans have a harder time finding an air bnb? because it's optional. you say i want to stay in your place. and, you know, we're not going to make someone, you know -- have someone in our home we don't want. we don't have an easy way to tell whether it's because they're african-american or some other reason. on the other hand, we can know, you know, what percent of the people who, you know, are getting rooms through air bnb are african-american. we could do that, and, again, if they're not -- you know, if african-americans have a difficult time renting units through air bnb. again, we could pay a discrimination tax. there are ways to deal with it. so the point is that we could find ways to deal with these issues. there are real issues. and isle just say, i was on a
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panel a couple months back on the sharing economy and there was a representative of the industry group. what they said was we're just like the yellow pages on the internet. and i wanted to strangle her. not really. but that's just not honest. we have the yellow pages on the internet. it's called craigslist. okay? that's the yellow pages on craigslist. you post on craigslist. it doesn't have a reputation that we're guaranteeing the quality, this or that. you post and people look at it and they understand. air bnb is trying to present itself as a brand. uber is trying to present itself as a brand. we just have to deal with this honestly pip think you can take advantage of the innovations which are real but at the same time ensure that the protections that we are trying to have there with existing regulatory structure, ensure they apply. that would be a win-win situation. thank you. [ applause ].
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>> thanks to our panel for laying out some of the benefits and some of the risks. we'll open it up in just a moment. but i wanted to take a moment to drill down a little bit more on one of the benefits and risks that surfaced in the conversation, this idea of reputational feedback systems. many of the sharing economy gadgets that technology has allowed us to have access to, they're convenient, low cost, and they have an opportunity to provide feedback in real time. what does reputational feedback systems, what does that mean for the world of consumer protections? i'd love to hear from the panel. >> i think reputational feedback systems are useful but not sufficient for consumer protection. at least right now. i could envision a future where particularly if these companies were to open their data systems and partnership with the public sector where you could create a system that was both reinforcing the existing regulatory system
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as well as creating that extra overlay layer. i think with the concern about safety that's been voiced by city leaders throughout the country and, you know, just the fact that these are new companies, that they're still in a growth mode, they're still hiring thousands of people and bringing this whole system online, that you need to make sure that you have a strong regulatory system in place. so like i said, i really can see this moving in a direction where it can be a much more useful tool, but at the moment i don't think we're there yet. >> i'm a little more optimistic. so i think just in the context of ride sharing, so reputational feedback mechanisms in the ride sharing context. i would say two things -- it's a two-sided market, right? sharing economy is a two-sided market. it's producers and consumers. they're both a diffuse network and the platforms themselves, uber is allowing all of these people to connect together. for those of you that didn't know, every time you rate a
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driver, the driver is rating you. you can actually get your scores if you'd like them from the ride sharing companies themselves. you just have to ask. but it's making drivers better. drivers know they are being watched very close hi by the person in the car. but also the reputational feedback mechanism tied to the other pieces of the platform. that is when you get into the car you know the driver's name, you know the driver's description, you know the car he or she was driving, you know where they picked you up, where they dropped you off. so if, for example, you were defrauded, assaulted, mistreated in your ride sharing, your ride sharing car, you can use the reputational feedback mechanism to make it clear to the platform, something went wrong but also everyone who interacts with that driver after you knows that to a certain degree because their score reflects this.
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now, imagine or compare it to the traditional taxi system. here in d.c., have any of you ridden in a taxi in d.c.? can you tell the difference between the companies? all the cars are painted the same. you cannot tell the difference between any company. so if you have a problem, you better hope you have a receipt, you got the driver's name, you looked on the side of the car. let's say something happens, you're a little frazzled at this point and you leave and you walk away and you say, oh, i forgot to get her name, his name, i forgot to get all of this information. it's lost, to you, to the world. you have no idea unless you paid with a credit card how to get that information. the reputational feedback mechanism is tied to everything else that has become sort of the hallmark of the sharing economy platforms empowers consumers and protects them in a way that simply there were dark spots. there were dark corners and dark alleys, if you will, in these traditional -- traditional
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industries. in particular in ride sharing. and i think the sharing economy is brightening up those darker spots. >> i would be skeptical on the consumer feedback. it's effective and useful, but you're talking about a one-time rare event, especially a bad one. someone gets assaulted in a cab. odds are that uber driver has not previously assaulted someone and presumably they won't do it again. on the other hand, you don't want that to happen in the first place. with the traditional taxi services they go through an fbi check. not perfect. obviously, someone can go through a check and turn around and assault someone. what does uber do? maybe what they do is fine, but i want to know they're doing something to make it unlikely someone driving an uber is likely to commit an assault. it doesn't do you a lot of good after they've done it you can give them a bad rating. the point is not to be in that situation in the first place. same thing with a bad driver. they're not in an accident every day.
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you're going along, having a conversation with your drive, you like them, fine, give them five stars. didn't do anything obviously bad. but maybe they are a bad driver and the next person who gets in they'll be in an consistent and seriously injured. that can happen with the traditional taxi services. but they get a special license. my mother would not get that license. i don't know whether she could be an uber driver, but, again, i want to know that uber's doing something that makes sure my mother does not drive an uber. same thing on the -- good thing my mother won't be watching this. same thing with air bnb. again, we're concerned that hotels are not firetraps. and, you know, you go into a hotel, i mean, an air bnb unit, and, you know, you have a nice time there and, you know, the host is nice, everything's good, give them five stars. but it turns out if there is a fire there's no way out. okay. so that may never appear. that's the sort of thing that air bnb could say. okay, do you have egresses, is there a way out, multiple ways out from this room if there's a
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fire? people may still lie and you can figure out the details of how you do that. the point is that won't be captured by consumer feedback except, oh, i was trapped in a fire. a little late. i think there is a logic to this regulation in addition to the obvious benefits of consumer feedback. i'd like to invite the audience to share some questions or insights you may have. go ahead and use those mikes. please. >> thank you. i really appreciate hearing the regulatory side, the research side. and i'm not sure if i have a question or a comment so i'll throw it out there. and that is, yes, technology, smart technology has made a lot of this possible. but what seems different about things like uber and sharing economy systems is there's a real consumer need. we've got a lot of young adults here who don't have regular jobs, who end up home sharing, home sitting, sharing cars, et cetera, et cetera, and it
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seems like these newer disruptive technologies or disruptive systems are addressing those needs. i appreciate the need for regulation, but i also recognize that there's this burgeoning pain, need, new economy because there's a changing world out there. how would you address that? >> i think i would start and say that this is where it's actually exciting to see the differences happening on the ground because to your point, i mean, i'll talk about ride sharing for a second, i was just in ft. collins talking with the mayor and city council member there, and ft. collins, colorado, and they were saying that didn't have taxis on ground before uber came. uber created a whole new service. yils was another example they saw uber and air bnb as a real economic development tool. so i think you have those types of examples but also cities that for a long, long time have had existing taxi industries have had, you know, very strong hotel industries so, they've had kind of existing services where it's
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creating a competitive environment where there might not be an even playing field. i think that kind of gets at the dynamic. yes, mayors and council members overall welcome this innovation happening. but there is a need to make sure that we're creating a level playing field where it's necessary, but that might not be necessary everywhere in the same way. >> yeah, but in terms of -- did she aukwalk away? >> i'm right here. >> your question was about work as well. when you look at the data, recently we got numbers from the irs in terms of what has the growth in 1099s looked like versus the growth of w-2s between the year 2000 and 2014. the number of w-2s issued stagnated or slightly declined by about 4% or 5%. conversely, the number of w-2s increased -- 1099s increased by about 22%, 23%. so, you know, granted, for 1099s if you're worried about the future of work, 1099s at this
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current rate, for them to surpass w-2 as the primary form of work in america it would be like 2085. we're a long way off. the future of work is far out there, i think, until traditional employment goals away. but when you look at who's working in the sharing economy and, you know, a recent survey of sharing economy participants found two-thirds roughly, two-thirds of sharing economy participants. now, this is outside of uber and lift. if you your only experience with the sharing economy is uber, lift, and air bnb, you would think participants in the sharing economy are much older because those are huge capital expenses you need to start up. you need to own a home or lease a home, own a car. they're reducing these barriers to entry. uber and lift are doing these lease to own programs or rental proms. but for the most part when you break it out into task rabbit and insta cart and all these other sharing economy companies, two-thirds of people are college age or recent college graduates and working professionals operating in the sharing
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economy. in a stagnating economy for a bunch of millennials who are graduating with a lot of hopes and little opportunity, this is an outlet for them. i would say to that, there's a story here of people finding opportunity beyond the consumer side, but the producer side, finding opportunity that otherwise wouldn't exist in the traditional environment. >> i guess i would flip it over. i find it incredibly frustrating people somehow accept we're going to have a bad economy forever. this was like incredibly bad economic policy that allowed for the housing bubble to grow, allowed for the crash, and then cut off the recovery. so we got all these people in washington who decided that the federal budget is like the family budget. i'm sorry. it's not. that's just wrong. but nudge, you know, they go arnold and it's bipartisan, i'll beat up on president obama as much as republicans in congress. he's boasting about us reducing the deficit. then he's boasting about slowing growth and keeping people from
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having jobs. so i don't think -- you know, if you can't get anything else, if you can work for task rabbit, yeah, that's better than nothing. but we don't have to have a really bad economy. that's a policy decision. ill hate to see us make our laws or regulations around the idea we're going to permanently have a really bad economy where large segments of the workforce can't have normal employment. >> thank you. >> this side of the room and then we'll return. >> charlie with travelers united. we're involved a lot in this whole sharing economy side right now. i think it was dean said it's like a bulletin board. it is in a lot of cases. brbo, the home away, i mean, they were set up as online bulletin boards. you pay to put your name up there and then the transaction comes along and you get to work with someone. it's exactly like a bulletin
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board. and so what air bnb has done and uber has done is they've added other features to that to make it easier for transactions to take place. and so as we follow that through, what we're running into, is we're going to run into areas where the cities and stapts are going to have to come up with new ways of collecting their own taxes, because what we're find right now, we used to have this whole economy of people renting out their homes, their condos, vacation rentals, and now that's coming online and it's becoming easier and easier. and big companies like priceline, booking, expedia are starting to get into the act and they're willing to collect taxes en masse and hand them down to the states and let the states decide how it's going to get all divvied up. but whether or not the states and localities are going to be able to handle this money coming in is going to be another question. so do you see any -- what do you
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guys see in terms of say the benefits to the state and local economies from all of these additional tax collections and what they're looking at in terms of ways to use it to help make the sharing economy even better? because there's going to be a big growth in income, which we just didn't used to have. >> i think this is one that the data still needs to be collected and research still needs to be better down on kind of substitution versus new creation of service. you know, because i think we to see that somewhat. you know, you definitely hear it anecdotally from people that they wouldn't have traveled if they wouldn't be able to use air bnb. but i don't think we fully know how many people are choosing to use those rather than staying in hotel rooms right now. certainly from a tax collection standpoint, it is one thing i would credit air bnb with, the way their platform has been put together, that they are working with some cities to collect taxes in those cities.
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i would say that i understand that home away and brbo have created a different type of platform historically, but it might be a good, you know, business decision to figure out how they could do something similar, because it's pretty hard for a city to really figure out, number one, which houses are actually put up on that marketplace, and number two, therefore collect the taxes. and so i think that as we move forward these kind of dynamic systems will work themselves out better and certainly we see, you know, additional tax collection that could take place as a net benefit for cities. >> okay. so i have a comment, but also i think i'm going to tie it to something dean was saying before about arbitrage. so the example of air bnb, brbo, or what have you, and i think you mentioned some people say i wouldn't travel but for having these services, they make life more efficient and more cost effecti
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effective. i think something like 90% people polled in a recent survey said that's why they're using the sharing economy, more effective and cost effective. that shines an issue on the way hospitality taxes are imposed on traveller, on tourists. you think, for example, if i were to go to atlanta, georgia, and stay in a hotel, i'm paying a huge tax to pay for the atlanta falcons stadium. they're funding the stadium through the hotel tax. or i can go through brbo and it's something like perhaps in some instance 15% to 20% cheaper because i don't have to pay that tax. as a consumer i'm certainly going to go with the cheaper product. it's up to the producer to figure out whether or not they're compliant with the taxes. so i think even with the transportation, is that the sharing economy is providing arbitrage opportunities for individuals to find new innovative and efficient means to overcome things that have become otherwise inefficient in some instance, anti-competitive.
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in terms of making cities better, i think something like air bnb is really forcing cities to rethink how they go about their tax policy and how they enforce their tax policy because they're clearly pushing people away from hotels and toward other options because they're artificially raising the price. >> you want to set reasonable hotel taxes. i'm not a fan of paying iffer the atlanta falcons stadium, but you want to make sure they comply across the board. air bnb with their platform, i don't think it is difficult, but if you have something that is more like craigslist, i can understand you're simply posting there. all they're doing is saying you get to post here, you pay us a fee, that's your end of your dealings with us, it's hard to hold them liable and the city's kind of left, okay, how do we collect the taxes, which, of course, is going to be difficult on a case-by-case basis. >> thank you.
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>> rosemary sheehan, president of consumers for auto reliability and safety. we spend a lot of time trying to keep the auto industry from killing its customers. i want to throw this out there in connection with the ride sharing economy. there are already now an uneven playing field when it comes to safety and safety recalls. last year we suck seeded in getting legislation passed in the republican congress to prohibit rental car companies from renting out cars that are under safety recall. so if off rental car company with a fleet over 35 vehicles, it is starting in june going to be a federal crime to rent out a car with an open safety recall. but taxicabs, limousines are regulated at the local level. i don't think they' even check when they do the annual inspections to see whether the safety recall work has been done. we have been looking into this, and we've been asking reporters to ask and we've asked uber and
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lift, you know, what do you do about safety recalls? and from what i can tell from an article in the american prospect, they require the owners of the car itself to certify. they could check the vin against the database at the national highway traffic safety administration and say to the owner you've got an open recall, we don't want customers riding in a car with an air bag that could explode and, you know, slice their carotid artery or blind them, or we don't want our customers in cars where, you know, the wheels are going to fall off, they catch on fire, the seat belts don't work, et cetera. they don't assert that. they don't take, you know, that one step and say, this is a car that the manufacturer said it's so unsafe it needs to be repaired to be safe to operate. so that's something where i think, you know -- >> great. thank you. >> could you comment on that? >> this again gets back to
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saying the reputational story won't deal with this because these are going to be onetime events. you don't want your air bag to explode in your face and do all sorts of damage to you and then you give them a bad rating. uber may do exactly that. they may do what we want them to do. but i want that to be on record. so with taxes, they have to go to annual inspections, not perfect but at least in principle they're making sure they're safe vehicles and i guess it varies city by city whether they would look for recalls. you'd like them to do that. again, i would like the see, okay, uber is doing this, they certify they're doing it, they could be spot checked or whatever. you'd like to have that be symmetric with taxes. >> i also think it's important to keep in mind that the reputational mechanism does not exist in a vacuum. there's torts. there's civil law. there's criminal law that all exists, already applies to everyone. so it could be very easily argued that a driver using an
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uber or lift platform to pick somebody um has a duty to the rider to not drive them around negligently. they knew or should have known that their car was subject to an open recall because it was unsafe. they had a duty not to drive people around in an unsafe car. they did it anyway. if something occurs, they should and ought to be held liable for what they do. >> how about uber's allowing them to do that, though? >> i mean, there is a certain question here as to who do you put the onus on, the individuals or the platform itself. so there could be really easy ways to overcome that. if it's as simple as checking a vin number, when they check the vin number they say we don't want your car. that could be very easy. i don't know what they're doing. but it's certainly important to keep in mind that all of these things that sharing economy is not unregulated because they're not sharing economy specific regulations. they're clearly regulated by all the torts, civil and other
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criminal penalties that would -- >> but those don't kick in until after you're injured? a mom lost two daughters in a recalled rental car. we don't want that to happen. right? we're trying to be proactive and preventive. i think we need some reguls saying -- >> certainly. tort and criminal law have a deterrent effect as well. it's not just people saying i have a duty and will adjust accordingly. i eel let brooks respond quickly then rapid-fire, three questions in a row, oom oop and let the panel respond before we close. go ahead, brooks. >> this is one of those situations where from a regulatory stand point there should be equality in how this is regulated. this is a safety issue and it makes a lot of sense to do that. >> thank you. so please go ahead with your question and then we'll go right back here and answer them as a bundle. >> it was more of an observation and probably good you're not giving me much time.
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richard holbrook, consumer federation of california, where we are grappling with what we call the sharecropping economy. i think we have to put this in a context all the wealth is going to the top one-tenth of 1%. people are doing coping mechanisms to try to figure out how to survive in an economy where the social contract between corporations, workers, consumer, and the community is fall eight part, and that's what a whole lot of the shift here to what folks who have -- you know, you think off smartphone and that the rules of gravity don't apply. the amnesia, the failure to recognize the lessons our grandparents had to learn a century ago when they established regulation for safety, for labor, you know, for the common good has to be relearned just like it was relearned after gramley led to the collapse of our banking system and we're seeing it all over again. the arrogance, the wealth.
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i mean, companies like uber, $50 billion valuation. folk who is made a fortune without ever having to learn the rules the harold way. even conservative corporations have learned about how to treat people. but let's call it what it is, sharecropping, coping mechanisms for people that can't survive? this economy. [ applause ]. >> my question is for dr. baker. i appreciate you airing a lot of the concerns about this. to me the sharing economy doesn't apparently mean sharing the profit with the workers, for example, and a number of other issues. my question is it's very hard when you raise these issues because you immediately get painted as a luddite, sort of this dishonest dichotomy that these companies are either for technology or for fairness and somehow we can't have both. i wonder if you have any strategies for coping with that. >> thank you. >> hi. i'm julie nephew with aarp foundation litigation.
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i have to say this is so in my personal -- i don't speak for aarp, but i have a real problem, mr. baker weather the idea of us allowing companies like uber or air bnb to discrimination and just pay someone off so it's okay, because the government is not the people that they harm when they're discriminating. if you have a fair housing right to rent a hotel room, you have a fair housing right to also rent air bnb. and people should not be telling them no. if you have a right to get a cab, even though you have a disability, you should expect that that uber driver is not going to drive away when you're halfway out of the car and injure you because they figured out that off disability and they don't want to give you a ride. that kind of behavior -- it's not just about whether or not there's a wheelchair-accessible car. it's about whether the top uber believes that it is not
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responsible for complying with the federal laws and with even the state laws. and so those are some real problems i have. with mr. cooper, this idea that there is some kind of tort mechanism that's going to help people, uber drooimps don't have any -- you know, they may have minimal insurance that doesn't cover anything, so you can get a liability award maybe, but you can never get compensated under that program. >> thank you. how about some closing remarks from each of us in terms of the short-sightedness, how short-sighted are we being, the discrimination tax, is it enough, or should we look at playing the game differently, new rules and not just allowing the shared economy to get by with such a tax? >> as we've seen the sharing economy grow in recent years we certainly see the good and the bad. i think it's incumbent on all of us to work to make the sharing economy work better for all of us, to make it a situation where it's creating good jobs rather
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than piecemeal jobs. i think it's one of those things where we want to welcome that innovation but make sure there is a level playing field. there's so much opportunity here and let's grasp it and make sure that there's a strong regulatory environment that protects safety and really promotes innovation for our country. thank you. >> so i think it's important to always keep in mind that the nature of technology is that it will always outpace regulation. it's just an inherent issue in regulation. it's always responsive. you know, if you try to foresee every outcome and stop every possible outcome oftentimes you will end up with a world where nothing good ever comes -- or the greatest things never come about. so i think it's important to keep in mind that you want to correct on the margins. is the sharing economy perfect? no. there are a lot of things that can be improved upon. will they be improved upon by continued competition from new
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and better products, or will they be improved upon by regulation? probably some mix of the both. and it's important to keep in mind what regulation can achieve, what it cannot achieve, what competition can achieve, what it cannot achieve, and keep those both in mind to create an environment that is both open, fair, and flexibility, that consumers are protected and empowered, that competitors are able to freely compete on the merits, and that the world continues to get better as new people can get better products and services in more efficient and more affordable ways. thank you. >> lot of good points raised to these questions. first off, you know, i agree that it's really unfortunate insofar as people feel like they have to rent out a room in their home or take extra hours driving an uber because they don't get enough pay in their job or don't have a job but would like one. that's our basic struggle. in terms of the question about, you know, technology being made
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to be lud it'dites, i'm used to called a luddite, really that's name-calling and politics and a lot of people are very good at it pip had a lot of fun with amazon. for years amazon was saying they couldn't collect sales taxes because it was too difficult. and my response was always, well, then maybe you should go out of business and someone who's better at doing an excel spreadsheet should be running your business. it's not too difficult. of coursitis not too difficult. you have someone's zip code, you can collect the sales tax. the same sorts of things come up with uber, a minimum wage. we know how to do that. it's not that complicated. if the boys at uber can't figure it out, they'll be replaced with someone who has better technology. they're the luddites then. it's just name-calling. it's silliness. we won't have perfectly symmetric regulation, but so what, we can do a lot better. last point, look, i'm not happy about the idea that you'll have discrimination. i just don't know a way arnold that. so i'm renting out a room through air bnb and i'm racist.
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you know, that's really bad, but i don't know how we can prevent that. how are we going to find out someone rents out a room five times and, you know, they decide they don't want an african-american in their house. that is really bad. but i don't know how we'll find that out. purely practical matter, how are we going to find that out. i don't know any way to do that. we can tell air bnb, okay, how many african-americans have tried to get a room, how frequently do they get one, how frequently are they turned down and if they're turned down more frequently than whites, guess what, you'll pay a fine for that and we'll give that to the hotel where is we know if you come into this hotel and you're african-american, odds are you can get a room just like a white person. i'm not saying it's okay. i just don't know a way around it. with uber, i mean, on handicap-accessible cabs, most cities require that some percent -- they aren't all handicapped accessible so yoenl if you're in a wheelchair, you have to say, i'm in a wheelchair, send over handicap-accessible vehicle, and, you know, that's what you get.
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uber, they have no requirement like that so if they're not -- they can keep a record again, it's not hard. how many of your uber cars are handicap accessible so if someone calls that needs a wheelchair, fanld they don't do it, they'll pay a fine. or you could require them. them you pay people. there are other ways to do it. i'm just sayingitis a real concern, every car is not going to be handicap accessible. that's understandable. you make sure that people with handicaps have their needs met through uber as through the traditional system and if n then, you know, they're going to have to pay some serious fine for that. >> thank you. we are over time. please join me in sharing appreciation for our panel. [ applause ] they did a great job. surfacing the benefits, risk, and provoking discussion. thank you so very much for join us. it looks like there's now a break. thank you.
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live tonight on c-span -- the republican party of milwaukee county dinner. ohio governor john kasich scheduled to speak at 8:30 eastern and texas senator ted cruz at 9:30. and this weekend on c-span's "newsmakers," david mcintosh, who heads the club for growth, his group has endorsed ted cruz for president and is running tv ads critical of donald trump. "newsmakers" is on c-span sunday at 10:00 a.m. and 6:00 p.m. eastern. i am a history buff. i do enjoy seeing the fabric of
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our country and how things -- just how they work and how they're made. >> i love american history tv. the presidency. american artifacts. they're fantastic shows. >> i had no idea they did history. that's probably something i'd really enjoy. >> and with american history tv, it gives you that perspective. >> i'm a c-span fan. the supreme court last week heard oral argument in a case over whether employees of religious groups should be able to access birth control through their employer-sponsored health insurance. the 2010 health care law guarantees women access to birth control. the religious group says that violates their first amendment rights. >> we'll hear argument this morning in case 141418, zubik versus burwell and the consolidated cases. mr. clement?
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>> thank you, mr. chief justice, and may it please the court. the little sisters of the poor and their co-petitioners face a dilemma that their religious freedom restoration act does not allow. and that the government deems necessary for them to provide contraception coverage through their health care plans. it tempts to recast them as an objection to the very active opting out. with all due respect, that's simply and demonstrably not true. >> could you explain to me the analogy with military objectors during the war, many of them felt that genuine belief they were pacificists.
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that if they registered as pacifists that others would have to serve. they were going to go to jail and many of them did go to jail because of this belief. why is going to jail less burdensome or less important than paying a financial penalty? >> i don't think it is, justice sotomayor. let me stick to the draft context. the way to analyze the conscientious objector case is to say because they faced jail time there's clearly a substantial burden. i think it's important to distinguish between -- >> no, no, no. let's stop there. to the extent of good faith
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belief if i register someone will serve in my lieu, what burden is it on the government? the government sends out how many notices to people to come and serve 1,000, 1200. do you really think it make a difference if it knows whether or not one person is not going to show up? and if we're going down the road of what's the difference, why would that law survive? >> i think it would. it would be difficult to administer that kind of system if you couldn't know about the objection or couldn't take any steps on the government. >> isn't thalt same here? if you don't know who can pay or who is eligible, not eligible or who is eligible to pay, how does
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this system work? >> did can require somebody to opt out. that's what they do for the churches, auxiliary. >> the churches have to tell us their church plans. have to tell the government their church plans. somebody has to tell the government who is eligible or not eligible. how is that different than military service? >> first of all, your honor, that's not true with respect to the churches, integrated auxiliaries and religious orders that stick to their knitting and only engage in religious activity. so, factually, there's that distinction. the more important thing, your honor, i would distinguish between the situation where a conscientious objector where the
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only way they can object is if they list the name of somebody else who is draft eligible, who then will be obligated to serve in their stead. >> you began by saying that the government mischaracterized your position. i was just not quite sure where that argument was take iing -- could you get into more of that? >> i would be delighted to, justice kennedy. my client does not object to objecting. part of the reason you know that is they have not been shy about objecting. my clients, the little sisters, couldn't qualify because they go out and serve the elderly, poor on a nondenominational basis. they objected then. they objected when they filed this lawsuit.
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they reaffirmed their objection when they filed to comply with the court's -- >> that might be so but what if somebody did just object to object? it seems as though all your arguments would apply the same way. in other words, somebody comes in and says i do object to objecting, because objecting will make it easier for the government to fill my slot. that's a perfectly understandable thing to say. and you say the sincere religious belief is what controls. there, too, it would seem it would be a burden. >> first, it would only be a burden if it was enforced with massive penalties. that's a rare situation. >> we have the same penalties as are here. and the person is just objecting to objecting and that's part of
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the rebelief. it will make it more likely for the government to fill the slot and provide contraceptives. >> i think the right way to understand that hypothetical, and as i was explaining to justice kennedy, it's just a hypothetical. >> it's a hypothetical that's directly implicated by your very theory of the case. your theory of the case says everything depends on a person coming in, saying this is against my religion and that being the end all and the be al all. >> the sincerity of our religious beliefs, the government can question them. the substantial burden analysis in this case is very clear because of the millions of dollars of penalties, exact same penalties that were issued to hobby lobby and the court
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said -- >> you're not answering the question. >> i'm try to, about all due respect. if you have everything else the same, that brings you the to the second part of the analysis. if our objection is contemporary to fact, based on our objection, the government provide this is service through the exchanges, through title ten, through an aetna uber policy where everybody gets their contraceptives from some overall government policy we object to none of those things. if we did, i think we would lose under the second half of the analysis. >> if i understand that answer, if objecting to objecting was a form of complicity you would have to go to the second which is to say, has the government's response been tailored?
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the difference between objecting to objecting and your client's position is not a difference at all with respect to the burden analysis. >> i think my client's position is discernible. one way to understand this is if there were, in fact, two forms, one was an opt out form. they would very much have an objection to the form. >> i don't think it does based on this court's precedence either. even if i'm wrong about that, you certainly would write an opinion that says there are three legs to the stool in this case. the fact that the government demands more than an objection, the fact that it enforces it with massive penalties and the
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reality that if that happens, they're going to imply their demands against our will. >> what law which burdens practice ever be insubstantial? every believer that's ever become bk before us, including the people in the military, are saying that my soul will be damned in some way. if that's ever to be substantial, how will we ever have a government that functions? how will we ever have anything that the government can demand people to do in objecting?
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>> two things. what you're saying about the government not being able to function under the substantial buried sben the least restricti restrictive. you can question who had the better of the debate. there's no question which side of the debate -- >> the side of the bebait that's settled which is if we're not asking you to do something except identify yourself and if -- it's not a substantial burden if someone else is going to do the act that you're objecting to.
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they also need additional information about our insurer. they require more. >> or thoon who is the insurer. that's all. >> that's what they say they need. >> then they have an independent contract. the insurer or the tpa and not the company. >> justice ginsberg that's true if and only if we provide the form. it's not just the information on the form. the government treats that form as an authorization.
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i fill out the form, i do not authorize. it doesn't make any difference. >> it makes all the difference. if we do not provide the form, the coverage doesn't flow. we haven't provided the form in these cases. as a result, it hasn't flown. with the self insured plans but is true of all of them. >> because the government has another interest at stake, one thing you said -- i want to be clear that this is not involved at all. no one doubts for a moment the sincerity of the belief of your
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client and all the others. sincerity of their belief is accepted it's off the table any more than the sincerity of belief on the parents in the roy case was questioned. didn't provide these for women and it saw compelling interest there so it can't be all my way. there has to be an accommodation. that's what the government tried to do. >> i agree but just because they call it an accommodation -- if what they give my client is what they gave the 300,000 churches,
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purely religious activities of religious orders, if they gave that accommodation to my client, we would fill out any form they wanted to. but the problem is, we have to fill out a form. the consequence of us filling out that form is we would be treated very differently from those other religious employers. >> you started to talk about self insure d plans. is it the case that the form or the notice to hhs in that instance becomes a planned instrument? >> in both cases, your honor it becomes a planned instrument. the government thinks that our notification in this case -- it's not really an opt out. the way the regulations were originally designed you didn't raise your hand and tell the government i object.
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you send a form directly to the insurer that they then treated as the permission slip to provide the coverage. >> that's out now. >> no, it's not out. thanks to this court and its interim relief, we can now file an objection that the government treats exactly the same way. all they do that's different is they essentially -- it's a mailing rule. they take our objection and then they provide that objection to the third party. this isn't your plan. don't worry about this when their whole interest is put in terms of seamless coverage. if it's seamless to the end user, i don't think the little sister's perception that it's seamless to them and they are, in fact, complicit is an
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irrational belief by any stretc stretch. >> is the essence of your objection that contraceptive coverage is being done through health insurance that you contract? >> i think that's a fair description of it, justice kennedy. and i think the only problem the government is having understanding our position is that that health plan is somewhat intangible. and i think if you put this in more tangible terms, if the consequence of us filing the form is that they would come into one of the little sister's homes and set up shop in a room, they could pay us rent. it wouldn't cost us a thing. then they operated a title 10 clinic out of our homes, i think everyone would understand that, of course, we're complicit in the coverage provided on our premises. and just because this is more intangib intangible, i don't think the principle is any different. certainly from the perspective -- >> do we accept the -- your
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client's view on complicity or do we have to see how far -- do we accept your view on complicity and see whether or not the accommodation is possible and what's the least restrictive? >> i think that's the role that your courts have had for the court. i don't think they want to get into the role of having the truth detector test. that's not just the hobby lobby decision. that goes back to the thomas decision f you remember that decision, you had a religious adherent who had an objection to cylindrical things that would go into tanks. another jehovah's witness in the record said you don't need to object to that. this court specifically said we're not going to get in the business of refereeing those disputes and we're not going to get into the business of whether mr. thomas is understanding his fate. you have a ton of amicus briefs
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that reinforce what's at issue for the little sisters and my other clients are not at all idiosyncratic, not at all wrong as a matter of faith. that's not an area you should get into. >> are you finished? >> yeah, i am. >> all right. i have -- you must have thought about this question, i suspect. it's topping the icing on the cake that pushes it over the edge, which is that you have to fill out the form saying i object this is my insurer. you can then contact my employees, da, da, da, da, da. it's a bunch of things.
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putting that all together now, are they protected by rifra? the reason that the court went from sherbert and verner over to smith was they couldn't figure out how to apply sherbert and verner. this is at least one difficulty with it, which is where i'm going. i even read st. benedict for informational purposes. sometimes a person who is not a hermit or monk is a member of society and does have to accept all kinds of things that are just terrible for him. think of the quakers. the quakers, who objected to vietnam. think of the people who object to laws protecting blasphemy. think of people who object to shoveling the snow in front of the walk that will lead to the abortion clinic. think of the christian
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scientists who know when they report the accident, the child will go to the hospital or the adult and receive medical care that is against their religion. so, there are loads of things. i've just given you four. think of the taxes. there's no question that doesn't violate the religious clause but plenty of other things do. so, what's the line? why do the quakers have to pay the taxes for vietnam? but you don't find the religious jew or muslim, nobody can work on sunday because their sabbath is on saturday. what is the line? i've been reading and reading to find a fairly clear, simple statement of what that line is and how it works and to repeat the difficulty of sherbert and verner, quite honestly, doesn't help me.
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but you might. >> you're exactly right. smith is a much more diminishable world. here is the way that you work it and draw the line. that is going to weed out some claims. if i was trying to claim that attacks on wine, for example. >> the quaker, you don't think that was a substantial burden? >> no, no, i'm saying it will weed out some claims. there will be work to be done. there's fairly obvious differences about a regime where essentially the government, by its own actions, has shown that people can't opt out. it's too important, too universal. you come at a case like this or like sherbert itself. it made it an easy case because the government of north carolina had taken care of the sunday objectors. so their argument that the whole
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system would collapse if we take care of the sabaatarians. if only the little sisters wouldn't go out and care for the elderly poor. they demonstrated this is an easy case. >> time. >> thank you, counsel. >> with respect to every other employee in this country who adopt get contraceptive coverage from an employer-based plan. for all these other employees, it furthers its interest in other ways. the government, therefore, needs to prove that those other ways are somehow insufficient when it comes to petitioner's employees, but the sum total of their showing in this case is limited to less than one column of one page of the federal register.
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that is simply insufficient before the government can demand that organizations like catholic charities and the little sisters of the poor engage in conduct that all agree here they regard as sinful. instead, what we have here is a religious employer definition. that is, those organizations that get the full-blown exemption as opposed to things like the petitioner here, full-blown exemption even if they don't object to providing contraceptive coverage. that treats identical organizations differently where you've got a catholic school on the west side of town that has to comply -- >> are you suggesting once you have this category, the church, then any other religious ly organized organization has to come into that category?
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it can't treat the church special and give them an exemption that it doesn't give other organizations? >> i'm not necessarily suggesting that. in this case if you look what the government has done, in particular, when you look what congress has, in fact, done, that's the line that congress has drawn, both in the title 7 exemption, where churches, like the houses of worship and religious organizations like our clients get treated the same. here, the government's entire line is drawn from the tax world where the line -- they define those who have to file informational taxes -- >> the government could do that. but does i have to? that is, can the government say we're going to treat the church itse itself, religious oriented organizations are protected but not at the same level? >> i don't think they can do that in the context of this regime that, the little sisters of the poor are any less at the
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core of a quote, unquote, church, than a house of worship. >> same with a university? >> excuse me, your honor? >> i think with a university, yes, your honor. you look how congress has drawn the line. universities get title 7 exemption for religious hiring. churches do. little sisters of the poor -- >> you're answering them really to the affirmative to justice ginsberg's question, once you give it to a church, you have to give it to any other religious organization. that's your position. >> not quite, your honor. the problem is that the government has to draw a definition that is coherent and rational. and i think the problem here is that they've drawn a definition from the tax regime that doesn't apply when you carry it over to this regime. in the tax world when the churches, when the universities, when the little sisters of the poor file that informational tax return, they actually get the exact same -- >> it seems to be very difficult for this court to write an opinion that says once you have a church organization, you have to treat a religious university the same. i find that very difficult to
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write. >> your honor, we're not suggesting that. what we are suggesting is that when the government has the same interest here that it has for all the other employees in this country that don't get coverage from an employer-based plan -- not just the religious employers, not just the grandfather plans. in addition you have the self employed, unemployed and employs of small businesses. the government has the same interest with respect to all those organizations -- >> i thought there was a very strong tradition in this country, which is that when it comes to religious exercise, churches are special. and, you know, we've said this most recently, but it's a long line of cases that says there's something very special about churches themselves. and if you're saying that every time congress gives an exemption to churches and synagogues and mosques that they have to open that up to all religious people, then congress decides not to
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give an exemption at all. that's why there are people who are strong supporters who have deserted this cause right here because of the mortal danger it proposes to churches. >> i'm not suggesting whenever you give an exemption to churches that exemption has to apply to all other religious organizations. what i am suggesting is that when the government has the same interest with respect to both religious and secular employees, churches, religious employers, employees of small businesses, grandfather plans -- and the government furthers that interest with respect to all those employees, whether it's the affordable care act, title 10, medicare, medicaid, at a minimum, the government needs to explain why those other ways are sufficient for all those other employee employees. >> there are many statutes that
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treat small enterprises differently. are you saying that once the government makes -- recognizes exempt for the law, the very small business -- once it has a number, like in title 17 employees, that's it. the flood gates open and it has to open what is an exemption for the very small business to everyone? >> not at all, your honor. what i am saying is if title 7 had an exemption that said you can't discriminate on the basis of race unless you have a pre-existing policy of racial discrimination, in which case you as long as you don't change it, that's fine. i think that would undermine the purpose of title seven. that's precisely the type of exemption you have in the contraceptive mandate. perhaps the executive survey churches and of -- of religious nonprofits and categories of
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religious nonprofits little sisters and those who are -- based on that survey? can congress do that? >> justice alito, they could do that and many other things as well. >> why don't we just assume that if they are part of the -- if the majority are part of the religion that they're not going to buy contraceptives. that's their religious tenet. so why are we worried about this case at all? >> your honor because -- >> we're worried because there are some women who don't adhere to that particular religious tenet and have, we perceive, the government has determined have a real need for contraceptives. >> justice sotomayor, that goes to the larger problem with the government's case, the utter
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absence of evidence. >> what is the utter absence? there's plenty of evidence that was relied upon to show when contraceptives are provided to women that the number of unintended pregnancies dramatically falls, as does the number of abortions. and so that that health risk to women who want contraceptives and can't get it is proven, scientifically and otherwise. >> that problem, whether you call it seediness or burdensomeness, that exists with not just with respect to petitioner's employees, but every other employee who liked petitioner employees -- >> we exempt certain employers of certain size from title 7. it's not because we don't believe that racial discrimination is a bad thing. and it's not that we're not
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committed to eradicating that problem but because at a certain point we have assumed as a society or as a government that you can't do everything. so, you can't -- you can, of a significant number. why is that a judgment that is not entitled to some respect? >> either the government is willing to tolerate all the problems th problems with respect to grandfather plans. with respect to employees of small businesses, with respect to religious employers. if they're willing to tolerate the problems, it really does question whether they have a compelling interest to enforce these particular petitioners to imply.
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if, as they suggest in their beliefs, they instead think they can further their interest in other ways, the question becomes why are they suddenly insufficient when it comes to petitioner's employees? let's assume for the sake of everything how many women out there actually lack action snes we don't know the answer to that. by forcing organizations like petitioner's to comply, reduce it by %, 15%, 50%. we don't know that. we still don't know whether the government could achieve a xrabl reduction through less burden some means.
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>> i have to admit to not understanding this argument. the most compelling interests are often have exceptions in them. there are often small business exceptions. there are often transition rules. if every time that existed somebody came in and said the government must not believe in this law because there's an exception to it. the state allows some people -- we might as well pack it all in. there's not a law in town that has exceptions like that. >> i don't think that's right, your honor. it's not a transition rule, contains no sunset provision. >> it's lower and lower every single year. >> for the first couple years, then leveled off in the last couple of years. >> if you make any change in your health plan, then you are
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out from under the grandfather. once you make a change in your plan, you're out from under the grandfather. >> yes, your honor, except they allow employees to raise co-payments at the rate of inflation without losing status and add employees without losing grandfathered status which partly explained why it's leveled off at about 25%. but even putting this aside, i think once you've drawn a massive settlemention for secular and religious reasons, it tends to do one of two things. either it shows your interest isn't that compelling -- because you're willing to tolerate a whole bunch of bad stuff for a whole bunch of other people or -- and i don't think that's really what it means here. what it means here, the government is telling us that it
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has the same interest with respect to -- >> here are the incentives you would put into place, mr. francisco. congress, next time you pass a lot, don't put in an exemption for churches. you're going to get in real trouble doing that. don't write transition rules that will help people adjust to a new legal regime. you're going to get in real trouble doing that. don't write exemptions for small businesses even though there are very particular concerns that small businesses face. you're going to get in trouble for that. those are terrible incentives to give to a legislature. are they not? >> your honor, i think what it means is that when government claims an interest, the overwhelming interest to force organizations like petitioner's to violate their sincerely held religious beliefs, yes. when it says we're going to exempt some organizations for purely secular reasons, some for religious reasons, then -- >> your point is that let's imagine widespread government
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program filled with exemptions. we look at those other exemptions. some seem to have good reasons. some seem to have terrible reasons. really, under the rifra or first amendment should exempt the religious, too. right? >> sure, your honor. >> i've just described to you the united states tax code where we know that you do not have to have an exemption for those who are religiously object iing to paying taxes because it would support a war. >> sure, your honor. >> i'm not asking to refute you. i'm asking it because i'm looking for what the distinction actually is. and for the reason i just said, i don't think the distinction can be well, exempted some
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people so you have to exempt the religious people, too. i believe you when you tell me there's a distinction. i want to know what you think it is. >> justice breyer, they're finely grained issues. >> no, they're not. well, go ahead. >> when you're looking at a regime like this one, that has both religious exemptions, that has large exemptions for totally nonreligious reasons and that has the exact same problem that the government claims petitioner's present with respect to all the other employees in this country who just like petitioner's employ employees -- i got where you're going with exemptions, but that's not the thrust of my question. the thrust is, i haven't found it yet. i want to find out what the real distinction is. i don't care what you call t i'm trying to find the basis for the distinction between those things that we do require people to do despite their religious
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objection. some go one way, some go the other way. he says because of other people being involved. that might be the answer. but what's your answer? >> that's a tough line but -- >> what is the right line? >> i don't think there's a clear line. >> give me a hint -- >> the way the law works, it says are you required to allow them to do this particular thing that violates their beliefs and in making that decision, you look at how the government is treating other similar situations. and if here the government is, in fact, saying with respect to all these other people who don't get the coverage from their employers, we're willing to tolerate it or willing to address the issue in other ways, then under rifra, the answer is you have to look to those other ways to see if they're sufficient for these employees or uniquely insufficient.
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>> may i ask a question? is there any accommodation that the government would offer that would, in fact, result in women employees getting contraceptive coverage under insurance? >> no, no, no. through -- in other words, is there -- you object to this notification. is there any kind of notification that would be acceptable? >> your honor, if by submitting this notification or any other notification, we got the same treatment as the religious employers, then this notification is acceptable. >> no. the religious employers, their employees do not get contraceptive coverage through the employer-based plan. i'm asking whether there's any accommodation that would result in the women employees getting
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contraceptive coverage seamlessly through an employer-based plan that you would find acceptable. >> your honor, possibly so, possibly not. if i could explain, we've not been offered that kind of alternative to consider. i think the more distance you put between the petitioner's on the one hand and the provision of the objectionable coverage to their employees on the other the less problematic it is. >> well, what might be acceptable, that puts enough distance? >> sure. easily enough distance is we filed the notice of objection. the government furthers its interest in the same way it furthers its interest with respect to all the other employees who don't get coverage from an employer-based plan. >> so your answer to justice kagan is wrong? basically you're saying even if all you do is an opt out, i raise my hand. i tell you that i'm a religious objector and they somehow, from this suit, know who your third
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party administrator is, they have a general law that requires now all arizza plans to tell them who their clients are, that if your insurer is involved in any way, you object? >> not necessarily, your honor. if there was an uber insurance policy where aetna was the company that the government picked to provide contraceptive coverage to all women in this country -- we happen to use aetna, i think we would be fine. >> paid for by the government? >> yes, your honor. the problem is -- >> justice kagan's question was, these college students want to get the same coverage that is available for all other condition conditions. >> as far as i'm understanding you're saying no, there has to be some other plan. as long as you connect the insurer that is insuring the religious organization, as long
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as that insurer is linked it's how these students will have to get something else that. >> justice ginsberg, as a general matter, i could certainly see the case that if they're seizing control of our plans, the plans that you are required to provide under a threat of penalty and using those plans as the vehicle to delivering the objectionable coverage to our employees solely as long as they're enrolled on those plans, which is what this does, i could certainly see why many clients would view this as a substantial burden on their religious beliefs. we then turn to less restrictive analysis. it's the same alternatives that it uses for everybody else. if all of those alternatives are fine with them, they at least
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need evidence to explain why they're not fine for us as well. >> thank you, counsel. >> may it please the court, petitioner's challenge in this case strikes precisely the same balance that congress sought when it enacted rifra. as it recognized in hobby lobby the accommodation seeks to respect religious liberty by exempting them to contraceptive requirement and to respect the interest of petitioner's employees -- >> is it fair for me to infer from the way you opened your remarks that you concede there is a substantial burden here? and the question then is what is a permissible accommodation? con dow concede there's a
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substantial burden? >> we do not, justice kennedy. we concede that the religious belief is sincere. we're not questioning the sincerity of the belief. we do not think the case this which an accommodation -- when the question is this. independent arrangements that the government makes with third parties to fill a regulatory gap created by granting an objection to generally applicable rule that that qualifies us. >> do you question their belief that they're complicit? >> no, we do not. >> well, then, it seems to me that that's a substantial burden. the next question is, whether there is an accommodation and whether that's the least restrictive. >> i'm happy to discuss substantial burden further i do want to go to what i think is the critical point on the question of how rifra scrutiny applies, if it does apply.
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and it's this. >> might be able to usen instead of the accommodation. i think there's a real problem with every single one of them in that every single one of them defeats purpose not just with respect to contraception, but all preventive services. the point here -- i think can you see this if you look at the relevant statutory provision, which you can find on page 4 a the health plan that covers people through their employer or the kind of coverage sold on exchanges shall include cost-free all of the preventive
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services. to ensure people who got health insurance would get the preventive services as part of their regular care from their regular doctor. through the insurance plan or third party administrator hired by the little sisters. in other words, it seems to me you can't say that what you're trying to do is make sure that everybody has this coverage. you want to make sure they have it through the program set up by the little sisters. that's what they object to. >> i understand, your honor. i'm happy to discuss financial burden further. in rifra scrutiny, the point i'm make heerg -- i do think this is critical, is that none of these options that the petitioners
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have identified going out on the exchange and buying a separate individual policy, contraceptive coverage only policy, title 10, medicare, medicaid, with respect to every one of them, you have to change the law to make them even eligible here. even if you could change the law, every single one of them creates the very problem that congress was trying to solve in this provision because it would require setting up -- >> the point is that it's the form in which the services are provided that you object to. not the fact that they be provide or not. that's not the question. the petitioners use the phrase hijacking. that's an accurate description of what the government wants to do. they want to use the mechanism that little sisters, other petitioners have set up to provide services because they want the coverage to be seamless.
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it's not whether or not women receive contraceptive services. petitioners do not object to the fact that people who work for them will have these services provided. they object to having them provided through the mechanism that they have set up, because they think that that is sinful. >> i understand that's their position. we think it doesn't constitute a substantial burden because the way that this is structured, the way congress designed from the perspective of the employer that this is provided through a separate program. >> but you're saying don't worry. religions, you're not complicit. that's what you're saying. >> nochlt we're saying judgment
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about complicity is up to you. on the scope of a recognizable burden, that that was true in the presmith case law before rifra and recognized in laying and -- >> less restrictive alternatives and is this the least restrictive alternative? >> as i said, your honor, if it applies, and this certainly is the least restrictive alternative -- >> let me mention one of them. is it possible for a woman who doesn't get contraceptive coverage under a grandfather plan or plan offered by a church or by a religious nonprofit to obtain a contraceptive only
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policy free of charge on one of the exchanges? why would that not be lease restrictive? >> it's not -- >> what type of a burden does that impose? is it because these exchanges are so unworkable? even with the help of a navigator, that a woman who wants to get free contraceptive coverage needs to sign up for that on the exchanges? >> no, your honor. >> she'll have two insurance cards, one from the employer and one from this plan, just as a lot of people have, one insurance card for medical services and one for prescriptions? >> yes, your honor. >> for dental or vision. >> where someone who has to get
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a separate policy -- >> we can talk about that in a minute. even in that hypotheticalical world, that's not effective. the whole point is you get this care from your regular doctor without any barriers, including any co-pay bayiers. consider this from the perspective of the woman employee. she has a health plan from her employer. she goes to her doctor, her regular doctor. she may have a medical condition that makes pregnancy a danger for her. she may be one of the women -- this is 15% of all prescribed contraceptions, to treat a medical condition or maybe she just wants the contraception that's appropriate for her. what happens under this -- under petitioner's regime, her regular doctor has to say to her, sorry, i can't help you.
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it's not just that he can't write the prescription, he can't council or educate -- >> why would that be? he would be paid under the contraceptive plan. >> it wouldn't be her regular doctor. she would have to go out and buy the separate plan, assuming there are insurance companies willing to sell them separate. >> don't you think they would be willing to in the case of those who provide services under self insured plans? >> the whole point here, perceived most small barriers, because the medical experiments said even when you're getting it as part of your regular coverage, work as an incentive that many fewer people see in contraceptive than they do otherwise. imposing a significantly greater
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barrier. >> what about the women in grandfathered plans? they offer no contraceptive coverage. what about them? >> grandfather plans, let's talk about them. >> there is no reason to think it's not going to continue to dro drop. >> in the long run, we're all dead but what happen notice interim? why did congress not require contraceptive coverage right away under the grandfather plans?
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to put in contraceptive coverage, preventive care coverage right away, just as they did for the 25-year-olds. but for these other things, you can continue to not provide t t that. >> it didn't impose an immediate requirement that every building be retro fitted so that access for the disabled be possible. what it said in that context is where it's feasible to do so, buildings shall retro fit and then new buildings shall have these access requirements. no one would say the government lacks a compelling interest in forcing americans with
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disabilities act because congress decide on a transitional program. congress decide on transition, understood that this number was going to drop dramatically over time. look at the declaration from the die cess of pittsburgh where they say we're sticking with our grandfather plan now because we don't want to trigger but it's costing us a fortune. it has to change. and with respect to contraception itself, your honor, the institute of medicine and its study so most of these women are going to have contraceptive coverage. they're not going to have it cost free. >> to come back to the point that you were making about the
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americans with disabilities act, that certainly is a good point for the americans with disabilities act. it can be very expensive to retro fit facilities to accommodate people with disabilities. are you saying that as it was done for coverage for 25-year-olds is xrabl to making act url changes? >> no. i'm saying unlike small employees, exempting 17 million people and does so permanently, this is a transitional device where over time you're going to get down to a situation where virtually nobody has -- is in the situation, being in a grandfathered plan and most of them are getting some contraceptive coverage anyway.
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>> the when does it have to act to accommodate and when doesn't it have to accommodate? some have suggested a line that if what your religious belief is asking the government to do is change its behavior with respect to others, then it can't be a substantial burden. we live in a society in which government has to function. you're a military objector. you can't tell the government o
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no, you can't draft someone else. you have to -- you can't spend your money on war. does this line make any sense to you? >> yes, your honor. >> i understand they're asking the government not to use regulatory power with third parties who don't have a religious objection and forcing a burden and burdening them to do other things. >> i think that is our position, your honor. i believe in trying to answer justice breyer's question where that come from, both recognize
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there is an objection. and the court said that it did not doubt that it would have a devastating affect on religious exercise. this is not just the case of the government dealing with a third party based on the petitioner's objection, but that the government is hijacking their insurance company, their third party administrator that they've hired to provide these services. i understand, yes, we can do what you want but you can't compel other people to take actions consistent with your religious beliefs. that's not what's going on here. little sisters' insurer or third party administrator with respect to other entities, that is being used by the government to provide these services. it's not just a third party that's being compelled. it's not just that they want
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third parties to take certain action. >> i would agree with you to this limited extent, mr. chief justice, that that's the context in which the government action occurs here, that the fact that there is this relationship between between petitioners and their employees is the occasion for government acting. but there's two points that are critical, i think, and go to why we shouldn't consider this to be a cognizable burden. and the first one is that what we are doing when we act here is trying to make an alternative arrangement that comes as close as we can to ensuring that the employees who may not share the petitioner's religious beliefs get what the law entitles them to while at the same time ensuring that the employer does not have any legal obligation to pay for the coverage, to provide the coverage in any way. i think the practical features of this are critical. the employer cannot be charged for the coverage.
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many instances provides a separate insurance cards to the employees for this part of the coverage. so in that respect it is an independent arrangement with third parties. and we -- >> they're not third parties. they're the insurance company that the petitioners have hired. it's the third party administrator that they've hired it seems to be that the balance is pretty clear. you want the coverage for contraceptive to be provided as you said seamlessly, in the one insurance package. that is the compelling government interest. and on the other side the question is whether or not people who have sincere religious objections in being
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co whether the government's compelling interest outweighs those sincere religious objections. is that a fair understanding of the case? >> i think it is one fair understanding of the case. we think -- >> is there a fairer one? >> let me put it this way, mr. chief justice, we would be content if the court were to conclude that, with respect to substantial burden it could assume a substantial burden but that the government has satisfied its burden under rfra to share a compelling interest and this is the least restrictive means -- >> you are giving up on the substantial burden. >> we're not giving up on it. it's a hard question and it's important to us and that's why we're fighting on it and not giving up. >> that's exactly what i found difficult. exact. and i read the brief. newborns, your brief said that. but will look to see it's not
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the kind of burden that counts for purposes of rfra or the oral or the first amendment. where the burden is of a certain kind, now what kind, and would you say, well, a kind where it arises out of the fact that we have a program that affects third parties in a big way. okay. we have the vietnamees church of the escapees in los angeles so poor they have to meet in the basement of a house. and the parking regulation stopped their congregation from coming even they want to meet only on sunday. think about that when we can put that easily into the context of third parties being hurt. so they can't practice their religion. so that one i can think of a lot of counter examples, but maybe you couple that with what we have in the tax cases.
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administrative, widespread, administrative rules the government has leeway where third parties, widespread, administrative. you see, i'm trying to get the thinking of the people who have thought about this, which are you and the others here on what's the best way to treat that burden. it's not hard to find in religious writing people when they go into society assume some burdens they're going to find totally -- >> we're not urging you to state a comprehensive standard here. >> well, then what do i do? >> i think we're urging a more incremental approach that recognizes that the principles articulated apply in a situation where the government is acting making arrangements with third parties in order to fill a regulatory gap that has been created by the government granting an exemption to a religious entity.
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>> could you entrust mr. clement's hypothetical about where the government would come in to an unoccupied room in the little sisters facility, it's not being used for anything, they don't interfere at all, they even pay rent. and they come in there and establish a title 10 clinic and distribute i distributiinining contraceptive that different and if so why? >> yes, we think that would trigger and be a substantial burden. the difference is in that situation you're actually on their premises. and in this situation, try to get back to what i was discussing with you, mr. chief justice, etna is a different entity from petitioners, blue cross is at different entities. the government makes arrangements with etna or blue cross and we make arrangements with other insurance companies and tpas to provide contraceptive coverage to third parties, the employees.
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>> but you say in your brief, you admit in your brief that at least in the case of the self-insured plan the notice -- the form or the notice becomes part of the plan. this is their health insurance plan established under arisa and you were putting a new objectionable element into the plan. isn't that correct? >> i don't think that's quite right, justice alito. i think there's been some confusion about that on the petitioner's side. there are two separate notices that operate here on the self-insured plan. the first is the notice that the employer provides to the government. that's an arisa plan document. there is a second document, a different document that the government then sends to the third party administrator. that document is the document that has a legal affect that creates the obligation on the third party administrator to
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provide the coverage. so is not the case that the document that comes to us isn't authorizing document. that's an exempting document. >> it's their plan. and you admit that you are putting something into their plan that they object to on religious grounds. so the difference between that and mr. clement's hypothetical is one involves something tangible, physical property and the other involves something that's intangible. that's the distinction. >> it's not that it's just like intangible property. the plan is really a set of rules. and the third party administrator becomes for purposes of administering this it becomes the plan administr e administrat administrator, the sole plan administrator for this portion of the plan. but even if one thought that there was -- that this did create a legal exhibition to find substantial burden for third party administrators, it's not true about situation with insurance companies. it's not true about church plans
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so it's whether switching from a third party administrator situation to an insurance company situation -- >> in the case of the insurance plan, isn't the insurance policy part of the plan? isn't the insurance policy the way in which the employer provides the benefits that are available? >> yes. and then the government makes an arrangement with the insurance company that operates in parallel to that plan. and so -- but it isn't through that plan, it's in parallel to that plan. so i think there's a significant difference there. >> what is the government's interest in requiring compliance by catholic charities of pittsburgh but totally exempting catholic charities of eerie? >> so this gets to the question of the church exemption, your honor. let me try to explain that. i think it's helpful to understand how it came about. the church initially hhs decided it would create an exemption for
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churches. and then there was some back and forth, regulatory proceedings, petitioners participated in that, created the exemption for churches. and then the religious nonprofits came in and said, well, the exemption ought to be extended to us. the government made a judgment that as a categorical manner it wasn't willing to extend the exemption to all religious nonprofits but instead would use this accommodation, which we thought was the best way that we could both protect their religious liberty and -- >> the difference as it's properly phrased in the briefing is the accommodation is the way in which the organizations comply with the mandate, with respect to catholic charities of eerie though they don't have to comply through the accommodation or anything. they are exempt. >> the reason we drew the line is because -- and i think professor's brief is quite instructive on this point. while no line is perfect, and i'm sure this line is imperfect. and there's going to be some
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overlap between entities that maybe you would think of look closer to being on one side of the line than the other. but the line is a valid line. and it's a valid line largely for the reasons justice kennedy identified earlier. because in that category of religious nonprofits maybe some entities like identified appear very close to entities that have an exemption. there are also going to be lots of oh entities whose connection to that core mission is much more -- >> you have to draw the line. could you apply the same requirements you apply to the little sisters, the church entity itself? >> so i think we could, your honor, yes. i think it would be an appropriate accommodation. and i think if we had the same compelling interests and we make the same means argument, but we've constrained ourselves. we've tried to be especially careful with houses of worship. and that's a normal thing governments do with respect to houses of worship. >> but you understand the argument. and we've said this in cases that if you have a lot of

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