Employment Division v. Smith - Oral Argument

Argument of William F. Gary

Chief Justice Rehnquist: Mr. Gary, you may proceed whenever you're ready.

Mr. Gary: Thank you, Mr. Chief Justice, and may it please the Court:

The Respondents in these cases were employed as drug counselors.

They were fired from their jobs because they deliberately violated their employer's rule that counselors must refrain from all use of dangerous drugs.

They applied for unemployment benefits from the Petitioner State of Oregon.

The state's employment agency disqualified them because their drug use was misconduct connected with their work.

The question presented is straightforward.

Do claimants have a constitutional right under the Free Exercise Clause to compel the state to pay them unemployment benefits solely because the criminal conduct that led to their firing, the use of peyote, was religiously motivated.

Unknown Speaker: Mr. Gary, there seems to be some dispute between you and your opponents as to whether this particular conduct was criminal under the laws of Oregon.

Mr. Gary: Yes, Mr. Chief Justice, the conduct is criminal under Oregon.

That's an issue that was presented for the first time in this Court, relying on one Court of Appeals decision, State v. Downes, which was factually quite dissimilar from this case.

It involved a heroin addict who was injected with heroin and never had any possession of the drug.

The Oregon law is very clear that possession means merely exerting control and, of course, the reason for the prohibition against possession of dangerous drugs is precisely to deter the use of the drug itself.

Unknown Speaker: Well, but, the statute prohibits possession, not use, is that right?

Mr. Gary: That's correct.

Unknown Speaker: And it is, I guess, theoretically possible that someone in a Native American church ceremony might have peyote buds administered to him rather than possessing it, is that right?

Mr. Gary: Your Honor, as I understand the practice, it would be difficult to have it administered without possessing, but, in any event, under Oregon law, the mere presence of an individual in the ceremony where the peyote is there would probably constitute sufficient possession of the drug to be criminal under Oregon law.

Mr. Smith, one of the claimants in this case, in fact, has made the argument that he needs to be exempted from the Oregon law because of his religious beliefs, because the conduct that he engaged in in this case and generally--

Unknown Speaker: Has the Oregon unemployment compensation law dealing with commission of crimes been satisfied in this case, either by the obtaining of a conviction of a felony or by the admission of it?

Mr. Gary: --No, and the Oregon Supreme Court correctly concluded that that was not the basis for disqualification of these claimants under state law.

The basis for disqualification of these claimants under state law was that they violated a policy of the employer--

Unknown Speaker: The employer's policy.

Mr. Gary: --Yes, and--

Unknown Speaker: Willful misconduct of an employer rule or requirement.

Mr. Gary: --That's correct.

Unknown Speaker: But the Oregon court went on apparently to find that the purpose of the Oregon unemployment compensation law did not include a purpose to enforce Oregon's criminal law, didn't it?

Mr. Gary: Your Honor,--

Unknown Speaker: It seems to have determined as a matter of state law that the purpose is to protect the fund and to take care of the unemployment compensation policies, not the Oregon criminal law policies.

Mr. Gary: --No.

The Supreme Court's conclusion was that it was bound by this Court's decision in Sherbert v. Verner to consider only the state's interest in the fiscal integrity of the fund.

That is not entirely clear from the opinion, but it is borne out by the--

Unknown Speaker: Well, it certainly isn't because the oregon court said, as I read its opinion, that its purpose, that the purpose of the Oregon law was to protect the fund.

Mr. Gary: --No.

The argument that was advanced in the Court of Appeals and in the Supreme Court revolved around the question of whether Sherbert v. Verner would permit the Court to look beyond the unemployment scheme itself at other interests.

Oregon's interest in controlling the use of... the conduct that is at issue here is manifested in a variety of different schemes, not only in the criminal law, but in education programs, rehabilitation programs, and also in the unemployment scheme itself.

In this case, the disqualification for job-related drug use was entirely consistent with the Employment Division's policy of disqualifying anyone who is found to engage in job-related drug use.

There is a policy that is included as an appendix to the Respondent's brief that was promulgated after this case was decided but is consistent with the practice that was in effect at this time, that demonstrates that any use of dangerous drugs in the job market, anything that is job-related, will be grounds for disqualification, and, so, I think it's clear by an examination of the briefs and taking the Court's conclusion with respect to what interest it examines in the context in which it was presented, that they were including that this Court had found them by Sherbert to look only at the fiscal interest.

Unknown Speaker: You can't derive that from the face and text of the opinion, can you?

Mr. Gary: No.

I concede that it is not entirely apparent from the face of the opinion, but I think that when you read the opinion in light of the arguments that were presented to the Court, it is clear.

It's also--

Unknown Speaker: What is... say it again.

You've lost me.

Mr. Gary: --The Oregon Court concluded that it was bound by this Court's decision in Sherbert to look only at the fiscal integrity of the fund as the state's interest, that it was prohibited to look at other compelling health and safety interests.

Unknown Speaker: So, you think that sentence, which reads

"the state's interest in denying unemployment benefits to a claimant discharged for religiously-motivated misconduct must be found in the unemployment compensation statutes, not in the criminal statutes. "

describing the use of peyote, you think that sentence is meant to be a statement of federal law rather than a statement of state law?

Mr. Gary: Yes.

Unknown Speaker: What they're saying is that under Sherbert, you have to find it within the state's--

Mr. Gary: Yes.

The Supreme Court's opinion in this case is merely a wooden application of the Sherbert rule, and they make a wrong step because they missed the threshold inquiry in Sherbert.

Sherbert proceeds from the assumption that the state has no interest in regulating the underlying conduct.

Because the state has no interest in regulating the underlying conduct in Sherbert, the state had no interest in regulating Mrs. Sherbert's Sunday worship, then the only interest that the Court... the state could assert was an interest other than interest in regulating that conduct.

Sherbert stands for the proposition that the state cannot burden a protected religious practice indirectly when it cannot burden it directly.

The vital distinction in this case between this case and Sherbert and Thomas and Hobbie is that here the state does have a vital health and safety interest in regulating the conduct that these claimants engaged in.

It has acted on that health and safety interest by making the conduct criminal.

If the conduct is criminal, the state cannot be required to provide benefits to these claimants because the claimants had no right to engage in the conduct in the first place.

Unknown Speaker: --Unless it's unconstitutional to render it criminal.

Mr. Gary: Precisely.

And it is not unconstitutional to render it criminal because of the nature of the state's health and safety interest.

Oregon, like all states, has determined that there is a compelling need to deal with the problems of drug abuse and no one in this Court disputes that.

The compelling nature of the state's interest in regulating drug use is conceded by the claimants.

They also concede that that compelling interest is furthered by the criminal prohibition.

Peyote is a Schedule 1 drug in Oregon.

It is... that means that it has determined that there is no safe use for it.

It cannot be used safely even under the care of a physician and that there is a great susceptibility to drug abuse.

Now, once we have borne the burden of demonstrating our compelling interest, the responsibility then is to demonstrate that that compelling interest would be undermined by granting an exemption to the criminal law in order to accommodate the religious practice at issue here.

In order to accommodate the religious practice would undermine the state's compelling interest in at least four different ways.

First, peyote is dangerous to the user and to those who come in contact with the user.

That's the very reason why the state has criminalized it in the first place.

It is also dangerous to the community which must xx its presence within it.

Peyote produces an hallucinogenic state similar to that produced by LSD.

All fifty states and the Federal Government categorize peyote has dangerous.

The dangers posed by peyote are indifferent to the motivations of the user, and the state is and should be no less concerned about the dangers posed to a religious user than to the dangers posed by the drug... by one who uses it for xx purposes or for personal enlightenment.

Once peyote is made lawful for some purposes, as these claimants contend they have a right to require the state to do, then the problem of controlling drug trafficking is significantly compounded.

Peyote only grows in the Southwestern United States, primarily Texas and in parts of Mexico.

It would be difficult to distinguish meaningfully between traffic for lawful purposes and traffic for unlawful purposes.

The simple fact is that once some people have a right to possess peyote, there is an increased risk the drug will fall into the hands of those who do not have that right.

There is a risk that others will commit crimes against persons who posses peyote lawfully in order to obtain it from them.

These claimants, like eighty-nine percent of the Native American population in Oregon, reside in urban areas, and that merely compounds the risk that the presence of the drug in the community will mean that it will fall into the hands of persons who cannot possess it--

The record in this case includes an affidavit from Stanley Smart, who is a road chief, who conducts the peyote ceremony.

He indicates that it is not uncommon for him to conduct as many as four peyote ceremonies a week.

That means that at any given time, Mr. Smart is in the possession of a large amount of peyote, and he makes himself thereby a target for those who would mean to obtain the drug from him for unlawful uses.

Moreover, to accommodate the religious drug use and to treat all religious beliefs--

Unknown Speaker: You can say the same thing about hospitals that have cocaine, I suppose.

Right?

I mean,--

Mr. Gary: --In Oregon, Your Honor, hospitals would not have cocaine because it's a Schedule 1 drug.

Unknown Speaker: --Well, pick some other narcotic that is generally illegal for traffic but is allowed to be used for some purposes.

Mr. Gary: Yes.

That's correct.

Unknown Speaker: Laudanum or whatever you want.

Mr. Gary: That's correct, and that problem is addressed because there is a conclusion that there are some safe uses for the drug and that it serves a purpose.

Unknown Speaker: Well, the purpose alleged here is a religious one.

Mr. Gary: That's correct.

But the religious use is the same use that the state has concluded is dangerous and I think demonstrably dangerous because of the nature of the hallucinogenic state that it produces, and the record in this case reflects that the purpose of the religious practice is to induce that hallucinogenic state.

And, so, the danger that everyone concedes the state has a compelling interest to address is directly implicated by the practice at issue here.

Unknown Speaker: Well, Mr. Gary, I'm still concerned because I'm not sure we even get to that question, unless we get over the initial hurdle that I asked you about.

And if I can return to that a minute, are you asking us to hold as a matter of federal law that Oregon must exercise its police powers through its unemployment compensation scheme?

Mr. Gary: No, Your Honor.

I am asking you to hold as a matter of federal law two things.

First, that where the state has a regulatory interest in the conduct that underlies the disqualification for unemployment benefits, it is appropriate for the Court to consider that interest in determining whether the disqualification is an impermissible burden on free exercise.

Unknown Speaker: Even when the Oregon Court, as a matter of state law, perhaps has refused to do it?

Mr. Gary: Well, if they refuse to do it as a matter of state law, then my burden is much heavier to carry.

My point is that they did not and at a minimum--

Unknown Speaker: But we don't know that for sure.

We don't know that.

Mr. Gary: --No.

I suspect that the record in this case, when you review it, will confirm my assertion that the determination by the Supreme Court of Oregon was a determination that they felt bound to make by virtue of this Court's prior decisions.

If you reach that conclusion, then, at a minimum, this case must be sent back to the Court for them to consider the application of our health and safety interest in the context of the regulatory scheme at issue.

But you don't even need to get to that point because our threshold point is that the criminal law of Oregon is relevant to the determination in a federal constitutional sense that the Supreme Court of Oregon simply swept under the rug, and that is our first argument, that because the conduct is prohibited as a matter of criminal law, assuming that that criminal prohibition is constitutional and we contend that it is, then these claimants had no free exercise right to engage in the conduct and Sherbert simply doesn't apply because Sherbert only controls when the state has no interest that it has acted upon in regulating the conduct itself.

When the state has regulated the conduct itself and, as in this case, has outright prohibited it, Sherbert doesn't apply.

You don't even get past that threshold holding by Justice Brennan in his opinion that you enter into the analysis that requires the state to prove a compelling state interest from withholding the benefits only because the state has no interest in regulating the conduct.

Unknown Speaker: Then, it seems to me you're suggesting that really the critical issue in the case that has to be decided is whether the conduct of using peyote in a Native American religious ceremony is constitutionally protected or not.

I think it's critical to your case that there is no constitutional protection for this use of peyote.

Mr. Gary: Yes.

It is critical to our case that there is no constitutional protection.

It is not absolutely necessary for the Court to decide that Oregon can criminalize the conduct because we think that the Court can and should evaluate the state's regulatory interest in the context of the question of whether benefits may be denied.

Unknown Speaker: You say if there really is no free exercise right out there, then we don't even reach the problems of Sherbert and those cases, is that right?

Mr. Gary: That's precisely correct.

And because of that--

Unknown Speaker: And do you read the Oregon Supreme Court's opinion as resting perhaps by implication on the proposition that the religious use of peyote cannot be punished or burdened by the state because of the federal free exercise clause?

Mr. Gary: --No, I don't.

I don't think the Supreme Court even considered that question, although it was advanced before them, and the reason that the Court's opinion should not be read to hold that Oregon cannot punish the conduct criminally is because it would require the Supreme Court to overrule a prior Court of Appeals decision in Oregon State v. Soto, which held precisely the opposite.

The only law in Oregon, judicial decision in Oregon, says that there is no constitutional right to an exemption from the application of the criminal law for religious use of peyote.

Unknown Speaker: So, the Supreme Court of Oregon rested its decision on the federal free exercise clause, but not on the ground that you could not criminalize peyote?

Mr. Gary: That's correct.

In essence, what the Oregon Supreme Court did was leap-frog over that threshold inquiry and then enter into a balancing test which was hopelessly infected by a misreading of this Court's decision in Sherbert.

Even then, they only considered the regulatory... I mean, the financial interests and they did not consider our regulatory interests.

Unknown Speaker: Specifically, you think they read Sherbert xx requiring that whatever state interest exists in order to overcome the claim for an exemption or an unwritten exemption, whatever state interest exists must be reflected in the compensation statutes themselves?

Mr. Gary: That's correct.

Unknown Speaker: Rather than just in some criminal law?

Mr. Gary: Yes, Your Honor.

I think that's the way they read Sherbert, and in order for them to read that, Sherbert, that way, they mistook this Court's conclusion in Sherbert reiterated in Thomas and Hobbie, that the state had no interest in regulating the conduct as a holding that the state's interest in regulating the conduct was irrelevant to the inquiry.

That was the constitutional mistake that the Oregon Supreme Court made.

Now,--

Unknown Speaker: Well, suppose there hadn't been any First Amendment issue at all, did the Oregon Supreme Court indicate that benefits should have in any event been granted in this case because the legality of the conduct was just irrelevant?

Mr. Gary: --No, Your Honor.

The Court specifically held that the benefits would be denied as a matter of state law, and if I could, I'd like to walk you through the Court's decision.

Unknown Speaker: And that was in the part of the opinion that dealt with Oregon law?

Mr. Gary: That's correct.

Unknown Speaker: The first part of the opinion?

Mr. Gary: That's correct.

Unknown Speaker: So that the second part of the opinion where the Court says that the unemployment benefit, the Board, the Division concedes that the commission of an illegal act does not in itself disqualify, if that were true, why, you would think that they wouldn't have needed to get to any federal issue.

Mr. Gary: Yes.

I think you're right, and that's why it's a little astonishing that the Court takes our concession in the part of our brief where we are talking about the state law issue of whether these people are disqualified and then translates that into our... the part of our brief that dealt with the impact of the criminal prohibition on the federal constitutional issue, and it's a little bit baffling, but it's very clear from our briefs that have consistently argued that the criminal conduct was not the basis for the disqualification under Oregon law, but that the fact that the conduct is criminal is vital to the Court's assessment of the free exercise clause.

Unknown Speaker: Because they did in the end rest their judgment on the free exercise clause, did they not?

Mr. Gary: Yes.

What the Court did was begin as the Oregon Court always does by looking at its own statutes, included that under Oregon law, because these claimants engaged in job-related drug use, that actively undermined their employer's interests, which in this case happens to coincide with the state's interests, that constituted misconduct in connection with the work and like anyone who engages in job-related drug use, these claimants are disqualified under state law.

They then turn to the Oregon Constitution and concluded that the Oregon religion clauses did not compel the state to provide benefits in any event and they turned specifically then to this Court's decision in Sherbert v. Verner and that's where they made the wrong turn.

Unknown Speaker: Well, they said that aside from any federal law, this claimant would have lost, should have lost under state law.

Mr. Gary: Correct.

Unknown Speaker: But only because... not because the conduct was criminal, but because it was wholly incompatible with the employer's business.

Right?

That's the way you put it a minute ago.

Mr. Gary: Yes.

The interest that the Supreme Court was applying is the interest that the state has in deterring job-related drug use and there are a wide variety of reasons.

Unknown Speaker: Well, let me put it another way.

Suppose that in... when the Court was dealing with Oregon law, it had been found that what the employee did was not incompatible with her job or his job, then the claimant would not have been disqualified just because the conduct was criminal.

Right?

Mr. Gary: That's correct.

In Oregon, one is disqualified only for job-related drug use and there's a very good reason for that.

The Federal Unemployment Tax Act requires that in order for states to have qualified programs, they can only disqualify persons for job-related misconduct.

Therefore, it is completely irrelevant under the Federal Unemployment Tax Act and in order for Oregon to have a qualified program, we cannot disqualify persons for off-the-job drug use.

But it is, nevertheless, very clear that if you're going to apply the state's regulatory interest in the context of the unemployment scheme, it plays out in exactly the same way as when you look at the state's regulatory interest and consider whether these claimants are entitled to an exemption from the criminal law.

The criminal prohibition is just one important application of the State of Oregon's public policy to curb drug abuse.

As I said earlier, the same policy is furthered and reflected in other programs and is reflected in the unemployment compensation scheme.

For example, a policy memorandum dealing with employer drug testing that is attached to the Respondent's xx states,

"If an employee is discharged for failing a drug test and it is demonstrated that the employee's job performance xx impaired by drugs, it is a discharge for misconduct. "

The Federal Unemployment Tax Act limits our disqualification only to job-related misconduct, but under Oregon law, all job-related drug use is disqualified.

All of the health and safety concerns that drive our criminal prohibition are further served by a disqualification for misconduct connected with the work.

Job-related... and, really, the Respondents in this case can't contest that because the very heart of their claim is that the disqualification, burdens, their practice of drug case and since our purpose is to burden their practice of drug use, demonstrates that the unemployment compensation scheme serves that purpose, and the same reasons that we cannot give an exemption to their use from the criminal law would apply in analyzing whether they should be exempted from the disqualification from the unemployment law.

In fact, when drug use spills into the work place, the hazards of that use are even greater.

In this case, we were talking about drug counselors who, to serve the interests of their clients by acting as role models, that suggested that perhaps if you use drugs responsibly, you could continue to use drugs, but it might just as well have been someone manufacturing automobiles or flying airplanes.

Drug use in the work place is a very serious concern.

It's real, immediate and compelling, and the same reasons that we can't grant the exemption would apply in the context of the unemployment scheme itself.

Unknown Speaker: Well, suppose this employee had worked for Harry and David and just used peyote in a religious ceremony and was fired because of that and the employee applied for unemployment compensation, he would have gotten that.

Mr. Gary: If the conduct was not job-related, they would get unemployment benefits, but the reason for that, Your Honor, is because, as I indicated, Federal Unemployment Tax Act limits our inquiry to job-related conduct.

Unknown Speaker: All right.

But if the unemployment board, nevertheless, denied compensation, it would have been reversed in the Supreme Court?

Mr. Gary: Sherbert v. Verner.

It would have been under state law.

You're right.

Unknown Speaker: Under state law.

Mr. Gary: It would have been as a matter of state law because the misconduct must be job-related in order for anyone to be disqualified.

Unknown Speaker: Well, isn't that essentially what happened in the... here in this case, when the Court was talking about Oregon law?

The only reason that compensation was denied was because the conduct was job-related.

Mr. Gary: Yes.

And the Oregon Supreme Court specifically so found.

Unknown Speaker: And the fact it was criminal had nothing we do with it.

Mr. Gary: Yes, but even the rule that is cited in the Respondent's brief relating to disqualification--

Unknown Speaker: Well, how can you really argue that although criminal conduct is not enough to deny compensation for, it, nevertheless, can be relied on to overcome a free exercise claim?

Mr. Gary: --For two reasons.

First, because if the conduct is criminal, the claimants have no right to engage in the conduct and, therefore, they can't assert a free exercise claim.

Second, because the state has a regulatory interest that must be folded into the calculation, even if you look at whether these people should have a constitutional exemption from the application of the state law-based disqualification.

Unknown Speaker: I'm not sure I understand why that's a second reason.

Isn't the regulatory interest the same as the interest in enforcing the criminal law?

Mr. Gary: Yes, Your Honor.

It's the same interest.

The analysis is just slightly different depending on whether you stop the analysis at the beginning or go into the second--

Unknown Speaker: If you had a statutory exemption from the prohibition on drug use for this particular... for religious use of peyote, then it seems to me one could argue that the conduct was constitutionally protected and the regulatory interest would fall by the way side.

If there were an exemption from the state criminal law.

Mr. Gary: --If there were an exemption from the state criminal law, then I think you're correct.

Oregon, by the way, as a matter of constitutional law, I think, is foreclosed from granting that kind of an exemption from its criminal law, unless it is compelled by the free exercise clause.

I'll reserve the balance of my time.

Thank you.

Argument of Suanne Lovendahl

Chief Justice Rehnquist: Thank you, Mr. Gary.

We'll hear now from you, Ms. Lovendahl.

Mr. Lovendahl: Thank you, Mr. Chief Justice, and may it please the Court:

Essentially, the Attorney General is arguing that it disagrees with the decision of state law on a state law issue, which has been our position essentially all along.

If you remove the alleged criminality of the Respondent's conduct, these cases are no different from the situations presented by the patterns in Sherbert, Thomas and Hobbie.

Unknown Speaker: Ms. Lovendahl, you say that's been your position all along.

Your brief in opposition to the Petition for Certiorari doesn't mention at all that this case was decided on the ground of state law, and I would have thought that if that language is to be read the way you assert, now assert it is to be read, you would have said that.

Mr. Lovendahl: Well, in my brief in opposition, I said that the state law correctly applied to principles in the context of the state... the state court applied them in the context of the state law.

Unknown Speaker: You had two points.

Reason for denying the writ: (1) the federal question raised by Petitioner has been clearly settled, (2) the decision of the Oregon Supreme Court is consistent with applicable decisions of this Court.

One would have expected (3) this case presents nothing but a question of state law.

Mr. Lovendahl: Well,--

Unknown Speaker: It's just not there.

Mr. Lovendahl: --I was responding to the way that they had done their issues, but within that response was the assumption that that was a state law issue.

Unknown Speaker: Well, I would have thought that the reason they did their issues that way is that the sentence you're relying upon, to wit the state's interest in denying employment benefits must be found in the unemployment compensation statutes, that is two sentences away from the lead sentence of the paragraph, which reads:

"Nor is the state's interest in this case any more over-riding or compelling interest than in Sherbert and Thomas. "

and I read that... the later sentence as the state did here, to be referring to what is necessary for the state's interest to be considered over-riding under Sherbert and Thomas, and the Court is saying in order to be so, it has to be found in the unemployment compensation statutes, and it seems to me that this whole case has been argued all the way through right up to here on that assumption, and all of a sudden, in your reply brief, we find that this case has just been decided under state law.

Had we known that, we wouldn't have granted cert in the case.

Mr. Lovendahl: The decision, though, that the interest had to be found on the state unemployment compensation statutes was a decision, they were interpreting the state law.

Unknown Speaker: Yes, but the... I thought your argument was that given that interpretation of state law, there's just no really substantial federal question because it's so clear that Sherbert governs it.

Mr. Lovendahl: Correct.

Unknown Speaker: But that's still a federal... that still leaves the decision below resting on the federal ground.

Mr. Lovendahl: It rests on a federal ground in that it was controlled by Sherbert and Thomas.

Hobbie had not been decided.

Unknown Speaker: So, you really don't say that the case went off on a state ground?

Mr. Lovendahl: No.

I mean that there's not a federal distinction between this case and Sherbert, Thomas and Hobbie.

Unknown Speaker: Yes, yes.

Mr. Lovendahl: Rather than it was not decided--

Unknown Speaker: Given that interpretation of the state law, the federal issue is perfectly clear.

Mr. Lovendahl: --Exactly.

Those cases are controlling.

If you accept the Attorney General Office's argument here, the effect ultimately is to present, actually present establishment law problem.

They say that there is an establishment law problem and I say that if these cases are reversed, you're presenting an establishment law problem because no other person who was in this situation would have been denied benefits on the grounds of illegality.

So, they are really trying to get the Court to consider illegality in the context that no other person would be penalized on that specific basis.

Unknown Speaker: Well, I guess they say they would have been denied benefits on the grounds of employee misconduct.

Mr. Lovendahl: Right.

There is a work connection here, but it was the same situation as Sherbert, Thomas and Hobbie.

There was a work connection in all of those cases.

The test isn't whether the person's getting a special benefit because of their religion, but are they being differently than other people who are forced... they are being forced to choose between their religion and their job.

Are they being treated differently from other individuals in the state who are involuntarily unemployed and eligible for that benefit program.

In Sherbert and Thomas and Hobbie, the people were refusing to do work and nobody else who had been in that situation, nobody who refused to do their job all together would have gotten benefits.

Nobody who refused to work on Sunday would have gotten benefits, but other religions were not put to that choice.

In this case, though, if you do compare fact for fact, in fact, it is not true, as the Attorney General's Office represents, that all job-related drug use is disqualified.

I cited two cases in my brief that are acknowledgement of the recognition that alcoholism and drug use are considered... this was an employer who was a rehabilitation employer and it was their philosophy that any use of drugs or alcohol by a recovering person was an illness.

So, in this situation, if the people were drug and alcohol counselors, if they used drugs off duty and it was a product of a drug addiction or if they used wine in a church ceremony, that would be considered relapse, and as long as the individuals were able to work and do other jobs, they would, in fact, be eligible for benefits.

So, these people would really be disadvantaged by applying a test requested by the Attorney General's Office rather than the reverse in this case.

The most disturbing suggestion that the state makes in this case is that they can extinguish a free exercise guarantee simply by labeling conduct as criminal.

I think it's been obvious for quite some time that the established test is that under the Constitution you have a right--

Unknown Speaker: May I ask you right there on that question, of course, it's more than labelling it, I suppose they do have a statute that makes it a crime to use certain drugs.

Is it your position that it's constitutionally impermissible to prohibit the religious use of peyote?

Mr. Lovendahl: --Well, I think that that balancing test has to be applied.

You can't ignore the balancing test.

Unknown Speaker: But if you apply the balancing test, do you end up with... in order to prevail, is it not correct that you must submit that your clients had a constitutional right to make... to use peyote in their religious ceremonies, that the state could not interfere with that right?

Mr. Lovendahl: Well, our position is that if you xx to look at the statute at issue that's imposing the burden.

In the unemployment context scheme, there was... the legality of the contact was really irrelevant.

So, it wasn't xx that was decided before.

Unknown Speaker: Well, it's relevant if you say that the state may enforce a neutral law that prohibits all drug use xx that that is religiously motivated.

Then, the law is relevant to the ultimate question of whether you have... your clients had a constitutional right to engage in this conduct.

Mr. Lovendahl: Right.

It's a very circular type of situation that we're in and that is presented by the state in this case, but the fact is that under the Constitution, you have a free exercise right and it can only be overcome if the state can show a compelling interest.

Now, in each individual fact situation, the fact is that under the unemployment statutes, this person is put to the same choice as the person who is under their religion.

They have to choose between the job requirement and adhering to their faith.

In a criminal situation,--

Unknown Speaker: Yes, but the difference that I don't think you're really confronting is the fact that there's really no dispute that in the Sherbert and Hobbie and Thomas cases, the conduct that was... that caused the discharge was conduct that they had a constitutional right to engage in.

There's an issue, however, in this case as to whether your clients had a constitutional right to engage in the conduct that led to their discharge.

Mr. Lovendahl: --Yes, and in--

Unknown Speaker: And don't you have to convince us that they did have a constitutional right in order to prevail?

Mr. Lovendahl: --No, I don't think we do, because I feel that that's the problem with their argument, is that they can't boot strap another statute.

The fact is that he has a free exercise right--

Unknown Speaker: If you don't have such a federally protected right, I don't see that there's even a federal question in the case.

Mr. Lovendahl: --Well, there would be if that issue could be decided, but under the state unemployment statute, the interest to be served by that statute is to protect involuntarily unemployed workers, and I think the question in this case really is would that interest be thwarted by giving unemployment benefits--

Unknown Speaker: Yes, but the Court ruled that under Oregon law, there was... these benefits were properly denied, and the claim then was, well, yes, but the first... the free exercise clause forbids you to deny benefits in this case, even though to every other employee that engaged in misconduct, benefits would be denied.

So, you have to get around, it seems to me, to saying that there is a free exercise clause right to engage in criminal conduct.

Mr. Lovendahl: --Well, the fact is that other people who want to argue this--

Unknown Speaker: Well, let me just ask you, do you think there is a free exercise clause right to engage in criminal conduct?

Mr. Lovendahl: --Well, it's our position that this particular religious practice is protected, and we've argued that in our brief.

Unknown Speaker: Well, I think you have to convince us of that.

Have you got any cases like that, that say that there's a free exercise clause right to engage in... to use drugs?

Mr. Lovendahl: Well, not to use drugs, but in terms of whether the conduct is criminal or not, in Wisconsin v. Yoder, the Court made clear that you still have to go through the entire balancing test.

Obviously, where conduct is made criminal, the most extreme burden that you could have and the state has an obligation to show--

Unknown Speaker: I read the Oregon Supreme Court's opinion as reciting without any criticism the fact that the Oregon Court of Appeals had held that religious use of peyote are not exempt from criminal sanctions in Oregon.

I'm just reading the footnote.

Mr. Lovendahl: --Right.

Unknown Speaker: And they don't seem to take any exception.

The State v. Soto.

Mr. Lovendahl: Well, because that wasn't the issue before them and that was why they didn't address it.

That was one of the things that--

Unknown Speaker: But is it part of your submission here that this wasn't criminal conduct under Oregon law at all?

I don't see... I don't know whether--

Mr. Lovendahl: --Well, our position is that there would be no distinction between this case at all, if the conduct... if it was clear that this conduct was constitutionally protected.

That's an issue that's never clearly been decided and since, in this case, the unemployment compensation statutes are the statute being applied,--

Unknown Speaker: --I understand that argument, but are you asking us to affirm on another ground, namely that this conduct wasn't criminal under Oregon law anyway?

Mr. Lovendahl: --Well, we don't really feel that that's an issue that has to be decided in this case.

Unknown Speaker: All right.

Then, you aren't asking us.

Mr. Lovendahl: No.

Unknown Speaker: All right.

The Attorney General... the Solicitor General says that it was a policy established by regulation of the Employment Division that drug-related... that job-related drug use would be automatically disqualified.

You don't quarrel with that proposition, do you?

Mr. Lovendahl: Job-related drug use?

That's correct.

Unknown Speaker: Yes.

And, so, why do you say then that this policy or whatever was not found in the unemployment compensation statute?

Mr. Lovendahl: Well, let me correct myself to your last question, though.

Job-related drug use would be protected if it was a product of an illness.

In other words, not willful, which I think is the same situation when you're talking about a religious impulse, and, so, that's why we feel that they're in the same position in Sherbert, Thomas and Hobbie.

Unknown Speaker: That they didn't smoke the stuff or whatever you do with it voluntarily?

Mr. Lovendahl: It was in response to a dictate of their religion.

I think that that's the idea behind Sherbert, Thomas and Hobbie, is that you're responding to an authority higher than your employer, but not--

Unknown Speaker: Yes, but in Sherbert and Thomas, there was no question but what the conduct engaged in was perfectly lawful.

Mr. Lovendahl: --That's correct, and that's the question in this case, is does that have an effect or not, and our position is that you look to the state law and if, under the state law, that's not an interest to be served by that particular legislation, then it has no bearing.

Unknown Speaker: Is that a question of federal law or state law whether you look to the state law?

I guess you're coming back to that sentence, and I hate to be dense, but I still don't understand what you're asserting that the sentence means.

I think you're saying that the Court was saying that the state's interest... that for purposes of Sherbert and Thomas, as a matter of state law, the state's interest apart from the interest found in the unemployment compensation statute is irrelevant.

Right?

For purposes of Sherbert and Thomas, as a matter of state law, any interest not in the unemployment compensation statute is irrelevant.

Is that a question of state law?

Mr. Lovendahl: Yeah.

Unknown Speaker: Can you say as a matter of state law, it's irrelevant for Sherbert and Thomas or is that a question of federal law?

Mr. Lovendahl: Well, what they did was they were deciding how to consider the legality and decided that it was irrelevant and then went on and did their balancing, but under state law, it wasn't anything that could be considered because the legality wasn't relevant, and--

Unknown Speaker: What do you mean under state law?

But he's not discussing state law.

He's discussing Sherbert and Thomas.

Mr. Lovendahl: --My reading of that portion of the opinion was that they looked to the legality before they did the balancing test to see whether it should be considered or not.

I think that they rejected the Attorney General's argument because the purpose of the unemployment statute was not to enforce the state criminal code.

Admittedly, that's a statute that imposes a burden, but the unemployment compensation, the burden imposed by that statute, was what the Court was trying to determine.

Unknown Speaker: Determine the state law issue and it was conceded that it was a violation under state law.

What was contended for was a requisite exception under federal law, under Sherbert and Thomas.

Mr. Lovendahl: The state law portion of it was that they interpreted their Constitution more restrictively than the federal Constitution has determined.

Under the way that they interpreted the Oregon Constitution, Sherbert, Thomas and Hobbie would not have gotten benefits.

There has been one case applying these cases since then involving a Jehovah's Witness and they reached the same result, that they were not entitled to benefits under the state Constitution, but they were entitled to them under the federal Constitution.

So, that's not the state law decision that we're interested in.

We're concerned about how you consider criminality under the unemployment statute.

It was a separate determination that they had made.

In Wisconsin v. Yoder, the Court stated that only those interests of the highest order and those not otherwise served can over-balance claims to the free exercise of religion, and in this case, the state has a set of statutes designed to serve its interests in law enforcement and the state legislature made it clear that the unemployment compensation statute is not to serve that purpose.

There might be some instances where that's not the case, but accepting their theory in this situation, the fact is that the individuals would not... would be discriminated against rather than favored.

The Division does pay benefits to people who engage in criminal law, and the only difference here is that the people are work-connected.

They're claiming that they're getting a special protection under the free exercise clause that they wouldn't have gotten but for their religion, but the fact is that the reason we have a free exercise law is to balance the rights that the majority has through legislation.

If this was a majority religion in this country, this practice would never be illegal, and that's where that balance comes in, and why it's important to protect this type of conduct.

We do feel, though, that if the state is obligated somehow under the federal Constitution to consider the status of the criminal statutes, that, first, it is extremely unclear that Mr. Smith and Mr. Black could have been charged with any crime.

They admitted that they used peyote in the ceremony.

Use itself is not illegal.

They never admitted that they possessed it or exercised dominion and control over it.

From the Native American Church amicus brief, it is clear that it's the road man who exercises dominion and control and that the people who attend the ceremony have no more control than an individual who's at a christian ceremony when wine is used.

It is essentially the same situation.

Unknown Speaker: Well, is it necessary for the state's case in order to refute the necessity... the constitutional necessity for an exception to their unemployment scheme, is it necessary for them to show that this particular conduct would have been unconstitutional or isn't it enough to show that there is a general state policy against the use of drugs?

I mean, the policy against the possession of it is obviously directed to prevent the use of it, and wouldn't it be enough just to show a general policy whether the state showed that this particular individual was criminally in violation or not?

Mr. Lovendahl: Well, in Wisconsin v. Yoder, this Court found that the interest should be weighed where the state's interest in enforcing that law against this particular religious group.

Otherwise, the state's interest would always outweigh the interest of the division.

Unknown Speaker: I'm not quarreling about the weighing argument.

I'm quarreling about your assertion that there's nothing to weigh because this individual had not violated the criminal law.

You're trying to preclude the weighing.

Mr. Lovendahl: Right.

That would make it a different case if the Court could find that, and that is our position, that they didn't engage in criminal conduct and they couldn't be charged.

The Attorney General's Office disputes that.

That was never an issue that was ruled on by the Court.

Unknown Speaker: I'm saying I don't see how that's relevant.

It clearly is a state policy, expressed in its criminal laws, against the use of peyote.

Mr. Lovendahl: Right.

Unknown Speaker: Against the possession.

The criminal law addresses possession, but the objective of it is to prevent the use, isn't that so?

Mr. Lovendahl: Right.

But if these people are exercising their free religious exercise right, it's not illegal under federal law, their particular conduct, I don't see how the state can consistently with the Constitution impose a penalty against them on the basis of their activity as, in fact, illegal.

It's not... it's sort of a false issue, you know, I agree, but in terms of whether the church practice itself is exempted, the Federal Government and every state that has considered this particular issue has found this to be a safe practice.

In the Attorney General's reply brief, they conceded that this particular church has a long history of safe use.

The lack of enforcement of the statutes against Native America Church members--

Unknown Speaker: Even so, I take it that the Oregon Supreme Court essentially held that whether the conduct is criminal is irrelevant to determining the free exercise clause, and I guess that that's your submission, too.

Mr. Lovendahl: --Right.

Unknown Speaker: And if we disagree with you, I would think we could disagree with the Oregon Supreme Court's conclusion that it is irrelevant and send it back.

They may end up saying that, well, it's... so it's relevant, but in this case, there's no criminal conduct.

Mr. Lovendahl: Right.

The problem, of course, is that it's not a decision that the Court could determine... could really consider under its opinion of the law in the context of an unemployment proceeding since it decided that it was irrelevant, and I do feel that that was the state court's decision.

The Attorney General's Office did present the argument that it was... there was no protected constitutional right and they did reject it.

In the course of rejecting it, they... both the Court of Appeals and the Oregon Supreme Court referred to the ambiguity about whether there was, in fact, some constitutional protection and suggested that their state decision in Soto v. State would be overruled if it came before them again.

They noted that it appeared to be a relic of a prior time.

It was based on a statute that was repealed as well.

Unknown Speaker: May I ask another question?

Has the Oregon Supreme Court ever addressed the question of whether this conduct is protected under the Oregon Constitution?

Mr. Lovendahl: The Native American Church practice conduct?

Unknown Speaker: Yes.

The use of peyote in their religious ceremony.

Has that ever come up, do you know?

Mr. Lovendahl: Well, in the Soto case, I believe that was disposed of under the federal Constitution.

What they basically decided was that it was a positive legislative enactment and didn't go into any kind of balancing test at all.

An individual who is--

Unknown Speaker: You have to help me a little more.

The Soto case held what?

Mr. Lovendahl: --That the individual could not even raise the defense.

Unknown Speaker: The what?

Mr. Lovendahl: The individual who was charged with the possession could not even raise the religious freedom defense.

So, in the dissent, they--

Unknown Speaker: They implicitly held that it was not constitutionally protected.

Mr. Lovendahl: --Right.

That there was no protection whatsoever.

Well, the person couldn't even raise the defense.

They didn't get to the balancing test.

Unknown Speaker: But the reason they couldn't... was it a procedural reason or because there's no constitutional protection for the use of peyote?

Mr. Lovendahl: They just considered that the fact that it was made criminal under state law was sufficient to over-ride the individual's claim.

Unknown Speaker: As regard to state law.

Mr. Lovendahl: Yeah, and there was a strongly worded dissent in that case, essentially to the effect that the Court was abdicating its responsibility as final arbiter of constitutional rights.

In any event, in terms of the constitutionality of the practice, the state has a history of lack of enforcement, So, it doesn't appear that they have an overwhelming interest in over-riding or disposing of this particular church practice, and the only concern that they have is that flood gates will essentially be opened.

This isn't a situation, though, where many other churches meet the test of safety that the history of the Native American Church has demonstrated.

This is an ancient religion that's been going on before the practice was made criminal.

The classic kind of situation that was presented in Wisconsin v. Yoder, with the Amish.

Their practices were not illegal before enactment of the state criminal code.

In fact, this church practice serves the purpose that the criminal law statutes were intended to serve.

It's actually a treatment program for individuals who have had difficulty with problems of alcoholism and a number of alcohol rehabilitation treatment centers use peyote in Native American Church ceremonies as a way of helping Native Americans.

It's an extremely important cultural-specific treatment plan that would actually compromise the interest of the state in helping people overcome, particularly Native Americans to overcome, the problems of drug addiction and substance abuse.

The reasons that the state has given are purely speculative and, in essence, they have admitted that they do not have a strong interest in terminating this particular religious practice.

There have been a number of state court xx that have had the benefit of the full evidentiary record on this particular issue, and they have made it clear that this is something that should be constitutionally protected.

The effect of a decision finding the criminality of these individuals' conduct to distinguish this case from Sherbert, Thomas and Hobbie by implication suggests that there is no constitutional protection here, and I submit that that would indicate a discrimination against this religious practice that would effectively cast a shadow over this entire church.

I don't see any reason why these people, this situation presented here is different from a situation in Sherbert, Thomas and Hobbie, and I feel that the same results should obtain.

Thank you.

Rebuttal of William F. Gary

Chief Justice Rehnquist: Thank you, Ms. Lovendahl.

Mr. Gary, you have one minute remaining.

Mr. Gary: Thank you.

Quickly to answer your question, Justice Stevens, the Oregon Supreme Court held in this case that a denial of benefits did not violate the Oregon Constitution.

They have not specifically addressed the question that you asked under the Oregon Constitution, but in Oregon, it is very clear under their other decisions that that would violate what is our equivalent of the establishment clause because, to borrow a phrase from Justice Scalia, in Oregon, a pinkie on the scale is as bad as a thumb and that would favor the religious practice, unless it is required by the free exercise clause.

Claimants do not get unemployment benefits under state law.

That's settled.

These claimants cannot prevail unless you conclude that they had a right to engage in the conduct that they engaged in.

If the conduct is criminal, they had no right to engage in the conduct.

This Court has never held that a state must accommodate prohibited conduct.

Therefore, the criminal law issue must be addressed as a matter of federal law in order for the claimants to prevail, and at a minimum, this case must be sent back to the Oregon Supreme Court with instructions to do so.

Thank you.

Chief Justice Rehnquist: Thank you, Mr. Gary.

The case is submitted,--