gentlemen. thank you all for coming this morning. my name is kenneth feinberg. and i have been assigned the task of designing and administering the gm ignition compensation claims resolution protocol. claims resolution protocol, the gm ignition switch compensation program. i want to spend a few minutes this morning an overview of the program, how we got where we are. secondly, i want to summarize the eligibility criteria for

claimants who can file a claim. third, i want to explain a bit the dollars and the compensation that is available under the program. we started drafting is protocol about two months ago at initially gm's request. we have reached out to a wide variety of individuals and institutions to get as much information as we could about what ought to be in this program. i thank general motors for their total cooperation in establishing this program, they are funding it, and they are funding it without any tap on the aggregate amount of money that will be available. gm basically has said whatever it costs to pay all eligible claims under the protocol, they will pay it. there is no ceiling on the aggregate dollars. also, gm has said under this program that anybody who already settled their claim with general motors before they knew about this cover-up or his ignition switch problem,

meyrick up the release they signed and come back into this program to get additional compensation. so i've read that there are some individuals who already settled and gave up their right to sue in return for compensation. they may now ignore that release and come into this program. they can receive additional compensation. the program will begin to receive claims on august 1 of this year, one month from now. i want to thank the deputy administrator, my colleague for over 35 years, camille byros here in the front row. she has worked with me on virtually every one of these compensation programs over the years and she will be here after the press conference to answer additional questions that individual media may have.

the program will commence on august 1. it will begin to receive claims between now and august 1. we will have the claim forms, the frequently asked questions, the website, we are translating the claim forms into french, canadian, and spanish. it will be august 1 when we begin to accept claims. all claims must be postmarked no later than december 31, the end of this year. for accidents, that occurred any time up to december 31, the gm bankruptcy is no bar to iling a claim. if an individual was injured or killed which is unfortunate, and one of these accidents, before or after the bankruptcy, it doesn't matter the date of the accident.

the bankruptcy will not be a barrier of any type to the filing of a claim. we will obviously have to stick around into 2015 because people will file claims, some of them late in the year, and we will need time to process the claims during 2015. if you file a claim with the fund a few points should be made about the overall program. first, the program is entirely voluntary. nobody is required to file a claim. this is a voluntary program. second, once your claim is submitted, and we deem it substantially complete, that is, it has the documents necessary, we will process that claim.

if it is a simple claim, we will process it within 90 days to payment. if it's a more complicated claim, which i will explain in a bit, we will process that claim with them 180 days from the time it is substantially complete. we will work as fast as we can to get compensation, voluntarily submitted claims, out the door to eligible claimants. a few other points about the program -- any contributory negligence of the driver, intoxication, speeding, texting on a cell phone, etc, are irrelevant nder this program. this is about general motors

and ignition switches. we have no interest in evaluating any alleged contributory negligence on the part of the driver. it is totally irrelevant. we have no interest. this program is aimed at compensation for defective switches, not anything about the driver. who is eligible under this program? let's discuss eligibility. the following individuals can file under this program -- the driver, any passengers in the utomobile, any pedestrian, any occupant of the second vehicle nvolved in the accident -- all eligible to file a claim. we are not limiting this program to just drivers of a particular vehicle.

as i said, contributory negligence is not a factor here at all. ow, eligibility -- there are a couple prerequisites to filing a claim. first, as the protocol spells out on ages two and three, for a claim to be eligible, it must involve one of the model make in your automobiles listed in the protocol. if the automobile that was driven and was involved in an accident is not listed in the protocol that you have, the laimant is ineligible. don't bother filing it. i am confident i will get many claims involving automobiles

that are not listed. i will get claims from mercedes and jaguars and cadillacs. build it and they will come. you will get a great many claims. the only automobiles that are eligible to be considered are the automobiles listed in this protocol. if that automobile, that model, that year, is an automobile involved in an accident, that automobile is eligible to be considered for consideration. if the airbag deployed in the accident, you are ineligible. airbag deployment, seatbelt pretension deployment means the power is on the automobile -- ineligible. it could not have been the ignition switch. i have not seen a claim yet eligible, working my way through potential claims --

i have seen many claims where the airbag did not deploy or we don't know that it deployed, fine, eligible. f we know the airbag deployed, the power is on, may have been a horrible accident but it's not the ignition switch. it must be an eligible vehicle with non-airbag deployment or uncertainty as to whether it deployed and those are the major eligibility to requisites --prerequisites to filing a claim. non-deployment, eligible vehicle, driver, passengers, pedestrians, occupants of other vehicles -- file a claim. we will evaluate the claim. we will evaluate it quickly. individuals who have suffered terribly during this whole experience deserve prompt treatment of their claim.

we will do that. any individual claimant who lost a loved one or any individual claimant who suffered a catastrophic injury defined in the protocol, i will be glad to meet him privately, confidentially and chat with them privately about any item or anything they would like to talk about. i am honored to do so i'm glad to do so. now, if you file a claim, the tester eligibility will be -- the test for eligibility will be -- -- was the ignition switch defect a probable cause of the accident? that is right out of the first year of law school. was the ignition switch defect

in an eligible vehicle with the airbag did not deploy approximate cause also known as a substantial cause of the accident. here's the challenge -- here's the challenge -- unlike the 9/11 fund, or the bp oil spill fund, many of these accidents occurred years ago, a ecade ago. what evidence, what circumstantial evidence can be produced that will demonstrate and ignition switch failure as the cause of the accident? well, we have done quite a bit of homework on this. there are, six, 7, 8 different examples of very valuable vidence that will help

demonstrate a link between ignition switch failure and the ccident. one, the car. it is very useful obviously the automobile is still available. unfortunately, some of these automobiles, the accident took place along ago that the automobile was not around anymore. if the automobile is available, that is the best evidence. we will look at the automobile and the lawyers and claimants, if they can show the against this if they can show that it was the ignition switch, that's wonderful. the automobile in many cases, maybe most cases, will not be available. second, do we have the edr blackbox data from the car? very, very useful. that data in the automobile, if the data was captured at the time of the accident by the

police or the insurance company or the claimant's lawyers, by whoever -- that edr data goes a long way in demonstrating ignition switch failure. even if you don't have a car, do you have the black box statement, very helpful? three, what does the police reports say at the time of the accident? some of these police reports arch streaming valuable as circumstantial evidence of irbag not the playing, contemporary witness statements about the steering wheel locking or the antilock recs not working. witnesses interviewed at the time by the police reflected in he police report, very helpful but of information. four, the photographs of the accident. we have already learnt that

photographs of the accident are enormously helpful to us in demonstrating ignition switch failure based on impact, the way the car was hit, what it hits come very, very useful -- contemporary photographs of the accident scene, very useful. next, the insurance company -- what did the insurance company say it's file about that accident? what is in the insurance files. insurance companies can be rather thorough in their examination of accidents and their own expertise. what does the insurance file show? what do the medical records show from the hospital must about the condition of the innocent victim but what did the witnesses tell the doctors in the hospital and the emergency room about what happened? my car suddenly lost power/ my steering wheel lock, breaks did not work.

what to the hospital records tells not only about the injury but about the cause of the injury. very useful. next, warranty and maintenance records -- we have found that some people weeks, months before the accident, took their automobile to the dealer or to an independent dealer and complained that their car was stalling. when the key hits the ignition switch fails. my car stalls and i am having trouble steering. i'm having trouble with the brakes, the antilock brakes. we would like to see as part of the submission of a claim any warranty and maintenance records that will help us in this regard. then there are some claimants, some individuals, who filed awsuits that are pending where

there were pre-child -- pretrial depositions written and written interrogatories. we had expert auto reconstruction experts filing reports. we would like to see those depositions and that information. all of these examples, and there may be others, there may be others -- we have talked to gm, we have talked to plaintiff lawyers. a list of the cabresa, bob hilliard and others, plaintiff lawyers, we have talked to the center for automotive safety, joan claybrook, clarence diploe - these are people we have been talking with over the last few months to try to get a better understanding on the key issue -- who is eligible to even file a claim? before you get to compensation, you have to be eligible. this is all part of the

eligibility determination. you will see in the protocol that if the claimant files a claim and the claim is deficient, we will not deny that claim. we will work with the claimant to try to help a claimant get other information that will cure the deficiency and the laim eligible. so, that is sort of a summary discussed on the first few pages of the protocol. that is sort of a summary of the eligibility requirements. we will work with claimants in an effort to find claims eligible in meeting the proximate cause standard that the ignition switch caused the ccident. it is a real challenge because

of the age of the claims, some of them, but we will work with claims and their lawyers, who have been very helpful here, in trying to do the right thing. compensation. there are three, in the protocol, summarized, ategories of compensation. one, we will compensate eligible death claims. nfortunate, innocent victims will die. victims not a factor. we will compensate individual victims of the accident who are ligible. a second category, we will compensate eligible catastrophic injuries defined in the protocol.

quadriplegics,paraplegics, permanent brain injuries requiring continuous care, double amputees, pervasive burn victims with burns over their entire body. these are the types of catastrophic injuries that are a special category as defined in the protocol. the third category of compensation, less serious and more moderate physical injuries requiring either hospitalization it within -- hospitalization within 48 hours, or those moderate injuries where the victim of the accident did not even go to a hospital or stay overnight, out patient medical treatment,

accident hours of the that isa third category of compensation. the true priority categories for this program, clearly a priority, the individual death claims and the catastrophic injury claims. these are the individuals and families mostly in need who want to try to get the compensation out as fast as we can. just as with the 9/11 victim compensation fund, which was he precedent we used every in coming up with the compensation model, everysingle individual filing a death claim, or a catastrophic injury claim, may choose one of two paths to compensation in he protocol. track a, all we

need is the age of the victim, how much she or he was earning at the time of the death or catastrophic injury, or, if here she was going to school, we go and come up with a number as if he were working at the age of 25. if someone died at age five or ten or going to school we have theformula included in the program, and whether or not he had any independents. that is all we need to know. we can meet privately with individual family members. that is fine. but under track a, if someone will just provide us the ageof the victim and how much the

victim was earning at the time of the accident, that is all we need to calculate a track a award based on national statistics of what that person ould earn over a lifetime. the claimant doesn't have to file tracka. if the claimant wants a quick and prompt processing of his and her claim under track a for death or catastrophic injury, hey can do so. we will add to that claim, in addition to what ever economic losses calculated, we will add $1 million in pain and suffering under track a for the victim, and, $300,000 for any surviving spouse, added to the calculation.

that's for deathexamples. claims. these are presumptive examples without regard to any individual claimant. i want to give you an idea of the scope of compensation under track a for death or catastrophic industry -- injury. a 17-year-old driver, single, living at home, no ependents, $2.2 million. track a. economic, and noneconomic loss. 25-year-old, married, two children, earning$46,200 a year, $4 million. under track a.

a 25-year-old, employed, earning $75,000 a year, married, two children, died. $5.1 million. xamples under track a. any individual family member who does not want to use track a, but wants to come in under track b and explain other extraordinary circumstances that should be brought to my attention, those numbers don't apply, we look at the individual claim submitted under track b, see what other extraordinary claims exists just like we did in 9/11, and these numbers will not apply. we will consider track b. catastrophic, or track a.

two examples. if you go track a for catastrophic injury, a 10-year-old individual young person, no earnings, paraplegic. track a, $7.8 million. if you go track a. a 40-year-old paraplegic earning $70,000 a year, married with no children paraplegic, $6.6 million under the und. again, the reason i can just project the numbers is that it is simply based on national averaging. it is the bureau of labor statistics providing us the ata.

any individual family member or victim who does not like this, the track a presumptive model, and would rather have a tailored track b consideration of extraordinary circumstances, glad to do it. in 9/11, we had a series of track b extraordinary circumstance cases. mr. feinberg, my daughter was going to be married next week. she was our only daughter and she died inworld trade center. we recognize that as track b. we lost both our children inthe world trade center. or on thewe recognize that as track airplanes. b. in the general motors matter, i

represent a client who, 10 years ago, was driving when her boyfriend was killed and, for 10 years, she thought she was the reckless driver. it destroyed her life. we want to go track b, of course. of course. we will work with individual family members to try and develop track a or track b for eath or physical injury. then there is the third category. less serious physical njury. all we want to know under this, we do not want to be flooded with less serious physical injuries and medical records

and doctors reports. the protocol builds on the virginia tech program we established and one fund boston marathon we established. we just ask a couple of questions. one, assuming you're eligible, how long were you in the hospital? hospitalization is a good surrogate for seriousness of injury. how long? overnight observation? $20,000. over a month$500,000, in between a sliding scale. mr. feinberg, i did not go to the hospital or i went to the emergency room or i went home. originally, we were not planning on including that is

eligible. we got such pushed back by so any people, plaintiff lawyers, center for auto safety, and others. the protocol does permit eligibility for outpatient medical treatment, cap that $20,000. on these less serious injuries, there is a prerequisite. all we want is the claim form filled out with a simple letter from the hospital or your doctor confirming medical treatment, hospitalization, within 48 hours of the accident. why not a week or a month, as ome suggested? the priority here of the death nd catastrophic injury claims,

the less physical ip jury claims,we want some contemporary documentation that people received immediate treatment. so, it is 48 hours. if you received outpatient medical treatment and three weeks later, you went in the hospital, that is fine. as long as there is an initial hospital treatment or medical treatment within 48 hours. then the sliding scale of protocol kicks in. those are the amounts that will be paid. will agree as i did with 9/11 and the boston marathon, as we did with virginia tech, aurora, colorado, and newtown, connecticut. i will meet privately with any

family member who wants to chat with me about their lost loved one, about needs, about life's unfairness, whatever they would like to chat about, my door is open and i will meet with them. it is without a doubt the most difficult part of this assignment. meeting privately with family members. it is very stressful, but it is essential. there are family members who want to be heard and want to have their voice heard, and i'm the fellow who is the administrator and i am willing to meet and chat with them about anything they want to tell me. this program is designed to help claimants. it is not designed to punish general motors. if people want punitive damages, if they want to use litigation to go after general

motors, then voluntarily, they should not submit a claim to me. if you submit a claim to this program and we reward a certain amount of money, you eventually have to sign a release that you will not sue general motors. do not sign the release if you want to seek satisfaction or sue general motors. remember, the program is voluntary and you do not have to decide whether or not you want to participate in the program until we offer a esolution. here is the amount, track a, track b, hospitalization, outpatient medical treatment. only then if you are satisfied

with the program will you participate and sign the release. many family members will want to see me personally before they agree and i welcome the meetings. that is the program. two final points and then questions. he 9/11 fund, 97% of all the eligible families who lost a loved one came in. $7.1 billion, taxpayer money. bp, 92% of all eligible claimants came into the fund. these are tough statistics to match. boston, 100%.

virginia tech, 100%. ewtown, connecticut, 100%. these are tough statistics to match. we will work with the lawyers, the families, to try to do his. i must say, in a way, it is a poor substitute. i say this all the time on these programs. money is a pretty poor substitute for loss. you could give people 20, 30, $50 million. it is a poor substitute. it is the limits of what we can do, unfortunately. it is the best we can do. it is pretty poor. hopefully, the program will ork. the only test, how many people participate in it.

all of the words in the world to not matter at the end of the day. the only thing that matters at the end of the day, how quickly did you get money out the door. that is the only test. when people say to me, it sounds this way and that way, i have heard from some lawyers, we will see. it sounds maybe this can work. i agree with that. we will see. but we are ready to start the process. august 1, we will be ready. i am ready to take questions. >> based on your conversations with general motors and the victims families, do you have a sense of how many victims? will it be over 50 or close to 100? >> i will not speculate. i have been asked many times

how many deaths, how many serious injuries? what is the cost to the program? and i have not got any idea. it will be pure speculation at this time. we have to look at what people are submitting. i will not speculate. >> have you talked with victims families as you have put the program together? >> no. i spoke with many lawyers representing victims families. i did not impose myself. i did not think it was appropriate. it is not my place. if victims families, as a result of this conference today, want to meet with me on the phone or in person, wonderful. i am glad to do it. can you just tell me when you ask a question who you represent? >> thank you. with cnn. 13 deaths over and over again.

a key question throughout all of this, we have talked to victims families, will death be accounted for in the backseat of a car? >> absolutely. >> even if they did not die as the result of an air back? >> it doesn't matter. >> and what about side impact? >> irrelevant. it doesn't matter. if a person, and eligible vehicle, the driver, passenger, pedestrian, occupant of another vehicle, or the airbag might have deployed. does not matter. eligible. >> side impact crashes? >> eligible. from reuters. >> yes. thank you. ome of the families have said, they want to go to court to bring punitive damages. they feel that will bring gm

further to justice. why should they take what you are offering? >> they should not. >> if a family member wants to seek tobring general motors to justice in their mind by seeking punitive damages, they should not come into this program. they should sue. will say this about lit pwating against -- gating against general motors. it is one thing if someone wants to litigate to get additional monetary punishment of general motors. i am here to compensate victims. innocent victims. i sometimes hear victims tell me we want to litigate because it is the only way we can find out what really happened. i would be careful about that rgument.

there are other available mechanisms or avenues to sue -- the to pursueand find out the facts. i read in the newspaper that u.s. attorneys and the department of justice are very interested in finding out what really happened. there are other avenues to pursue to do that. if it is the money that drives the punitive damage avenue, then this program is not for you. damages, -- ri compence tri damageshopefully, very generous, if propensity very is what you see, and to use other avenues to find out what happened, that, to me, is the way to go. >> to be clear on something, is the money you pay, in addition

to actual expenses the person might have incurred, or is it designed to be total? >> total, we are not netting out other expenses. we are calculating damages on a link slate and paying total award. we are not factoring in fees or other costs. we are paying the loan son -- the lump some all in. if what you have already spent is litigation costs, or expert nvestigative reports, yes. if what you have spent our medical expenses, we will see about that. in the protocol, we look at the very last paragraph of the protocol. we will work with the claimant

to ensure the claimant gets a lump sum payment and we will make sure we work on the lump sum problem. >> i am the birth mother of mber marie rose. i have found 165 deaths. i have the information in my hand. would you like it? >> i would indeed. i would like not only that information, but i would be glad to meet with you and amily members privately. i would love to sit and chat with you at your convenience to learn more about what you think.

>> we have evidence in a few cases that it looks like the driver actually managed to get the vehicle on a second or two before impact. >> i would be glad to consider anything you have. if you have some relatively rare example like that, at least i would like to hear what you have to say absolutely. > thank you. >> in terms of the protocol on the newer vehicles, can you explain why it only applies to vehicles who had the part replaced? gm told me it is not just the ignition switch problem. it is the whole contest in which the recall occurred.

the inability to disclose it, the fact that gm should have disclosed it. i am not an automotive engineer, but gm told us over and over again that this is a unique problem with gm that arose. it is not simply the defect itself but the context in which it arose. they have decided, this is the limitation of the authority i have on the program. >> will you make a public accounting of your findings and how many claims approved and nied and pay youths -- payouts? >> absolutely. it gets tricky. at the end of the program, as we always do, we will have an audit, an executive summary, how many claims were eligible, in, aggregate dollars,

etc.. we have to be careful we do not disclose at any time the confidential submissions of families. they do not want officials to know they filed or how much money they receive. we found out all these programs, 9/11 and other programs, that in order to maximize participation, confidentiality is critical and many people just do not want that information enclosed. let me say another thing before i forget that i neglected to say. a tip of the hat to the center of autosave the, joan and clarence. the number one issue with us was noticed. how do you reach people and tell them about the program?

how do you know people around the country and elsewhere, canada, will know about the program? we are notifying by letter 2.6 million people who are the subject of the recall. we are notifying by letter hundreds of people who already notified gm that they think they were involved in a death claim involving the ignition switch. we will send a letter to hem. we also, at personal urging, we will notify all former owners of the vehicles, so the former vehicles who traded their vehicle in, or sold it, if they were subject to death or physical injury, they could ile a claim.

it will be about as expansive ofnotice of a program as we can come up with. this was a big issue. emember this also. this program is limited to physical injury or death. i read in the newspaper all sorts of lawsuits. value of the automobiles involved, that has nothing to do with this program. we are not in any way involved in any economic property damage claims. this is strictly physical injury and death claims. >> thank you.

when calculating the money that would go to the victims, i know you're looking at labour statistics. when you're starting of the baseline of one million or the hospital stays, who came up with these numbers? ow did you reach them? will you -- will these families be told to keep silent if they do sign and take the claim? >> entirely up to them. if these families decide they want to call a press conference in taking -- then taking this money is entirely up to the families. i would not begin to impose any other conditions on the families. i have learned over the years it is not my business. they can do whatever they want. that is not my business. these numbers are not gm's numbers. these are number is -- numbers that our team of economists, we ame up with these numbers.

nonmember -- not economic laws, $1 million for a claim, it may be more under track b, we decided the number should be average.00 we went to $1 million. a lawyer in detroit and texas and other lawyers as well, colleagues, in texas, all said if, even on a presumptive award, it ought to be more than hat, $1 million. the 300,000 is much more than he 9/11 average as well.

the second question about silence. no such condition imposed. >> looking at what you have done in the past with the oil spill and 9/11, they are different as it was very clear who died as a result of the explosion or of 9/11. here, can you talk to us about the process? are these families -- going to be holding court in front of you to decide? alsoyou talked about having to be expeditious in getting the money out. in some of these cases there is a lot to go through. how do you make that -- determination that the prosm matt cause was the ignition switch? >> it is difficult. it is a challenge. do not be misled into thinking we had the same problems as 9/11 and bp. we did.

in 9/11, the statute creating the program said that physical injuries had to occur -- occur n the immediate vicinity and that medical treatment had to be immediately thereafter. we ran into a storm of problems with first responders to lay medical treatment. the deaths, you are right. they were traumatic deaths, much easier in 9/11. bp, we have huge problems not with deaths but whether or not the economic damages were caused by the oil spill. this is a challenge. it is a challenge. the main problem we will have here, and we will work right in the protocol to cure deficiencies, is that so many of these were cured long ago. the car is gone and we have got to, with circumstantial

vidence. all of the ways you would do that are laid out what you are right that the will be challenged here while people collect information. it will be a challenge, no question. >> i just wanted a little bit more on the interaction with gm. i know they will also be able to give you information. are you going to meet with them and sit down and talk about your methodology coming up to it or just sending them a claim? >> good question. the section in the protocol that gives both the claimant and gm the opportunities to be heard. the claim information does not go to gm. it stays with us. we will notify gm of the basic

claims this week, a spreadsheet that says these are the claims. if gm has any information they think would be helpful to us, fine. i am open to either side, as long as we are not exchanging anything confidential. here is the key. in this protocol. once we make a decision, ligible x dollars, the protocol gives us final discretion to do that. gm may not challenge it in court. it is fine but you have to honor it. they have to pay the claim. they cannot refuse, under the protocol, to pay any final

determination we make on the grounds it was a mistake. we heard you, gm, we respect your right to disagree, we decided it, and that is the end of it. es, sir. >> several members of congress investigating gm have taken an interest in the compensation fund. did you meet any members and brief with them? >> i met and briefed one of the most visible members of congress, senator blumenthal. extraordinarily helpful. he had written a letter to the justice department urging compensation. he expressed certain views about helping claimants and suggestions he hoped i would follow up on, which i have.

i welcome any input, or any suggestions from members of congress and other senators, and i would be glad to meet with them as well. >> a quick question with general motors. how much did you talk with her when setting this up? >> i spoke with her two or three times. almost all of my conversations involve other people in congress but i did meet her two r three times. 100% cooperative peer we want to the right thing. general motors is a great company and we want to do right by those who are innocent victims. general motors has been extremely helpful. i thought it very important not to limit our input to just general motors.

i went to various lawyers around the country and what they thought about the protocol and the center for auto safety in washington. i must say, general motors, at no time, they do not agree with everything in the protocol. hey signed on to it. they are paying the freight on this. but healthy debate, very open and transparent discussion. i give general motors a lot of credit for participating in this program. no caps on the aggregate amount of money erie that is so important. i found when there is an aggregate cap, inevitably, a claimant will say, you are giving me less is you have to save more to pay somebody else. it is human nature. with no aggregate cap, i could tell every claimant you do not have to worry about it and you will get what you are entitled

o. general motors waving contribute agreeing, no negligence, we're opening old claims and allowing people to come into the program. general motors using the bankruptcy bar to undercut notorious claims. i cannot speak to the history of a problem but i can certainly speak to the last three months and i must say mary barra and her colleagues at general motors absolutely 00% cooperative. >> there is a section in the data talking about seatbelt inhibitors. does that mean if somebody is wearing their seatbelt, you would be ineligible? >> it depends on the case. so far, all i have seen,

seatbelts do not work either. that is an engineering issue. i do not think it is likely that the airbag did not deploy, so you are ineligible. we will have to see based on the claim. i think that is right. >> wait for a microphone. >> you are next. >> will all the awards be lump sum or structured settlement? >> that is up to the individual claimant or lawyers. any conditions about how individual claimants want to see this money, i advise you to do any thing they want.

> thank you. you consulted data from federal agencies. granted that no amount of money will really compensate but dot has a policy of $9.1 million for the value of a life. i would like to know, did you consider that when you arrived at your protocol? i have not ready yet. >> you have not? no. i do not believe we did. i do have an overall policy answer to that, which is very important. lawyers around the country constantly remind me about

it. whatever that presumptive number might be in the individual case. if the claimant or her. if her or his lawyer is uncomfortable with the number, they have the option of going track b, presenting information like that that will result, in their mind, of raising the overall value of their word. we will look at it and examine it, and meet with the claimant of his lawyer and try to work hat out. if the number is deemed by any claimant to be insufficient. david. >> is it accurate gm told to they had over 3500 individual claims that could be linked to this? >> no.

i do not think that is accurate. they just said it is a group. >> anything about a car or accident. >> a what. >> any other questions? him yes or. i have a quick question at

the second category of injury. the more minor injuries. claimss like the death and the more catastrophic injuries have some economic compensation. is that the case with the lower category of injury, if you lost an arm or and i? eye, you lost an arm or an these less serious injuries are limited to how long you were in the hospital and that is all. if you lost an arm and you don't think you can go to work, and if you were in the hospital for 32 days, you will get a flat amount of $500,000 and that is it. that is for the hospitalization of that lost arm. >> if that prevented you from going back to work in that profession? >> you may opt out of this

program if you think it is too little. any other questions? i want to thank everybody. this is a complex program. i think it is easy to apply. fter this press conference if anybody has questions about the mechanics of how you will follow mail, where you can get information, my colleague will be here to answer those questions as well. thank you all very much.

>> our energy policy is being impacted as a result. it you can see it live today at

10:30 a.m. eastern on c-span two. with hillaryt down clinton in little rock to discuss her new book "hard choices." >> getting to the point where easy.n have peace is not you make peace with people who are your adversaries and who have killed those you care about and your own people or those you are trying to protect. a psychological drama. you have to get into the head of those on the other side. change their calculation enough to get them to the table. talk about what we did with iran, you have to put a lot of economic pressure to get them to the table and we will see what happens. that has to be the first up. i read about what we did in afghanistan and pakistan and the taliban to the table for a discussion with the government

of afghanistan. in iraq today, i think what we is ato understand is it political problem that has to be addressed. sunnicension of the advantage is taking of the breakdown in the political dialogue and the total lack of trust between the mallet the government and the sunni leaders and the kurdish leaders. >> more with hillary clinton on p.m. on book 7:00 tv. >> president obama and nominated robert mcdonald as his head of the veteran affairs department. mcdonald will be the replacement.

this is 15 minutes. gentlemen, the president and the vice president of the united states accompanied by mr. bob macdonald. >> good afternoon. please be seated. thanking acting secretary gibson for welcoming us today. i am pleased to be joined by our vice president. leaders across this department and our main partners. particularly representatives veterans and military family service organizations. i want to begin by making a basic point. those who serve here at the v.a. do vital work every single day for our veterans and their families. how deeply you care about

our veterans. many of you are veterans yourselves. veterans serving veterans. you help them transition to civilian life. go to college. by their first home. started a business. some of us doctors and nurses in the country and provide some the best specialized health care. veterans to rest with dignity and compassion. of veterans are grateful for the good work that you do. i am grateful as well. but, we are here today because of problems that have outraged us all. that includes the conduct we have seen at too many the a health-care facilities. i'm here for two reasons. to update you and the american people on how to fix the

problems and to announce my choice for the next secretary of veterans affairs to move forward. those responsible for manipulating or falsifying records at the v.a. and those who tolerated are being held accountable. of some officials of already been relieved of their duties and a investigations are continuing. where we find this conduct it will be punished. i expect full cooperation with all ongoing investigations. reached out to 135,000 veterans to get them off the waitlist and into clinics. andave added more staff sent mobile medical units and we are making it easier for veterans to use hospitals and clicks outside the v.a.. everyl keep that until one of our veterans is off the waitlist and receives the care that they have earned. moving ahead with

reform at the health of ministration. the 14 day scheduling a day has been removed. there is no incentive to engage in inappropriate behavior. providing the highest quality care when our veterans need it, that is your incentive. there will be new measures of patient satisfaction. today's outdated scheduling system is going to be overhauled with the latest technology. neighbors that rob conducted found significant and chronic systemic failures too little responsiveness, transparency, and accountability. that is totally unacceptable. berecommends that it restructured and reformed. i totally agree.

we're going to make that happen. i have asked rob to remain at the v.a. to help movies reforms forward. leaders has been frozen. make sure the new team is the right one. based on the recommendations of .ur i would get the best leader of a job. we will work with congress to make sure that the vh eight -- v.a. gets the care that our veterans deserves. we are instituting a new culture of accountability. the very idea that senior executives will receive bonuses appalled many americans and those bonuses have been canceled. when employees speak up about a

problem action should be taken. the problem should be fixed. everyone will be held accountable for doing better. congress can help by giving the secretary more authority to remove senior leaders. we are rebuilding our leadership team here at the v.a.. i want to thank those who stepped up to serve in new roles in this critical time. beene to say that you have an outstanding driving force behind the reforms are under way. we will rely on your steady hand in this time of transition and your continued service. i know all of you will have an outstanding art or an secretary in my choice to lead the v.a. going forward. one of our nation's most accomplished the business leaders and managers, robert mcdonald. i have gotten to know bob a bit over the years.

he has come to the white house to share his perspectives as worker cap located issues. he is pragmatic. he does not seek the limelight. saying,ts the japanese he worked and lived in japan for six years. climbsing goes, he who mount fuji is a wise man, he who climbs it twice is a fool. bob climbed mount fuji once. bob is a wise man. if you need any more evidence that he is wise, you need to meet his family who are here today. they are a wonderful family and they have served along with him in the past. caring for our veterans is deeply personal to them. his father served in the army air corps.

pow.ife's father was a her uncle was exposed to agent orange and still receives treatment from the v.a.. this is not an abstract mission for them. bob is a veteran himself. he graduated from west point sloanhe and his will -- were classmates. his wife have teamed up with the uso to honor our veterans. what makes him the right choice is his three decades of experience building and managing one of the world's most recognized companies. the v.a. is not a business, but is a large department. more00 employees working than 1700 facilities serving 90 million veterans.

the workload is enormous. 85 million appointments a year and .5 million consultations. gamble heprocter & oversaw 120 thousand employees. he knows the key to any successful enterprise is staying focused on the people he is trying to serve. he is known for his operational excellence. he served in virtually every level of procter & gamble. he understands the grand plans are not enough. bob is an expert in making organizations better. he is taken over struggling business units, he knows federal sleeves and gets to work.

he puts an end to what does not work in adopting best practices the do. makes operations more efficient and effective. he is about delivering better results. ofalso knows the importance old and high-performance team. putting the right people in the right places and hold them accountable. bob is known for his integrity. guided by that prayer from west point. he served our country in uniform and is repaired to answer the call once more. , this state the obvious is not going to be an easy assignment. he knows that. he isny airborne ranger ready and jumps into tough situations.

on behalf of all of us, thank you for your readiness to serve again. this.ttom line is we have to change the way the v.a. does business. over the past five years this agency has done some excellent work in dealing with a range of difficult challenges. i don't want people to forget that. ofhave had some influxes veterans. we have had to manage people who had difficulty accessing services were admitted. ptsd orit is having cases of agent orange. more people were coming into the system. we have to get up and running. we are doing quite effectively, work in terms of the g.i. bill

to make sure that our young people are able to get the training they need after they leave the military. across the board there has been some terrific work. there is a lot more that has to be done. we have to fix things the are broken. sloan started that process. we will have to drive until we get it done. we have to regain the trust of the veterans with a v.a. that is more effective, more efficient, and puts veterans first. bob is the manager we need to get this done. i urge the senate to confirm him as soon as possible. i also urge the senate to confirm my nomination for cfo. they have all been waiting and

waiting and waiting for a vote. case more than a year. we'd them on the job now. tigress needs to act and help us do right by our veterans. by veteranso right like kyle carpenter. i presented him with the medal of honor for his actions in afghanistan. he used his body to shield his best friend from a grenade blast. he spent two and a half years in the hospital. he endured 40 surgeries to rebuild his body and his face. he is gone through excruciating rehab. to see him stand in the white his medal ofeive honor was something i will never forget. it was an inspiration. .e is medically retired he is now in college.

with the help of the v.a. educational benefits he is an example of the good work for the is done. his experience with v.a. has been frustrating. he said it was ok that i share this with you today. i want to use him as an example. he is an american hero by any definition. sometimes we use that word to loosely. this guy is a hero. he deserves everything we can do. had other veterans he trouble making an appointment. he had to wait a month to see the doctor only to be referred to another doctor and wait another two months for that appointment. number. felt like a if he was being passed between doctors who did not know his situation he is relied on the help of a patient advocate. it has been harder than it should've been. as his advocate said it should

not be this way. the v.a. does many things well. we need all of you to keep doing that important work. building on the good work that is our to been done in reducing homelessness among our veterans and helping them get their education under the post-9/11 g.i. bill. having them find jobs so they can enjoy the american dream that helped to defend. when it comes to delivering timely, quality health care, we have to better. kyle,e to do better for

for all of our wounded warriors, we have to do better for all of our veterans from all of our wars. they are looking for us to. lincoln's pledge, to care for those who have borne the battle and their families and survivors. do that.ident we can so long as i'm president we will do everything in our power to uphold what is a sacred obligation. tohout i want to invite bob say a few words. thank you for taking on this assignment. [applause] >> to improve the lives of our country's veterans and to help change the way the u.s.

department of veterans affairs does business. mr. president, you have made it clear what you expect. a v.a. that is more effective, more efficient, and puts our veterans first. if confirmed by the senate, my priority would be to lead the transformation. has been torpose improve the lives of others. i went to west point to be an officer in the army to help free people who were living in a nonfree society. i became an airborne ranger infantry officer in the 82nd airborne division because i wanted to be on the front line in leading that change. i joined the procter & gamble company 34 years ago because of its purpose, to improve the lives of the world's consumers. thank you for mentioning my

father and my wife's father and uncle. taking care of our veterans is very personal to our family. we need to care for the veteran of the center of everything that we do in veterans affairs. at procter & gamble we focus on our customer. the veteran is our customer at the v.a. and we must focus all day everyday on getting them the benefits and the care that they have so learned. that is the only reason we are here. i look forward to working with the dedicated men and women of the veterans affairs to accomplish this mission. i would like to thank my family for supporting me throughout my life. my wife, my daughter, my son-in-law, my son are all here today. my parents did not attend. thank you for your love and support.

, mr. president. i look forward to working with you to transform veterans affairs and better serve our country's veterans. thank you. [applause] ♪ scholars examine the crisis in syria. 10:00overage begins at stern -- eastern on c-span three. ruled that court corporations of five or fewer shareholders can refuse to

provide contraceptive coverage for employees. lobbytorneys for hobby react to the ruling. i present to you senior counsel. i am laurie windham. i represent hobby lobby. the decision is a landmark decision for religious freedom. the supreme court recognized that american families do not lose their fundamental rights when they open a family business. important not just for families like the greens but for religious ministries.

the court's decision was narrow and careful. the court ruled that families to not lose their religious freedom when i open a family business. grant religious protections to large publicly traded companies. the focus is on everyday americans who lead seek to live out their faith. the reasoning was clear and should've been clear to the government as well. no cannot argue there were alternative means for other people. we don't know what the government will choose to do next. we know the greens are free from this unjust mandate. the government should offer the same protections to religious ministries like the little sisters of the poor. grain and barbara

elizabeth anna fought for their religious freedom. today, they won a. women will continue that fight. women's voices are heard standing up for religious freedom. this case is about the freedoms of all americans. all americans should celebrate today. thank you. [applause] >> i am senior counsel and we represent one of the victorious

plaintiff in the case today. to paraphrase president obama, what we found out today for the supreme court is religious liberty -- religious freedom is not been vanquished. we still live in a country where people are free to live out their faith both in their churches and outside their churches. you cannot be forced into a government created hole where you are allowed to practice her religious liberty. you get to impact every part of your life. that includes your family owned business. this is a critical win for religious liberty. congratulate those who have stood with the honda family and the green family. thank you.

[applause] >> the oral argument in the case. it challenge the federal health care law a requirement that companies provide contraception to employees in health plans. this is from march and is 90 minutes.

>> we'll hear argument this morning in consolidated cases number 13354, sebelius, secretary of health and human services v. hobby lobby stores, and 13356, conestoga wood specialties corporation v. sebelius. mr. clement? >> mr. chief justice, and may it please the court, when a federal government agency compelled employers to provide something as religiously sensitive as contraception, it knew that free exercise in rfra claims would soon follow. in particular, the agency itself provided exemptions and accommodations for the religious exercise of a subset -- >> is your claim limited to sensitive materials like contraceptives or does it include items like blood transfusion, vaccines? for some religions, products made of pork? is any claim under your theory that has a religious basis, could an employer preclude the use of those items as well? >> well, justice sotomayor, the first step in the analysis would be to ask whether or not there's a substantial burden on religious exercise. i do think this case is, in a sense, easier than most of the examples that you've brought up because here's one where it's so religiously sensitive, so fraught with religious controversy, that the agency itself provides a certain number of exemptions and accommodations. so that's one way, i think, that you'd address the first step of

the question here. >> well, i mean, just take one of the things that justice sotomayor asked about, which is vaccinations, because there are many people who have religious objections to vaccinations. so suppose an employer does and refuses to fund or wants not to fund vaccinations for her employees, what happens then? >> well, if we assume we get past the substantial burden step of the analysis, then the next step of the analysis the compelling interest and least restrictive alternatives analysis. and every case would have to be analyzed on its own. i do think in the context of vaccinations, the government may have a stronger compelling interest than it does in this context because there are notions of herd immunity and the like that give the government a particularly compelling interest in trying to maximize the number -- >> blood transfusions? >> blood transfusions. again, each one of these cases, i think would have to be evaluated on its own and apply the compelling interest, least restrictive alternative test and the substantial burdens part of the test. >> so really, every medical treatment. and justice sotomayor is quite right that there are quite a number of medical treatments that difference religious groups object to. so one religious group could opt out of this and another religious group could opt out of that and everything would be piecemeal and nothing would be

uniform. >> well, justice kagan, nothing could be clearer than when congress passed rfra congress made a judgment that rfra was going to apply to all manner of federal statutes. and i think what the congress -- >> mr. clement, maybe it seemed clear then, but since rfra, just as before rfra, congress has continued to write into federal legislation specific religious exemptions for some, but not everybody, for individuals, sometimes religious institutions. so if it was all that clear that rfra took care of it all, why did congress continue after rfra to pass these laws focusing the exemption on an individual, religious institution? those, as i take your argument, all of those laws and there are more than half a dozen were

unnecessary. once rfra was on the books, congress didn't have to do that any more. >> well, justice ginsburg, i'm not sure that they were all unnecessary. and of course, in a variety of contexts, congress may proceed on a belt and suspenders matters. so i think there's really two different questions. one is when congress passed rfra, was rfra just done with creating other exemptions. and i think the answer to that is no. but i think the question that justice kagan's question brought up is, was congress evident and did congress specifically consider whether rfra would apply across the board to all the provisions of 18 u.s.c., or rather all the provisions of the united states code. and congress could not have been clearer that it was passing a statute that it wanted to apply to all preexisting statutes and to all subsequent statutes unless congress specifically provided otherwise. >> you were beginning by giving us a framework for your argument. do i think of this as a statutory case? of course, the first amendment

is on the stage at some point here, but i take it you can prevail just on the question of statutory interpretation, and if that is so, are there any statutory rules that work in your favor, that is to say, avoiding a constitutional question or how do we think about this case, primarily as a statutory case? >> obviously, one of my clients has before you right now a free exercise claim and my other client has a free exercise claim that's live in the lower courts. so those issues are preserved. but i, think, as your question points out, this court really, first and foremost, can decide this on the basis of the federal statute, and the ashwander principles of constitutional avoidance seem like they would be sort of fully applicable to the court's consideration of that question. and then, of course, the normal principles of statutory construction would certainly point you to the answer to the first objection the government raises, which is do persons include for-profit corporations because --

>> mr. clement, isn't this a special kind of statute? because this a statute that specifically refers back to a body of constitutional law. it basically says we want to get right back to the place that we were with respect to religious claims before employment division v. smith. and so we have it's not you know, it's a statute that directs us to a body of constitutional law. that body of constitutional law is, i think, very different from the one you portray in your brief. it suggests that accommodations should be made sometimes, but rarely, and subject to a to a balancing analysis, not to a compelling interest standard in the way we would use it for, say, race discrimination. so, you know, what's the response to that? >> well, first, justice kagan, let me take a little bit of an issue with your premise and let me try to responsive to your question anyways after i do that. how i'd like to take issue with your premise is that when congress first passed the statute rfra, it talked about free exercise as defined in the

court's cases. and then at the time that it passed rluipa, which is a later statute, it actually confronted some lower court cases that had limited rfra and tried to impose a centrality requirement. and congress didn't want that. it didn't want to take all the baggage of the pre-smith free exercise cases. so it actually amended the statute to broaden it so it now protects any exercise of religion. so i would take issue with your premise that rfra simply picks up everything that ever happened pre-smith. >> well, there there's another respect in which this, even as originally enacted, does not track the preemployment division v. smith law. that is to say, the compelling state interest test in the prior cases was never accompanied by a least restrictive alternative requirement. that was an invention of this of this law. >> i think that's fair, justice scalia. one of the things that you run into if you try to sort of get

at this statute the way that justice kagan is suggesting is that not everybody exactly agreed as to what the pre-smith case law was. you described the pre-smith case law in your opinion in a certain way. justice o'connor described the pre-smith case law in another way. so it's a little bit difficult to try to say, as justice kagan's question would suggest, that rather than just apply the statute as written, we should really sort of just go back and apply pre-smith laws if this were -- >> well, it is applying the statute as written. the statute as written this not a question of legislative history the statute as written points back to pre-smith law. it says -- that's what we mean. >> well, you're right, justice kagan, in the purpose part of the statute it says -- what we mean to do here is basically restore the pre-smith law. but it also accompanies that purpose statute with operative language. and the operative language, which i think this court should apply, as justice scalia suggests, applies broadly to any exercise of religion by any person and then suggests that the relevant test is substantial

burden with the burden on my client as to the substantial burden part of the test. and then it's -- >> mr. clement, this was a law that was passed overwhelmingly, both houses of congress. people from all sides of the political spectrum voted for it. it seems strange that there would have been that tremendous uniformity if it means what you said it means, to take to cover profit corporations, especially in light of there was an effort to adopt a conscience amendment, a specific conscience amendment in 2012, and the senate rejected that. that that amendment would have enabled secular employers and insurance providers to deny coverage on the basis of religious beliefs or moral convictions. it was specifically geared to secular employers and insurance

providers. and that that was rejected. >> well, justice ginsburg, i would suggest to the contrary. the reason that there was such unanimity behind rfra in the first place is that efforts to limit to just certain subclasses, subsets of religious freedom claims, were rejected and sort of everybody in congress got together and said, all right, you have some claims you actually want to be vindicated, you have some claims you want to be vindicated, we'll vindicate all of them. and if we're going to look at any legislative history as shedding light on this, then i would suggest you look at professor laycock's brief, which goes into great detail about the legislative debates involved in that led up ultimately to the passage of rluipa. and when congress was trying to pass a broader statute, the rlpa, the religious liberty protection act, the issue of the statute's application and rfra's application to for-profit corporations was squarely put at issue by the nadler amendment. and that amendment was rejected and the house report that

demonstrates the rejection of that amendment could not be clearer that they understood that for-profit corporations would be covered. now, in fairness, what they understood is that we were probably talking about in the real world a relatively small set of corporations like an incorporated kosher market or kosher deli of the kind that this court had before it in the crown kosher case. and so i think it's you know, we can talk about the extent and how you'd apply these principles to exxon, but i think that's just something that's not going to happen in the real world. it is no accident that the claims that you have before you in these cases are brought by small closely held corporations that have firmly held religious beliefs. >> but, again, mr. clement as justice ginsburg said, this was a very uncontroversial law. your understanding of this law, your interpretation of it, would essentially subject the entire u.s. code to the highest test in constitutional law, to a compelling interest standard. so another employer comes in and that employer says, i have a

religious objection to sex discrimination laws; and then another employer comes in, i have a religious objection to minimum wage laws; and then another, family leave; and then another, child labor laws. and all of that is subject to the exact same test which you say is this unbelievably high test, the compelling interest standard with the least restrictive alternative. >> well, i don't say that. i think congress said that. but to be as responsive as i can to your question, the parade of horribles that the government offers you ought to sound familiar, because if you look at that parade of horribles social security, minimum wage, discrimination laws, compelled vaccination every item on that list was included in justice scalia's opinion for the court in smith. and justice o'connor responded to that in her separate opinion and she said, look, you've got to trust the courts; just because free exercise claims are being brought doesn't mean that the courts can't separate the sheep from the goats. now, whatever -- >> well, she had an understanding of how the court

worked pre-smith that was a kind of sherbert v. verner yoder understanding, which was we did a balancing, we looked at the government's interests, we took those very seriously, especially to the extent that there was harm to identifiable third parties and that it fell on an identifiable third party. that was basically you could not get an accommodation for that kind of harm. >> well, what she said and whatever the merits of it as a matter of constitutional debate isn't relevant. what i think is relevant is that congress clearly preferred one side of that debate and thought courts could handle this. so then the question becomes -- how do courts actually apply this test? and i don't think applying the test to recognize this case, where i think the government has an incredibly weak case on compelling interest and least restrictive alternatives, which they almost don't want to talk about at all, is going to endanger any other statutes. and if i could talk about specific -- >> well, could i ask you this, mr. clement. in all the years since rfra has been on the books, has any of

these claims involving minimum wage, for example, been brought and have they succeeded? >> justice alito, very few of these claims have been brought. very few of them have succeeded, and that's notwithstanding the fact that all of these statutes we're talking about apply to employers generally. and it and none of those claims have been brought or they haven't succeeded notwithstanding the fact that the government concedes that sole proprietorships and partnerships and nonprofit corporations are all protected by rfra. now, millions of americans are employed by proprietorships, partnerships, and nonprofits. so if these statutes really were on a collision course, i think we would have seen the collision already. >> well, with respect, mr. clement, i think that that's probably because the court has had a different understanding of what rfra does and the kind of analysis that it requires courts to perform than you're arguing for in this case. that if your argument were adopted and there was a strict scrutiny standard of the kind that usually applies and a least and because you say that there

and i think this absolutely right when you say it that you cannot test the centrality of a belief to a religion, you cannot test the sincerity of religion. i think a court would be, you know their hands would be bound when faced with all these challenges if your standard applies. >> well, justice kagan, a couple of thoughts. first of all, i mean, it's not like this court has never had a rfra case that it applied the standard on the merits. and in the o centro case, this court applied something that very much felt to the government at the time as being strict scrutiny. but if this court -- >> well, it was a religious organization. >> it certainly was a religious organization and it's a separate question as -- >> this what's different. i mean, all along the earlier cases dealt with individuals and they dealt with religious

institutions. >> well, if i may, justice ginsburg, there's two separate questions. there's a question about how to apply the test if it's applicable in a particular case, and i think o centro is the starting place for guidance on that. your question also brings up the separate question about the coverage of the statute. and as to that, i think the place to start is the statute itself, which broadly provides coverages to persons. that is not an incidental term. it's a term that picks up additional context through the dictionary act and specifically applies to all corporations, to joint partnerships, to societies. >> how does a corporation exercise religion? i mean, i know how it speaks and we have, according to our jurisprudence, 200 years of corporations speaking in its own interests. but where are the cases that show that a corporation exercises religion? >> well, justice sotomayor, those cases i mean, i'd start with cases like lukumi or o centro, which all involved corporations, and nobody thought it was particularly problematic

there that the plaintiffs before the court were artificial entities. and i suppose you could take -- >> well, but they were really arguing about things that affected their membership, not them as a corporate entity. >> well, i'm not sure that you can so easily divide the two, and we can talk about how it is with corporations generally. you understand how the corporation has certain beliefs or -- a scienter requirement. the courts every day deal with issues of trying to figure out what kind of intent or motivation a corporate entity has. >> so the dissent in this case, in the tenth circuit case, said how do we determine when a corporation has that belief? who says it? the majority of shareholders? the corporate officers? the is it 51%? what happens to the minority? and how much of the business has to be dedicated to religion? 5%?

10%? 90%? just assume not a business like yours you picked great plaintiffs, but let's assume -- >> let's assume just a business that sells 5% of religious books, doesn't play christmas music, doesn't give off works on sunday, you know, does nothing else religiously. >> right. and, justice sotomayor, i think the way to approach those cases would be the same basic way you approach other questions of corporate intent or corporate motivation. you look to the governance doctrines, if any of this put at issue. and i think that's really a critical question, which is ultimately, i think this line of questioning goes to a question of sincerity, and if some large corporation asserts some claim that's going to save them lots of money, i would think that the government in those kind of cases is really going to resist the sincerity piece of the analysis. in this kind of case -- >> that's the most dangerous piece.

that's the one we've resisted in all our exercise jurisprudence, to measure the depth of someone's religious beliefs. >> to be clear, this court's cases have always distinguished between the sincerity inquiry, which the court has allowed, and the centrality inquiry, which it suggested is inappropriate. but sincerity has always been a part of this court's cases. >> i thought more importantly was whether a burden was substantial or not. that we've never acceded to the person claiming a religious exemption, a belief in how substantial the burden might be. >> right. this court has not questioned that. the thomas case, i think, puts as common ground the idea that you don't really second-guess the person's the person's belief, but you can contest sincerity. it is there is case law in this. you know, you have people who are arrested in possession of large quantities of marijuana and they assert that they belong to the church of marijuana, and those cases do get litigated and they get rejected. and there's a lot of different

ways to -- >> is there is there a different way of looking at it, the leeway? in u.s. v. lee, we said, "when followers of a particular sect enter into a commercial activity as a matter of choice, the limits they accept on their own conduct as a matter of conscience and faith are not to be superimposed on the statutory schemes which are binding on others in that activity." so isn't that really the answer, that we've never considered a for-profit corporation as exercising religion? >> well, let me let me take on lee first. and i mean, that's obviously the two lines of lee that are the government's favorite two lines in lee. but lee starts with a substantial burden inquiry, which is where most of these sincerity questions go. and lee definitely says that there is a sincere religious belief and a substantial burden on religious exercise. so the two sentences that you're quoting come in the compelling interest analysis of the case. and i think lee does stand for the proposition that in the tax

context, it's going to be very hard for somebody to bring a claim that satisfies even the demanding compelling interest, least restrictive alternative test. >> well, that's an interesting question, because the briefs on both sides here are written as if the penalty for not having a health insurance policy that covers contraceptives is at issue. but isn't there another choice nobody talks about, which is paying the tax, which is a lot less than a penalty and a lot less than the cost of health se notnce at all? to give health insurance and pay not that high a penalty, not that high a tax. >> well, just to put this in concrete terms, for hobby lobby, for example, the choice is between paying $475 million per year penalty and paying a $26 million per year coverage. >> no, i don't think that that's the same thing, mr. clement.

there's one penalty that is if the employer continues to provide health insurance without this part of the coverage, but hobby lobby could choose not to provide health insurance at all. and in that case hobby lobby would pay $2,000 per employee, which is less than hobby lobby probably pays to provide insurance to its employees. so there is a choice here. it's not even a penalty by in the language of the statute. it's a payment or a tax. there's a choice. and so the question is, why is there a substantial burden at all? >> well, just to be clear, we were talking about the same thing. so the option, the choice, is between paying a $475 million a year penalty and a $26 million a year penalty. that's what hobby lobby faces. so $2,000 per person -- >> no, between paying $2,000 per employee per year if hobby lobby does not provide -- >> that's $26 million.

>> you know, hobby lobby is paying something right now for the for the coverage. it's less than what hobby lobby is paying for the coverage. there are employers all over the united states that are doing this voluntarily because they think that it's less. >> i thought i thought that part of the religious commitment of the owners was to provide health care for its employees. >> that is true, mr. chief justice. it is also true that this -- >> well, if they want to do that, they can just pay a greater salary and let the employees go in on the exchange. >> exactly, which is, by the way, why comparing the $2,000 penalty to the cost of the health care is a false it's a false comparison. >> it's not called a penalty. it's called a tax. and it's calibrated and it's calibrated >> she's right about that. >> and it has been treated for some purposes as a penalty. and i think for this purposes, it certainly feels punitive. and if i could finish the thought about why it's a false comparison, the 2,000 penalty to the cost of the health

insurance, is that it's going to very much hurt hobby lobby if all of the sudden it doesn't provide health care to its employees. and in order to compensate for that, it would have to increase the wages. and i think it would be worse off as a result of this. but if i could also -- >> well, let's say that that's right. let's say that they have to increase the wages a little bit. i mean, still we are talking about pretty equivalent numbers. maybe it's a little bit less; maybe it's a little bit more. but this not the kind of thing that's going to drive a person out of business. it's not prohibitive. it's like the thing that we talked about in braunfeld where we said, you know, maybe if the store can't stay open 7 days a week, it makes a little bit less money. but so be it, is what we said. >> no, i actually think what it's like, your honor, with all due respect, it's like the five dollar penalty enforcing the prohibition in yoder. and what this court says, it's one thing if you don't have a direct government prohibition on a religious exercise or a mandate that somebody do something that violates their religion.

in those cases, which is like sherbert and is like braunfeld, then you have to look at the substantial pressure, and it becomes a little bit more of a loosey-goosey analysis. but when you have a government law that specifically says you must do something that violates your religion and it's enforced with a penalty, and with all due respect i think $2,000 per employee is a penalty. >> but mr. clement, it's not saying you must do something that violates your religion. it's giving you a choice. you can do this thing or if this thing violates your religion you can do another thing. and that other thing is approximately the same price as the thing that you don't want to do. >> i don't think it would be the same price at the end of the day. i'd also like to point out how this -- >> well, of course it wouldn't be the same price at the end of the day. if they deny health insurance, they're going to have to raise wages if they are going to get employees. >> absolutely. >> it's absurd to say that, you know, it comes out of nowhere. >> absolutely, your honor. and by the way, this $2,000 penalty is very much a double-edged sword for the government, because you're trying to -- >> but why is that a problem? let's assume that the cost of

providing insurance is roughly equivalent to the $2,000 penalty. how is the employer hurt? he can just raise the wages. >> may i just put a footnote on this. i thought the average price of providing insurance for a single person is $4,000, and it's $12,000 for a family for a family. so the 2,000 tax that's what it's called is to help the government provide subsidies to people on the exchange that don't have employer insurance. so it's a tax because it's it is to do exactly what your client wants, to get the government to supply the contraceptives, not the insurance companies. >> here's the problem with this way of looking at it, which is to say whatever it costs per employee to get this, this health care, that's something that right now hobby lobby is paying whatever it's paying

them, plus it's, you know, imputed into that is the idea that they're getting their wage and they're getting health care insurance. if they take away the health care insurance, they are going to have to increase the wages to make up for that. and they're going to have to pay the $2,000 penalty on top of it, plus they're going to have to violate their own interest which is, we actually we believe it's important to provide our employees with qualified health care. >> ok, the last is important. but just assume hypothetically that it's a wash, that the employer would be in about the same position if he paid the penalty and the employer -- pardon me, an employee went out and got the insurance and that the employee's wages were raised slightly and then it's and that it's a wash so far as the employer are concerned, other than the employer's religious objection, but just on the financial standpoint. can we assume that as a hypothetical. then what would your case be? >> i think my case would be that in that case the government might be able to sort of support

itself on the compelling interest. i think there would still be a substantial burden on their exercise. but again, this all turns on issues that the government hasn't put in issue. this case hasn't been litigated on this particular theory, so i think i'd love to have the opportunity to show how by not providing health insurance it would have a huge burden on my client and their ability to attract workers, and that in fact would cost them much more out of pocket. but that's not been the nature of the government's theory. >> can i ask -- >> there was a point made earlier, and i think you didn't mean to say this, that provision of health care is not part of their religious belief. covering their employees for health care, that is not a religious tenet, right? >> no, it actually is. again, it hasn't been the principal theory on which this case has been litigated. but see, if you go back to the complaints and you go back to our briefs, you know, it's part of the religious beliefs that both the hahns and the greens have. they think it's actually important -- >> but, mr. clement, you're not saying, are you, that their religious beliefs mandate them to provide health care? i thought that you were never making that claim.

>> i didn't have to make that claim in the course of this litigation. what i'm pointing out, though, is for purposes of the substantial burden analysis, it is perfectly appropriate to take into account that the 2,000 the $26 million in fines they would pay would not be the only thing that they would lose out if they are on that horn of the dilemma. they would also lose out all the additional wages they would have to pay, and they would be in this position of not offering health care, which is something they believe is important for which is something they believe is important for their religion as well. >> you know, i'm sure they seem like very good employers. and i'm sure they want to be good employers. but again, that's a different thing than saying that their religious beliefs mandate them to provide health insurance, because here congress has said that the health insurance that they're providing is not adequate, it's not the full package.

>> well, with respect, what congress has said is that this kind of plan is not appropriate for a non-grandfathered plan. but if we're going to talk about the government's compelling interests here, which i think has got to be part of the analysis, then i think the grandfathered provisions of this statute really are devastating for the government's argument that it has a compelling interest. when the government pursues compelling interest, it demands immediate compliance. it doesn't say, "get around to it whenever it's convenient." i can't imagine congress passing title vii and saying, "stop discriminating on the basis of race, unless of course you have a preexisting policy that discriminates on the basis of race, and then you can keep it as long as you'd like." it is fundamentally inconsistent with a compelling interest -- >> well, but i think even -- >> analysis to have this kind of grandfathering. >> that example, you know, initially title vii did not apply to any employers with fewer than 25 employees. and then gradually, congress brought the number down because congress realized that there were going to be transition issues and that some time was