Hobby Lobby gains a win in appeals court

WASHINGTON (BP) -- A federal appeals court has handed Hobby Lobby a significant, though limited, victory in its legal challenge of the Obama administration's abortion/contraception mandate.

The 10th Circuit Court of Appeals in Denver ruled Thursday (June 27) the popular arts and crafts chain and Mardel, its sister Christian bookstore chain, had demonstrated they probably would prevail in demonstrating their religious freedom had been infringed on by the mandate. The judges reversed a federal court's refusal to provide a preliminary injunction blocking enforcement of the controversial provision while the case proceeds. They also instructed the lower court to reconsider whether it should grant an injunction.

Hobby Lobby, which has 550 stores in the United States, and Mardel filed suit last year against the portion of the 2010 health care reform law that requires employers to pay for coverage of drugs defined by the Food and Drug Administration (FDA) as contraceptives, even if they can cause abortions. Members of the Green family -- evangelical Christians who own Hobby Lobby and Mardel -- do not oppose all contraceptive methods, only those that have abortion-causing qualities. They have said they will not obey the mandate.

These FDA-approved drugs include Plan B and other "morning-after" pills with a secondary, post-fertilization mechanism that can cause an abortion by preventing implantation of tiny embryos. The mandate also covers "ella," which -- in a fashion similar to the abortion drug RU 486 --- can even act after implantation to end the life of the child.

A federal judge and a three-judge panel of the 10th Circuit Court refused last year to block enforcement of the mandate, but the appeals court made the highly unusual move of granting an "en banc" hearing, which was held in May before a panel of eight active judges.

The 10th Circuit's decision Thursday gave Hobby Lobby and Mardel hope they might gain relief from a penalty under the mandate that could reach $1.3 million a day while their lawsuit is active.

The ruling was "a milestone in Hobby Lobby's fight for religious liberty," said Kyle Duncan, general counsel for the Becket Fund for Religious Liberty, which is representing the chain stores. "This is a tremendous victory not only for the Green family and for their business, but also for many other religious business owners who should not have to forfeit their faith to make a living."

On Friday (June 28), the Obama administration issued a final rule on the abortion/contraception mandate. It did not provide a religious liberty accommodation to for-profit companies such as Hobby Lobby and Mardel, and religious freedom advocates said it failed to remedy the conscience problems for non-profit organizations that object.

In his opinion for the 10th circuit panel, Judge Timothy Tymkovich said Hobby Lobby and Mardel not only were eligible to sue under the 1993 Religious Freedom Restoration Act (RFRA) but "have established a likelihood of success that their rights under this statute are substantially burdened by the contraceptive requirement." The federal court had ruled they had not demonstrated such a likelihood.

The 10th Circuit rejected the Obama administration's argument RFRA's protections do not extend to for-profit companies such as Hobby Lobby and Mardel. "Such corporations can be 'persons' exercising religion for purposes" of RFRA, Tymkovich wrote.

A majority of the panel also found Hobby Lobby and Mardel had satisfied the requirement that they show "irreparable harm" to be granted a preliminary injunction. No majority existed among the panel's judges, however, for two other factors in considering injunctive relief -- whether the "balance of equities" is in the companies' favor or whether an injunction would be "in the public interest." The 10th Circuit ordered the federal court to evaluate those two factors in deciding whether to grant an injunction.

Hobby Lobby and Mardel sought an injunction before July 1, when the mandate and its hefty fines are scheduled to take effect for the two companies.

The case is Hobby Lobby v. Sebelius.

Hobby Lobby seeks to honor God "by operating the company in a manner consistent with Biblical principles," according to its statement of purpose. Its stores are closed on Sundays. The Oklahoma City-based chain contributes to Christian organizations selected by the Green family that seek "to share the Good News of Jesus Christ to all the world," according to its website.

More than 60 lawsuits have been filed against the abortion/contraception mandate, and Hobby Lobby is one of only seven for-profit companies that have failed to win an injunction or restraining order blocking enforcement of the controversial requirement while their suits proceed in court, according to the Becket Fund. Courts have granted injunctions to 21 for-profit corporations. No action has been taken in four lawsuits by for-profit companies.

The Southern Baptist Ethics & Religious Liberty Commission (ERLC) has signed on to five briefs defending the religious freedom of entities challenging the mandate at the appeals court level. One was in the Hobby Lobby case.

The leading religious freedom spokesmen for Southern Baptists and American Roman Catholics urged all members of Congress in a June 21 letter to pass legislation designed to bolster conscience protections in health care, including for the abortion/contraception mandate. The letter from Russell Moore, president of the ERLC, and William Lori, archbishop of Baltimore and chairman of the U.S. Conference of Catholic Bishops' ad hoc committee for religious liberty, sought support for the Health Care Conscience Rights Act, H.R. 940 in the House and S. 1204 in the Senate.

The abortion/contraception requirement will be implemented for Christian institutions and other non-profit organizations beginning Aug. 1. It will take effect when each organization's health plan begins a new year. The mandate's start-up date for for-profit organizations was Aug. 1 of last year.

The abortion/contraception mandate -- also known as the HHS mandate because of its issuance by the Department of Health and Human Services -- gives those who object to it, the ERLC says, three options, all unacceptable: (1) Violate their consciences by obeying it; (2) violate the law, which could produce hefty fines; or (3) stop providing health coverage, which could force workers to purchase insurance with provisions they object to and possibly open the employers up to penalties.

The Obama administration proposed a rule change in February to address conscience objections to the abortion/contraception mandate. Religious liberty advocates said it appears to protect churches and church ministries but does not relieve the burden on religious institutions and individuals who object.


Tom Strode is the Washington bureau chief for Baptist Press. Get Baptist Press headlines and breaking news on Twitter (@BaptistPress), Facebook (Facebook.com/BaptistPress) and in your email (baptistpress.com/SubscribeBP.asp).

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