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Hobby Lobby Will Appeal Denial of Injunction Against HHS Mandate

A federal court rules that case law has not established that 'secular, for-profit corporations' like Hobby Lobby have 'a constitutional right to the free exercise of religion.'


| Posted 11/20/12 at 9:01 PM


OKLAHOMA CITY — The retailer Hobby Lobby will appeal a federal court’s refusal of its request for an injunction against the federal Health and Human Services' contraceptive mandate.

A district court judge denied Hobby Lobby’s request for an injunction Nov. 19, thereby requiring the Christian-owned business to cover abortion-causing drugs in its health-insurance plans or face millions of dollars in fines.

“We disagree with this decision, and we will immediately appeal it,” said Kyle Duncan, general counsel for the Becket Fund for Religious Liberty.

The religious-freedom group is representing the Oklahoma City-based company, which is owned by founder and CEO David Green and his family. Hobby Lobby’s sister company, Mardel, Inc., is also a plaintiff in the case.

Green and his family object to providing abortion-inducing contraceptive drugs.

“Every American, including family business owners like the Greens, should be free to live and do business according to their religious beliefs. The Green family needs relief now, and we will seek it immediately,” Duncan said Nov. 19.

The ruling is the latest development in the controversy over the Department of Health and Human Services' mandate requiring insurance coverage for sterilization and contraception, including some abortion-causing drugs. The mandate’s narrow religious exemption applies only to nonprofit organizations that aim to spread religious values and that employ and serve primarily people of their own religion.

Employers who violate the mandate risk fines of $100 per employee per day. Hobby Lobby, which employs more than 13,000 full-time workers, said it faces a daily $1.3-million fine beginning Jan. 1, 2013, if it ignores the law.

A lawyer for the federal government said the drugs do not cause abortions and the U.S. has a compelling interest in mandating insurance coverage for such medications, The Associated Press reported.


‘Uncharted Waters’

In his Nov. 19 decision, U.S. district Judge Joe Heaton of the Western District of Oklahoma ruled that Hobby Lobby and Mardel “are not religious organizations.” The judge also said the plaintiffs had not cited, and that the court had not found, any case that had concluded that “secular, for-profit corporations” such as Hobby Lobby have “a constitutional right to the free exercise of religion.”

Judge Heaton said the mandate only “indirectly” burdens the Greens’ religious beliefs.

Judge Heaton wrote that the court is “not unsympathetic” to the company’s dilemma. He said the 2010 health-care law’s expansion of employer obligations has caused “concerns and issues not previously confronted by companies or their owners.”

The question of whether restrictions on business corporations violate the religious freedom of their owners is one of “largely uncharted waters,” he said.

Hobby Lobby’s David Green said legal action for relief from the application of the contraceptive mandate was necessary because of Hobby Lobby’s dedication to God.

“It is by God’s grace and provision that Hobby Lobby has endured,” he said. “Therefore, we seek to honor God by operating the company in a manner consistent with biblical principles.”

Hobby Lobby has 500 stores in 41 states. It is the largest business to file a legal challenge against the HHS mandate. It is also the first business not owned by Catholics to do so.

The company is one of the few national retailers that continues to close its stores on Sunday “in order to allow our employees and customers more time for worship and family,” its website says.

The mandate is causing significant concern among Catholic and other employers with religious and moral objections to providing the mandated coverage. It could affect many Catholic colleges, charities, health-care systems and even some dioceses that must provide the coverage or face crippling fines.

There are currently 40 lawsuits with over 110 plaintiffs challenging the mandate.

While the Obama administration has proposed an accommodation to expand religious-freedom protections, its details and effectiveness are still unclear. The administration has opposed congressional efforts to broaden the exemption, and President Barack Obama criticized Republican presidential candidate Mitt Romney for supporting a broader religious exemption.