Hobby Lobby Changes HHS Landscape


When we last saw the Green family and their business, Hobby Lobby, the government was threatening to impose crippling fines on them because of their religious objections to the contraceptive mandate imposed by the Department of Health and Human Services.

Two federal courts had denied them relief, and the Supreme Court had refused their emergency appeal.

But now their case may have changed everything in the fight over the mandate.

Late June, a full appellate court — consisting of eight federal judges on the Tenth Circuit Court of Appeals — finally gave the Greens recognition of their religious objections. The court, significantly, found that the Greens had shown they had a "likelihood" of success in showing their religious beliefs would be substantially burdened by the mandate.

Among other things, the Greens would have to pay millions of dollars in fines if they refused to provide certain kinds of contraceptive coverage. They could lose their entire business.

Further, the court found, the Greens had also established that they would suffer "irreparable harm" if the mandate were upheld.

The Hobby Lobby case is a significant turning point in the battle against the HHS mandate. There are now more than 60 cases pending across the country fighting the application of the mandate to a wide range of institutions.

The earliest cases were on behalf of religious nonprofit institutions such as colleges. But about half the cases are on behalf of for-profit businesses like Hobby Lobby that incorporate religious beliefs into their business practices.

Here, the court found, rightly, that even a for-profit, private institution can constitutionally exercise the religious beliefs of its owners — and that the government cannot blithely shut down that exercise simply because it is not a nonprofit under the tax code.

The Greens brought a challenge to the mandate under both the Free Exercise Clause of the Constitution and the Religious Freedom Restoration Act (RFRA). RFRA provides that if the plaintiff can show that a law presents a substantial burden on a sincere religious practice the law must be overturned, unless the government can show a "compelling interest" why the law should be enforced against that plaintiff. This is the most stringent legal standard in constitutional law.

The government argued that RFRA did not even apply to Hobby Lobby because a corporation could not, in these circumstances, be a "person." The court soundly rejected this argument and found that even for-profit corporations had a right to freely exercise religious beliefs.

For this reason alone, the opinion is valuable. It squarely confronted the government’s contention that somehow religious institutions could only be "not-for-profits," as defined by the Internal Revenue Code. But the state cannot define what entities are able to express the religious beliefs of their owners; the tax code, or any other regulation, cannot change constitutional rights. Corporations already have the right to free speech, and the court saw "no reason the Supreme Court would recognize constitutional protection for a corporation’s political expression but not its religious expression."

When faced with these court challenges, HHS tried to carve out an exception to the mandate for religious nonprofits that were staffed by, and provided services to, only those of the same faith. The court, here, puts that to rest: "But we see no reason why one must orient one’s business toward a religious community to preserve free-exercise protections. A religious individual may enter the for-profit realm intending to demonstrate to the marketplace that a corporation can succeed financially while adhering to religious values. As a court, we do not see how we can distinguish this form of evangelism from any other."

Further, the court blasted the government’s argument that this mandate served "compelling interests" and was designed as the least intrusive way to satisfy those interests. Those interests in public health and gender equality, while important, the court found, were too vague to support a specific burden on Hobby Lobby’s constitutional rights.

The court noted that, because of a grandfather provision, the mandate actually exempts tens of millions of Americans while harming companies like Hobby Lobby. The government’s argument that the mandate was the best way to protect public interests made little sense.

The court sent the case back to a lower court for further proceedings, and, indeed, the lower court — once it had the case again — granted the Greens a preliminary injunction, pending a full trial. But its reasoning on the constitutional rights of all entities — not just religiously affiliated ones — is strong and will govern the case going forward.

This may also have positive effects on HHS’ recent efforts to "accommodate" and change the mandate, which have not yet met with the approval of the Catholic bishops.

Gerald Russello is editor of

The University Bookman.