Hobby Lobby appealing refusal of HHS mandate injunction

Oklahoma City, Okla., Nov 20, 2012 / 17:00 pm

The retailer Hobby Lobby will appeal a federal court's refusal of its request for an injunction against a Health and Human Services rule that requires 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 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 case is the latest in the controversy over the Department of Health and Human Services mandate requiring insurance coverage for sterilization and contraception, including some abortion-causing drugs. Its narrow religious exemption applies only to non-profit organizations which aim to spread religious values and which employ and serve primarily people of their religion.

Employees who violate the mandate risk fines of $100 per employee per day. Hobby Lobby, which employs over 13,000 full-time employees, 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 them, the Associated Press reports.

U.S. District Judge Joe Heaton of the Western District of Oklahoma on Monday ruled that Hobby Lobby and Mardel "are not religious organizations." The judge also noted that the plaintiff's lawyers did not cite any case and the court did not find any case concluding that "secular, for-profit corporations" such as Hobby Lobby have "a constitutional right to the free exercise of religion." He 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.

Meanwhile, David Green said the legal action 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 anxiety 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 which 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 Obama criticized Republican presidential candidate Mitt Romney for supporting a broader religious exemption.