DENVER (AP) - A federal appeals court ruled Thursday that Hobby Lobby stores have a good case that the federal health care law violates their religious beliefs in ordering them to provide birth control to employees, and that they shouldn't be subject to millions in fines while their claim is considered.
The 10th Circuit Court of Appeals in Denver decided the Oklahoma City-based arts and crafts chain can proceed with its lawsuit seeking to overturn the birth-control coverage mandate on religious grounds. The judges unanimously sent the case back to a lower court in Oklahoma, which previously said Hobby Lobby must comply with the requirement or start paying millions of dollars in fines next week.
Hobby Lobby Stores Inc. argues for-profit businesses - not just religious groups - should be allowed to seek an exception if the law violates their religious beliefs. Its owners oppose certain types of contraception, including the morning-after pill.
Hobby Lobby is the largest and best-known of more than 30 businesses in several states that have challenged the contraception mandate.
Five of eight active judges hearing the company's case agreed that arguments for exemption from the mandate by for-profit businesses like Hobby Lobby have merit. "Their exercise of religion is substantially burdened," the judges wrote.
The judges also pointed out that Hobby Lobby would be subject to more fines for refusing the contraception mandate - nearly $475 million a year - than if it provided no employee health coverage at all. That action would prompt an annual fine of about $26 million.
Hobby Lobby and its sister store, Christian booksellers Mardel Inc., won expedited federal review because the chain would have faced fines starting Monday for not covering the required forms of contraception. The 10th Circuit judges said the Oklahoma court was wrong to not grant the companies an injunction in the face of serious financial penalties.
"Sincerely religious persons could find a connection between the exercise of religion and the pursuit of profit," the judges wrote. "Would an incorporated kosher butcher really have no claim to challenge a regulation mandating non-kosher butchering practices?"
The 10th Circuit heard the case before eight active judges instead of the typical three-judge panel, indicating the case's importance.
Hobby Lobby and other companies challenging the contraception mandate say the morning-after pill is tantamount to abortion because it can prevent a fertilized egg from becoming implanted in a woman's womb.
The U.S. Department of Justice argued that allowing for-profit corporations to exempt themselves from requirements that violate their religious beliefs would be in effect allowing the business to impose its religious beliefs on employees.
The 10th Circuit cited a 2010 U.S. Supreme Court conclusion that for-profit corporations have rights to political expression.
"We see no reason the Supreme Court would recognize constitutional protection for a corporation's political expression but not its religious expression," the judges wrote.
One judge went even further in a concurring opinion.
"No one suggests that organizations, in contrast to their members, have souls," Judge Harris Hartz wrote. "But it does not follow that people must sacrifice their souls to engage in group activities through an organization."
Hobby Lobby calls itself a "biblically founded business" and is closed on Sundays. Founded in 1972, the company now operates more than 500 stores in 41 states and employs more than 13,000 full-time employees who are eligible for health insurance.
Lawyers for store owners the Green family called the ruling a "resounding victory for religious freedom."
The Greens "run their business according to their Christian beliefs," said Emily Hardman, spokeswoman for the Washington-based Becket Fund for Religious Liberty, which represents Hobby Lobby.
But Americans United for Separation of Church and State said the judges were wrong to say Hobby Lobby has a reasonable chance of success with its arguments.
"This court has taken a huge step toward handing bosses and company owners a blank check to meddle in the private medical decisions of their workers," executive director Barry Lynn said in a statement. "This isn't religious freedom; it's the worst kind of religious oppression."
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