Appeals Court Denies Hobby Lobby's Request To Block Contraceptive Coverage Rules

December 21, 2012 — A federal appeals court on Thursday agreed with a lower court's decision that retail chain Hobby Lobby should not receive an injunction to temporarily block enforcement of the federal contraceptive coverage rules, the Washington Times reports (Wetzstein, Washington Times, 12/20).

Last month, U.S. District Judge Joe Heaton ruled that that the company's Christian owners are not exempt from providing employees with birth control coverage because they operate a secular business. The lawsuit also involved Mardel, Hobby Lobby's sister company.

The suit argued that providing coverage of certain contraceptives for Hobby Lobby's workers would violate the freedom of speech and religious beliefs of founder and CEO David Green and his family. The suit also claimed that certain contraceptives -- including emergency contraception and intrauterine devices -- can prevent the implantation of a fertilized egg in the uterus, which the Green family considers to be an abortion.

The suit sought to block enforcement of the contraceptive coverage rules for the Green family's businesses and "other individuals and organizations that object on religious grounds." The rules, which are being implemented under the Affordable Care Act (PL 111-148), require most health plans issued or renewed after Aug. 1 to cover contraceptive services without copayments or deductibles. HHS has given religious not-for-profits, such as colleges and hospitals, a one-year delay period to come into compliance, and religious institutions, such as churches and synagogues, are exempt altogether (Women's Health Policy Report, 11/20).

Details of Thursday's Ruling

In its ruling, the 10th U.S. Circuit Court of Appeals concurred with the lower court's decision that Hobby Lobby and Mardel are not religious entities with constitutional protections related to the contraceptive coverage rules. The appellate judges wrote that the court was unlikely to expand the reach of a federal law that guarantees religious freedom "to encompass the independent conduct of third parties with whom the plaintiffs have only a commercial relationship" (Monies, The Oklahoman, 12/20).

Further, the appeals court agreed with the lower court that the company's owners failed to show how the rule would "substantially burden" their freedom of religion (Norman, CQ HealthBeat, 12/20).

Plaintiffs' Response

The plaintiffs pledged to appeal to the Supreme Court. Plaintiffs' attorney Kyle Duncan -- general counsel for the Becket Fund for Religious Liberty -- said the Green family will "continue to make their case on appeal that this unconstitutional mandate infringes their right to earn a living while remaining true to their faith" (Olafson, Reuters, 12/20).

Hobby Lobby and Mardel said they will continue to cover other types of contraceptives in their health plans. Hobby Lobby faces a Jan. 1 deadline to comply with the contraceptive coverage rules for its 13,000 employees. Failure to offer the coverage could result in fines of up to $1.3 million per day (The Oklahoman, 12/20).