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Hobby Lobby beats Obamacare at the Tenth Circuit

In a victory for religious freedom, the United States Court of Appeals for the Tenth Circuit ruled in Hobby Lobby v. Sebelius that the retail chain is entitled to protection under the Religious Freedom Restoration Act (RFRA), that it is likely to succeed in its lawsuit against Obamacare’s contraception mandate, and that the mandate deals irreparable harm to Hobby Lobby. 

Following the passage of Obamacare, the U.S. Department of Health and Human Services (HHS) adopted regulations that require employers like Hobby Lobby to provide insurance that covers all FDA-approved contraceptives. Noncompliance meant fines of $100 per day per employee after July 1, 2013, or $475 million a year in Hobby Lobby’s case. Hobby Lobby’s only other option to conform to its religious beliefs would be to not provide insurance to its employees, with fines totaling $26 million per year.

The Hobby Lobby corporation is privately held as is Mardel, a chain of Christian bookstores owned by Mart Green, a member of the family that owns Hobby Lobby. The Greens brought suit under both the RFRA and the free exercise clause of the First Amendment. They do not challenge all contraceptives, but only ones that “would prevent implantation of a fertilized egg,” such as Ella and Plan B. 

Ruling against the HHS regulation in a 67-page majority opinion, the Tenth Circuit determined that corporations like Hobby Lobby are considered “persons” under the RFRA, that for-profit corporations can freely exercise religion, and that in this case HHS has substantially burdened Hobby Lobby’s free exercise without advancing any compelling governmental interest. It’s a slam dunk for the religious freedom, and the entire majority opinion, though lengthy, is worth a read.

Importantly, Hobby Lobby brought an as-applied challenge, so this does not overturn the HHS mandate, but prevents its enforcement against Hobby Lobby and opens the door to other corporations to challenge its application on religious grounds. The government complained that this opens the door to lies about religious practice, but the Court easily dismissed this:

The government . . . raises the specter of future cases in which, for example, a large publicly traded corporation tries to assert religious rights under RFRA. That would certainly seem to raise difficult questions of how to determine the corporation’s sincerity of belief. But that is not an issue here. Hobby Lobby and Mardel are not publicly traded corporations; they are closely held family businesses with an explicit Christian mission as defined in their governing principles. The Greens, moreover, have associated through Hobby Lobby and Mardel with the intent to provide goods and services while adhering to Christian standards as they see them, and they have made business decisions according to those standards. And the Greens are unanimous in their belief that the contraceptive-coverage requirement violates the religious values they attempt to follow in operating Hobby Lobby and Mardel. It is hard to compare them to a large, publicly traded corporation, and the difference seems obvious.

The Hobby Lobby opinion comes just one day shy of the one-year anniversary of the Obamacare decision in NFIB v. Sebelius, which upheld the requirement that all Americans must have health insurance or pay a fine (or tax, as the Court called it). Hobby Lobby’s is a much smaller fight, but no less important from a constitutional perspective. As I discussed months ago it is but one of many suits targeting individual components of Obamacare’s myriad tentacles. 

On a sour note, this decision comes just days after a short affirmation from a three-judge panel at the Tenth Circuit of the dismissal of our Free Speech case here in Wyoming. 

Like Free Speech, Hobby Lobby is not yet over. The Tenth Circuit has remanded the case to the Western District of Oklahoma to consider the remaining two factors of preliminary injunction—the balance of equities against the government and whether an injunction is in the public interest—but given the strength of the opinion, it’s very likely these remaining factors will favor Hobby Lobby. Following this and the final decision of the case on the merits, HHS may appeal the case all the way to the Supreme Court, but, again, given the strength of today’s opinion I think it’s safe to say First Amendment principles have taken a small effective bite against one little piece of the Obamacare behemoth.

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Monday, 23 October 2017
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