Court Denies Hobby Lobby and Its Owners A Preliminary Injunction Against Contraceptive Coverage Mandate

Another decision in the many challenges to the contraceptive coverage mandate under the Affordable Care Act was handed down yesterday. In Hobby Lobby Stores, Inc. v. Sebelius, (WD OK, Nov. 19, 2012), an Oklahoma federal district court denied a preliminary injunction, rejecting both 1st Amendment and Religious Freedom Restoration Act claims by Hobby Lobby Stores, Inc., Mardel, Inc. and the Green family that owns and operates the closely held businesses. Plaintiffs asserted that their free exercise rights are infringed by requiring the companies' employee health insurance policies to cover contraceptive methods that they believe amount to abortion. The court held that secular, for-profit corporations do not have a constitutional right to the free exercise of religion. As to claims by the individual owners of the companies, the court found that the free exercise claims are not likely to succeed because the mandate is a neutral requirement of general applicability, and therefore need only meet the rational basis test.

Moving to the RFRA claim, the court concluded that business corporations are also not covered by its protections:

General business corporations do not, separate and apart from the actions or belief systems of their individual owners or employees, exercise religion.  They do not pray, worship, observe sacraments or take other religiously-motivated actions separate and apart from the intention and direction of their individual actors.  Religious exercise is, by its nature, one of those “purely personal” matters ... which is not the province of a general business corporation.

Finally the court concluded that the mandate does not impose a "substantial burden" on the free exercise rights of the individual owners of the business corporations:

[E]ven assuming, as appears to be the case with plaintiffs, that they object as a matter of religious faith to any act supporting or facilitating abortion, no matter how indirect, that does not end the issue. RFRA’s provisions do not apply to any burden on religious exercise, but rather to a “substantial” burden on that exercise.... [T]he particular “burden of which plaintiffs complain is that funds, which plaintiffs will contribute to a group health plan, might, after a series of independent decisions by health care providers and patients covered by [Hobby Lobby’s] plan, subsidize someone else’s participation in an activity that is condemned by plaintiff’s religion.”...  Such an indirect and attenuated relationship appears unlikely to establish the necessary “substantial burden.”...

UPDATE: A Becket Fund press release says that Hobby Lobby will appeal the decision.

UPDATE2: Plaintiffs on Nov. 20 filed with the 10th Circuit Court of Appeals a motion for an injunction pending appeal and a memorandum in support of the motion. (Full text).