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U.S. Can't Fine Hobby Lobby $1.3 Million Daily After Monday, Judge Rules

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HOBBY LOBBY
Customers are seen at a Hobby Lobby store in Denver on Wednesday, May 22, 2013. A challenge to the federal health care law faces its most prominent test yet in a full 10th Circuit hearing in Denver on Thursday. Hobby Lobby stores is challenging a federal mandate requiring it to offer employees health coverage that includes access to the morining-after birth control pill. The Oklahoma based arts and crafts chain says the mandate violates the religious beliefs of its owners. | AP

OKLAHOMA CITY -- Hobby Lobby and a sister company will not be subject to $1.3 million in daily fines beginning Monday for failing to provide access to certain forms of birth control through its employees' health care plans, a judge ruled Friday.

U.S. District Judge Joe Heaton set a hearing for July 19 to address claims by the owners of Hobby Lobby and the Mardel Christian bookstore chains that their religious beliefs are so deeply rooted that having to provide every form of birth control would violate their conscience.

The 10th U.S. Circuit Court of Appeals had said Thursday the companies were likely to prevail, comparing the companies to a kosher butcher unwilling to adopt non-kosher practices as part of a government order.

Until the hearing, the government cannot impose fines against Hobby Lobby or Mardel for failing to comply with all of the Affordable Care Act. The companies' owners oppose birth control methods that can prevent implantation of a fertilized egg in the uterus, such as an intrauterine device or the morning-after pill, but are willing to offer the 16 other forms of birth control mentioned in the federal health care law.

"The opinion makes it very clear what is a valid religious belief and what is not," said Emily Hardman, spokeswoman for The Becket Fund for Religious Liberty. The group is representing the companies and their owners, the Green family.

Heaton asked the government and companies to seek some sort of solution before the hearing, given that the 10th Circuit has already cleared the way for the companies to challenge the law on religious grounds. While not binding beyond the states in the 10th Circuit, Thursday's ruling could benefit others that oppose all forms of birth control, Hardman said, such as Catholic hospitals.

"We got a fantastic opinion from the 10th Circuit, which will impact all the cases," she said.

The companies had faced fines totaling $1.3 million daily beginning Monday. Had they dropped its health care plan altogether, they could have been fined $26 million. The only alternative would be to pay for birth control that violates its religious beliefs, the companies' owners said.

The appeals court on Thursday had suggested the companies shouldn't have to pay the fines, but there were unaddressed questions pending at the lower court. Heaton resolved those Friday in the companies' favor: Hobby Lobby had shown they would suffer financial or spiritual consequences, and that an injunction was in the public interest.

In fighting Hobby Lobby and other companies that oppose some or all forms of birth control, government lawyers had said companies cannot pick which portions of the Affordable Care Act with which they will comply.

Spokesmen for the Department of Health and Human Services have repeatedly declined to comment on pending lawsuits over birth control coverage.

Electronic court filings did not show any response from the government to Hobby Lobby's latest injunction request, but Heaton said in his order that lawyers from both sides had weighed in.

Hobby Lobby's lawyers have said the U.S. Department of Human Services has granted exemptions from portions of the health care law for plans that cover tens of millions of people and that allowing the companies an injunction would be no great burden to the government at the expense of the Greens' religious freedoms.

The companies' lawyers calculated potential losses at $475 million in a year – $100 per day for 13,000 workers – while harms to the government are "minimal and temporary."

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