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In February of 2012, as the Obama administration sought to placate the United States Conference of Catholic Bishops' (USCCB) objections to contraception coverage under the Affordable Care Act, a new wrinkle in the debate took observers by surprise. Anthony Picarello, the USCCB's general counsel, protested that exemptions and accommodations for churches and religious charities didn't go far enough. "If I quit this job and opened a Taco Bell," Picarello said, "I'd be covered by the mandate."

This was the first time one of the religious objectors to the proposed regulation had raised the prospect of an exemption for for-profit, corporate entities. "We thought it was laughable at the time," says Louise Melling, deputy legal director of the American Civil Liberties Union (ACLU), which has filed amicus briefs in support of the government's position in lawsuits later brought by for-profit companies. "I'm not laughing anymore."

Last month, in the first appellate decision in these cases, the Tenth Circuit ruled in favor of arts-and-crafts chain Hobby Lobby and its affiliated chain of Christian bookstores, Mardel. The court found that corporations have the standing to sue under the Religious Freedom Restoration Act (RFRA), and have free-exercise rights under the First Amendment. "A religious individual may enter the for-profit realm intending to demonstrate to the marketplace that a corporation can succeed financially while adhering to religious values," a majority of the court's full en banc panel of eight judges wrote. "As a court, we do not see how we can distinguish this form of evangelism from any other."

Conservatives were elated. "What the Tenth Circuit did en banc is extraordinarily significant for this case and the prosecution of all the other [Health and Human Services] mandate cases," says Kyle Duncan, counsel with the Becket Fund for Religious Liberty, which represents Hobby Lobby. The question of whether a for-profit business has a right to sue under RFRA and the Free Exercise Clause of the First Amendment, said Duncan, was the "key question" in the case. "From our point of view," he added, "it was a very, very significant win."

The Anatomy of a Legal Challenge

Most observers agree that the legal questions raised in the Hobby Lobby case will ultimately be decided by the Supreme Court. While it is not clear which of the 33 cases brought by businesses against the government will reach the highest court, the legal claims are the same. Three other federal appeals courts, the Third, Sixth, and Seventh Circuits, heard oral arguments around the same time as the Hobby Lobby argument, but have not yet ruled. The Eighth and D.C. Circuits will hear cases in the fall.

But the Hobby Lobby case has been one of the most closely watched of the 33 business lawsuits against the government. The chain, based in Oklahoma, has over 500 stores nationwide, with 13,000 full-time employees on its insurance plan. Unlike other for-profit plaintiffs, many of which are small local businesses, including heating and air-conditioning contractors, cabinet makers, and Bible publishers, Hobby Lobby is a well-known Bible belt brand. Its case has become a cause célèbre among conservative activists for its "bold stand for religious freedom," in the words of Concerned Women for America. Last month, Ralph Reed's Faith and Freedom Coalition awarded the company's president the Courage in Business Leadership Award.

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Hobby Lobby's billionaire founder and CEO, David Green, and its president, Green's son Steve, have promoted themselves as patriotic Christians who serve God through their business endeavors. Their lawsuit speaks to religious conservatives who have been swept up in activism by politicians and clerics claiming that laws protecting women's rights to reproductive health, or legal equality for LGBT people amount to government "persecution," imposing "unprecedented" threats to their religious freedom-and by extension, they claim, the very survival of their businesses. Their lawsuit, and the story of their "Christian" business, is part of a narrative that religious conservatives and Republican lawmakers have pushed since Representative Darrell Issa, a Republican from California, unwittingly made Sandra Fluke a star after excluding her testimony from a hearing on whether the Obama administration "has trampled on freedom of religion."

The Greens, who declined to be interviewed for this article, say the success of the Hobby Lobby case is God rewarding their faithfulness. In a speech last year to the Great Commission World Summit, a group that gathers businessmen and women to raise money for global evangelizing organization International Cooperating Ministries, David Green, who now has a net worth of $4.5 billion, recounted his company's humble beginnings. In 1970, he and his wife Barbara borrowed $600 and began making miniature picture frames in their Oklahoma City home. Two years later, they opened the first Hobby Lobby store. For the past 40 years, "we have tried to run our business in a way that would be pleasing to our savior," Green said. In 2012, the company had $3 billion sales. "To God be the glory," said Green. "I feel God's anointing on my life and in my work."

"Using business and businessmen to proliferate certain moral 'norms'" says Darren Grem, a historian at the University of Mississippi and author of the forthcoming book, Corporate Revivals: A Business History of Born-Again America. "was vital for the construction of evangelicalism as we now know it." In that narrative, Grem adds, "business is sacred" and the state is the "enemy" of "godly forms of consumerism: the local business or large-scale 'Christian' corporation."

At issue in Hobby Lobby's lawsuit is far more than whether its employees will have coverage for all 20 methods of birth control Department of Health and Human Services regulations require employers to cover free of co-pays and deductibles. The suit, and others like it, is asking the courts to recognize for-profit corporations as entities with religious consciences that can be, in the legal parlance of RFRA, "substantially burdened" by government regulations.

The burden, Hobby Lobby argued, and the Tenth Circuit agreed, is that the government will impose fines of $100 per employee per day for failing to comply with the coverage requirement, potentially totaling $475 million in fines per year. That, the court found, amounted to a "Hobson's choice," forcing Hobby Lobby to choose between "catastrophic fines or violating its religious beliefs."

Duncan maintained that the notion of a corporation having religious-freedom rights was "not a novel proposition," but admitted there were no cases "squarely on point." The vociferous dissents in Tenth Circuit's 168-page opinion point to the conflicting legal theories that in all likelihood will be sorted out by the Supreme Court. The Tenth Circuit's chief judge, Mary Beck Briscoe, excoriated the majority for finding that the operation of a successful for-profit corporation could be seen as a "form of evangelism," effectively deeming them "faith-based businesses" entitled to free-exercise rights. That, Briscoe contended, "is nothing short of a radical revision of First Amendment law, as well as the law of corporations."

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Corporate plaintiffs, including Hobby Lobby, have argued that the Supreme Court's 2010 decision in Citizens United v. FEC, which recognized free-speech rights for corporations, bolstered their claim that corporations have rights under the Free Exercise Clause. But Marty Lederman, a professor at Georgetown University Law School and an expert on religious-freedom issues, said that the free-speech ruling does not translate to the free exercise context. "It's not at all obvious that a for-profit corporation can be injured in that way-a corporation doesn't have a conscience, or religious obligations," Lederman said.

Unlike Catholic plaintiffs, which oppose covering all methods of birth control, Hobby Lobby is refusing only to cover intrauterine devices and the emergency contraceptives Ella and Plan B, which they claim are abortifacients. Hobby Lobby says that its deeply held religious conviction is that "life begins at conception." Because, it claims (contrary to medical evidence), emergency contraception and IUDs can prevent implantation of a fertilized egg, it considers these drugs and devices "abortifacients." (Conservative activists have taken to calling the contraception coverage requirement the "abortion pill" or "abortion drug" mandate.)

Dr. Anne Davis, Consulting Medical Director to Physicians for Reproductive Health (PRH), which filed an amicus brief in the case, says that the "essence of their argument is that they believe that pregnancy occurs at fertilization. No major medical organization endorses that idea." Rather, she says, a pregnancy test is not positive until implantation has occurred.

The emergency contraceptives Ella and Plan B do not interfere with implantation, but rather with ovulation, says Davis. The copper IUD can be used for conventional or emergency contraception, but "it's spermicidal. So the sperm don't make it past the uterus." There is, as PRH noted in its brief, some evidence that the copper IUD may alter the endometrial lining, thus preventing implantation. But, Davis says, frequently fertilized eggs never implant, for unknown reasons, so to attribute a failure to implant to the remote possibility that it was caused by the IUD misses the point.

"They've got people hypnotized into thinking that fertilization is pregnancy," says Davis. "You can believe whatever you want, you can have your own beliefs about what these things mean to you," but "these are not abortifacients."

The Tenth Circuit zeroed in on PRH's statement that one of the devices in question, the copper IUD, could change conditions for implantation. "We need not wade into scientific waters here," the court wrote in a footnote, "given the above-noted agreement that some of the challenged devices function in a manner that Hobby Lobby and Mardel find morally problematic."

"Biblical Principles"

Hobby Lobby's overt religiosity-beyond the piety of its owners-seemed to further persuade the court of its need for legal protection. Its stores close on Sundays to allow workers time for family and church. The company pays above federally mandated minimum wage, currently $14 per hour for full-time employees and $9.50 per hour for part-time employees. Every Christmas, Easter, and Fourth of July, the company takes out newspaper advertisements proclaiming belief in Jesus Christ as lord and savior, America's founding as a Christian nation, and evangelizing non-believers.

But a Christian foundation for a company does not always translate to the workplace. Charity Carney, a historian who has studied mega-churches, worked at the Nacadoches, a Texas Hobby Lobby location in the summer of 2011, when she was between teaching jobs. She says that although the stores are officially closed on Sundays, "they keep employees for as long as they need to"- including on Sundays and weeknights past closing time-in order to stock shelves or ready merchandise for the next day. Carney's employment at Hobby Lobby came to an abrupt end when she refused, after working a 12-hour day, to stay into the night to help set up Christmas ornaments. The manager "basically told me if I left I shouldn't come back," Carney says.

Every staff meeting, Carney says, began with a reading from the Bible and a prayer. The employee handbook, which she said was kept in the store but not distributed to employees, included biblical references.

Despite the company's religious bent, Carney also described an atmosphere of sexual harassment, with employees photographing women's backsides with their cell phones and laughing about it, as well as a "culture of crude talk," which she says management turned a "blind eye" to.

Through a spokesperson, Hobby Lobby said, "To our knowledge, we have not received any formal complaints of this nature from this store, which would give us an opportunity to fully investigate the situation. If she would like to file a formal complaint, we will certainly address any policy violations. It is not our practice to discuss personnel issues."

In his 2005 book, More Than A Hobby: How a $600 Start Up Became America's Home & Craft Superstore, which Carney says was heavily marketed in her store, the elder Green paints a nostalgic picture of his down-home company that grew in part because of the dedication of its employees.

He devotes a chapter to explaining why the company minimally uses computers, and doesn't use barcodes and scanners for merchandise: "We insist that computers remain our servants, not our masters." Carney said cashiers must input prices by hand, and check a list of sale items in order to give the customer the right price, a process she described as "really inefficient."

"Truth" in a Vacant Strip Mall

Beyond their stores, and beyond the elder Green's unmatched generosity to evangelical causes, Steve Green, Hobby Lobby's president, has launched an ambitious project to protect and preserve the Bible, biblical education, and what conservative evangelicals call a "Christian worldview." In his 2011 book, Faith in America: The Powerful Impact of One Company Speaking Out Boldly, Green endorses the idea that there is "biblical truth" that conflicts with other ways of looking at the world. "[I]t isn't really possible to just coexist and get along," he writes. "Truth isn't inclusive. It's exclusive."

In a speech earlier this year after receiving the National Bible Association's John M. Templeton Biblical Values Award, Green discussed his plan to develop a public-school Bible curriculum. "This nation is in danger because of its ignorance of what God has taught. ... If we don't know it, our future is going to be very scary."

Last year, through a $50 million grant from the National Christian Foundation, one of the largest donor-advised funds in the country, a non-profit formed by the Greens purchased the Washington Design Center in Washington, D.C., for a future Bible museum that will house Green's collection of biblical artifacts and texts, which he claims is the largest private collection in the world.

Currently, part of Green's collection is on display in a traveling exhibition called "Passages," which is housed in a box store strip mall on a forlorn stretch of Colorado Springs, Colorado, sandwiched between a two vacant stores and a Bargain Mart.

Inside, an array of artifacts, including several scraps of the Dead Sea Scrolls, are displayed alongside kitsch. One moment you can look through a glass case at some of the earliest editions of the King James Bible, in pristine condition. The next, you can see a talking mechanical wax figure of William Tyndale, who was executed by King Henry VIII for translating the Bible into English and distributing it to the masses. About to be burned at the stake, the figure prays that the people "read the translation of the Bible I died for."

While claiming to be an ecumenical history of the Bible, the exhibit takes a distinctly Protestant view, focusing largely on the martyrdom of Reformation figures like Tyndale, Martin Luther, and even Anne Boleyn, a mechanical figure of whom proclaims, "As I await my fate, all I ask is to cling to my Tyndale New Testament."

Although the exhibit does contain Jewish relics, including numerous Torah scrolls, the one room dedicated to Jewish persecution during pogroms and the Holocaust is treated as a cautionary tale for Christians. An introductory video at the start of the exhibit lists the Holocaust room as one of the five "must-sees" in the museum. That room "poses the most alarming what-if," the narrators say, hinting at the themes of the conservative campaign for "religious liberty," of which the contraception lawsuits are a part. "What if the biblical books and scrolls in Passages were relics of people that no longer existed?" the narrators ask. "No churches, no temples, none of the hospitals, schools, or charities they support, that promote freedom, well-being and human dignity?"

Courts and Legislators Weigh In

While it's widely thought that one of the business cases will eventually make its way to the Supreme Court to challenge the contraception coverage mandate, congressional Republicans aren't waiting for the Court to rule. They've introduced the Health Care Conscience Rights Act, which would, among other things, create an exemption for any religious objector to contraception coverage, whether for-profit or non-profit. The bill was promoted last month at a forum on the "Fight to Preserve Religious Liberty" at the Archdiocese of Philadelphia, which featured its House co-sponsors, Representatives Joe Pitts, a Republican from Pennsylvania; Diane Black, a Republican from Tennessee; and Chris Smith, a Republican from New Jersey. While the bill has 180 co-sponsors in the House, its prospects in the Senate are considerably weaker. As a result, Pitts said there that Majority Leader Eric Cantor was receptive to a plan to attach the bill to a "must-pass" piece of legislation like a continuing resolution for appropriations or raising the debt ceiling limit.

Should the Supreme Court uphold the Tenth Circuit's holding in Hobby Lobby's case, or a similar one from another appeals court, "it could have significant implications for religious liberty cases and for corporate law," Lederman said, cautioning that "it's still very uncertain how the questions will be framed if and when the Court takes on the issue." The ACLU's Melling said that such a ruling, along with a future passage of the Employment Nondiscrimination Act, for example, which would bar discrimination against LGBT people, could lead to challenges that an employer's religious beliefs should relieve them from complying with the law.

But Chief Judge Briscoe sounded a more urgent alarm in her dissent. The majority's "ultimate holding, which is unprecedented," she wrote, "is sufficiently ambiguous that neither the majority nor anyone else can confidently predict where it may lead." For Hobby Lobby, however, the path is clear. As Steve Green writes in his book, "It is time for our nation to make a decision on what direction it is going to take": to serve God or to "turn to the other gods."

This report was supported by a 2012 Knight Grant for Reporting on Religion and American Public Life. The Knight Grants are a program of the University of Southern California's Knight Program in Media and Religion.