Kristen Wyatt

DENVER: A federal appeals court ruled Thursday that Hobby Lobby stores have a good case that the federal health-care law violates their religious beliefs in ordering them to provide birth control to employees, and that they shouldn’t be subject to millions in fines while their claim is considered.

The 10th Circuit Court of Appeals in Denver decided the Oklahoma City-based arts and crafts chain can proceed with its lawsuit seeking to overturn the birth-control coverage mandate on religious grounds.

The judges unanimously sent the case back to a lower court in Oklahoma, which previously said Hobby Lobby must comply with the requirement or start paying millions of dollars in fines next week.

Hobby Lobby Stores Inc. argues for-profit businesses — not just religious groups — should be allowed to seek an exception if the law violates their religious beliefs.

The company’s owners oppose certain types of contraception, including the morning-after pill.

Hobby Lobby is the largest and best-known of more than 30 businesses in several states that have challenged the contraception mandate.

Five of eight active judges hearing the company’s case agreed that arguments for exemption from the mandate by for-profit businesses like Hobby Lobby have merit.

“Their exercise of religion is substantially burdened,” the judges wrote.

The judges also pointed out that Hobby Lobby would be subject to more fines for refusing the contraception mandate — nearly $475 million a year — than if it provided no employee health coverage at all.

That action would prompt an annual fine of about $26 million.

Hobby Lobby and its sister store, Christian booksellers Mardel Inc., won expedited federal review because the chain would have faced fines starting Monday for not covering the required forms of contraception.

The 10th Circuit judges said the Oklahoma court was wrong to not grant the companies an injunction in the face of serious financial penalties.