At the heart of the two-year legal battle between Hobby Lobby's owners and the Department of Health and Human Services (HHS) is a single sentence from the Religious Freedom Restoration Act of 1993 (RFRA).

"Governments," the law reads, "should not substantially burden religious exercise without compelling justification."

In a 5–4 ruling today, the Supreme Court decided the federal government failed to live up to that standard.

At issue was a section of the Affordable Care Act which requires companies with more than 50 employees to provide health care insurance. In implementing the law, HHS named 20 kinds of contraception that needed to be covered by employers. But the owners of Hobby Lobby and Conestoga Wood Specialties, whose cases were decided together today, considered four of those contraceptives potential abortifacients due to the way they can prevent implantation of a fertilized egg in a mother's womb. Their refusal to pay for those four methods meant they faced millions of dollars in fines.

That violated RFRA, wrote Justice Samuel Alito in the majority opinion, because it penalizes the religious beliefs of the Green family, evangelical Christians who own Hobby Lobby, a craft store chain with 500 stores and more than 13,000 employees, and the Hahn family, Mennonites whose company employs more than 1,000 employees in five factories across the country.

While the case was decided 5–4, the opinions that accompanied the court's decision also signal that seven of the nine justices agree that businesses can make religious liberty claims in court—an important ruling, said Joshua Hawley, senior counsel for The Becket Fund for Religious Liberty.

"The opinion was right on the money … that the government is required to accommodate those folks and not violate their religious beliefs," Hawley said. "That is exactly the kind of coverage and protection that the law is supposed to give, and the court reaffirmed that today. It's quite targeted and modest, but firm, and for people of religious conviction this is a great victory."

In refusing to comply with the mandate, Hobby Lobby faced an estimated $475 million in fines, according to court documents.

"If these consequences do not amount to a substantial burden, it is hard to see what would," Alito said.

A familiar and narrow majority comprised of Justices Alito, Clarence Thomas, Antonin Scalia, Anthony Kennedy, and Chief Justice John Roberts ruled in favor of the companies and their owners. Justices Stephen Breyer, Ruth Bader Ginsburg, Elena Kagan, and Sonia Sotomayor dissented. Ginsburg read portions of her dissent from the bench in a gesture that is reserved for occasions of sharp disagreement among the justices.

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A key issue in the case was the for-profit status of the companies, since HHS had already created a way for religious nonprofits to obtain an exemption from the "contraceptive mandate." But the court majority ruled that RFRA does apply to for-profit corporations, at least to "closely held" firms, which are often owned by a few family members.

They also ruled that since the government had an alternate plan for providing contraception coverage to employees of religious nonprofits, it had a workable alternative to mandated coverage that was less restrictive on the companies and their owners.

"We hold that the regulations that impose this obligation violate RFRA, which prohibits the Federal Government from taking any action that substantially burdens the exercise of religion unless that action constitutes the least restrictive means of serving a compelling government interest," the majority wrote.

Carl Esbeck, University of Missouri law professor and former senior counsel to the deputy attorney general in the Bush administration, said that the government's willingness to accommodate faith-based nonprofits undermined its case.

But Esbeck sees a more fundamental flaw in an administration that argued for a limited view of how religion affects everyday life and the decisions of business owners. "They could not get their heads around the idea that religious people could go into business and take their faith with them," he said.

The ruling may also signal the Court's attitude toward faith-based nonprofits that object to the contraceptive mandate. Currently, they are required to "certify" to their insurance companies that they object to the mandate on religious grounds, and the insurance companies then have to arrange for coverage.

But in an interim January ruling in the case of a Catholic order called Little Sisters of the Poor, the Court ruled that the Sisters were only required to inform HHS of their objection to the mandate, with the government responsible for arranging contraception coverage for their employees.

Mark Rienzi, senior counsel for the Becket Fund for Religious Liberty and counsel for Hobby Lobby, represents the Little Sisters of the Poor and a number of other religious nonprofits. He said that his clients would likely be open to such an approach.

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For today, Rienzi was delighted with the Supreme Court's ruling. He called it a "big win for religious freedom in America."

Rienzi noted the Court majority's opinion that if the government wants to provide free contraception to employees, it can do that without requiring religious believers to violate their conscience.

"There's simply no need to drag unwilling religious objectors into the process," he said.

Barbara Green, cofounder of Hobby Lobby, said in an official statement that her family was "overjoyed" by today's decision.

"The Court's decision is a victory, not just for our family business, but for all who seek to live out their faith," she said. "We are grateful to God and to those who have supported us on this difficult journey."

In her dissent, Ginsburg argued that the ruling harms women who disagree with the Greens. She noted that women pay more than men for preventive care, citing a wide range of physical and emotional conditions that can be worsened by unintended pregnancies. She called the companies' claims for a religious exception "extraordinary."

"The exemption sought by Hobby Lobby and Conestoga would override significant interests of the corporations' employees and covered dependents," she wrote. "It would deny legions of women who do not hold their employers' beliefs access to contraceptive coverage that the ACA would otherwise secure."

The court's willingness to grant religious freedoms to for-profit corporations also came under sustained attack from critics who believe it will lead to a slew of other demands for religious accommodations.

"The potential effects of this decision are absolutely chilling, setting a precedent that is sure to reverberate far beyond the issue of contraceptive coverage," said Ronald A. Lindsay, president and CEO of the Center for Inquiry, in a statement. "This is not a decision that advances religious freedom – it is a decision that enshrines religious privilege over and above employee well-being. This decision defies common sense, lacks compassion, and has the potential to harm us all."

Yet the majority seemed to anticipate these criticisms in the narrowness of the decision.

They specifically indicated that the decision does not apply to other medical procedures, such as vaccinations or blood transfusions, to which persons might have religious objections. They also pointedly observed that RFRA can't be used as an excuse to engage in illegal discrimination—specifically addressing racial discrimination, but also very possibly hinting at future litigation about sexual orientation.

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"This decision concerns only the contraceptive mandate and should not be understood to hold that all insurance-coverage mandates, e.g., for vaccinations or blood transfusions, must necessarily fall if they conflict with an employer's religious beliefs. Nor does it provide a shield for employers who might cloak illegal discrimination as a religious practice," the court said in its ruling.

As for the fear that major corporations—like an IBM or a Wal-Mart—would claim religious exemptions to federal law, Rienzi observed that the court's ruling depends on firms being owned by religious people who consistently underscore that their business operates by religious principles. Conestoga Wood Specialties' "Vision and Values Statement," for example, states that the firm seeks to "ensure a reasonable profit in a manner that reflects [the Hahns'] Christian heritage."

Publicly traded corporations rarely or never make such claims. To suddenly discover a religious exemption would require a firm to lie in court, Rienzi said.

"People who come into courts and tell lies go to prison," he said.

Today's ruling marks the second time in recent years that the Obama administration has lost a major case involving religious liberty. Rienzi hopes that the federal government will take religious liberty more seriously in the future.

"In my ideal world, [this decision] makes the administration say enough is enough. We don't need to bully people into violating their religion."

The Becket Fund is representing Wheaton College, Colorado Christian University, the Eternal World Television Network, and a number of other nonprofits challenging the contraceptive mandate. In a conference call with reporters, Rienzi said that his clients would likely be amenable to the accommodation already given to the Little Sisters of the Poor, mentioned in a footnote in the Hobby Lobby case.

"We think that solution from the footnote is a perfectly good one," said Rienzi.

Thomas Berg, professor at the University of St. Thomas (Minnesota) School of Law, said that RFRA was designed to deal with conflicts between religions beliefs and government interests. In this case, he said, the law worked the way it was intended.

"It's a mechanism for striking balances, given the facts of the case," he said.

Berg said that RFRA does not exclude for-profit business owners.

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"There's no exception that says you can't carry your religious beliefs into your business dealings," said Berg.

While the ruling doesn't resolve the cases involving nonprofits, Berg said, "It does seem at this point that there ought to be a way for the administration to set up the accommodation in a way that the nonprofits could accept."

Will this decision introduce "havoc," as Justice Ginsburg implied in her dissent, with countless firms filing RFRA claims for religious exemptions? Not likely, said David Skeel, a corporate law professor at the University of Pennsylvania, especially for larger firms. "Hobby Lobby is not, in my view, opening a religious floodgate," he said. "People won't forget about it, but there won't be dozens and dozens of cases involving giant corporations any time soon."

The court's opinion leaves at least one question unanswered, Skeel said: defining what makes a corporation religious. The ruling implies that corporations would qualify as religious when most or all shareholders were religiously oriented and a statement of purpose included explicit reference to faith, but in the absence of specific guidance, future cases will undoubtedly test just how far that protection extends.

Also up in the air is whether the ruling extends to companies with more than a few closely related family members as owners. "Perhaps a firm like Chick-Fil-A would qualify, but I'm not even sure they would," he said.

While the Supreme Court specifically notes its decision does not extend to vaccinations and blood transfusions, other healthcare costs associated with reproductive health might be up for debate now, Skeel said. For instance, two closely-held Chicago corporations—Triune Health Group and Ozinga Brothers—have Catholic owners who have petitioned for the right to not pay for contraception and sterilization for their employees, according to a press release from Jubilee Campaign USA. Those and similar cases could be up for discussion, though the courts are likely to be less willing to accommodate such broad restrictions, Skeel said.

The court's ruling sends an important message that corporations should have some ethical leeway in their healthcare decisions, said Paige Comstock Cunningham, executive director of the Center for Bioethics and Human Dignity at Trinity International University.

"But for the company, these employees would not have health insurance, and the company believes they should have health insurance," she said. "But they want to provide ethical health insurance, because they're paying for it."