(Reuters) - A federal judge has temporarily exempted Hobby Lobby Stores Incfrom a requirement in the 2010 healthcare law that it offer workers insurance coverage for birth control, which the retailer said violated its religious beliefs.
The preliminary injunction issued by U.S. District Judge Joe Heaton in Oklahoma City, where Hobby Lobby is based, covers the arts and crafts chain and its affiliated Mardel Christian bookstore chain.
He put the case on hold until October 1, giving the federal government time to decide whether to appeal a June 27 decision by a federal appeals court inDenver to let Hobby Lobby challenge the mandate on religious grounds.
A U.S. Department of Justice spokesman had no immediate comment. The government has said contraception coverage is needed to promote public health and gender equality.
The Becket Fund for Religious Liberty, a nonprofit law firm representing Hobby Lobby, said there are 63 lawsuits nationwide challenging the mandate.
It said Hobby Lobby is the largest company to be excused, at least temporarily, from having to comply. Hobby Lobby has 556 stores in 45 U.S. states, and has about 13,000 employees.
The Green family, which owns Hobby Lobby, had argued that providing coverage to workers for the morning-after pill and similar contraceptives violated its Christian beliefs.
It also said it could have under Obamacare faced $1.3 million in daily fines by not providing such coverage.
In a written order, Heaton said the size of those penalties, the "substantial" public policy issues involved, and the amount of similar litigation justified an injunction for Hobby Lobby.
"There is a substantial public interest in ensuring that no individual or corporation has their legs cut out from under them while these difficult issues are resolved," Heaton said at a hearing, according to the Becket Fund.
In its June 27 ruling, the Denver appeals court said there was a good chance that Hobby Lobby would ultimately prevail.
It said Hobby Lobby had "drawn a line at providing coverage for drugs or devices they consider to induce abortions, and it is not for us to question whether the line is reasonable."
Lori Windham, senior counsel for the Becket Fund, said in an interview that Heaton's decision "shows that companies can be protected from the mandate, and continue to exercise their religious beliefs in the way they run their businesses."
The case is Hobby Lobby Stores Inc et al v. Sebelius et al, U.S. District Court, Western District of Oklahoma, No. 12-01000.
(Editing by Gerald E. McCormick, Andrew Hay and Richard Chang)