A divided panel of the Seventh Circuit Court of Appeals has temporarily blocked the Obama administration from requiring that an Illinois company comply with the mandate that insurance policies provide full coverage of birth control methods.

The plaintiffs, Cyril and Jane Korte run a for-profit construction company and claim the contraception mandate violates their religious liberty rights.  In issuing the injunction, the 7th Circuit majority said the Kortes had met their burden and established a reasonable likelihood of success on the merits of their Religious Freedom Restoration Act claim, and that the government had not yet justified the apparent “substantial burden” on their religious exercise rights.

The ruling is a first by a federal appeals court to block enforcement of the mandate against people who said it violated their faith and came just days after the Supreme Court refused to intervene in the Hobby Lobby case. In that case, the Tenth Circuit Court of Appeals came to an opposite conclusion and refused to block enforcement of the mandate against the for-profit retail craft store.

The ruling also signals a possible shift in the federal courts in the landscape of rights available to corporations in a post-Citizens United world. Historically, the courts have ruled that religious liberty does have limits in the commercial sector, including the rights of employees to be free from employers imposing religious faith on their employees. On this point the Seventh Circuit appears to disagree:

[T]he government’s primary argument is that because K & L Contractors is a secular, for‐profit enterprise, no rights under RFRA are implicated at all. This ignores that Cyril and Jane Korte are also plaintiffs. Together they own nearly 88% of K & L Contractors. It is a family‐run business, and they manage the company in accordance with their religious beliefs. This includes the health plan that the company sponsors and funds for the benefit of its nonunion workforce. That the Kortes operate their business in the corporate form is not dispositive of their claim. See generally Citizens United v. Fed. Election Comm’n, 130 S. Ct. 876 (2010). The contraception mandate applies to K & L Contractors as an employer of more than 50 employees, and the Kortes would have to violate their religious beliefs to operate their company in compliance with it.

The decision itself is not a ruling on the merits, but does suggest at least one federal appellate court is willing to entertain another dramatic expansion of corporate “rights” and that alone could be enough to bring the issue before the Roberts Court.