2nd Circuit: Students Lack Standing To Challenge Diversion of Dollars To Religious Schools

In Montesa v. Schwartz, (2d Cir., Sept. 12, 2016), the U.S. 2nd Circuit Court of Appeals, in a 2-1 decision, held that plaintiffs-- dozens of students in the East Ramapo Central School District in New York state-- lack standing to sue over funds allegedly diverted by the school board to Orthodox Jewish schools.  The students claim that the diversion-- in part through manipulation of payments under the Individuals With Disabilities Education Act-- led to less funding for the public schools they attend.  In denying standing, the majority said in part:

We have not found a case ... where an appeals court has recognized [plaintiffs'] theory of direct exposure—where the plaintiffs’ exposure is the loss of a favored governmental service or benefit caused, in part, by a diversion of public resources away from such service or benefit to support a preferred religion....  The Student‐Plaintiffs’ injury arises out of being enmeshed in an underfunded school system, not out of being directly exposed to the alleged unconstitutional IDEA Settlements themselves. An alleged causal connection between the underfunding of the school district’s budget and the alleged unconstitutional expenditures is insufficient to give rise to a direct injury. To hold otherwise would impermissibly expand the concept of direct exposure to include injuries that are unrelated to the challenged governmental act but which flow in fact from a government’s decision to fund one program or service at the expense of another.  This is a theory of indirect injury and recognizing it would allow plaintiffs who are only incidentally affected by a challenged governmental expenditure to assert Establishment Clause claims.

Judge Reiss dissented. Courthouse News Service reports on the decision.