Supreme Court Says Montana Cannot Exclude Religious Schools From Tax-Credit Program

In Espinoza v. Montana Department of Revenue, (US Sup. Ct., June 30, 2020), the U.S. Supreme Court in a 5-4 decision held that Montana's exclusion of religious schools from its scholarship tax credit program violates the Free Exercise clause of the U.S. Constitution.  The Montana Supreme Court had invalidated the entire scholarship program because it included religious schools, relying on the "no aid" provision of the Montana constitution.  Chief Justice Roberts majority opinion, joined by Justices Thomas, Alito, Gorsuch and Kavanaugh, said in part:

This case also turns expressly on religious status and not religious use. The Montana Supreme Court applied the no-aid provision solely by reference to religious status. The Court repeatedly explained that the no-aid provision bars aid to “schools controlled in whole or in part by churches,” “sectarian schools,” and “religiously-affiliated schools.”... Applying this provision to the scholarship program, the Montana Supreme Court noted that most of the private schools that would benefit from the program were “religiously affiliated” and “controlled by churches,” and the Court ultimately concluded that the scholarship program ran afoul of the Montana Constitution by aiding “schools controlled by churches.”... The Montana Constitution discriminates based on religious status just like the Missouri policy in Trinity Lutheran, which excluded organizations “owned or controlled by a church, sect, or other religious entity.”...

...Status-based discrimination remains status based even if one of its goals or effects is preventing religious organizations from putting aid to religious uses.

Justice Thomas filed a concurring opinion which was joined by Justice Gorsuch, saying in part:

I write separately to explain how this Court’s interpretation of the Establishment Clause continues to hamper free exercise rights. Until we correct course on that interpretation, individuals will continue to face needless obstacles in their attempts to vindicate their religious freedom.

Justice Alito filed a concurring opinion, saying in part:

Respondents argue that Montana’s no-aid provision merely reflects a state interest in “preserv[ing] funding for public schools,”... known as “common schools” during the Blaine era. Yet just as one cannot separate the Blaine Amendment from its context, “[o]ne cannot separate the founding of the American common school and the strong nativist movement.”  Spearheaded by Horace Mann, Secretary of the Massachusetts Board of Education from 1837 to 1848, the common-school movement did not aim to establish a system that was scrupulously neutral on matters of religion. (In a country like ours, that would have been exceedingly difficult, if not impossible.) Instead the aim was to establish a system that would inculcate a form of “least-common denominator Protestantism.”This was accomplished with daily reading from the King James Bible, a curriculum that, Mann said, let the book “speak for itself.” ... Yet it was an affront to many Christians and especially Catholics, not to mention non-Christians.

Mann’s goal was to “Americanize” the incoming Catholic immigrants. In fact, he and other proponents of the common-school movement used language and made insinuations that today would be considered far more inflammatory.

Justice Gorsuch filed a concurring opinion, saying in part:

 I was not sure about characterizing the State’s discrimination in Trinity Lutheran as focused only on religious status, and I am even less sure about characterizing the State’s discrimination here that way....

Maybe it’s possible to describe what happened here as status-based discrimination. But it seems equally, and maybe more, natural to say that the State’s discrimination focused on what religious parents and schools do—teach religion....

Most importantly, though, it is not as if the First Amendment cares. The Constitution forbids laws that prohibit the free exercise of religion. That guarantee protects not just the right to be a religious person, holding beliefs inwardly and secretly; it also protects the right to act on those beliefs outwardly and publicly.

Justice Ginsburg filed a dissenting opinion, joined by Justice Kagan, saying in part:

[T]he Montana court remedied the state constitutional violation by striking the scholarship program in its entirety. Under that decree, secular and sectarian schools alike are ineligible for benefits, so the decision cannot be said to entail differential treatment based on petitioners’ religion.

Justice Breyer filed a dissenting opinion, joined in part by Justice Kagan, saying in part:

It is true that Montana’s no-aid provision broadly bars state aid to schools based on their religious affiliation. But this case does not involve a claim of status-based discrimination. The schools do not apply or compete for scholarships, they are not parties to this litigation, and no one here purports to represent their interests. We are instead faced with a suit by parents who assert that their free exercise rights are violated by the application of the no-aid provision to prevent them from using taxpayer-supported scholarships to attend the schools of their choosing. In other words, the problem, as in Locke, is what petitioners “‘propos[e] to do—use the funds to’” obtain a religious education. ....

I agree with the majority that it is preferable in some areas of the law to develop generally applicable tests. The problem, as our precedents show, is that the interaction of the Establishment and Free Exercise Clauses makes it particularly difficult to design a test that vindicates the Clauses’ competing interests in all—or even most—cases.That is why, far from embracing mechanical formulas, our precedents repeatedly and frankly acknowledge the need for precisely the kind of “‘judgment-by-judgment analysis’” the majority rejects.

Justice Sotomayor filed a dissenting opinion, saying in part:

Neither differential treatment nor coercion exists here because the Montana Supreme Court invalidated the tax-credit program entirely....

To be sure, petitioners may want to apply for scholarships and would prefer that Montana subsidize their children’s religious education. But this Court had never before held unconstitutional government action that merely failed to benefit religious exercise....

[T]he Montana Supreme Court remedied a state constitutional violation by invalidating a state program on state-law grounds, having expressly declined to reach any federal issue....

NPR reports on the decision.

Catholic School Sues For More Adequate State Bus Transportation

On Friday, a pre-K through 8th grade Catholic school in Madison, Wisconsin announced that it has filed suit against the Madison, Wisconsin Metropolitan School District to obtain state-funded bus transportation that meets its current class starting time.  The complaint (full text) in St. Maria Goretti Congregation v. Madison Metropolitan School District, (WI Cir. Ct., filed 5/15/2020), alleges in part:

Chapter 121 of the Wisconsin Statutes requires school districts ... to provide and fund transportation services to both public and private-school students in their boundaries, with “reasonable uniformity” in the transportation offered.... [T]he District provides busing to its own students that drops them off reasonably before the start of their school day. Yet, despite its plain statutory obligations, the District has adamantly refused to provide similar busing for the upcoming 2020–21 term to the students of St. Maria Goretti School.... Instead, the District has repeatedly informed St. Maria Goretti that it would only provide and fund busing that drops off its students 70 minutes after its current start time. So, the District is forcing St. Maria Goretti to substantially change its start and end times to receive busing, devastating almost every aspect of the school, including its Catholic mission; or to accept manifestly inadequate services that drops off its students well after the beginning of the school day; or to pay for busing services itself, despite the substantial burdens this would impose. This unequal, unjust treatment violates Chapter 121.

The school also filed a 47-page brief (full text) in support of its motion for a temporary injunction or writ of mandamus.

Litigation Delay Refused In Suit Over Christian School's Compliance With Nondiscrimination Requirements

In Bethel Ministries, Inc. v. Salmon, (D MD, April 15, 2020), a Maryland federal district court refused to stay discover in a suit by a Christian school challenging its disqualification from Maryland's scholarship program for non-public schools.  Bethel Christian Academy was denied funds because of its failure to comply with non-discrimination requirements which include a ban on discrimination on the basis of sexual orientation and gender identity. Maryland school officials had sought a stay because of the U.S. Supreme Court's grant of certiorari in Fulton v. City of Philadelphia. In refusing a stay, the district court said in part:

[T]he Supreme Court’s decision in Fulton might provide useful guidance for this Court’s resolution of Bethel’s claims. Even so, this Court is disinclined to stay proceedings because of a theoretical possibility....

By the nature of the claims presented in this case, a delay of more than a year would have a significant effect on Bethel’s enrollment, and its ability to budget for the academic year. Irrespective of the ultimate result of this matter, Bethel and Defendants would be better served by entering the 2020-2021 school year with this litigation moving closer to a definitive conclusion.

President Proclaims National School Choice Week

Yesterday President Trump issued a Presidential Proclamation (full text) declaring January 26 to February 1 as National School Choice Week.  His Proclamation says in part:

Each child is a gift from God who has boundless potential and deserves a fair shot at the American Dream. To have that fair shot, children and their families must be free to pursue an educational environment that matches their individual learning style, develops their unique talents, and prepares them with the knowledge and character needed for fulfilling and productive lives.....

Today, I renew my call on the Congress to focus on what is best for children and pass a Federal tax credit to support State-based educational choice programs.....

Christian School Denied Injunction Against Anti-Discrimination Provisions In Aid Programs

In Bethel Ministries, Inc. v. Salmon, (D MD, Jan. 21, 2020), a Maryland federal district court refused to issue a preliminary injunction requested by a Christian elementary school. Bethel Christian Academy sought to enjoin enforcement of a provision requiring non-discrimination on the basis of sexual orientation or gender identity in order to participate in state-sponsored scholarship and school aid programs.  The court concluded that the school had not shown that the state targeted, was hostile to, or expressly discriminated against the school because of its religious beliefs. Nor had the school shown a likelihood of success on its claim that its free speech rights were infringed.

Supreme Court Will Hear Arguments Today In Montana Religious School Aid Case

The U.S. Supreme Court will hear oral arguments this morning in Espinoza v. Montana Department of Revenue.  In the case, the Montana Supreme Court held that Montana's tax credit program for contributions to student scholarship organizations is unconstitutional under Montana Constitution Art. X, Sec, 6 which prohibits state aid to sectarian schools. (See prior posting.) The Solicitor General will  participate in oral argument, contending that Montana's "no-aid" provision violates the U.S. Constitution's free exercise clause.  SCOTUS blog has a preview of today's arguments. Here is SCOTUS blog's case page with links to all the filings in the case and to additional discussion of the issues involved. I will post the transcript of the oral arguments later today when it becomes available.

Justice Department Supports Challenge To Vermont's Exclusion of Parochial Schools From College Program

Yesterday the U.S. Department of Justice filed a Statement of Interest (full text) in in A.M. v. French, (D VT, filed 5/9/2019). DOJ's filing supports the position of plaintiffs who are challenging the exclusion of religious private school students from Vermont's Dual Enrollment Program.  Under the program, high school students may take up to two courses at public or private colleges at state expense. However while public and other private schools and home schooled students are eligible, private religious school students are not. DOJ argues that this discriminates against students' religious expression. DOJ also issued a press release explaining its action.

New Mexico Supreme Court Upholds Textbook Loan Program

In Moses v. Ruszkowski, (NM Sup. Ct., Dec. 13, 2018), the New Mexico Supreme Court in a 5-2 decision held that New Mexico's textbook loan program does not violate the state constitution. The program provides for the loan of secular textbooks to private and parochial school students.  In 2015, the state Supreme Court held that the program was unconstitutional. (See prior posting.) However in 2017, the U.S. Supreme Court  granted certiorari, vacated the judgment and remanded the case for further consideration in light of the U.S. Supreme Court's Trinity Lutheran Church decision. (See prior posting.) Now on remand, the state Supreme Court reversed itself, saying in part:

On remand, we conclude that this Court’s previous interpretation of Article 16 XII, Section 3 raises concerns under the Free Exercise Clause of the First Amendment to the United States Constitution. To avoid constitutional concerns, we hold that the textbook loan program, which provides a generally available public benefit to students, does not result in the use of public funds in support of private schools as prohibited by Article XII, Section 3. We also hold that the textbook loan program is consistent with Article IV, Section 31 of the New Mexico Constitution, which addresses appropriations for educational purposes, and Article IX, Section 14 of the New Mexico Constitution, which limits “any donation to or in aid of any person, association or public or private corporation.”

Chief Justice Nakamura and Justice Clingman dissented. Courthouse News Service reports on the decision.

Montana Supreme Court Invalidates Tuition Tax Credit Program

In Espinoza v. Montana Department of Revenue, (MT Sup. Ct., Dec. 12, 2018), the Montana Supreme Court in a 5-2 decision held that Montana's tax credit program for contributions to student scholarship organizations is unconstitutional under Montana Constitution Art. X, Sec, 6 which prohibits state aid to sectarian schools. The majority said in part:

Montana’s no-aid provision is unique from other states’ no-aid provisions. Article X, Section 6’s prohibition of “any direct or indirect appropriation or payment from any public fund or monies, or any grant of lands or other property for any sectarian purpose or to aid any . . . school . . . controlled in whole or in part by any church” make it a broader and stronger prohibition against aid to sectarian schools than other states. Even other states whose no-aid provisions also contain “indirect” language only prohibit aid in the form of the direct or indirect taking of money from the public treasury....  Such language is distinct from and less stringent than Montana’s prohibition on any type of aid, whether it be a “direct or indirect appropriation or payment from any public fund or monies, or any grant of lands or other property.” Mont. Const. art. X, § 6(1). 

The majority also held that the Department of Revenue's attempt to cure the program's unconstitutionality by Rule was invalid because the Department exceeded its rule making authority. The court left the student scholarship organization provisions in force, but without the accompanying tax credit for contributions.

Justice Gustafson filed a concurring opinion concluding that the tax credit program also violates the federal Free Exercise and Establishment clauses. Justice Sandefur joined this concurring opinion and also filed a separate concurrence.

Justice Baker, joined by Justice Rice dissented saying in part:

The creation of the credit is a government’s determination not to collect tax revenues. The statute diverts the funds before they ever become public monies. This well may result in an indirect impact on the “public fund or monies,” but it is not an indirect payment,,,,

The Court today holds that a tax credit—granted to a private individual for a donation that may or may not be directed to a religious entity—violates the State Constitution, even though it is clear under the law that a direct tax exemption by the State to a church does not.

Justice Rice also filed a separate dissent. The Missoulian reports on the decision,

7th Circuit Upholds Wisconsin's Limit on Busing Benefit To One School of Each Denomination In District

In St. Augustine School v. Evers, (7th Cir., Oct. 11, 2018), the U.S. 7th Circuit Court of Appeals, in a 2-1- decision, upheld Wisconsin's statue which requires school districts to bus private school students, but limits the obligation to only one private school affiliated with the same religious denomination or sponsoring group in each attendance district. St. Augustine school did not qualify for busing because another Catholic school in the district qualified first. The majority rejected free exercise and Establishment Clause challenges to the arrangement, saying in part:

The reason why St. Augustine cannot demand services within its desired attendance zone is not because it is a Catholic school; it is because—by its own choice—it professes to be affiliated with a group that already has a school in that zone.  By the same token, Wisconsin is not denying the Forros a transit subsidy because they are Catholic or because they seek to send their children to Catholic school. It funds transportation for all of the Catholic families who send their children to St. Gabriel. The problem for St. Augustine is not that it is Catholic; it is that it is second in line.

Judge Ripple dissented arguing that St. Augustine and St. Gabriel should not be seen as affiliated with the same denomination because St. Augustine is organizationally unaffiliated with the Catholic Archdiocese.

Washington's Work-Study Program Challenged Over Non-Sectarian Employer Requirement

A suit was filed last week in federal district court in the state of Washington challenging Washington's structuring of its Work-Study program.  The Program provides financial aid to college students by paying part of a student's salary when the student is working for a participating employer, usually in a field related to the student's studies. Eligible employers, and jobs themselves, must be non-sectarian.  The complaint (full text) in Summit Christian Academy v. Meotti, (WD WA, filed 8/14/2018) contends that excluding religious employers and sectarian work violates the free exercise clause, the equal protection clause and the Establishment Clause. Institute for Justice issued a press release announcing the filing of the lawsuit.

Education Department Considering Expanding Faith-Based Insitutions' Eligibility For Grants

As part of its Spring 2018 regulatory agenda released on Wednesday, the U.S. Department of Education signaled that it is considering rule amendments to expand the eligibility of faith-based institutions for federal grants.  In a release titled Eligibility of Faith-Based Entities and Activities, DOE said:

Various provisions of the Department’s regulations regarding the eligibility of faith-based entities to obtain grants from the Department or to participate in State-administered programs and the activities that they may perform unnecessarily restrict participation by religious entities in the Department’s grant programs by including requirements specific to such entities. The Department plans to review and to amend or rescind such regulations in order to be consistent with current law and to reduce or eliminate unnecessary burdens and restrictions on religious entities and activities.

According to the New York Times, the proposals are an attempt to align DOE rules regarding religious colleges and universities with the Supreme Court's 2017 Trinity Lutheran decision. [Thanks to Scott Mange for the lead.]

Michigan Supreme Court Refuses To Reverse Injunction Against Private School Aid

In Council of Organizations and Others for Education About Parochiaid v. State of Michigan,  (MI Sup. Ct., March 9, 2018), the Michigan Supreme Court in a brief order denied leave to appeal a preliminary injunction issued by the Court of Claims.  That injunction prohibited payment of $2.5 million the legislature had allocated to private schools to cover the cost of complying with state mandates. (See prior posting.)  Chief Justice Markham filed a dissenting opinion arguing that the decision of the Court of Claims should be reversed.

Final Tax Bill Extends 529 Plans To Elementary and Secondary School Tuition

The final version of the Tax Cuts and Jobs Act as it emerged from the Conference Committee (full text) extends Section 529 Qualified Tuition Programs so that they will now be able to be used to fund not just higher education expenses, but also up to $10,000 per student per year of tuition at public, private or religious elementary or secondary schools.

New Tax Bill Would Allow "529 Plans" For Parochial School Tuition

The Republican tax bill (full text) introduced yesterday (see prior posting) would allow parents to set up "529 Plans" for up to $10,000 per year of elementary and secondary school tuition, including tuition at religious schools. (Section 1202).  529 Plans, currently limited to saving for college expenses, are a method of earning tax-free income on educational savings.  The bill also allows a Section 529 plan to be set up for an "unborn child," defined in the proposal as a "child in utero," which is in turn defined in the bill as "a member of the species homo sapiens, at any stage of development, who is carried in the womb."

Trinity Lutheran Decision Does Not Apply to Neutral Ban on Funds to Private Schools

As reported by the Detroit Free Press, a Michigan state Court of Claims judge held this week that the U.S. Supreme Court's Trinity Lutheran decision is not a basis for lifting a preliminary injunction issued earlier this month barring payment of $2.5 million the legislature had allocated to private schools to cover the cost of complying with state mandates. That injunction was based on a Michigan state constitutional provision that bars public funds for "any private, denominational or other nonpublic, pre-elementary, elementary, or secondary school".  In Council of Organizations and Others for Education About Parochiaid v. State of Michigan, (MI Ct. Cl., July 25, 2017), the court said in part:

... the Court concludes at this juncture that the constitutional provision at issue in this case, Article 8, § 2 of the Michigan Constitution, can be understood as falling within the category of neutral and generally applicable laws, rather than n provision that singles out the religious for disfavored treatment....  [T]his Court is disinclined to extend the Trinity Lutheran decision to a case that plainly does not involve express discrimination.

Supreme Court Remands School Aid Cases For Reconsideration In Light of Trinity Lutheran Decision

The U.S. Supreme Court yesterday, in light of its decision this week in Trinity Lutheran Church of Columbia, Inc. v. Comer, sent back to the lower courts for reconsideration school aid cases from Colorado and New Mexico.  All the cases remanded involved reliance on state Blaine amendments to invalidate aid to religious schools.  In three consolidated cases from Colorado, the Court granted certiorari, vacated the judgments below, and remanded to the Supreme Court of Colorado for further consideration. The Colorado cases are Doyle v. Taxpayers for Public Education, (Docket No. 15-556), Douglas City School District v. Taxpayers for Public Education,  (Docket No. 15-557), and Colorado State Board of Education v. Taxpayers for Public Education, (Docket No. 15-558). (June 27, 2017 Order List).  In the cases, the Colorado Supreme Court struck down Douglas County's elaborate Choice Scholarship Pilot Program. (See prior posting.)

In New Mexico Association of Nonpublic Schools v. Moses, (Docket No. 15-1409), the Supreme Court also granted certiorari, vacated the judgment and remanded to the Supreme Court of New Mexico for further consideration. In the case, the New Mexico Supreme Court struck down a New Mexico statute that allows the state to lend secular textbooks to private and parochial school students. (See prior posting.)

Canadian Provinces May Not Fund Non-Catholic Students In Catholic Schools

Canada's Constitution Act of 1867 (Sec. 93) guarantees Catholics and Protestants in the three Canadian provinces of Alberta, Saskatchewan and Ontario the right to petition the provincial government to create a separate denominational school for them when they comprise a minority in a school attendance area. In Good Spirit School Division No. 204 v. Christ the Teacher Roman Catholic Separate School Division No. 212, (QB Sask., April 20, 2017), a Saskatchewan trial court in a 230-page opinion held that it is a violation of Canada's Charter of Rights and Freedoms for the provincial government to provide funding for non-Catholic students at government-supported Catholic schools.  The court held that Catholic separate schools have no constitutional right to receive funding for non-Catholic students and that it violates the province's duty of religious neutrality, as well as guarantees of equality, to fund non-minority faith students in denominational schools.  Global News reports on the decision.

Florida Supreme Court Denies Review In Tax Credit Scholarship Challenge

Yesterday in McCall v. Scott, (FL Sup. Ct., Jan. 18, 2017) the Florida Supreme Court declined to hear in appeal in a case challenging the constitutionality of Florida's Tax Credit Scholarship Program.  In August, a state appeals court held that a group of plaintiffs-- advocacy organizations, teachers, parents and religious and community leaders-- lack standing to pursue the case. (See prior posting.) Tampa Bay Times reports on the state Supreme Court's action.

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.