Religious Institutions Update: February 2017

Timely Topics

A draft executive order of President Donald Trump relating to religious freedom proposes several material changes to federal law. First, it would require the executive branches to recognize a broad scope for religious freedom applicable to "all activities of life," not merely houses of worship or the home and not confined to conduct that is required or compelled by sincerely held religious beliefs. It would preclude federal agencies from promulgating regulations, taking actions or enacting policies that substantially burden a person's religious exercise, unless the imposition represents the least restrictive means of furthering a compelling governmental interest. Second, its definition of a "religious organization" would include a closely held for-profit corporation, operated for a religious purpose, even if its purpose is not exclusively religious. Third, it would preclude the Department of the Treasury from imposing any tax or penalty, delaying or denying tax-exempt status, or disallowing tax deductions for contributions to an organization that a) speaks on moral or political issues from a religious perspective where religious speech of similar character has, consistent with law, not ordinarily been treated as an intervention in a political campaign by the agency, or b) believes, speaks or acts in accordance with the belief that marriage is or should be recognized as the union of one man and one woman; sexual relations are properly reserved for such a marriage; male and female refers to an individual's biological sex at birth; and human life begins at conception and merits protection at all stages of life. It also would prevent an agency from denying a person with such beliefs access to charitable fundraising campaigns. Fourth, it would require c) the secretaries of the Departments of Health and Human Services (HHS), Labor and the Treasury to exempt from the preventive-care mandate all persons and religious organizations that object to complying with the mandate for religious or moral reasons, and d) the secretary of HHS to ensure that any individual purchasing health insurance from the individual market can purchase health insurance that does not provide or subsidize coverage for abortion. Fifth, the draft order would prevent the federal government from discriminating against a religious organization that provides federally funded child welfare services. Last, the draft order settles that federal agencies must extend federal employment exemptions and protections to persons, houses of worship or religious organizations that contract with the federal government, and requires federal agencies to accommodate the religion of federal employees. Stay tuned to this publication or contact the author to learn whether this order or an amended version ultimately becomes law.

Key Cases

Sign Pointing to Church in Right-of-Way Constitutional

In Tearpock-Martini v. Shickshinny Borough, No. 16-3367, 2017 WL 35714 (3d Cir. Jan. 4, 2017), the court of appeals affirmed the district court's ruling that the defendant had not violated the establishment clause by erecting a sign on a right-of-way near the plaintiff's home that said "Bible Baptist Church Welcomes You!" and had an image of a cross and book and showed the phrase "1 Block" on an arrow pointing toward the church. There also was a sign pointing to a boat launch area owned by the borough and a sign pointing to a Subway restaurant. The plaintiff alleged that the latter was unapproved by the borough. The court ruled that a reasonable person would not perceive the sign as an endorsement of religion and that the sign had a secular purpose to aid people in finding a local institution, did not have the primary effect of advancing religion and was not excessively entangled with religion. The court observed, "[T]he most entanglement Tearpock-Martini can find is that the Borough installed the sign and, when it fell over, reinstalled it. That is not 'entanglement,' let alone 'excessive' entanglement."

Minnesota Assisted Suicide Statute Upheld

In State of Minn. v. Final Exit Network, Inc., No. A15-1826, 2016 WL 7338722 (Minn.App. Dec. 19, 2016), the court ruled that a statute criminalizing assisted suicide was narrowly tailored to serve the government's compelling interest in the preservation of human life. Minnesota Statute 609.215, subd. 1, makes it unlawful to "intentionally advise, encourage, or assist another in taking the other's own life." Therefore, the court determined that it satisfied strict scrutiny in a challenge to a statute as a content-based restriction violating the First Amendment, as applied to a right-to-die organization's actions of, inter alia, advising members who committed suicide as to suicide methods.

Church-Affiliated Schools Cannot Have "Church Plan"

In Martinez-Gonzalez v. Catholic Schs. of Archdioceses of San Juan Pension Plan, No. 16-2077, 2017 WL 382711 (D. P.R. Jan. 27, 2017), the court ruled that the Employee Retirement Income Security Act of 1974 (ERISA) exemption for retirement plans established and maintained by churches, but not church-affiliated organizations, does not violate the free exercise clause, and that the retirement plan of the Superintendence of Catholic Schools of the Archdioceses of San Juan was not a church plan because it was not established by a church, notwithstanding an IRS letter ruling to the contrary. As a result, the court ruled that the plaintiffs stated a claim under ERISA for breach of a duty of disclosure and breach of fiduciary duty.

Deposits into Personal Account Held in Name of Church Taxable

In Gardner v. Commissioner of Internal Revenue, 845 F. 3d 971 (9th Cir. 2017), the court of appeal affirmed the ruling of the district court that deposits into the bank accounts of the plaintiffs who purported to be pastors for an unincorporated association were taxable income to them, rather than exempt charitable contributions. The plaintiffs had no congregation, but traveled across the country promoting corporations sole and limited liability companies as a way to avoid taxation and ensure autonomy. They had a "donation" sheet for the cost of their services. Payments were made to Bethel Aram Ministries (BAM), which was an unincorporated association that was not tax exempt. The plaintiffs took vows of poverty and claimed to have no personal bank account apart from that of the ministry. The court ruled that the so-called donations were actually taxable compensation to the plaintiffs over which they had complete control and were given in exchange for personal services performed and quid pro quo exchanges.

Parochial High School Principal a Minister for Purposes of Ministerial Exception Doctrine

In Ginalski v. Diocese of Gary, No. 2:15-CV-95-PRC, 2016 WL 7100558 (N.D. Ind. Dec. 5, 2016), the district court granted summary judgment under the ministerial exception doctrine in favor of the Diocese of Gary against the diocese's former parochial high school principal and her federal claims for age, sex and disability discrimination, as well as retaliation. On the one hand, the principal's employment agreement contained "Ministerial Duties/Morals Clauses," wherein the principal acknowledged that she was accepting a ministry position and agreeing to faithfully reflect the teachings of the Roman Catholic Church. The principal even conceded in deposition that her role was as a minister on campus and that part of her job was to ensure "the integration of faith within the learning process." On the other hand, the principal was not required to have any formal religious training, was not a member of the clergy and did not perform religious functions, such as leading prayers or teaching religion. The court weighed these factors and determined that "[a]lthough Ginalski's title and training and the lack of evidence of involvement in religious activity weigh against applying the ministerial exception, the ministerial role assigned to and accepted by Ginalski as the head of the Catholic high school are sufficient for the Court to apply the ministerial exception in this case." The plaintiff abandoned her claims for negligent infliction of emotional distress and defamation, and the diocese abandoned its counterclaims. The court relinquished the remaining state law claims.

"Environmentalism" Is Not a Religion

In Krause v. Tulsa City-County Library Comm'n, No. 16-CV-643-JHP-TLW, 2017 WL 337996 (N.D. Okla. Jan. 23, 2017), the court dismissed the plaintiff's lawsuit alleging that by placing "fake" recycling bins throughout the Central Library in downtown Tulsa, Okla., the defendant had unduly burdened his asserted religion of "Environmentalism." The court ruled that under the applicable Twombly and Iqbal pleading standards, the plaintiff's conclusory assertions that Environmentalism is a religion were inadequate. The court reiterated that "personal preferences and secular beliefs do not warrant the protection of the Free Exercise Clause." Even if Environmentalism were a religion, the court determined that the plaintiff had not plausibly shown that the defendant's recycling program was created pursuant to law as necessary to implicate the First Amendment.

Requiring Proof of Civil Marriage Certificate for Health Insurance Is Constitutional

In Abdus-Shahid v. Mayor and City Council of Baltimore, No. 15-2181, 2017 WL 35725 (4th Cir. Jan. 4, 2017), the court dismissed the claim of a Muslim employee of the city and his wife, who alleged that the city's policy of requiring its employees to submit proof of their recorded civil marriage certificate in order to establish the spouse as eligible for health insurance coverage violated their rights under the free exercise clause, Maryland Constitution and Title VII. The court determined that the city's policy was generally applicable and neutral toward religion and, thus, not a free exercise violation. Concerning the plaintiff's remaining claims, the court determined that the employee did not comply with the mandatory notice provisions of Maryland's Local Government Tort Claims Act and failed to exhaust his administrative remedies with respect to his Title VII disparate impact claims.

Muslim Congregation States RLUIPA Claim to Build Mosque

In Islamic Soc'y of Basking Ridge v. Township of Bernards, No. 16-1369 (MAS) (LHG), 2016 WL 7 496661 (D. N.J. Dec. 31, 2016), the court granted partial judgment on the pleadings to a Muslim congregation that challenged the denial of its site plan application to build a mosque. The court determined that the township's Planning Board violated the Religious Land Use and Institutionalized Persons Act's (RLUIPA) nondiscrimination provision by applying a parking ordinance differently on the basis of religion. The defendants claimed that the term "churches" within a provision setting a 3-to-1 ratio between seats and parking spaces for churches refers exclusively to Christian churches and not to Muslim mosques. Yet, the township also applied this ratio to Jewish synagogues. The court also ruled that the provision in the ordinance setting forth the 3-to-1 ratio was unconstitutionally vague under the United States and New Jersey Constitutions because it allows the board to require additional parking spaces without having to abide by any specific guidelines about what constitutes sufficient off-street parking.

Religious Institutions in the News

• The Florida Supreme Court declined to take up a constitutional challenge to the Florida Tax Credit Scholarship case, meaning that the lower and appellate court rulings that the plaintiffs lack standing to challenge it has prevailed and the scholarship program remains fully operational.
• The percentage of self-identified Christians in Congress has held roughly constant since the 1960s, notwithstanding the growth of the religiously unaffiliated in America.
• In December, President Obama signed the International Religious Freedom Act into law, strengthening the 1998 International Religious Freedom Act.
• ISIS published a list of more than 8,000 U.S. churches urging supporters to attack them over the holidays.
• The U.S. Supreme Court has agreed to hear appeals by religious hospital systems of lower court rulings that find, contrary to IRS letter rulings (as discussed above in Martinez-Gonzalez), that they do not qualify to have church plans.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.