Religious Institutions Update: September 2010

Timely Topics

What are the differences between “church-state law” and “First Amendment law,” and why should a religious institution that is not a church be concerned about them? The general counsel of a large religious institution recently posed these questions to me as we sipped designer coffee together in an Internet cafe; it struck me that her question might not be so unusual. The phrases certainly do not have fixed meanings, but at the least church-state law has broader and additional content as compared with First Amendment law. Perhaps most importantly, church-state lawyers provide advice about avoiding legal risks, whereas First Amendment lawyers look for and litigate conflicts. In this sense, church-state law relates more to the day-to-day operations of religious institutions with which chiefs of staff and chief financial officers of institutions are concerned. Examples include governance of the institution under its bylaws, incorporating institutions, complying with tax laws, advising on employment and enrollment decisions, drafting policies and procedures, and protecting intellectual property.

A second difference between church-state law and First Amendment law can be overstated. First Amendment law relates primarily to the enforcement of five freedoms: speech, press, religion, assembly, and petition and related constitutional protections. The First Amendment’s relevance hinges upon “state action,” such as when the state denies funding to a religious institution that is otherwise entitled to it because of the group’s religious speech. It used to be that most of a private religious institution’s conduct would not fall into this category. Some such conduct still does not. Church-state law firms must be familiar with this broader body of law unrelated to the First Amendment that govern religious institutions; however, multiplying regulations mean that more and more private conduct is now subject to state action and, therefore, that church-state lawyers must always also be familiar with First Amendment principles.

To some extent, church-state law is a misnomer, because it deals with not only churches but also not-for-profit religious institutions in general. Religious institutions that are nominally so probably do not need to be much concerned with it, but institutions that are intentionally religious should certainly be familiar with church-state law to ensure that they are maximizing liberties and defenses available under the law. The intentionally religious institution that settles for legal advice relevant generally to not-for-profit institutions will almost certainly be poorly served. Of course, even the best risk avoidance advice cannot prevent all litigation, and when it arises, church-state lawyers will often look like First Amendment lawyers when the state is involved or private defense counsel with subject-matter expertise when the state is not.

Key Cases

World Vision Qualifies for Title VII Religious Exemption

In Spencer v. World Vision, Inc., No. 08-35532 (9th Cir. Aug. 23, 2010), the United States Court of Appeals for the Ninth Circuit held that World Vision is entitled to terminate employees who disagree with its statement of faith under the exception provided for religious institutions in Title VII of the Civil Rights Act. The court rejected the plaintiffs’ argument that only churches and similar entities qualify. It considered several tests, none of which received a majority vote, to determine whether World Vision qualified for the exception. The court warned that it lacked competence under the circumstances to decide whether World Vision’s services were fundamentally religious. “World Vision contends that its humanitarian relief efforts have religious meaning; the Employees claim they do not. If we were to apply this prong … to the case at hand, we would at least implicitly have to answer that question. The very act of making that determination, however, runs counter to the ‘core of the constitutional guarantee against religious establishment.’” The court also raised cautions about inquiring whether World Vision was owned, affiliated with or financially supported by a formally religious entity such as a church or synagogue, because this inquiry “contains the potential for discrimination amongst religious institutions” by favoring ones with denominational affiliations over those without. The court explained, “[T]o confine an exemption ‘to religious institutions with hard-nosed proselytizing, that limit their enrollment to members of their religion … is an unnecessarily stunted view of the law.” To avoid these pitfalls when deciding whether the "general picture" of World Vision was "primarily religious," Circuit Judge O'Scannlain applied a three-part test and asked whether it (1) is a non-profit established for a self-identified religious purpose (as evidenced by Articles of Incorporation or similar governance documents), (2) is engaged in activity consistent with, and in furtherance of those religious purposes, or (3) holds itself out to the public as religious. Concurring, Circuit Judge Kleinfeld preferred this four-part test: whether World Vision (1) is organized for a religious purpose, (2) is engaged primarily in carrying out the religious purpose, (3) holds itself out to the public as an entity for carrying out that religious purpose, and (4) does not engage primarily or substantially in the exchange of goods or services for money beyond nominal amounts. Regardless, both Circuit Judges agreed that World Vision is a religious corporation within the meaning of Title VII. There was also a dissent by Circuit Judge Berzon.

“Seventh-day Adventist” Mark Enforced Against Church

The United States Court of Appeals for the Sixth Circuit affirmed awarding the General Conference Corporation of Seventh-Day Adventists an injunction against use of the name “Seventh-day Adventist” by a break-away church. General Conf. Corp. of Seventh-Day Adventists v. McGill, No. 09-5723, 2010 WL 3120043 (6th Cir. Aug. 10, 2010). Although the defendant knew that the Conference had trademarked the name, he used it anyway because he believed that he was divinely mandated to do so, and because he considered the mark generic. First, the defendant moved to dismiss the infringement action on the grounds that the court allegedly lacked subject matter jurisdiction over the dispute, but the court held that it could decide the dispute anyway, utilizing neutral principles of trademark law without resolving any underlying doctrinal dispute. The court declined the invitation to create a ministerial exception to trademark law. Next, the defendant argued that enforcement of the trademark laws would violate the Religious Freedom Restoration Act (RFRA), but the court held that RFRA does not apply in suits between private parties, as opposed to against the government. Last, the defendant argued the name “Seventh-day Adventist” is generic. The court found that this was a question of fact and that the defendant offered inadequate evidence that the public perceives the term as referring to a particular set of beliefs (i.e., Baptist beliefs), rather than to the plaintiffs’ church. Last, the court found no reasonable jury could find other than that McGill’s use of the mark is likely to cause confusion among the public.

Town’s Hostility Leads to Damages and Injunction Enabling Church and School to Build

A town’s obvious hostility expressed toward a Pentecostal church with a Christian academy led to an injunction enabling the church to build, as well as an award of compensatory damages, attorneys’ fees and costs under the Religious Land Use and Institutionalized Persons Act (RLUIPA) and Section 1983 of the Civil Rights Act. Fortress Bible Church v. Feiner, Case No. 03 Civ. 4235 (SCR), 2010 WL 3199876 (S.D.N.Y. Aug. 12, 2010).

The church submitted an application to the Town of Greenburgh, New York to build in November 1998. The Town required various routine studies to be completed, including parking, traffic, drainage, stormwater and environmental studies. The church hired experts, completed all the studies, and provided mitigation meeting or exceeding the Town’s standards. Nevertheless, the Town delayed referring the application to various boards until after passage of an amendment to the Code concerning steep slopes, contrived erroneous reasons outside the Code to oppose the application such as that the school’s curriculum must be approved by the Board of Regents, appointed a community opponent of the project as a “Deputy Supervisor,” and hired its own planning experts to identify new code compliance problems. A Commissioner suggested that the church donate a fire truck or make payment in lieu of taxes to the Town to facilitate approval of the application. Said one official, “I will tell you [the application] is not going to be processed until we get paid ….” Another commissioner stated on the record that “we do not need another church in Greenburgh, especially in that area,” and added she wanted to “kill” the project. Meanwhile, the Town approved applications for commercial uses submitted before and since the church’s application – some more complex than the church’s. The Town argued that RLUIPA was unconstitutional; however, the court disagreed and found that the Town’s actions substantially burdened the church’s religious exercise by coercing it to continue religious practices in inadequate facilities without satisfying any compelling governmental interest. The court found that all of the reasons the Town gave for its actions were fabricated, disingenuous or erroneous. The court also held that the Town violated the church’s state and federal free exercise and equal protection rights by demonstrating that its application was treated differently from other comparable applications. The court awarded an injunction under RLUIPA, compensatory damages under Section 1983, fees and costs, and sanctions, because the Town intentionally destroyed evidence.

Ninth Circuit to Rehear Ministerial Exception Case

The United States Court of Appeals for the Ninth Circuit has agreed to rehear en banc its decision in Alcazar v. Corp. of Catholic Archbishop of Seattle, 598 F. 3d 668 (9th Cir. 2010), reh’g en banc granted, 2010 WL 316590 (9th Cir. Aug. 5, 2010). In Alcazar, the court had held that it lacked jurisdiction under “functional approach” to the ministerial exception doctrine over claims of seminarians in a Catholic church that the church violated Washington’s Minimum Wage Act. (For more on this case, see Holland & Knight’s April 2010 Religious Institutions Update.)

University of Wisconsin-Madison Must Fund Student Religious Speech

The United States Court of Appeal for the Seventh Circuit recently held that the University of Wisconsin-Madison engaged in impermissible viewpoint discrimination when it denied student funding to a Catholic student group for mentoring students, a summer leadership retreat and other activities. Badger Catholic, Inc. v. Walsh, Nos. 09-1102 and 09-1112 (7th Cir. Sept. 1, 2010). The university requires all students to contribute to its student fund; however, the university claimed to distribute the funds to student groups without regard to the speakers’ perspectives with one caveat: the university decided it would not pay for speech relating to worship, proselytizing and religious instruction. The district court disagreed with the university that the Establishment Clause mandated this exception and instead found that it violated the First Amendment. On appeal, the university claimed that it was entitled to withhold funds from religious speech even if not commanded to do so under the Establishment Clause. The Seventh Circuit disagreed, writing: “[A] university cannot shape Badger Catholic’s message by selectively funding the speech it approves, but not the speech it disapproves. Once it creates a public form, a university must accept all comers within the forum’s scope.”

Ministerial Exception Doctrine Bars Victim Trafficking Claim

A California federal district court has held that the ministerial exception doctrine requires dismissal of claims that the Church of Scientology violated the Trafficking Victims Protection Act. Headley v. Church of Scientology Int’l, No. CV 09-3986 DSF, 2010 WL 3157064 (C.D. Cal. Aug. 5, 2010) and No. CV 09-3987 DSF, 2010 WL 3184389 (C.D. Cal. Aug. 5, 2010). The plaintiffs voluntarily joined an order of the church known as the “Sea Organization,” which forbade the raising of children. Claire Headley alleged the defendant coerced her into having two abortions, made it difficult for her to leave, would pursue her if she left without “routing out,” disciplined her for expressing a desire to leave by depriving her of sleep and food and subjecting her to heavy manual labor, censored her communications, and attempted to force her to divorce her husband. Likewise, Marc Headley claimed the defendant physically abused him, made it difficult for him to leave, would pursue him if he left without routing out, told him that he would lose his wife and family if he left, censored his communications, and threatened to sue him for a debt if he left. The court found that Marc did not unambiguously testify that he was held against his will, and that the defendant’s conduct was doctrinally motivated. Accordingly, the court held, “Determining whether Scientology’s practices of routing out, censorship, or heavy manual labor as a form of discipline, for example, constitute involuntary servitude within the meaning of the TVPA is precisely the type of entanglement that the Religion Clauses prohibit.”

Regulation Could Force Aliens on Special Immigrant Religious Worker Visas to Return Home Before Gaining Permanent Residence

In Ruiz-Diaz v. United States, No. 09-35734, 2010 WL 3274284 (9th Cir. Aug. 20, 2010), a class of alien beneficiaries of special immigrant religious worker visa status lost their challenge to a regulation providing that they may file an application for adjustment of status to become permanent residents only after their petition for special immigrant religious worker visa status has been approved. Their concern was that United States Citizen and Immigration Services (USCIS) would not process their petition for a special immigrant religious worker visa soon enough to do many of them any good; they contended that if they could not apply concurrently for the status they would have to depart the country when their R-1 visas expire (and face uncertain consequences) or remain illegally in the country while their petition is processed. The plaintiffs argued that the USCIS misinterpreted the underlying statutory language at issue, but the court held the agency’s interpretation requiring consecutive application reasonable. The case was remanded for a decision whether the regulation complies with the Equal Protection Clause and the Religious Freedom Restoration Act.

Religious Institutions in the News

Religious institutions are protesting a provision in the legislation to reauthorize the Substance Abuse and Mental Health Services Administration, which would prohibit them from receiving federal money if they consider a job applicant’s religion when hiring. See Religion-Based Groups Protest Restrictions in Bill; Religious Hiring Spat: Conservative Religious Groups Push Against Employment Rules In Federal Funding; Over 100 Groups Urge Congress to Preserve Religious Hiring Rights

Estimates of religious populations in the United States are unreliable because this country is one of the few that does not capture this information in its census. See Estimates of Religious Populations Require a Bit of Faith

Surveys reveal an increasing exodus of young people from the church, causing church leaders to change their approach. See The Perils of 'Wannabe Cool' Christianity