March 2, 2016

Religious Institutions Update: March 2016

Lex Est Sanctio Sancta
Holland & Knight Update
Nathan A. Adams IV

Timely Topics

The death of U.S. Supreme Court Associate Justice Antonin Scalia will have an uncertain effect on religious institutions. Justice Scalia delivered the majority opinion in Employment Div. v. Smith, 494 U.S 872 (1990), in which the court abandoned strict scrutiny when laws that are neutral and generally applicable infringe religious expression. Most anti-discrimination and public accommodation measures fall into this category. After Smith, laws violate the Free Exercise Clause in more limited circumstances, such as in the event of discrimination against persons on grounds of religion. In the wake of Smith, when neutral and generally applicable laws impact religious exercise, plaintiffs are left with statutory religious claims under federal and state Religious Freedom Restoration Acts (RFRA) and the Religious Land Use and Institutionalized Persons Act (RLUIPA). Congress enacted these laws in reaction to Smith. Justice Scalia has interpreted RFRA broadly, most recently in Burwell v. Hobby Lobby, 573 U.S. (2014), where the court ruled that the contraception mandate contained in the Patient Protection and Affordable Care Act violated strict scrutiny as applied to a for-profit, closely held corporation. Oral arguments are scheduled for March 23 in the latest RFRA challenge to the contraception mandate. Some think that without Justice Scalia, this case could be lost or split 4-4 or via plurality. Whereas some argue that Justice Scalia shrank constitutional protections for religious exercise, he consistently weakened separationism under the Establishment Clause. For example, he joined the majority decision finding school vouchers constitutional in Zelman v. Simmons-Harris, 536 U.S. 639 (2002), and he also supported public displays of religion on public property and legislative prayer. Justice Scalia also joined the majority in Boy Scouts of Am. v. Dale, 530 U.S. 640 (2000), in which the court found that the constitutional right to freedom of association allows a private organization to exclude a person from membership when the presence of the person would affect the group's ability to advocate public or private viewpoints. Scalia was a practicing Catholic. Time will tell how his jurisprudence and death will affect religious institutions.

Key Cases

Ecclesiastical Abstention Doctrine Bars Discrimination Claim Against Hospital

In Penn v. N.Y. Methodist Hosp., 2016 WL 270456 (S.D. N.Y. Jan. 20, 2016), the court ruled that the ministerial exception doctrine bars an African-American former hospital chaplain from bringing a Section 1981 lawsuit against a hospital alleging race and religious discrimination and retaliation. Plaintiff argued that neither the defendant nor his job was religious. In 1975, New York Methodist Hospital (NYMH) amended its certificate of incorporation and removed all reference to its "church related character" and relationship with The United Methodist Church. Also, the hospital advertised itself as a secular institution. Nevertheless, the court found that the hospital's bylaws require the board to have significant representation from the church, the name of the institution preserves a tie to the church and the hospital maintains an active ecumenical program of pastoral care. Plaintiff argued that he provided "spiritual care," instead of "religious care," but the court did not see any difference. "Therefore, insofar as plaintiff is a Methodist and was responsible – at least in part – for preaching the Christian faith, the relationship between Plaintiff and NYMH (specifically, the pastoral care department) was that of a religious employee and a religious institution," barring the plaintiff's claims. The court observed that it was not required to reach the question of whether the same result would hold for employment of a minister, pastor or chaplain of a different faith.

New York Court Upholds Civil Fine Against Business Declining Same-Sex Wedding

In Gifford v. McCarthy, 23 N.Y.S. 3d 422 (N.Y. App. Div. 3d Dept. Jan. 14, 2016), the court upheld a $10,000 civil fine and $1,500 in compensatory damages for each member of a same-sex couple who complained of public accommodation discrimination when farm owners declined to rent their facilities to them for a same-sex wedding. Liberty Ridge Farm LLC sells crops to the public and rents portions of the farm for wedding ceremonies and receptions. The court ruled that the farm constitutes a place of public accommodation under the New York State Human Rights Law (NYSHRL). The court also rejected the petitioners' argument that they did not discriminate on grounds of sexual orientation, but merely exercised their religious beliefs regarding same-sex marriage. As evidence, they testified that they were willing to host a same-sex wedding reception. The court rejected this argument as well, finding that the NYSHRL does not permit a business to offer a "limited menu" of services to customers. The court also rejected the defendants' state and federal free exercise claim on the grounds that the NYSHRL is a neutral, generally applicable law, their free speech claim on the grounds that they had not engaged in expressive speech and the NYSHRL does not compel endorsement of same-sex marriage, and their free expressive association claim because their wedding business was not organized for expressive purposes.

Oklahoma Supreme Court Upholds Scholarship Program Under Blaine Amendment

In Oliver v. Hofmeister, No. 113267, 2016 WL 614009 (Okla. Feb. 16, 2016), the court ruled that the Lindsey Nichole Henry Scholarships for Students with Disabilities Act – a statute providing a state-funded scholarship to students with disabilities to attend a private school – is constitutional under the state's Blaine amendment. Oklahoma's Blaine amendment states, "No public money or property shall ever be appropriated, applied, donated, or used, directly or indirectly, for the use, benefit or support of any sect, church, denomination, or system of religion, or for the use, benefit or support of any priest, minister or other religious teacher or dignitary, or sectarian institution as such." Eight factors convinced the court the scholarship program is constitutional: 1) participation in the program is voluntary; 2) parents or legal guardians have genuine independent choice in selecting sectarian or non-sectarian private schools; 3) payment warrants are issued to parents or legal guardians (not directly to schools); 4) the parent endorses payment to the independently chosen private school; 5) the act is religion neutral with respect to criteria to become an approved school for the scholarship program; 6) each public school district has the option to contract with a private school to provide mandated special educational services instead of providing services in the district; 7) acceptance of the scholarship under the act serves as parental revocation of all federally guaranteed rights due to children; and 8) the district public school is relieved of its obligation to provide educational services to the child with disabilities.

RFRA Is No Defense to Individual's Religious Discrimination Claim

In Mathis v. Christian Heating and Air Conditioning, Inc., No. 13-3740, 2016 WL 304766 (E.D. Pa. Jan. 26, 2016), the court denied the defendant's motion for summary judgment premised upon the RFRA against plaintiff's Title VII religious discrimination claim. Defendant is a for-profit corporation dedicated to the Lord. The defendant requires its mechanics to wear identification badges that display their names and photographs, along with a portion of the company's religious mission statement. Defendant employed the plaintiff as a heating and air conditioning installation mechanic. Plaintiff was an atheist who covered over the ID badge. The defendant instructed the plaintiff that by refusing to wear the badge, he had "quit" his employment. The court ruled that the RFRA cannot be used as a defense in a lawsuit brought by an individual, not the government, notwithstanding that the U.S. Equal Employment Opportunity Commission (EEOC) could have been a party to the action. Consequently, the court went on to find that plaintiff stated a claim under three theories for: 1) termination due to his religious beliefs, 2) denial of a reasonable religious accommodation, and 3) termination in retaliation for requesting a reasonable religious accommodation. In particular, the court was skeptical that plaintiff's requested accommodation of covering over the ID badge would impose more than a de minimis cost on the business.

YMCA's Colorado Retreat Center Entitled to Religious Property Tax Exemption

In Grand Cnty. Bd. of Comm'rs v. Colorado Property Tax Administrator, No. 14CA1767, 2016 WL 241466 (Colo. App. Jan. 14, 2016), the court affirmed the determination of the Board of Assessment Appeals on remand that the YMCA is entitled to a religious purposes exemption from property taxes. The court agreed with the taxpayer that: 1) in determining whether the exemption applies, the use of the property must be considered in light of the property owner's religious mission and purposes, and 2) a statutory presumption that the taxpayer's stated uses of real property is in furtherance of the taxpayer's religious purposes applies at every stage of review. The primary argument of Grand County and Larimer County was that use of the YMCA's properties should be examined without regard to the character of the property owner and that, in the counties' view, uses such as hiking and camping are not religious. The property in question has 40 cabins, 12 vacation homes and 61 campsites on 2,187 acres of land. The court ruled that the parsing of the facility's functions as religious or secular would involve excessive entanglement with religion and that the legislature reasonably sought to avoid this with the property tax exemption scheme. The court also rejected the counties' argument that the exemption violates separation of powers, as it merely codifies the principles of religious neutrality and nonentanglement, and accords with the power of the Legislature (art. X, s. 5, Colo. Const.) to limit, modify or abolish exemptions provided by the state constitution.

Denial of Tax Exemption for Noah's Ark Attraction Unconstitutional

In Ark Encounter, LLC v. Parkinson, No. 15-13-GFVT, 2016 WL 310429 (E.D. Ky. Jan. 25, 2016), the court ruled that the Commonwealth may not deny tax incentives to a religious tourist attraction that meets the neutral criteria for the incentives. The plaintiffs claim to have created an exact replica of Noah's ark at a cost of $100 million as part of a tourist attraction near the community of Williamstown, Ky. Under the Kentucky Tourism Development Act (KTDA), Kentucky provides an incentive program for qualifying tourism attractions "in order to advance the public purposes of relieving unemployment by preserving and creating jobs that would not exist if not for the incentives offered by the authority to approved companies, and by preserving and creating sources of tax revenues for the support of public services provided by the Commonwealth." Ky. Rev. Stat. §148.853(1)(b). The incentive allows an approved project to recover the lesser of either its total amount of sales tax liability or up to 25 percent of its approved development costs over a period of 10 years. §148.853(3)(b).Several projects have qualified, such as the Newport Aquarium and Kentucky Speedway. Plaintiffs are the first religiously affiliated applicants. After initially welcoming the project, the Commonwealth denied the plaintiffs' second application for two reasons: 1) the plaintiffs intend to discriminate in hiring its employees based on religion, and 2) extending the incentives would allegedly violate the Kentucky Constitution by advancing religion. The court disagreed and ruled that neither the Establishment Clause nor the state's Blaine amendment justify violation of the plaintiffs' free exercise and free speech rights. The court ruled that: 1) the KTDA has a secular legislative purpose, and neither the act itself nor allowing plaintiffs' participation gives rise to an endorsement of religion, nor does it have the primary effect of advancing religion nor involve an excessive entanglement between the Commonwealth and religion; 2) denying the plaintiffs' participation violates the principle of neutrality and non-entanglement with religion because it requires state officials to critique and scrutinize the plaintiffs' beliefs; and 3) denying the plaintiffs' participation would also amount to content-based exclusion of religious speech, viewpoint discrimination and violation of freedom of association through the imposition of a requirement not found in Title VII or KTDA requiring that they not discriminate in hiring based on religion. Furthermore, the court ruled that sections 184, 186 and 189 of the Kentucky Constitution do not apply to this dispute as they relate to funding for schools. The plaintiffs do not propose to operate a school or place of worship, and, even if they did, the KTDA does not involve revenue of the state but instead a potential rebate of sales taxes based on sales generated from the project, without any actual levy of taxes or requirement for taxpayers to contribute to it.

Ecclesiastical Abstention Doctrine Prevents Resolution of Church Disputes

In Church of God in Christ, Inc. v. L.M. Haley Ministries, Inc., No. W2015-00509-COA-R3-CV, 2016 WL 325499 (Tenn. Ct. App. Jan. 27, 2016), the court ruled that the ecclesiastical abstention doctrine also bars a hierarchical church from obtaining an order establishing control over a local church's real and personal property in the absence of any allegation that the local church had decided to "break away" from the hierarchical church. Under The Official Manual of the Church of God in Christ (COGIC), the bishop was empowered to appoint a pastor of the local church once the founding pastor died. Bishop Hall appointed himself, and the local congregation resisted. Defendants recorded a quit claim deed attempting to transfer the local church to a new entity and remove it from Bishop Hall's jurisdiction while remaining part of COGIC. The court of appeal affirmed the trial court's decision to dismiss the hierarchical church's request to reform the deed and create a trust for the benefit of COGIC. The court also ruled that to hold that Bishop Hall has authority over the local church's personal property would require it "to make a determination as to the appropriate leader" of the church, which it "simply has no jurisdiction to determine...."

In Glass & Garden Drive-in Church v. Chassis of the Southwest, R.C.A., No. 1CA-CV 14-0525, 2016 WL 233103 (Ariz. App. Jan. 19, 2016), the court affirmed dismissal under the ecclesiastical abstention doctrine of the lawsuit filed by former members of a local church against the Reformed Church in America drawing into question its "supersession" process by which the denomination may remove a local church's consistory and install new leadership. The court agreed that the neutral principles of law approach does not apply to the case because its resolution requires the court to resolve questions of ecclesiastical governance and religious doctrine and practice.

RLUIPA Claims Result in Split Outcomes

Pro: In Chabad Lubavitch of Litchfield Cnty., Inc. v. Borough of Litchfield, Conn., No. 3:09-CV-1419, 2016 WL 370696 (D. Conn. Jan. 27, 2016), the court denied the defendants' motion for summary judgment on the plaintiff's RLUIPA substantial burden and nondiscrimination claims in connection with the defendant's denial of the plaintiff's application for a certificate of appropriateness to expand a Victorian house to accommodate its purposes, including a sanctuary, two kosher kitchens, a ritual bath, a residence for the rabbi, staff/visitor housing, a coffee bar and an indoor swimming pool. Although denying the plaintiff's application, the defendant invited the plaintiff to reapply for a smaller addition. The court concluded that the proposed facilities were in large measure for religious exercise and a genuine issue of material fact existed regarding whether the balance of facilities were as such. To determine whether there was a substantial burden on this religious exercise, the court found questions of material fact pertaining to the arbitrariness of the denial, whether the plaintiff could rearrange its facilities so as to fit into the smaller space, whether feasible alternatives exist, whether the plaintiff reasonably believed it would be permitted to modify the property, and whether there was a close nexus between the modifications and plaintiff's religions exercise. One of the statements that the court considered potential evidence of animus was a board member's statement at a pre-hearing, "[w]e have to get the public out on this project for the public hearing."

Con: In Andon, LLC v. City of Newport News, Va., No. 14-2358, 2016 WL 502714 (4th Cir. Feb. 9, 2016), the court affirmed dismissal of the plaintiffs' RLUIPA substantial burden claim, concluding they never had a reasonable expectation to use the property as a church and any burden on their religious exercise was, therefore, self-imposed. Plaintiffs knowingly entered into a contingent lease agreement for a non-conforming property, meaning that the alleged burdens that they sustained were not imposed by the local government. The court ruled that its conclusion is not altered by the plaintiffs' contention that they have been unable to find another property that meets the congregation's desired location, size and budgetary limitations.

Religious Institutions in the News

  • The Georgia legislature has passed a bill that protects clergy from performing same-sex marriage; precludes ordinances requiring a business to operate on either Saturday or Sunday; protects a religious organization from having to rent or lease to a person objectionable to it; precludes government from taking adverse action against a person or faith-based organization on the basis of what that person believes, speaks or acts in accordance with sincerely held religious beliefs regarding marriage; and requires government to consider accredited, licensed or certified any person or faith-based organization that would have been so by a private entity but for that entity's determination on the basis of what it believes, speaks or acts in accordance with sincerely held religious beliefs regarding marriage.
  • Plaintiffs chose not to appeal summary judgment granted in favor of the defendants in Center for Inquiry, Inc. v. Jones, Case No. 2007-CA-1358, Circuit Court, Leon County on Jan. 20, 2016. The case involved a Florida Blaine amendment challenge to a state contract with a faith-based criminal rehabilitation and drug treatment provider that used the Alcoholics Anonymous and Narcotics Anonymous 12-step program.
  • Religious conviction is having an effect on the presidential selection process, with evangelicals disproportionately supporting Donald Trump in South Carolina, Nevada and other primaries.


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.

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