March 30, 2023

Religious Institutions Update: March 2023

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

Key Cases

Class Action

Donors State Claims for Misuse of Their Funds, But Not as a Class Action

In Carrier v. Ravi Zacharias Int'l Ministries, Inc. No. 1:21-CV-3161-TWT, 2022 WL 1540206 (N.D. Ga. May 13, 2022) and Carrier v. Ravi Zacharias Int'l Ministries, Inc., No. 1:21-CV-3161-TWT, 2023 WL 2355891 (N.D. Ga. March 3, 2023), former donors filed a putative class action against the defendant for violation of the Georgia Charitable Solicitations Act (GCSA), unjust enrichment and violation of the Georgia Fair Business Practices Act (GFBPA), alleging that the defendants "bilked hundreds of millions of dollars from well-making contributors who believed RZIM and Zacharias to be faith-filled Christian leaders," when "[i]n fact, Zacharias was a prolific sexual predator who used his ministry and Ravi Zacharias International Ministries, Inc. (RZIM) funds to perpetrate sexual and spiritual abuse against women." In its first opinion, the court determined that the plaintiffs had standing to bring the lawsuit and that neutral principles of law could be used to resolve the misuse-of-funds allegations and other claims without passing impermissible judgment on questions of religious faith or doctrine. The court determined that the estate of Ravi Zacharias was not liable for certain claims, but determined that RZIM was not exempt from the GFBPA and that the plaintiffs' claims could proceed on the theory that the defendants wrongfully failed to disclose their misuse of donor funds.

In the second opinion, the court has agreed with the defendants that the plaintiffs are not entitled to certify a class because the First Amendment protects against compelled disclosure of RZIM's donors who would comprise the class at least where the plaintiffs failed to make any showing that the government has a substantial interest in the class action proceeding. Furthermore, the court determined that the plaintiffs are unable to satisfy the predominance requirement of certification. A class-wide damages award of all contributions would be inequitable and implausible because the plaintiffs proposed no method to differentiate the class members whose donations were misappropriated to cover up the sexual misconduct of Zacharias from those whose donations were not. Furthermore, the court decided that there was no ongoing deceptive behavior by RZIM that would warrant injunctive relief because Zacharias died, RZIM commissioned an independent investigation of his misconduct and admitted wrongdoing, and the results of the investigation are published. The court ruled against the defendants as to the applicability of the Religious Freedom Restoration Act (RFRA) where the government was not a party to the lawsuit.


Court Will Consider Disparate Treatment Claims in USCIS Processing of Religious Worker Visas

In Society of the Divine Word v. U.S. Citizenship and Immigration Servs., Case No. 21 CV 3650, 2022 WL 17820973 (N.D. Ill. Dec. 20, 2022), the petitioners sued U.S. Citizenship and Immigration Services (USCIS) alleging that its regulations, policies and practices "discriminate against U.S.-based religious employers and their selected international religious workers, while interfering with their [constitutional and statutory] rights to appoint and employ ministers." Ministers and other religious workers can seek classification in employment-based immigrant preference categories for "special immigrants" known as the "special immigrant religious worker" category or "EB-4." EB-4 classification requires a series of steps by both employers and non-citizen employees that the plaintiffs argue have become impossible to complete before the processing time delay for the relevant forms expires. Although Congress authorized the U.S. Department of Homeland Security (DHS) to establish and collect a premium fee for expedited processing, USCIS did not open that avenue to those seeking EB-4 classification. Therefore, processing times for petitions for religious workers slipped to more than two years, while the processing time for most secular employers did not slip as much and could be expedited. USCIS moved to moot the lawsuit by processing and approving the plaintiffs' forms. USCIS also began moving to make changes to the pertinent rules. But the court declined to rule the case moot "based on these arguments, which rely upon possible, but not certain, events that are partially within USCIS's control." The court went on to conclude that the plaintiffs can establish standing in federal court based on their allegations of disparate and discriminatory treatment in the process of filing EB-4 motions. The court ruled that it "could remedy plaintiffs' expense burden through a court order to expand concurrent filing and premium processing to EB-4 petitioners like 
plaintiffs … .” But the court also ruled that it lacked jurisdiction to hear certain claims such as under the Administrative Procedure Act (APA), the concurrent filing regulation contained in 8 C.F.R. § 245.2(a)(2)(i)(B) because it was not enforced or applied against them and the premium processing regulation under 8 U.S.C. § 1356(u)(2)(E) because it is barred by 8 U.S.C. § 1252(a)(2)(B)(ii).


Healthcare Organizations Enjoin Sex Discrimination Provisions of ACA and Title VII Requiring Them to Perform Gender Transitions

In Religious Sisters of Mercy v. Becerra, 55 F.4th 583 (8th Cir. 2022), the court of appeals affirmed in part the decision of the district court granting the plaintiffs' motion for summary judgment and issuing a permanent injunction against enforcement of prohibitions against discrimination within Section 1557 of the Patient Protection and Affordable Care Act (ACA) and within Title VII "on the basis of sex," defined to include gender identification, otherwise requiring them to perform and provide insurance coverage for gender transitions as in violation of RFRA. Section 1557 of the ACA provides, in relevant part, that a federally funded or administered health program or activity is prohibited from denying benefits to, or subjecting to discrimination, an individual "on [a] ground prohibited under … Title IX of the Education Amendments of 1972 (20 U.S.C. 1681 et seq.)." Title IX, which states that "[n]o person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance," authorizes enforcement by terminating the federal funding of any noncomplying recipient.

In 2016, the U.S. Department of Health and Human Services (HHS) promulgated a final rule implementing Section 1557 of the ACA, prohibiting discrimination on the basis of gender identity and sex stereotyping so as to outlaw categorical exclusion or limitation of coverage for all health services related to gender transition or hysterectomies for transgender men and so as to evaluate whether the denial of such procedures in individual cases is discriminatory. HHS declined to import Title IX's blanket religious exemption into Section 1557, but said that it would evaluate RFRA claims on a case-by-case circumstantial basis. HHS also declined to exclude third-party administrators of health plans from the reach of Section 1557. Intervening litigation against new rules adopted in 2020 resuscitated pertinent provisions of the 2016 rule. New rulemaking begun in 2022 also proposed a similar standard. See Nondiscrimination in Health Programs and Activities, 87 Fed. Reg. 47824-01, 47871-72, 47878-79 (proposed Aug. 4, 2022). Consequently, the court of appeals agreed with the district court that the plaintiffs face a credible threat of enforcement from the U.S. Equal Employment Opportunity Commission (EEOC) and HHS and affirmed the district court's grant of permanent injunctive relief to the plaintiffs except to the extent the district court recognized the associational standing of the Catholic Benefits Association (CBA).

Free Exercise

Law Preventing and Differentiating Concealed Carry at Houses of Worship Stricken

In Spencer v. Nigrelli, No. 22-CV-6486, 2022 WL 17985966 (W.D. N.Y. Dec. 29, 2022), the court ruled that a pastor and his church were likely to succeed on the merits of their claims that a New York statute making it a felony for "concealed carry" license holders to possess firearms at any place of worship or religious observation violated the First and Second Amendments. The pastor testified that members of the church's security team of congregants protect the congregation pursuant to a calling from God. The court ruled that the state, by enacting the house of worship exclusion, burdened their sincere religious practices. The plaintiffs demonstrated that the state permits countless other private actors hosting secular activities to do what a house of worship may not without evident justification. Therefore, the court ruled that the exclusion was not a neutral law of general applicability. As relates to the Second Amendment, the court ruled that the state failed to demonstrate that the houses of worship exclusion is consistent with this nation's historical tradition of firearm regulation. Many colonial-era enactments mandated carry at places of worship.

Court Upholds Minor Therapy Conversion Law Against First Amendment Challenge

In Chiles v. Salazar, No. 1:22-cv-02287-CNS-STV, 2022 WL 17770837 (D. Colo. Dec. 19, 2022), the court denied a licensed professional counselor's motion to enjoin Colorado's Minor Therapy Conversion Law. The plaintiff alleged that it prohibits her ability to assist minor clients "seeking to reduce or eliminate unwanted sexual attractions, change sexual behaviors or grow in the experience of harmony with [their] physical bod[ies]." Therefore, she claimed to avoid certain conversations with her clients out of fear that they could violate the law. The court ruled the plaintiff was unlikely to succeed on the merits of her lawsuit because the law primarily regulates professional conduct (i.e., licensed professional counselor's therapeutic "practice[s] or treatment[s]") rather than speech. According to the court, regulations of professional conduct are constitutionally permissible and subject only to rational basis review. In addition, the court ruled that the law is neutral and generally applicable and, therefore, does not violate the Free Exercise Clause and is not unconstitutionally vague.

Court Enjoins Mandatory Abortion Care Coverage

In Foothill Church v. Watanabe, No. 2:15-cv-02165, 2023 WL 1767748 (E.D. Cal. Feb. 3, 2023), the court granted the plaintiffs' request for a permanent injunction on their free exercise challenge to the California Department of Managed Health Care's denial of their request for exemption from its abortion care coverage requirement. The court ordered the defendant to consider requests and proposals from the plaintiffs for abortion care coverage comporting with their religious beliefs, and to approve or provide feedback on the proposed coverage within 30 days and upon approval of the language to solicit an amended evidence of coverage document containing the approved language.

Ministerial Exception Doctrine

Mashgiach Is Minister for Purposes of the Ministerial Exception Doctrine

In Markel v. Union of Orthodox Jewish Congregations of Am., No. 2:19-cv-10704-JWH-SK, 2023 WL 1093676 (C.D. Cal. Jan. 3, 2023), the court ruled that the ministerial exception doctrine barred a kosher supervisor, or mashgiach, from suing his employer and supervisor for violation of the Labor Code, Unfair Business Practices, fraud, negligent misrepresentation and failure to provide itemized wage statements. The plaintiff argued that the Union of Orthodox Jewish Congregations of America (OU) was a business because it received $130 million in annual revenue from kosher certification, but the court agreed with the defendants that OU was organized as a nonprofit and tax-exempt religious organization that, not incidentally, qualified for New York tax-exempt bond financing. All five claims for relief that the plaintiff asserted were anchored in violations of state employment and wage-related law. None of the allegations against the plaintiff's supervisor were separate from the employment-related decisions that OU made. Therefore, the court granted summary judgment to the defendant on all of the plaintiff's claims for reliefs.

Hostile Work Environment and Retaliation Claims May Proceed Against Archdiocese

In Brandenburg v. Greek Orthodox Archdiocese of N. Am., No. 20-CV-3809, 2023 WL 2185827 (S.D. N.Y. Feb. 23, 2023), "sanctified nuns" at a monastery run by the Greek Orthodox Archdiocese of North America sued the archdiocese and several clergy members claiming inappropriate sexual conduct for years. The court ruled that plaintiffs' hostile work environment and one retaliation claim can proceed against the defendants despite the applicability of the ministerial exception doctrine subject to strict limitations on what a fact finder can consider at trial. The plaintiffs conceded that the plaintiffs and clergy defendants qualified as "ministers" and the archdiocese as a religious institution under the ministerial exception doctrine. Although there is a split of authority in the courts of appeal on the question, the defendants waived any argument that the plaintiffs' claims were categorically barred by the ministerial exception doctrine and argued that the court should instead analyze the plaintiffs' claims to determine whether adjudicating them would involve neutral principles of law or a purely secular inquiry. The court rejected a retaliation claim pertaining to the plaintiffs' removal from certain spiritual functions and hobbies, a constructive discharge claim due to the delay between the plaintiffs' resignations and the alleged misconduct and a defamation claim because the plaintiffs failed to prove falsity.

Title IX

Challenge to U.S. Department of Education's Application of the Title IX Religious Exemption Dismissed

In Hunter v. U.S. Dep't of Educ., No. 6:21-cv-00474-AA, 2023 WL 172199 (D. Or. Jan. 12, 2023), the court dismissed the plaintiffs' lawsuit claiming that defendants facilitate and encourage sex discrimination by the Title IV-eligible religious schools to which they applied, attended or attend by failing to enforce Title IX based on the defendants' application of the religious exemption. The court determined that the plaintiffs submitted no allegations of discriminatory motivation or impermissible purpose on the part of those enacting the religious exemption, failed to allege how the religious exemption fails intermediate scrutiny and shed no light on the details of the plaintiffs' substantive due process claim. "Plaintiffs' allegations do not plausibly demonstrate how the relief they seek in enforcing Title IX in religious schools is not the very excessive entanglement Plaintiffs argue is impermissible."

Establishment Clause

Two Justices Call into Question "Offended Observer" Standing

In City of Ocala v. Rojas, No. 22-278 (U.S. March 6, 2023), the City of Ocala chief of police responded to a shooting spree that left several children injured by, at the suggestion of others, organizing a prayer vigil in which police chaplains participated. Atheists chose to attend knowing that they would be offended. The U.S. Supreme Court denied a petition for a writ of certiorari to review a ruling finding that at least one of the atheists enjoyed Article III "offended observer" standing to contest the religious speech under the Establishment Clause. Justice Neil Gorsuch agreed that granting certiorari was premature. Justice Clarence Thomas dissented. Both argued that the "offended observer" test is an insufficient predicate for standing now that the Lemon test from which it sprung is no longer good law.


Former Employees State Religious Discrimination Claim Against Mandated Vaccination

In Gardner-Alfred v. Federal Reserve Bank of N.Y., No. 22-cv-1585, 2023 WL 253580 (S.D. N.Y. Jan. 18, 2023), the court ruled that former employees of the Federal Reserve Bank of New York plausibly alleged that termination of their employment for failing to comply with the requirement that employees be vaccinated against COVID-19 violated their sincerely held religious beliefs as required to state a prima facie case of religious discrimination under Title VII. One employee claimed membership in the Temple of Healing Spirit that opposed invasive techniques of western medicine; the other alleged that her Catholic beliefs required her to refuse vaccines created using human cell lines derived from abortion and that her natural immunity from contracting the virus twice was an alternative to vaccination. The court also ruled that the provision of Title VII creating a judicial remedy for employment discrimination claims against the federal government did not preclude RFRA religious accommodations or free exercise claims against the bank, which, as a matter of first impression, was ruled an "instrumentality" of the federal government subject to both. The claim also ruled that a provision of the Federal Reserve Act granting the federal reserve banks power to dismiss employees "at pleasure" preempted the antidiscrimination provisions of New York law.


Special Use Permit Requirement in Agricultural District Does Not Violate RLUIPA

In Alive Church of the Nazarene, Inc. v. Prince William Cnty., 59 F. 4th 92 (4th Cir. 2023), the court ruled that the county did not violate the equal terms, nondiscrimination or substantial burden provisions of the Religious Land Use and Institutionalized Persons Act (RLUIPA) or the Free Exercise Clause when it required the plaintiff to obtain a special use permit to conduct religious services in an agricultural district. The court rejected farm wineries or limited-license breweries as similarly situated comparators. The court decided that the ordinance did not create an absolute impediment to religious land use in violation of RLUIPA. Furthermore, the court ruled that imposing a liquor license requirement on the church for conducting special events in the agricultural district such as that required of farm wineries or limited-license breweries did not violate the church's free exercise or equal protection rights nor the church's right to peaceably assemble.

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, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.

Related Insights