United States: Religious Institutions Update: December 2015

Lex Est Sanctio Sancta

Nathan A. Adams IV is a Partner in our Tallahassee office.

Timely Topics

Captive insurance companies can be a win-win for organizations with excellent claim records that would rather accrue their insurance premiums than pay them to a third-party insurer. Put simply, captive insurers are insurance companies formed by the insured with the specific objective of insuring risks emanating from the parent company or group of companies. The advantages can be substantial: For example, after "endowing" the captive insurer, the parent no longer has to make annual premium payments unless the captive has an unexpected payout period or takes on additional risks. Like ordinary insurers, captive insurers must convince regulators that their business is sound from an actuarial and financial perspective. Typically, captive insurance companies hire outside specialists to assist with this. They retain the underwriting profit and investment income, preserve control over how the company pays losses and settles claims, can develop their own forms and rates based on group experience, and, where necessary, may seek reinsurance to protect against remote risks. Captive insurers can tailor their products to the exact risks and strengths of your organization, whereas commercial insurers lump your risks into the risk profiles of other organizations that may prove quite different. By retaining control over settling claims, captives wrest control from third parties over these claims and are able to benefit directly from enhanced loss prevention programs. Not all types of insurance can be insured through captives, not all states authorize captives for every type of organization and not all risk profiles or organization sizes make sense for captives. Smaller organizations may want to join together in associations to benefit from them. Captives also require experienced and sophisticated management from at least outside vendors. But when the elements for captive insurance are satisfied, it is an excellent way to benefit from good risk-compliance programs and to steward resources. Holland & Knight is glad to assist if you would like more information about captive insurance companies.

Department of Justice May Not Enjoin School Voucher Program Based on Federal Desegregation Order

In Brumfield v. La. State Bd. of Educ., No. 14-31010, 2015 WL 6989319 (5th Cir. Nov. 10, 2015), the court ruled that the district court was without subject matter jurisdiction to modify a federal desegregation order to gain oversight and some level of control over Louisiana's Student Scholarships for Educational Excellence Act (Act). The federal order, put in place in 1975 because of Louisiana's historical practice of subsidizing racially discriminatory private schools, was converted into a consent decree in 1985, incorporating a process for private schools to be certified as non-discriminatory to be eligible for state assistance. Under the court's continuing jurisdiction over the consent decree, the U.S. Department of Justice (DOJ) sought to compel discovery of information about the voucher program, then to alter the order to enjoin Louisiana from awarding any vouchers to students who currently attend public school districts subject to ongoing desegregation orders. The only evidence in the record showed that the Act has no negative effect on school desegregation. Under the Act, students whose family income is below 250 percent of the federal poverty line and who are entering kindergarten or previously attended a school receiving a grade of "C" or lower, with preference of students in "D" and "F" schools, receive scholarships to attend public and private schools. DOJ convinced the district court to enter an order creating a process for continuing federal oversight of the voucher program. Intervenors who are parents of students who participate in the program moved to vacate the order by arguing, inter alia, that the judgment was void under Rule 60(b)(4) for lack of jurisdiction. They appealed the denial of their motion, as if it were tantamount to a refusal to dissolve an injunction. Describing the DOJ's motion as "disturbing" as a transparent attempt to "regulate the program without any legal judgment against the state," the appellate court reversed the district court on the ground that its order was outside the scope of its continuing jurisdiction for three reasons: (1) the voucher program's potential impact on desegregation orders for public schools in separate federal desegregation cases is distinct from eliminating public funding for discriminatory private schools; (2) the voucher program aid is for students rather than private schools; and (3) even if the voucher program aids private schools, it is not being given to discriminatory private schools. Judge Costa dissented on the grounds that the appeal was improper and "vigilance about retrenchment in the area of school desegregation" is reasonable.

Removing Evangelical Proselytizers for Objectionable Speech Violated Constitution

In Bible Believers v. Wayne Cnty., Mich., No. 13-1635, 2015 WL 6500505 (6th Cir. Oct. 28, 2015), an en banc court ruled that a municipality violated the Free Speech and Free Exercise rights of an evangelical group when the sheriff and deputies required them to leave the Arab International Festival, where they were proselytizing with T-shirts and banners proclaiming, for example, "Islam is a Religion of Blood and Murder." The court ruled that the police effectuated a "heckler's veto" and failed to intervene to control a group of adolescents who were throwing objects at the group. The court ruled, "If there is a bedrock principle underlying the First Amendment, it is that the government may not prohibit the expression of an idea simply because society finds the idea itself offensive or disagreeable." The parties agreed that the festival constituted a traditional public forum. They disagreed over whether the evangelical group was involved in incitement to violence or fighting words. The court rejected both arguments; it found the group's speech did not contain a single word encouraging violence or lawlessness and was not directed at any individual. Rather, the court found that it was the hecklers who posed the threat and ruled that an officer may not "sit idly on the sidelines – watching as the crowd imposes, through violence, a tyrannical majoritarian rule – only later to claim that the speaker's removal was necessary for his or her own protection." Because the defendants cut off the group's protected speech, placed undue burden on their exercise of religion and treated them disparately from other speakers at the festival on the basis of the views that they espoused, the court ruled that the defendants' violated their constitutional rights and are entitled to damages.

New Mexico Supreme Court Strikes Schoolbook Loan Program Benefiting Private Schools

In Moses v. Skandera, No. S-1-SC-34,974, 2015 WL 7074809 (N.M. Nov. 12, 2015), the New Mexico Supreme Court reversed the lower courts' ruling that New Mexico's Instructional Material Law (ILM) satisfies Article XII, Section 3 of the New Mexico Constitution. Pursuant to the ILM, the legislature appropriates funds, and private schools are allocated a percentage based on the number of students enrolled in their schools. The schools select and purchase nonreligious materials, then loan them to the students. The New Mexico Supreme Court found a violation of Article XII, Section 3, which states: "The schools, colleges, universities and other educational institutions provided for by this constitution shall forever remain under the exclusive control of the state, and no part of the proceeds arising from the sale or disposal of any lands granted to the state by congress, or any other funds appropriated, levied or collected for educational purposes, shall be used for the support of any sectarian, denominational or private school, college or university." The court referred to this language as an elaboration on the Blaine amendment required as a condition of admitting New Mexico to the union. The court found that the ILM at least indirectly benefits private schools by freeing them from the obligation of buying instructional materials and, thus, is unconstitutional.

Surveillance Program Singling out Muslims Under Constitutional Scrutiny

In Hassan v. City of N.Y., 804 F. 3d 277 (3d Cir. Oct. 13, 2015), the court found that plaintiffs state a claim for violation of the Equal Protection Clause, Free Exercise Clause and Establishment Clause against the New York City Police Department (NYPD) for implementing a wide-ranging surveillance program targeting Muslim individuals, businesses and institutions in the wake of the September 11, 2001, terrorist attacks. The program allegedly involves camera and video surveillance of mosques and worshippers; informants infiltrating mosques (so-called "mosque crawlers" and "rakers"), colleges and universities, and Muslim student groups; intelligence gathering; and reporting on "locations of concern." The plaintiffs argued that because of the program's stigmatizing and reputational consequences, it has adversely affected their worship and religious activities. The court agreed with the plaintiffs that the program is facially discriminatory because it intentionally singles out Muslims for different treatment, and rejected as an insufficient justification the city's claim that the motive was national security and public safety, not animus. Agreeing with two other courts of appeal, the court decided that classifications based on religious affiliation trigger heightened scrutiny under the Equal Protection Clause, but declined to decide whether this is intermediate or strict scrutiny.

Christian Science Nursing Facilities Denied Medicare Reimbursement

In Hill v. Burwell, No. 14-2135(JEB), 2015 WL 6736779 (D.D.C. Nov. 3, 2015), the court affirmed two decisions by the Administrator of the Centers for Medicare & Medicaid Services (CMS) that concluded four Christian Science nursing facilities were not entitled to reimbursement for the provision of specific types of nonmedical care to religious patients. The Medicare statute allows Medicare-certified religious nonmedical healthcare institutions, all of which during the period under review were Christian Scientist, to receive reimbursement for running "approved educational activities" that "contribute to the quality of patient care" rendered by that provider. 42 C.F.R. §413.85. Critical to the dispute, CMS defines approved educational activities as "formally organized or planned programs of study of the type that: (1) are operated by providers...; (2) enhance the quality of health care at the provider; and (3) meet the requirements of ... licensure or accreditation." The fiscal intermediary for Medicare denied reimbursement to the facilities because it concluded that the Commission for Accreditation of Christian Science Nursing Organizations/Facilities, Inc. was not providing adequate accreditation because it lacked specific standards. The court agreed.

Taxpayers Opposed to Tourism Incentives for Noah Project Not Allowed to Intervene

In Ark Encounter, LLC v. Stewart, No. 15-13-GFVT, 2015 WL 6680837 (E.D. Ky. Oct. 30, 2015), the court ruled four taxpayers lacked a substantial interest in the plaintiffs' lawsuit against the state due to their exclusion from a tourism incentive program created under the Kentucky Tourism Development Act. Plaintiffs seek to participate in the program to develop a multi-acre, paid-admission complex consisting of buildings, exhibits and amenities centered on Noah, the Ark and the Genesis flood account. Plaintiffs opposed the taxpayers' intervention on the grounds that the incentives at issue are entirely funded from sales taxes paid by persons who visit the project. By contrast, the taxpayers argue that the tax rebates would "effectively compel" them to subsidize a religious ministry against their will. The court ruled that their interest in the case is no different from that of Kentucky taxpayers at large and, thus, is inadequate.

Church Not Liable for Battery by Treasurer's Husband on Pedestrian

In Rodriguez v. Judge, 132 A.D.3d 966, 2015 N.Y. Slip Op. 07828 (N.Y. App. Div. - 2d Dep't Oct. 28, 2015), the court ruled that a church was not vicariously liable when the church treasurer's husband, while on the way to services with her, assaulted and battered a pedestrian using a gate pole procured from the church premises allegedly with her assistance. The court found that the treasurer was not acting in furtherance of church business at the time, the church owed no duty to and had no relationship with the pedestrian, and the husband's use of the pole to commit the battery was an unforeseeable, superseding and intervening cause of plaintiff's injuries.

Churches Lack Standing to Challenge Texas Election Code

In Joint Heirs Fellowship Church v. Akin, No. 14-20630, 2015 WL 6535336 (5th Cir. Oct. 29, 2015), the court per curiam affirmed the district court's determination that three churches involved in efforts to recall elected officials in Houston and San Antonio lack standing to challenge provisions of the Election Code governing corporate contributions to political committees, defining "political committee" and defining "contribution" and "expenditure." The court gave as the reason a limiting interpretation by the Texas Ethics Commission indicating that it will not enforce the statutes to prohibit the churches' proposed activities.

Former Parishioners Ruled Trespassers at Deconsecrated Parish

In Roman Catholic Archbishop of Boston v. Rogers, 88 Mass.App. Ct. 519, 39 N.E. 3d 736 (Mass. App. Oct. 14, 2015), the appellate court affirmed the trial court's order declaring former parishioners of a deconsecrated parish trespassers and permanently enjoining them from entering the church property. The parishioners maintained an around-the-clock, seven-days-per-week vigil since the decree of suppression entered in October 2004. In February 2015, the Archbishop notified the defendants that they must end their vigil and leave the church or face legal action. The appellate court agreed that the matter could be decided under "neutral principles of law" and that it was not obligated and could not entertain the defendants' claim that they are equitable owners of the church under canon law.

Religious Institutions in the News

The share of U.S. adults who say they believe in God declined from 92 percent to 89 percent between 2007 and 2015.

The U.S. Supreme Court agreed to review another challenge to the contraceptive mandate contained in the Affordable Care Act (ACA).

Peacemaker arbitration has come under criticism.

Australian Catholic bishops face court action and fines for sending home with parochial school children a booklet advocating traditional views on marriage.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions