United States: Religious Institutions Update: January 2018

Lex Est Sanctio Sancta

Nathan "Nate" A. Adams IV and Shannon B. Hartsfield are partners in our Tallahassee Office.

Timely Topics

By Shannon B. Hartsfield

The U.S. Department of Health and Human Services (HHS) announced on Jan. 18, 2018, the creation of a new division within its Office for Civil Rights (OCR). OCR is described as the "law enforcement agency" within HHS that enforces federal laws protecting civil rights and conscience in health and human services, and the security and privacy of individual health information. HHS indicated that the Conscience and Religious Freedom Division will allow HHS to focus on the enforcement of "existing laws protecting the rights of conscience and religious freedom, the first freedom protected in the Bill of Rights." OCR Director Roger Severino stated, "Laws protecting religious freedom and conscience rights are just empty words on paper if they aren't enforced. No one should be forced to choose between helping sick people and living by one's deepest moral or religious convictions, and the new division will help guarantee that victims of unlawful discrimination find justice. For too long, governments big and small have treated conscience claims with hostility instead of protection, but change is coming and it begins here and now."

OCR's enforcement authority is found in numerous federal conscience protection statutes, including the following:

  • the "Church Amendments," found in 42 U.S.C. §300a-7 et seq., which were enacted to protect the rights of individuals and entities that, on the basis of religion or moral convictions, object to assisting in or performing abortion or sterilization procedures
  • the Public Health Service Act, §245, codified at 42 U.S.C. §238n, which prohibits any government entity receiving federal financial assistance from discriminating against an entity because it refuses to perform abortion, provide abortion training or engage in certain other training activities related to abortion
  • the Weldon Amendment, first passed as part of an HHS appropriation in 2005, that prohibits HHS funds from being made available to any federal agency or program, or to a state or local government, if the agency, program or government discriminates against a healthcare entity on the basis that the entity does not provide, pay for or cover abortions
  • Section 1303(b)(4) of the Affordable Care Act (ACA), Pub. L. No. 111-148, as amended by Pub. L. No. 111-152, which states that "No qualified health plan offered through an Exchange may discriminate against any individual health care provider or health care facility because of its unwillingness to provide, pay for, provide coverage of, or refer abortions"
  • Section 1553 of the ACA, which prohibits discrimination against an individual or institutional healthcare entity on the basis that the entity does not provide services relating to assisted suicide

The day after its announcement, HHS also published new guidance to state Medicaid directors rescinding 2016 guidance that restricted states' ability to take certain actions against abortion providers. OCR also issued a proposed rule to enforce statutory conscience protections for those involved in HHS-funded programs. More information on the new OCR division, as well as information regarding how to file religious freedom complaints, is available on the HHS website.

Key Cases

By Nathan A. Adams IV

Baptized States Claim Against Church for Internet Publication

InDoe v. First Presbyterian Church U.S.A. of Tulsa, Oklahoma, No. 115182, 2017 WL 6478193 (Okla. Dec. 19, 2017), the court reversed on rehearing dismissal of the lawsuit for lack of subject matter jurisdiction and ruled that an individual who was kidnapped and tortured by extremists in Syria, allegedly due to publication on the internet of his baptism, stated a claim against the church that baptized him for breach of contract and tort. The appellant alleged that he consented to baptism only after receiving assurance of privacy, whereas appellees urged that they had no knowledge of Doe's request for confidentiality in baptism, and church doctrine would have prohibited them from keeping the baptism private. Because of these disputed factual issues, and because it is undisputed that the appellant did not seek or become a member of the church, the court ruled that the appellant stated a claim. The court determined that the church autonomy doctrine could not apply to bar the claim of a non-member and, in any event, is an affirmative defense, not a jurisdictional bar. The dissent (Combs, C.J., and Winchester and Reif, JJ.) disagreed with the court's grant of rehearing, that the church autonomy doctrine (as opposed to ministerial exception doctrine) is an affirmative defense rather than a bar to subject matter jurisdiction and that the appellant's nonmember status bars application of the church autonomy doctrine.

Application of Public Accommodations Law to Bakers Upheld

In Klein v. Oregon Bureau of Labor and Indus., 289 Or.App. 507 (Or. App. 2017), the Bureau of Labor and Industries (BOLI) sued the Kleins, owners of Sweetcakes, after they declined to prepare a wedding cake for a gay couple or, according to them, to "facilitate the celebration of a union that conveys messages about marriage to which they did not [subscribe] and that contravene their religious beliefs." The court affirmed BOLI's order in three respects. First the court concluded that the Kleins' denial of service was "on account of" the complainants' sexual orientation within the meaning of ORS 659A.403. The Kleins argued that they are willing to serve homosexual customers, as long as those customers do not use their cakes in celebration of weddings, but BOLI found that the Kleins' refusal to provide cakes for a wedding is synonymous with refusing to provide a cake because of the complainants' sexual orientation. Second, the court affirmed BOLI's conclusion that its order does not impermissibly burden the Kleins' right to free expression as it requires compliance with a neutral law of general applicability. The court determined that the Kleins' wedding cakes include expressive and non-expressive elements, triggering only intermediate scrutiny. Furthermore, the court determined that any burden on the Kleins' expressive activities is no greater than essential to further Oregon's substantial interest in promoting the ability of its citizens to participate equally in the marketplace without regard to sexual orientation. Third, the court agreed that the Kleins were not denied due process of law when BOLI's commissioner did not recuse himself due to bias. The court affirmed a damages award against the Kleins, including $75,000 to one complainant and $60,000 to another. Concerning his public comments, the court determined that they "do not demonstrate anything more than [his] general views about law and policy related to antidiscrimination statutes," rather than prove a lack of impartiality. The court reversed BOLI's order only with respect to its conclusion that the Kleins violated ORS 659A.409, which, in essence, makes it unlawful to threaten to withhold services in the future.

Remaining Challenges to Hospital Church-Plan Rejected

In Medina v. Catholic Health Initiatives, 877 F. 3d 1213 (10th Cir. 2017), the court affirmed summary judgment for the defendants against an employee and participant in the defendant's retirement plan. The latter was adopted pursuant to the church-plan exception to the Employee Retirement Income Security Act (ERISA). The court ruled both that the defendant's retirement plan satisfies the statutory criteria for a church plan and that the exception is constitutional, rather than an establishment of religion. In Advocate Health Care Network v. Stapleton, 137 S.Ct. 1652 (2017), the U.S. Supreme Court ruled that an employee-benefit plan need not be established by a church to qualify for ERISA's church-plan exemption. But it did not provide guidance on whether defendant's internal benefits committee qualifies as a principal-purpose organization; that is, an organization whose principal purpose is administering or funding a retirement plan for entity employees and, if so, whether that organization is associated with a church. The court determined that a church plan is "maintained" by a principal-purpose organization when the organization "cares for the plan for purposes of operational productivity." According to the court, "this is precisely the point of the Subcommittee." The court also ruled that the defendant and its subcommittee were indeed affiliated with the Roman Catholic Church based on several factors such as articles of incorporation, commonality of trustees between the defendant and its canon-law alter ego, and The Official Catholic Directory. The plaintiff also argued that the plan was not qualified because more than 25 percent of plan participants work for a joint venture with another religious institution, but the court ruled that it was not necessary that all of those employees share common religious bonds and convictions with each other, but that they share "common religious bonds and convictions" with some church. The church-plan exemption is constitutional as an accommodation of the exercise of religion, rather than endorsement of religion.

Broadened Religious and Moral Exemption to Contraceptive Coverage Mandate Enjoined

In California v. Health and Human Servs., Case No. 17-cv-05783-HSG, 2017 WL 6524627 (N.D. Cal. Dec. 21, 2017) and Pennsylvania v. Trump, No. 17-4540, 2017 WL 6398465 (E.D. Pa. Dec. 15, 2017), the courts granted nationwide preliminary injunctions against interim final rules exempting certain religious organizations from the Affordable Care Act (ACA) mandate that employers must provide contraceptive coverage as invalid under the Administrative Procedure Act (APA). Pursuant to Executive Order No. 13,798, issued on May 4, 2017, the Departments of Treasury, Labor and HHS issued the Religious Exemption Interim Final Rule (IFR) and the Moral Exemption IFR. As a result of the former, the agencies substantially broadened the scope of the religious exemption. The agencies expanded the exemption to include persons that object based on sincerely held moral convictions; rendered the accommodation process optional and eliminated requirements to provide notice of an intent to take advantage of the exemption. The court found that the defendant's failure to comply with the APA notice and comment requirement denied the states their opportunity to protect their interest in ensuring that women have access to no-cost contraceptive coverage under the ACA and would cause significant fiscal impacts. Defendants asserted exceptions from the terms of the APA based on a claim that Congress expressly and implicitly authorized bypassing notice and comment rulemaking with respect to the IFRs and due to "good cause" that the notice and comment procedure is "impracticable, unnecessary, or contrary to the public interest" due to, inter alia, the Religious Freedom Restoration Act (RFRA). The Pennsylvania court decided that Congress legislated compliance with the ACA and only narrow exceptions. The court noted precedent to the effect that the accommodation process is not a substantial burden on the exercise of religion. RFRA does not apply to the moral exemption. In contrast, the California court observed, "The 2017 IFRs transform contraceptive coverage from a legal entitlement to an essentially gratuitous benefit wholly subject to their employer's discretion."

Faith-Based School May Receive Administration Fees, But Delegated Authority to Authorize Charter Schools Subject to Challenge

In Indiana Coalition for Public Educ. – Monroe Cnty. v. McCormick, No. 1:17-cv-01295-JMS-MPB, 2017 WL 5889723 (S.D. Ind. Nov. 29, 2017), the court denied the defendant's motion to dismiss the plaintiffs' complaint alleging that the Indiana Charter School Act impermissibly delegates the power to authorize public charter schools to religious institutions in violation of the Establishment Clause, but granted the motion as relates to the act's administrative fee provision as consistent with the Establishment Clause and state Blaine Amendment. The plaintiffs include a nonprofit association of public school teachers, public school employees, parents with children in public schools and taxpayers. The court agreed that they have standing based on "'specific injury' as a result of the funding lost to Seven Oaks." Nonparty Grace College is a private religious institution that authorized several charter schools, including intervenor defendant Seven Oaks Classical School Inc. The court ruled that to determine whether the delegation is lawful, it must evaluate the nature of the delegation and determine whether the Charter School Act provides an "effective means of guaranteeing that the delegated power will be used exclusively for secular, neutral and nonideological purposes." The plaintiffs contend that religious institutions have the final say whether to authorize a charter school even when denied by public entities. Therefore, the court wishes to learn what are the "nationally recognized" authorizing standards and how much discretion they vest in individual authorizers, what sort of active oversight they contemplate and how they are enforced. But the court determined that religious authorizers' collection of up to 3 percent of the state funding as an administrative fee comports with the Establishment Clause and Article I, Section 6 of the Indiana Constitution, because the fee is directly tied to school parents' genuine and independent private choices, and there was no allegation that the fee is for reimbursement of anything other than legitimate, secular administrative services or that the process of reporting the fees results in unconstitutional public oversight. Article I, Section 6 states, "No money shall be drawn from the treasury, for the benefit of any religious or theological institution."

Enhanced Vetting Enjoined But Not Under Establishment Clause

In Hawaii v. Trump, No. 17-17168, 2017 WL 6554184 (9th Cir. Dec. 22, 2017) (per curiam), the court affirmed in part and vacated in part the district court's grant of a motion for temporary restraining order against implementation and enforcement of Section 2 of the Presidential Proclamation 9645, entitled "Enhancing Vetting Capabilities and Processes for Detecting Attempted Entry into the United States by Terrorists or other Public-Safety Threats" to the extent that it indefinitely barred entry by nationals from Iran, Libya, Syria, Yemen, Somalia and Chad. The court did not reach the plaintiffs' argument that the proclamation violates the Establishment Clause, but instead ruled on the basis of plaintiffs' statutory claims. It narrowed the scope of the injunction to those with a credible bona fide relationship with the U.S. When granting review of this decision on Jan. 19, 2018, the U.S. Supreme Court called for briefing on the Establishment Clause issue.

Religious Worker Compensation Requirement Enjoined Under RFRA

In O Centro Espirita Beneficiente Uniao Do Vegetal in the U.S. v. Duke, No. 17-1137, 2017 WL 6453305 (D.N.M. Dec. 15, 2017), the court granted injunctive relief to the plaintiff in light of the intent of the U.S. Citizenship and Immigration Services (USCIS) to deny one or both of the plaintiff's R-1 non-immigrant religious worker status petitions on the grounds that a key religious figure responsible for teaching its oral traditions, Juan Carlos Garcia, is neither financially compensated nor part of an established missionary program. A central aspect of the plaintiff's theology is non-compensation of its ministers, and an established missionary program requires that at least one religious worker, at some point, be compensated. The court ruled that defendants' actions prevent participation in conduct motivated by a sincerely held religious belief and is, thus, likely a substantial burden on the plaintiff's and Garcia's sincere religious exercise in violation of RFRA. The court also ruled that the defendants made no arguments regarding why their regulations requiring ministers to be compensated are the least restrictive means of furthering their interest in preventing immigration fraud. Accordingly, the court required the defendants to reconsider the plaintiffs' R-1 petition without applying the compensation requirement.

Rabbinical Jews Prove Unlawful Discrimination

In Congregation Rabbinical College of Tartikov, Inc. v. Village of Pomona, N.Y., No. 07-CV-6304, 2017 WL 6206193 (S.D. N.Y. Dec. 7, 2017), the court ruled that the plaintiffs proved violations of the First and 14th Amendments, Religious Land Use and Institutionalized Persons Act (RLUIPA) nondiscrimination clause, the Federal Housing Administration (FHA) and Sections 3, 9 and 11 of the New York Constitution as a result of enacting laws such as the Accreditation Law, Dormitory Law and Wetlands Law designed to prevent or render impractical rabbinical Jews from locating a college and expanding their presence in the village. Village officials explicitly stated their intent to thwart the Jews' plans and acted on the animus that community members expressed against them. The court determined that the defendants' actions substantially burdened the plaintiffs' religious exercise and adversely impacted their right to associate freely. The court found that the interests the defendants offered justifying their actions were not compelling and that the challenged laws were not narrowly tailored to serve those interests.

Church and Conference Not Liable for Youth Pastor's Sexual Misconduct

In B.B. v. Methodist Church of Shelbina, Mo., Case No. ED 104969, 2017 WL 6459989 (Mo.App.-Div. 3, Dec. 19, 2017), the court of appeals affirmed the trial court's grant of summary judgment against an alleged victim of sexual misconduct. The church youth pastor allegedly invited the youth home, showed him pornography on the computer and touched his genitals. The youth pastor was subsequently convicted by a jury of first-degree child molestation. The court of appeals agreed that the trial court could not have entertained appellant's negligence-based claims or breach of fiduciary/confidential relationship claim without interfering with and interpreting the doctrine, policy, polity, practice and administration of the respondents in violation of the First Amendment. In addition, the court ruled that the appellant failed to establish that the conduct occurred on church premises to support a claim for intentional failure to supervise clergy; the conduct was outside the course and scope of the youth pastor's employment; the church was not liable for aiding and abetting under Section 562.056.1 RSMo 2000; and the church could not be liable as a nonperpetrator for a perpetrator's childhood sexual abuse under Section 537.046 RSMo 2000.

No Jurisdiction to Decide Priest's Defamation and Discrimination Claims

In Melendez v. Kourounis, No. A-0744-16T1, 2017 WL 6347622 (N.J. App. Dec. 13, 2017), the court affirmed summary judgment against the plaintiff, a priest of the Albanian Orthodox Diocese of America, who sued the defendant for defamation, false light and racial discrimination in violation of the New Jersey Law Against Discrimination (LAD). The defendant published an open letter to clergy and laity stating that the plaintiff's chapel was established without canonical permission; prohibiting clergy to visit or participate in any services there; and advising clergy to announce to parishioners that they should not visit or attend services there. The court determined that this was an ecclesiastical matter and that any adjudication of it would encroach on the church's ability to manage its internal affairs. The plaintiff tried to argue that he was not a member of the Greek Orthodox Church, but prior representations were to the contrary. The court ruled that LAD was not applicable to the dispute and that, even if it was, a religious institution's employment decisions are exempt from it.

Religious Institutions in the News

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