Freedom From Religion Foundation, Inc. v. Bugher

In the

United States Court of Appeals

For the Seventh Circuit

No. 99-2850

FREEDOM FROM RELIGION FOUNDATION,

INCORPORATED, ANNE GAYLOR, ANNIE LAURIE

GAYLOR and DAN BARKER,

Plaintiffs-Appellees,

v.

MARK D. BUGHER, Secretary of

the Wisconsin Department

of Administration and member

of the TEACH Wisconsin

Board, JOHN T. BENSON,

Superintendent of Public

Instruction and member of

the TEACH Wisconsin Board,

RAYMOND ALLEN, GUS WIRTH, JR.,

L. ANNE REID, JONATHAN BARRY,

JAMES M. BOWEN, RODNEY G.

PASCH, and DARYLANN WHITEMARSH,

members of the TEACH Wisconsin

Board,

Defendants-Appellants.

Appeal from the United States District Court

for the Western District of Wisconsin.

No. 98-C-0767-S--John C. Shabaz, Chief Judge.

Argued November 13, 2000--Decided April 27, 2001

Before HARLINGTON WOOD, JR., KANNE, and DIANE P. WOOD,

Circuit Judges.

HARLINGTON WOOD, JR., Circuit Judge. On November

4, 1998, Freedom From Religion Foundation, Inc.,

a national organization whose purpose is to

protect the fundamental constitutional principle

of separation of church and state, and individual

plaintiffs Anne Gaylor, Annie Laurie Gaylor, and

Dan Barker (collectively, the "Plaintiffs")

initiated this action. Pursuant to 42 U.S.C. sec.

1983, Plaintiffs challenged the constitutionality

of a Wisconsin program which subsidizes

telecommunications access for both public and

private, sectarian and nonsectarian, schools. On

cross motions for summary judgment, the district

court concluded that the program was

constitutional except for that portion which

provided unrestricted cash grants to private,

sectarian schools in order to reduce the cost of

their existing telecommunications access

expenses. The court granted summary judgment in

part in favor of the Defendants, finding the

access portion of the program was constitutional,

and in part in favor of the Plaintiffs, finding

that the grant aspect of the program was

unconstitutional under the Establishment Clause.

The Defendants appeal from the summary judgment

in favor of the Plaintiffs as to the grant

portion of the program. Although the Plaintiffs

had initially appealed the summary judgment in

favor of the Defendants that the major portion of

the program was constitutional, after the

publication of Mitchell v. Helms, 530 U.S. 793,

120 S.Ct. 2530 (2000), a case which challenged

the constitutionality of state and federal school

aid programs as applied to parochial schools in

Louisiana, Plaintiffs dismissed their cross

appeal. We have jurisdiction under 28 U.S.C. sec.

1291, and we affirm the district court’s holding.

I. Background

The 1997-98 Wisconsin Budget Act, 1997 Wis. Act

27, created the Technology for Education

Achievement Board (the "TEACH board"), which

administers the Educational Telecommunications

Access program, Wis. Stat. sec. 196.218 (4r) (the

"program"). Defendants are members of the TEACH

board. The program is funded by mandatory

contributions from telecommunications providers

who are permitted to increase their rates to

customers in order to recover the costs. The

individual plaintiffs are taxpayers of the state

of Wisconsin and are local telephone service

customers of Ameritech Wisconsin. The individual

plaintiffs pay a monthly surcharge to Ameritech

by which Ameritech recovers its contributions

used to fund the program.

Under the terms of the program, private

elementary and secondary schools and colleges,

technical colleges, cooperative educational

service organizations, public library boards, and

public school districts are able to request that

the TEACH board provide them with access to one

data line or video link, which enables the user

to access the Internet. A video link also enables

the user to create an interactive television

hook-up whereby students and a teacher can see,

hear, and speak to each other via television from

remote locations. The data lines and video links

provided by the state under the program are

heavily subsidized. Although program participants

are charged $100 per month for a data line and

$250 per month for a video link, the cost to the

program to provide a data line and a video link

is approximately $640 and $2,300 per month,

respectively.

Private schools and colleges, almost all of

which are religiously affiliated, are not

permitted to participate in any of the broader

aspects of the legislative initiatives, but are

authorized only to participate in the portion of

the program that allows them to contract with the

state for low-cost access to a data line or video

link, or to receive grants to reduce the net cost

of their existing data line or video link. These

private schools account for approximately ten

percent of the total cost of the program. The

program does not in any way control the content

of information received by participants over the

data lines or video links, although such links

are sometimes used to transmit religious

information.

The program was amended in 1997 by Wis. Act 237

to provide grants to school districts and private

schools which had contracts for access to a data

line or video link in effect on October 14, 1997.

The grant amount is the difference between the

cost to the program to supply a link less the

ordinary contribution of the school, but not to

exceed the actual contract cost. Wis. Stat. sec.

196.218 (4r)(g). No statutory restriction is

placed on the use of the grant funds, although a

letter accompanying the grant provides that the

funds are to be used for "educational technology

purposes . . . includ[ing] making payments on the

existing service contract, purchasing hardware

and software, providing training to teachers and

staff, upgrading existing networks, wiring school

buildings, or completing any other educational

technology project."

Prior to the district court’s ruling, the

program had awarded annual grants of $1,944,261

to 130 schools and colleges. A portion of that

total, $58,873, approximately three percent, has

been awarded to nine private, religiously-

affiliated schools and colleges participating in

the grant portion of the program. These nine

schools represent not quite seven percent of the

total number of schools participating in this

aspect of the program. Only these unrestricted

cash grants to religious schools are at issue in

this appeal.

II. Analysis

A. Standing

Standing is "the threshold question in every

federal case, determining the power of the court

to entertain the suit." Warth v. Seldin, 422 U.S.

490, 498 (1975). Under Article III, only a

plaintiff with a personal stake in a case or

controversy has standing. Gonzales v. North

Township, 4 F.3d 1412, 1415 (7th Cir. 1993). This

personal stake can be established only if the

plaintiff has suffered an injury in fact. Warth,

422 U.S. at 499. At the summary judgment stage,

the plaintiff must produce evidence in the form

of Fed.R.Civ.P. 56(e) affidavits or documents

that support the injury allegation. See United

States v. Students Challenging Regulatory Agency

Procedures (SCRAP), 412 U.S. 669, 689 (1973);

Gonzales, 4 F.3d at 1415. Plaintiffs have met the

standing requirement by showing that as taxpayers

their tax dollars have gone to support an

allegedly unconstitutional program which

contributes unrestricted cash grants to religious

schools. See Flast v. Cohen, 392 U.S. 83, 105-06

(1968); Gonzales, 4 F.3d at 1416; Freedom From

Religion Found., Inc. v. Zielke, 845 F.2d 1463,

1470 (7th Cir. 1988).

B. Cash Grants

We review de novo the decision of the district

court to grant summary judgment. See Gonzales, 4

F.3d at 1417 (citing Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 249-52 (1986)). Summary

judgment is proper when the "pleadings,

depositions, answers to interrogatories, and

admissions on file, together with the affidavits,

if any, show that there is no genuine issue as to

any material fact and that the moving party is

entitled to a judgment as a matter of law."

Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477

U.S. 317, 322-23 (1986). In determining whether

a genuine issue of material fact exists, we must

review the record in the light most favorable to

the Defendants in this case and make all

reasonable inferences in their favor. See

Anderson, 477 U.S. at 255 (citation omitted).

Because the parties do not dispute the material

facts, we review de novo the district court’s

conclusions of law. See Freedom from Religion

Found., Inc. v. City of Marshfield, 203 F.3d 487,

490 (7th Cir. 2000) (citation omitted).

The Establishment Clause, which states that

"Congress shall make no law respecting the

establishment of religion," U.S. const. amend.

I., cl. 1, prevents the government from promoting

or affiliating with any religious doctrine or

organization. See County of Allegeheny v.

American Civil Liberties Union, 492 U.S. 573, 590

(1989); Gonzales, 4 F.3d at 1417. The

Establishment Clause also "is a specific

prohibition on forms of state intervention in

religious affairs . . . ." Lee v. Weisman, 505

U.S. 577, 590 (1992). This applies equally to

state legislatures under the due process clause

of the Fourteenth Amendment. See Cantwell v.

Connecticut, 310 U.S. 296, 303 (1940). In

addition, the Wisconsin Constitution, art. I,

sec. 18, provides, "nor shall any money be drawn

from the treasury for the benefit of religious

societies, or religious or theological

seminaries," which has been held to be the

equivalent of the Establishment Clause by the

Wisconsin Supreme Court. See Jackson v. Benson,

578 N.W.2d 602, 620 (Wis. 1998) (citation

omitted).

In an effort to prevent sponsorship, financial

support, or active involvement of the government

in religious activity, see Walz v. Tax Comm’n,

397 U.S. 664, 668 (1970), the Supreme Court

formulated a three-pronged test to determine

whether a statute complies with the Establishment

Clause. See Lemon v. Kurtzman, 403 U.S. 602, 612

(1971). Under this test, a statute does not

violate the Establishment Clause if (1) it has a

secular legislative purpose, (2) its principal or

primary effect neither advances nor inhibits

religion, and (3) it does not create excessive

entanglement between government and religion. Id.

at 612-13. In Agostini v. Felton, 521 U.S. 203

(1997), the Supreme Court modified the Lemon test

in cases involving school aid, emphasizing the

continuing importance of the first two prongs of

Lemon, but determining that entanglement could be

considered as an aspect of the second prong’s

"effect" inquiry. Id. at 222-23. The Court then

used "three primary criteria" in evaluating

whether government aid has the effect of

advancing religion: whether the statute or

program in question "result[s] in governmental

indoctrination; define[s] it recipients by

reference to religion; or create[s] an excessive

entanglement." Id. at 234.

Plaintiffs concede that the TEACH program has a

secular purpose, that of encouraging schools to

use and teach telecommunications, and that the

program does not foster excessive governmental

entanglement with religion. Therefore, the first

and third prongs of the Lemon test are not at

issue in this case. Our inquiry is a narrow one

where only the "effect" of the governmental aid

need be considered. See Mitchell, 120 S.Ct. at

2540. We must determine under the second prong of

Lemon whether or not the principal or primary

effect of direct cash grants advances or inhibits

religion. Under Agostini’s "three primary

criteria" review of this prong, the statute

clearly does not define its recipients by

reference to religion and Plaintiffs concede

there is no excessive entanglement. See Agostini,

521 U.S. at 234. Therefore, only the first

criteria need be examined under the effect

inquiry--whether the direct cash grant portion of

the program results in governmental

indoctrination. See Mitchell, 120 S.Ct. at 2540.

"[T]he question whether governmental aid to

religious schools results in governmental

indoctrination is ultimately a question whether

any religious indoctrination that occurs in those

schools could reasonably be attributed to

governmental action." Id. at 2541.

The Supreme Court has stated that direct aid is

considered to have a "principal or primary

effect" of advancing religion if the aid goes to

institutions that are "pervasively sectarian."

See Bowen v. Kendrick, 487 U.S. 589, 610 (1988);

Hunt v. McNair, 413 U.S. 734, 743 (1973). The

Court described a "pervasively sectarian" school

as "’an institution in which religion is so

pervasive that a substantial portion of its

functions are subsumed in the religious mission

. . . .’" Bowen, 487 U.S. at 610 (quoting Hunt,

413 U.S. at 743). However, the Court itself has

cautioned against using this analytical shortcut.

The Establishment Clause like the Due Process

Clause is not a precise, detailed provision in a

legal code capable of ready application. . . .

The line between permissible relationships and

those barred by the Clause can no more be

straight and unwavering than due process can be

defined in a single stroke or phrase or test. The

Clause erects a "blurred, indistinct, and

variable barrier depending on all circumstances

of a particular relationship."

Lynch v. Donnelly, 465 U.S. 668, 678-79 (1984)

(quoting Lemon, 403 U.S. at 614). The Court noted

that "an institution is not pervasively sectarian

merely because it is religiously affiliated." See

Hunt, 413 U.S. at 743. Further blurring the lines

of this direct test, the Court in Agostini held

that government aid to a pervasively sectarian

institution does not impermissibly advance

religion if it is the result of private choices

of the individual rather than state

decisionmaking, where the aid supplements rather

than supplants the school’s core educational

funding. 521 U.S. at 226. The Court in Mitchell,

which relies on Agostini to fashion its review

for indoctrination, stated that "nothing in the

Establishment Clause requires the exclusion of

pervasively sectarian schools from otherwise

permissible aid programs, and other doctrines of

this Court bar it. This doctrine, born of

bigotry, should be buried now." Mitchell, 120

S.Ct. at 2552 (Thomas, J., plurality opinion).

Given this ambiguity as to the necessity of

determining whether the schools were pervasively

sectarian or not, this line of cases indicates

that regardless of whether schools are

pervasively sectarian or not, states may not make

unrestricted cash payments directly to religious

institutions. See Tilton v. Richardson, 403 U.S.

672, 680-83 (1971). "[T]he State may not grant

aid to a religious school, whether cash or in

kind, where the effect of the aid is ’that of a

direct subsidy to the religious school’ from the

State." Witters v. Wash. Dept. of Servs. for

Blind, 474 U.S. 481, 487 (1986) (quoting Grand

Rapids School Dist. v. Ball, 473 U.S. 373, 394

(1985)). This direct subsidy is viewed as

governmental advancement or indoctrination of

religion. The Supreme Court has recognized that

"special Establishment Clause dangers [exist]

where the government makes direct money payments

to sectarian institutions . . . ." Rosenberger v.

Rector and Visitors of Univ. of Va., 515 U.S.

819, 842 (1995) (listing cases); see also

Mitchell, 120 S.Ct. at 2546.

Of the cases which follow Lemon, the one most

directly on point with the present case is

Committee for Public Education v. Nyquist, 413

U.S. 756 (1973). In Nyquist, a New York statute

provided in part direct money grants from the

state to qualifying nonpublic, nonprofit schools,

most of which were church-affiliated, id. at 768,

to be used for maintenance and repair of school

facilities and equipment to ensure the health,

welfare, and safety of enrolled pupils. Id. at

762. Each qualifying school was required to

submit an audited statement of its expenditures

for maintenance and repair during the preceding

year, and the grant could not exceed the total of

the expenses. Id. at 764. The Court reviewed the

grant program to determine whether there had been

"sponsorship, financial support, [or] active

involvement of the sovereign in religious

activity." Id. at 772 (citing Walz, 397 U.S. at

668, and Lemon, 403 U.S. at 612). Although the

Court found that the grant program passed the

first prong of the Lemon test, that of secular

purpose, it held that direct monetary payments to

the schools, particularly where no restrictions

are made requiring the money to be used for

secular purposes only, failed the second prong of

the test. Id. at 773, 776-77, 779-80.

Nothing in the statute, for instance, bars a

qualifying school from paying out of state funds

the salaries of employees who maintain the school

chapel, or the cost of renovating classrooms in

which religion is taught, or the cost of heating

and lighting those same facilities. Absent

appropriate restrictions on expenditures for

these and similar purposes, it simply cannot be

denied that this section has a primary effect

that advances religion in that it subsidizes

directly the religious activities of sectarian

elementary and secondary schools.

Id. at 774.

The Court repeated the warning that "a secular

purpose and a facial neutrality may not be

enough, if in fact the State is lending direct

support to a religious activity," in Roemer v.

Board of Public Works of Maryland, 426 U.S. 736,

747 (1976). In Roemer, the Court held that the

Establishment Clause permits direct state-money

grants to general secular educational programs of

non-pervasively sectarian religious colleges

where there is a statutory prohibition against

sectarian use and an administrative enforcement

of that prohibition. 426 U.S. at 759. Therefore,

even if the sectarian schools in the present case

were found not to be pervasively sectarian, the

direct aid portion of the program still fails

because there are no statutory prohibitions or

administrative enforcements in place. See Roemer,

426 U.S. at 759; Nyquist, 413 U.S. at 776-77. The

possible effect of religious indoctrination is

not altered by the letter from the TEACH board

which accompanies the grant and purports to

restrict the use of the grant money. There is no

authority in the statute for such a limitation,

nor is there any penalty for failure to comply.

See Wis. Stat. sec. 196.218(4r)(g). In addition,

there is no evidence of any ability or attempt to

monitor the use of the grant money received by

the religious schools. Unlike Roemer, in both

Nyquist and this case, there are no real

restrictions on the use of the grant money by the

religious schools; the money may be used as

easily for maintenance of the school chapel or

for the religious instruction classrooms or for

connection time to view a religious website,

instead of payment for the telecommunications

links. See Nyquist, 413 U.S. at 774; Simmons-

Harris v. Zelman, 234 F.3d 945, 959 (6th Cir.

2000).

Defendants argue that recent Supreme Court

cases, by implication, have overruled Nyquist and

other precedential cases on this issue. We note

that Agostini does not hold that government

funding that directly flows to "the coffers of

religious schools" would survive an Establishment

Clause challenge. 521 U.S. at 228-29. Also, as

the Court pointed out in Rosenberger, "We do not

confront a case where, even under a neutral

program that includes nonsectarian recipients,

the government is making direct money payments to

an institution or group that is engaged in

religious activity." 515 U.S. at 842. Defendants

state that "the district court’s opinion [which

struck down the entire grant aspect of the

program] cannot stand in light of the plurality

and concurring opinions in Mitchell." The Court

in Mitchell specifically stated that there may be

"special Establishment Clause dangers . . . when

money is given to religious schools or entities

directly rather than . . . indirectly. . . . But

direct payments of money are not at issue in this

case . . . ." 120 S.Ct. at 2546 (quotations and

citations omitted) (emphasis in original).

Mitchell is clearly distinguished from the issue

at hand in that the federal government

distributed funds to state and local governmental

agencies, which in turn lent educational

materials and equipment to public and private

schools. 120 S.Ct. at 2536. Only Wolman v.

Walter, 433 U.S. 229, 248-51 (1977), and Meek v.

Pittenger, 421 U.S. 349, 362-66 (1975) (both

cases holding in pertinent part that the lending

of instructional materials and equipment to

religious schools was unconstitutional), were

specifically overruled by Mitchell. Id. at 2555.

In addition, the Supreme Court has refuted the

possibility of overruling precedent by

implication.

[I]f a precedent of this Court has direct

application in a case, yet appears to rest on

reasons rejected in some other line of decisions,

the Court of Appeals should follow the line of

cases which directly controls, leaving to this

Court the prerogative of overruling its own

decisions.

Agostini, 521 U.S. at 237 (quotations and

citation omitted). "In the absence of an

effective means of guaranteeing that the state

aid derived from public funds will be used

exclusively for secular, neutral, and

nonideological purposes, it is clear from our

cases that direct aid in whatever form is

invalid." Nyquist, 413 U.S. at 780; see also

Strout v. Albanese, 178 F.3d 57, 64 (1st Cir.

1999) ("approving direct payments of tuition by

the state to sectarian schools represents a

quantum leap that we are unwilling to take."

(emphasis in original)). Therefore, until the

Supreme Court has clearly overruled Nyquist, we

must apply its holding, which "directly controls"

this case. See Agostini, 521 U.S. at 237. The

Wisconsin direct grant program impermissibly

provides a direct subsidy to participating

religious schools.

III. Conclusion

For the above-stated reasons, we AFFIRM the

district court’s order granting summary judgment

in part to the Plaintiffs.