Amicus Curiae Brief — Catholic Charities Bureau, Inc., et al., Petitioners v. Wisconsin Labor & Industry Review Commission, et al.
Supreme Court briefFeb 3, 2025
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No. 24-154
In the Supreme Court of the United States
CATHOLIC CHARITIES BUREAU, INC., ET AL.,
PETITIONERS
v.
WISCONSIN LABOR & INDUSTRY REVIEW COMMISSION,
ET AL.
ON WRIT OF CERTIORARI
TO THE SUPREME COURT OF WISCONSIN
BRIEF FOR THE UNITED STATES
AS AMICUS CURIAE SUPPORTING PETITIONERS
CURTIS E. GANNON
Deputy Solicitor General
Counsel of Record
ERIC D. MCARTHUR
Deputy Assistant Attorney
General
NICHOLAS S. CROWN
Assistant to the Solicitor
General
MICHAEL S. RAAB
LOWELL V. STURGILL JR.
Attorneys
Department of Justice
Washington, D.C. 20530-0001
SupremeCtBriefs@usdoj.gov
(202) 514-2217
QUESTION PRESENTED
Whether a Wisconsin statute that mirrors a provision of the Federal Unemployment Tax Act and exempts services performed in the employ of an organization “operated primarily for religious purposes,” 26
U.S.C. 3309(b)(1)(B), can be read to comport with the
Free Exercise Clause and the Establishment Clause of
the First Amendment to the United States Constitution.
(I)
TABLE OF CONTENTS
Page
Interest of the United States....................................................... 1
Introduction................................................................................... 2
Statement:
A. Legal background ............................................................. 3
B. The present controversy................................................... 5
Summary of argument ............................................................... 10
Argument:
A. The Wisconsin Supreme Court erred in construing
FUTA and its identical state-law analogue .................. 12
1. This Court should correct the state supreme
court’s misunderstanding of federal law ................ 12
2. The religious-employer exemption covers
organizations that conduct their affairs
sincerely and principally for religious reasons ..... 14
3. The Wisconsin Supreme Court’s contrary
reasoning lacks merit ............................................... 21
B. The decision below conflicts with the Free Exercise
and Establishment Clauses ............................................ 26
C. Petitioners qualify for the exemption they seek .......... 33
Conclusion ................................................................................... 35
TABLE OF AUTHORITIES
Cases:
BP p.l.c. v. Mayor & City Council of Baltimore,
593 U.S. 230 (2021).............................................................. 24
Better Business Bureau of Washington, D.C., Inc.
v. United States, 326 U.S. 279 (1945) .............. 16, 17, 20, 35
Bond v. United States, 572 U.S. 844 (2014) .................. 27, 32
Burwell v. Hobby Lobby Stores, Inc.,
573 U.S. 682 (2014)........................................................ 19, 20
Carson v. Makin, 596 U.S. 767 (2022) ........................... 27, 30
(III)
IV
Cases—Continued:
Page
Chamber of Commerce v. Whiting,
563 U.S. 582 (2011).............................................................. 25
Clark v. Martinez, 543 U.S. 371 (2005) ............................... 33
Corporation of the Presiding Bishop of the Church of
Jesus Christ of Latter-day Saints v. Amos,
483 U.S. 327 (1987)........................................................ 28, 39
Cutter v. Wilkinson, 544 U.S. 709 (2005) ...................... 19, 34
Delaware v. Pennsylvania, 598 U.S. 115 (2023) ................ 25
Dumaine Farms v. Commissioner,
73 T.C. 650 (1980) .......................................................... 17, 18
Duquesne Univ. of the Holy Spirit v. NLRB,
947 F.3d 824 (D.C. Cir. 2020) ....................................... 21, 34
Freeman v. Quicken Loans, Inc.,
566 U.S. 624 (2012).............................................................. 24
Fulton v. City of Philadelphia, 593 U.S. 522 (2021) .......... 28
Golden Rule Church Ass’n v. Commissioner,
41 T.C. 719 (1964) .......................................................... 17, 18
Gonzales v. O Centro Espirita Beneficente Uniao do
Vegetal, 546 U.S. 418 (2006) ............................................... 23
Hernandez v. Commissioner,
490 U.S. 680 (1989)................................................... 19, 28-30
Holt v. Hobbs, 574 U.S. 352 (2015) ....................................... 22
Hosanna-Tabor Evangelical Lutheran Church
& Sch. v. EEOC, 565 U.S. 171 (2012) ................................ 27
Iancu v. Brunetti, 588 U.S. 388 (2019) ................................ 27
Jennings v. Rodriguez, 583 U.S. 281 (2018) ....................... 32
Kedroff v. Saint Nicholas Cathedral of the Russian
Orthodox Church in N. Am., 344 U.S. 94 (1952) ............. 27
Larson v. Valente, 456 U.S. 228 (1982).......................... 27, 30
Living Faith, Inc. v. Commissioner,
950 F.2d 365 (7th Cir. 1991) ............................. 17, 18, 21, 35
V
Cases—Continued:
Page
Mayo Clinic v. United States,
997 F.3d 789 (8th Cir. 2021) ............................................... 17
Michigan v. Long, 463 U.S. 1032 (1983) ............................. 13
National Ass’n of Mfrs. v. Department of Defense,
583 U.S. 109 (2018).............................................................. 14
New York v. Cathedral Academy,
434 U.S. 125 (1977).......................................................... 3, 28
NLRB v. Catholic Bishop, 440 U.S. 490 (1979) .................. 32
O’Brien v. Skinner, 414 U.S. 524 (1974).............................. 13
Our Lady of Guadalupe Sch. v. Morrissey-Berru,
591 U.S. 732 (2020).......................................20, 21, 26, 31, 32
Polselli v. IRS, 598 U.S. 432 (2023) ..................................... 22
Presbyterian & Reformed Publ’g Co. v.
Commissioner, 743 F.2d 148 (3d Cir. 1984) ..................... 17
Ramirez v. Collier, 595 U.S. 411 (2022) .............................. 20
Rumsfeld v. Forum for Academic & Institutional
Rights, Inc., 547 U.S. 47 (2006) ............................... 2, 12, 32
Serbian E. Orthodox Diocese v. Milivojevich,
426 U.S. 696 (1976).............................................................. 27
St. Martin Evangelical Lutheran Church v. South
Dakota, 451 U.S. 772 (1981) .................. 10, 12, 13, 24, 27, 33
Thomas v. Review Bd. of the Ind. Emp’t Sec. Div.,
450 U.S. 707 (1981).............................................................. 28
United States v. Ballard, 322 U.S. 78 (1944) ...................... 30
United States v. Dykema, 666 F.2d 1096
(7th Cir. 1981), cert. denied, 456 U.S. 983 (1982) ....... 18, 19
United States v. Hansen, 599 U.S. 762 (2023) .................... 33
University of Great Falls v. NLRB,
278 F.3d 1335 (D.C. Cir. 2002) ........................................... 28
Wimberly v. Labor & Indus. Relations Comm’n,
479 U.S. 511 (1987).......................................................... 3, 24
Wisconsin v. Yoder, 406 U.S. 205 (1972) ....................... 20, 31
VI
Constitution, statutes, and regulations:
Page
U.S. Const.:
Amend. I ................................................ 8, 11, 19, 20, 26-32
Establishment Clause ........................ 1, 2, 9, 25-27, 29
Free Exercise Clause ............................... 1, 2, 9, 25-27
Amend. XIV ..................................................................... 27
Employment Security Amendments of 1970,
Pub. L. No. 91-373, § 104(b)(1), 84 Stat. 698 ...................... 4
Federal Unemployment Tax Act,
26 U.S.C. 3301 et seq. ............................................................ 1
26 U.S.C. 3301 .................................................................... 3
26 U.S.C. 3302 .................................................................... 3
26 U.S.C. 3304 ................................................................ 3, 4
26 U.S.C. 3304(c) ........................................................... 1, 4
26 U.S.C. 3306(a) ............................................................... 3
26 U.S.C. 3306(c) ............................................................... 3
26 U.S.C. 3309 ................................................................ 3, 4
26 U.S.C. 3309(b) (1976).................................................. 13
26 U.S.C. 3309(b) ............................................................... 4
26 U.S.C. 3309(b)(1) .......................................................... 8
26 U.S.C. 3309(b)(1)(A) ................................................... 33
26 U.S.C. 3309(b)(1)(B) ............... 2, 4, 6, 10, 12, 13, 15, 16,
23, 24, 30, 31, 34
Internal Revenue Code (26 U.S.C.):
26 U.S.C. 170(c)(2)(B) ..................................................... 29
26 U.S.C. 501(c)(3) ............................ 5, 8, 11, 14, 17, 18, 21
26 U.S.C. 1426(b)(8) (1940) ............................................. 16
National Labor Relations Act,
29 U.S.C. 151 et seq. ............................................................ 21
Religious Freedom Restoration Act of 1993,
42 U.S.C. 2000bb et seq. ..................................................... 19
VII
Statutes and regulations—Continued:
Page
Religious Land Use and Institutionalized Persons
Act of 2000, 42 U.S.C. 2000cc et seq. ................................. 19
Social Security Act, ch. 531, 49 Stat. 620
(42 U.S.C. 301 et seq.) ..................................................... 3, 16
Tit. IX, 49 Stat. 639 ........................................................... 3
Social Security Act Amendments of 1939, ch. 666,
Tit. VI, § 615, 53 Stat. 1396 .................................................. 3
42 U.S.C. 2000e-1(a) .............................................................. 29
Wis. Stat. (2019-2020):
§ 108.01 et seq. .................................................................... 4
§ 108.02(15)(h)2 ........................2, 4, 6, 10, 14-16, 23, 31, 34
20 C.F.R.:
Section 1.501(c)(3)-1(c)(1) ............................................... 17
Section 604.6 ...................................................................... 4
Miscellaneous:
52 Fed. Reg. 27,072 (July 17, 1987) ...................................... 25
89 Fed. Reg. 90,053 (Nov. 14, 2024) ....................................... 4
H.R. Rep. No. 612, 91st Cong., 1st Sess. (1969) ................. 25
IRS, Publication 5859: Exempt Organizations
Technical Guide (Feb. 1, 2024),
https://www.irs.gov/pub/irs-pdf/p5859.pdf ....................... 17
The Oxford English Dictionary (2d ed. 1989):
Vol. 10 ............................................................................... 15
Vol. 12 ............................................................................... 15
Webster’s Third New International Dictionary
(1971) .................................................................................... 15
In the Supreme Court of the United States
No. 24-154
CATHOLIC CHARITIES BUREAU, INC., ET AL.,
PETITIONERS
v.
WISCONSIN LABOR & INDUSTRY REVIEW COMMISSION,
ET AL.
ON WRIT OF CERTIORARI
TO THE SUPREME COURT OF WISCONSIN
BRIEF FOR THE UNITED STATES
AS AMICUS CURIAE SUPPORTING PETITIONERS
INTEREST OF THE UNITED STATES
This case involves a state statute that mirrors and
implements the Federal Unemployment Tax Act (FUTA),
26 U.S.C. 3301 et seq., which authorizes grants of federal funds to qualifying States for the administration of
state unemployment-compensation programs and provides tax credits for covered employers operating
within such States. The Secretary of Labor administers
FUTA by, among other things, certifying to the Secretary of the Treasury whether each State’s law conforms
to FUTA’s requirements. 26 U.S.C. 3304(c). Moreover,
the decision below addressed whether Wisconsin’s implementation of a FUTA exemption violates the Free
Exercise Clause or Establishment Clause of the First
Amendment. The United States therefore has substantial interests in this case.
(1)
2
INTRODUCTION
The statutes at issue provide a tax exemption for
certain church-controlled organizations that are “operated primarily for religious purposes.” 26 U.S.C.
3309(b)(1)(B); Wis. Stat. § 108.02(15)(h)2 (2019-2020).
The Wisconsin Supreme Court construed that language
to require courts to consider not only the motivations
that drive the organization to conduct its activities but
also whether those activities are inherently religious or
secular. That was error. The statutory text makes clear
that the inquiry focuses on whether the organization
actually operates primarily for religious reasons, not on
the nature of its activities or on whether another organization could undertake the same activities for nonreligious reasons. The decision below recognized that the
state and federal provisions “contain[] verbatim language” and that “Wisconsin’s law was enacted to conform” with the FUTA exemption. Pet. App. 31a. Because a grant of “certiorari to determine whether a statute is constitutional fairly includes the question of what
that statute says,” Rumsfeld v. Forum for Academic &
Institutional Rights, Inc., 547 U.S. 47, 56 (2006), the
state supreme court’s misreading of the unambiguous
text is sufficient reason to reverse.
The decision below also conflicts with the Free Exercise and Establishment Clauses of the First Amendment. By inviting inquiries into whether an action is intrinsically religious or nonreligious, the state supreme
court’s reasoning would permit government officials or
judges to second-guess the sufficiency of religious values, inspect practitioners’ adherence to religious doctrine, and discriminate among various faiths. This
Court has recognized that “[t]he prospect of church and
state litigating in court about what does or does not
3
have religious meaning touches the very core of the constitutional guarantee against religious establishment.”
New York v. Cathedral Academy, 434 U.S. 125, 133
(1977). To the extent this Court perceives any statutory
ambiguity that might support the judgment below, the
Court should still reject the lower court’s interpretation
to avoid serious constitutional questions.
Under the proper understanding of the religiousemployer exemption, petitioners—organizations that
serve as the social-ministry arm of a diocese of the Roman Catholic Church—are “operated primarily for religious purposes.” And because it is undisputed that petitioners satisfy the remaining statutory prerequisites,
they are entitled to the exemption.
STATEMENT
A. Legal Background
Congress enacted FUTA as part of the Social Security Act, ch. 531, 49 Stat. 620. See Tit. IX, 49 Stat. 639;
Social Security Act Amendments of 1939, ch. 666,
Tit. VI, § 615, 53 Stat. 1396. The Act “envisions a cooperative federal-state program of benefits to unemployed workers.” Wimberly v. Labor & Indus. Relations Comm’n, 479 U.S. 511, 514 (1987). To fund that
program, the Act imposes a federal excise tax on wages
paid by an “employer” in covered “employment.” 26
U.S.C. 3301, 3306(a) and (c).
Employers may receive a credit of up to 90% of
their FUTA taxes if they contribute to a fund maintained under a State’s federally approved unemploymentcompensation program. 26 U.S.C. 3302. To obtain federal approval, a state unemployment-compensation program must meet certain requirements under FUTA.
See 26 U.S.C. 3304, 3309. FUTA requires, for example,
that a qualifying state program provide unemployment-
4
insurance benefits to individuals who work for certain
employers. Ibid. Each year, the Secretary of Labor reviews and certifies whether each State’s unemploymentcompensation program complies with the Act’s prerequisites. 26 U.S.C. 3304(c); see 20 C.F.R. 604.6.
FUTA exempts certain “service[s]” and allows
States to do so as well. 26 U.S.C. 3309(b). The religiousemployer exemption at issue here was enacted in 1970.
See Employment Security Amendments of 1970, Pub.
L. No. 91-373, § 104(b)(1), 84 Stat. 698. A State may
exempt services performed “in the employ of * * * an
organization which is operated primarily for religious
purposes and which is operated, supervised, controlled,
or principally supported by a church or convention or
association of churches.” 26 U.S.C. 3309(b)(1)(B).
Wisconsin operates an unemployment-compensation
program, see Wis. Stat. § 108.01 et seq., which the Secretary of Labor has certified to be compliant with
FUTA, 89 Fed. Reg. 90,053, 90,054 (Nov. 14, 2024). Wisconsin’s religious-employer exemption mirrors Section
3309(b)(1)(B). Wis. Stat. § 108.02(15)(h)2. Under Wisconsin law, services are exempt from state unemployment taxes if they are provided in the employ of “an organization operated primarily for religious purposes
and operated, supervised, controlled, or principally supported by a church or convention or association of
churches.” Ibid. As the state supreme court explained
in the decision below, when the Wisconsin legislature
enacted the current version of its exemption, it sought
to “ ‘bring Wisconsin’s law in line with’ ” and “to conform” with the same exemption in FUTA. Pet. App. 31a
(citation omitted).
5
B. The Present Controversy
1. Petitioners—Catholic Charities Bureau, Inc., and
four of its sub-entities—are nonprofit organizations
that serve as the social-ministry arm of the Diocese of
Superior, a diocese of the Roman Catholic Church. Pet.
App. 7a-9a. They are covered by an exemption from
federal income tax under 26 U.S.C. 501(c)(3) for a group
that includes “the educational, charitable, and religious
[i]nstitutions operated by the Roman Catholic Church
in the United States.” Pet. App. 386a; see id. at 10a n.6.
Since 1917, Catholic Charities Bureau has provided
“services to the poor and disadvantaged as an expression of the social ministry of the Catholic Church in the
Diocese of Superior.” Pet. App. 7a. Its stated purpose
is “ ‘to be an effective sign of the charity of Christ’ ” by
providing services “that are ‘significant in quantity and
quality’ and not duplicative of services provided by
other agencies.” Ibid. It also oversees several separately incorporated sub-entities, including the other petitioners in this case. Id. at 7a-8a. The sub-entities provide various services for individuals with developmental
and mental-health disabilities, including subsidized housing, job placement and training, in-home support services, and transportation. Id. at 8a-9a, 128a-131a. The
sub-entities also set their own “organizational goals and
make plans to accomplish those goals, employ staff, set
program policies, enter into contracts, raise funds, and
assure regulatory compliance.” Id. at 9a-10a.
Although the sub-entity petitioners do not receive
funding from the Diocese of Superior, Pet. App. 8a-9a,
each petitioner is subject to the diocesan bishop’s “control,” id. at 7a. The bishop serves as the president of
Catholic Charities Bureau and “appoints its membership,” which in turn “ ‘provide[s] essential oversight to
6
ensure the fulfillment of the mission of Catholic Charities Bureau in compliance with the Principles of Catholic social teaching.’ ” Id. at 7a-8a. Petitioners and their
employees are subject to policies and a code of ethics
forbidding “activities that violate Catholic social teachings.” Id. at 131a; see id. at 371a-385a.
2. In 2016, petitioners sought a determination from
the Wisconsin Department of Workforce Development
that they qualify for the religious-employer exemption
codified in Wisconsin’s version of Section 3309(b)(1)(B).
Pet. App. 10a-11a; see Wis. Stat. § 108.02(15)(h)2.
The Department denied petitioners’ requests. Pet.
App. 351a-370a. It was undisputed that petitioners are
“operated, supervised, controlled, or principally supported by a church,” Wis. Stat. § 108.02(15)(h)2, but the
Department concluded that petitioners are not “operated primarily for religious purposes” within the meaning of the exemption. Pet. App. 352a, 356a, 360a, 364a,
368a. Following a hearing, an administrative law judge
sitting as an appeal tribunal reversed, concluding that
petitioners are entitled to the exemption. Id. at 291a350a.
On further administrative appeal, however, the
State’s Labor and Industry Review Commission reinstated the denials of petitioners’ exemption requests.
Pet. App. 212a-290a. The Commission reasoned that an
entity’s “activities, not the religious motivation behind
them or the organization’s founding principles, determine whether an exemption” applies. Id. at 227a, 242a243a, 258a, 273a-274a, 290a. It concluded that petitioners do not qualify for an exemption under that test because “[p]roviding services to those in need is not intrinsically, necessarily, or uniquely religious in nature.” Id.
at 224a, 240a, 255a, 271a, 287a-288a.
7
3. Petitioners sought judicial review in state court.
a. In a bench ruling, the trial court concluded that
petitioners are entitled to the religious-employer exemption. Pet. App. 189a-211a. The court reasoned that
“the test is really why the organizations are operating,
not what they are operating,” and found that petitioners
qualify for the exemption because they are motivated
by “Catholic tenets” and the “religious motive of the
Catholic Church of being good stewards, of serving the
underserved.” Id. at 209a.
b. The state court of appeals reversed. Pet. App.
125a-168a. The court “acknowledge[d] that the professed reason that [petitioners] administer [their] social
service programs is for a religious purpose: to fulfill the
Catechism of the Catholic Church.” Id. at 163a-164a.
But the court took the view that the exemption requires
consideration of “both the activities of the organization
as well as the organization’s professed motive or purpose.” Id. at 146a. It held that petitioners do not qualify
for the exemption because they provide “charitable social services that are neither inherently or primarily religious activities.” Id. at 165a.
c. The state supreme court affirmed in a 4-3 decision. Pet. App. 1a-122a. The majority reasoned that
“both activities and motivations must be considered in a
determination of whether an organization is ‘operated
primarily for religious purposes.’ ” Id. at 21a-22a. According to the court, “[c]onsidering purposes, i.e., motivations, alone would give short shrift to the word ‘operated’ ” and “essentially render an organization’s mere
assertion of a religious motive dispositive.” Id. at 21a,
23a. The court thus concluded that analyzing the statutory exemption requires an “objective examination of
8
[petitioners’] actual activities” to determine whether
those activities are “secular in nature.” Id. at 32a.
The state supreme court explained that its interpretation is consistent with the identical exemption in
FUTA. Pet. App. 31a-32a. It emphasized that Wisconsin’s exemption “contains verbatim language to” Section 3309(b)(1) and that the Wisconsin legislature had
adopted FUTA’s language “to conform” state law with
the federal statute. Id. at 31a. Because the Wisconsin
legislature intended for the state exemption to be “in
line with” FUTA’s parallel text, the court reasoned that
FUTA’s legislative history informs the meaning of Wisconsin’s parallel provision. Ibid. (citation omitted). The
court also invoked the analysis that federal courts undertake when evaluating tax-exemption requests under
Section 501(c)(3), id. at 26a-27a, and when applying the
“ministerial exception” under the First Amendment, id.
at 27a-28a.
Under its interpretation of the phrase “operated primarily for religious purposes,” the state supreme court
held that petitioners do not qualify for the religiousemployer exemption. Pet. App. 28a-33a. Although the
court “accept[ed]” at “face value” petitioners’ “assertions of religious motivation” for their operations, id. at
29a, it concluded that petitioners “are not operated primarily for religious purposes” because their activities
“are secular in nature,” id. at 31a-32a. The court understood petitioners’ activities to be “primarily charitable
and secular” because their “services can be provided by
organizations of either religious or secular motivations,
and the services provided would not differ in any sense.”
Id. at 30a; see id. at 32a. The court emphasized that one
of the sub-entity petitioners “had no affiliation with any
religious organization” until 2014, and that “the services
9
provided before and after [its] partnership with [Catholic Charities Bureau] commenced were exactly the
same.” Id. at 30a.
The state supreme court further held that its interpretation does not violate the Free Exercise and Establishment Clauses. Pet. App. at 33a-51a. The court concluded that its “neutral and secular inquiry” into petitioners’ “actual activities,” id. at 40a-41a, does not
“cross into an evaluation of religious dogma,” id. at 38a.
The court added that its interpretation does not violate
principles of church autonomy because it “neither regulates internal church governance nor mandates any activity.” Id. at 45a-46a. Finally, the court found that its
statutory construction does not violate petitioners’ freeexercise rights because imposing a generally applicable
tax is not a constitutionally significant burden. Id. at
48a-50a.
Justice Bradley dissented, joined almost entirely by
Chief Justice Ziegler. Pet. App. 51a-121a. According to
the dissent, the majority erred in “ask[ing] whether”
petitioners’ activities are “religious in nature” because
“no activities are inherently religious.” Id. at 79a. What
makes “an activity religious,” the dissent noted, is “religious motivation.” Ibid. The dissent would have applied the “common-sense understanding” of the term
“purposes” and concluded that petitioners qualify for
the exemption because it is “uncontested” that petitioners’ “raison d’être is religious.” Id. at 65a, 67a. The dissent also warned that the majority’s interpretation
“triggers constitutional quandaries” by “engag[ing] in
religious discrimination and entangl[ing] the state with
religion in violation of the First Amendment.” Id. at
90a; see id. at 90a-121a.
10
Justice Hagedorn also dissented. Pet. App. 121a122a. He agreed with the primary dissent’s “construction of the statute,” but “would not [have] reach[ed] the
constitutional questions” implicated in this case. Ibid.
SUMMARY OF ARGUMENT
The religious-employer exemption from the federalstate unemployment-tax framework applies to certain
church-controlled organizations that are “operated primarily for religious purposes.” 26 U.S.C. 3309(b)(1)(B);
Wis. Stat. § 108.02(15)(h)2 (2019-2020). The Wisconsin
Supreme Court erred in construing that language to require courts to ask not just whether the organization
has sincere religious motivations but whether its activities are inherently religious or secular. The statutory
text makes clear that the relevant inquiry is whether
the organization actually operates primarily for religious reasons, not whether another organization could
undertake the same activities for nonreligious reasons.
This Court should reverse.
A. The judgment below rests on a misunderstanding
of federal law. Although this Court typically accepts the
interpretation of state law as announced by that State’s
highest court, that principle is inapplicable here because the decision below relied on federal case law and
analyzed a state-law exemption that is the same as, and
intended to conform with, the parallel exemption in
FUTA. This Court should correct the state court’s misconstruction, just as it did the last time it construed
FUTA’s religious-employer exemption and its implementation by a parallel state statute. See St. Martin
Evangelical Lutheran Church v. South Dakota, 451
U.S. 772, 780 n.9 (1981).
The religious-employer exemption applies to organizations that conduct their affairs primarily for sincere
11
religious motivations. That focus on the subjective intent motivating an organization’s operations tracks the
ordinary meaning of the statutory terms “operated,”
“primarily,” and “purposes.” That interpretation also
finds support in the broader tax context, including the
exemption in Section 501(c)(3) of the Internal Revenue
Code. At the same time, the religious-employer exemption allows courts to assess the sincerity and predominance of an organization’s asserted purposes.
The state supreme court’s contrary reasoning lacks
merit. Rather than adhere to the statutory focus on actual intent, the court analyzed whether certain activities
are inherently religious. But that interpretation effectively excises the terms “purposes” and “primarily.”
B. Even if this Court concludes that there is statutory ambiguity, it should still reject the state supreme
court’s view. That court’s construction, as applied to petitioners, would conflict with the First Amendment in at
least two respects.
First, by asking whether an activity is inherently religious or nonreligious, the decision below invites courts
to second-guess whether a sincerely held belief or expression of faith is truly religious. This Court has made
clear that the First Amendment guards against that
type of intrusive inquiry.
Second, the state supreme court’s reasoning creates
a constitutionally impermissible risk that certain religions would be treated unequally in the granting and
denying of tax exemptions. The court listed certain acts
—such as worship services and ceremony, religious outreach, and religious education—that it viewed as enjoying “strong indications that the activities are primarily
religious in nature.” Pet. App. 29a. But that approach
privileges the activities of certain religions over others,
12
especially minority faiths, thereby discriminating in the
allocation of benefits or administration of government
programs.
The decision also raises additional constitutional concerns that courts will be entangled in religious issues. Accordingly, this Court should adopt an interpretation of
the religious-employer exemption that avoids those constitutional infirmities and doubts. St. Martin, 451 U.S.
at 780.
C. Under a proper understanding of the religiousemployer exemption, petitioners—organizations that
serve as the social-ministry arm of a diocese of the Roman Catholic Church—qualify as organizations “operated primarily for religious purposes.” And because it
is undisputed that petitioners satisfy the remaining prerequisites, petitioners are entitled to the exemption.
ARGUMENT
A. The Wisconsin Supreme Court Erred In Construing
FUTA And Its Identical State-law Analogue
The decision below rests on a fundamental misunderstanding of federal law. The state supreme court misinterpreted language in a state-law tax provision that is
materially identical to, and intended to conform with, 26
U.S.C. 3309(b)(1)(B), and that court relied on federal
precedent for its erroneous conclusion. This Court
should reverse.
1. This Court should correct the state supreme court’s
misunderstanding of federal law
Although petitioners do not directly question the
state supreme court’s construction of the relevant statutes, “there can be little doubt that granting certiorari
to determine whether a statute is constitutional fairly
includes the question of what that statute says.” Rums-
13
feld v. Forum for Academic & Institutional Rights, Inc.,
547 U.S. 47, 56 (2006) (FAIR). This Court ordinarily
accepts the interpretation of state law as announced by
that State’s highest court. See, e.g., O’Brien v. Skinner,
414 U.S. 524, 531 (1974). But when a “state court decision fairly appears to rest primarily on federal law, or
to be interwoven with the federal law, and when the adequacy and independence of any possible state law
ground is not clear from the face of the opinion,” the
Court presumes “that the state court decided the case
the way it did because it believed that federal law required it to do so.” Michigan v. Long, 463 U.S. 1032,
1040-1041 (1983). In those circumstances, this Court
may correct the state court’s misunderstanding of federal law. See ibid.
This Court has already done that in the context of
FUTA’s exemptions for religious employers. In St.
Martin Evangelical Lutheran Church v. South Dakota,
451 U.S. 772 (1981), the Court reviewed the South Dakota Supreme Court’s decision about a state statute
that shared identical text with FUTA. Id. at 774 nn.1, 2
(quoting 26 U.S.C. 3309(b) (1976) and the parallel state
statute). Although the state-court decision technically
“concern[ed] the construction of a state statute,” this
Court reviewed the state court’s judgment and determined “the proper * * * interpretation of the intertwined federal law.” Id. at 780 n.9.
The Court should follow the same course here because this case involves the proper interpretation of
FUTA. Like the state-court judgment under review in
St. Martin, the decision below turned on a state-law
exemption that is “intertwined” with its parallel exemption in FUTA. 451 U.S. at 780 n.9. The relevant text
in both statutes is identical. Compare 26 U.S.C.
14
3309(b)(1)(B) (“operated primarily for religious purposes”), with Wis. Stat. § 108.02(15)(h)2 (2019-2020)
(same). The state supreme court recognized that the
Wisconsin legislature enacted “verbatim language to a
provision of federal law” to “ ‘bring Wisconsin’s law in
line with’ ” and “to conform” state law with FUTA. Pet.
App. 31a (citation omitted). In analyzing the state statute, the state court relied on FUTA’s legislative history,
id. at 27a n.15, 31a-32a, and on federal case law interpreting the similarly worded Section 501(c)(3) of the Internal Revenue Code, id. at 23a, 26a-29a, 40a. And the
Wisconsin Attorney General has supported an “analytical approach * * * consistent with the congressional
history of FUTA” and treated decisions from various
state courts as presenting “similar interpretation questions” precisely because the States have “copied the language of [FUTA].” Br. in Opp. 8, 14.
2. The religious-employer exemption covers organizations that conduct their affairs sincerely and principally for religious reasons
Statutory interpretation “begins with the statutory
text.” National Ass’n of Mfrs. v. Department of Defense, 583 U.S. 109, 127 (2018) (citation omitted). If “the
plain language” is “ ‘unambiguous,’ ” the inquiry “ ‘ends
there as well.’ ” Ibid. (citation omitted). The statutory
text at issue here means that the exemption applies to
organizations that conduct their affairs sincerely and
fundamentally with religious motivations.
a. The religious-employer exemption added to FUTA
in 1970 and its state-law analogue apply to services performed in the employ of “an organization which is operated primarily for religious purposes and which is operated, supervised, controlled, or principally supported
by a church or convention or association of churches.”
15
26 U.S.C. 3309(b)(1)(B); see Wis. Stat. § 108.02(15)(h)2.
Because the parties agree that petitioners are “operated, supervised, controlled, or principally supported by
a church,” Pet. App. 5a n.3, 218a-219a, only the first
clause of the provisions is at issue.
The relevant statutory terms here are “operated,”
“primarily,” and “purposes.” The term “operated” is
the past-participle form of the transitive verb “operate,”
which means, as pertinent here, “to manage and put or
keep in operation.” Webster’s Third New International
Dictionary 1581 (1971) (Webster’s) (giving the example
“operated a grocery store”); see 10 The Oxford English
Dictionary 848 (2d ed. 1989) (OED) (“To direct the
working of; to manage, conduct, work (a railway, business, etc.); to carry out or through, direct to an end (a
principle, an undertaking, etc.).”). The ordinary meaning of “primarily” is “fundamentally, principally,” or
“first of all.” Webster’s 1800 (capitalization omitted);
see 12 OED 472 (“In the first place; first of all, preeminently, chiefly, principally; essentially.”). And a “purpose” is “an end or aim to be kept in view in any plan,
measure, exertion, or operation.” Webster’s 1847; see
12 OED 878 (“the object which one has in view”; “[t]he
object for which anything is done or made, or for which
it exists; * * * end, aim.”).
Read naturally, those terms mean that the relevant
inquiry—determining whether an organization “is operated primarily for religious purposes”—is whether the
principal objects or aims for the organization’s activities
are religious. That inquiry turns on the organization’s
own objects or aims—not on whether that organization
(or another one) could have engaged in the same kinds
of activities in the service of nonreligious aims. The tax
exemption at issue here is based on an organization’s
16
fundamental motivation for its affairs, not on the nature
of the activities through which it pursues its purposes.1
b. That interpretation of FUTA’s exemption finds
support in the broader tax context. For instance, this
Court employed a similar approach in Better Business
Bureau of Washington, D.C., Inc. v. United States, 326
U.S. 279 (1945), when it construed a tax exemption in
the Social Security Act, 42 U.S.C. 301 et seq., that had
been incorporated into the Internal Revenue Code. 326
U.S. at 280 n.1. Much as FUTA and Wisconsin’s parallel
provision tether the applicability of a tax exemption to
an organization’s principal purpose, the Social Security
Act provided an exemption for “[s]ervice performed in
the employ of a corporation * * * organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes.” 26 U.S.C. 1426(b)(8)
(1940). This Court recognized that the exemption focused on the corporation’s purposes animating its activities, not the nature of its actions. See Better Business
Bureau, 326 U.S. at 283-284. The Court concluded that
the exemption did not apply to the Better Business Bureau because, even though it sought to educate businesses and the public about honest business practices,
its corporate charter and title reflected that its “activities we[re] largely animated by” the non-exempt “comThe decision below suggested that a court must look at the motivation of the organization seeking the exemption, and not the motivation of a church that controls the organization. Pet. App. 16a17a. That observation is immaterial because all agreed that petitioners have sincerely held religious motivations. Id. at 29a. It is
also incorrect because the exemption contemplates that an organization “operated primarily for religious purposes” is in some cases
“operated * * * by a church.” 26 U.S.C. 3309(b)(1)(B); Wis. Stat.
§ 108.02(15)(h)2. In those circumstances, the church’s own purposes
are at issue.
1
17
mercial purpose” of promoting practices that would
help merchants “profitably conduct their business.” Id.
at 284. The Court concluded that the organization’s efforts were “directed fundamentally to ends other than
that of education,” ibid., without determining whether
its activities were innately educational or pedagogical.
Courts have similarly construed the longstanding
and widely used exemption in Section 501(c)(3) of the
Internal Revenue Code by focusing on an organization’s
purposes. Section 501(c)(3) provides that an organization is exempt from federal income tax if it is “organized
and operated exclusively” for, among other things, “religious” purposes. 26 U.S.C. 501(c)(3). 2 To determine
whether an organization is exempt, courts and the Internal Revenue Service have focused on “the purposes
toward which an organization’s activities are directed,
and not the nature of the activities.” Living Faith, Inc.
v. Commissioner, 950 F.2d 365, 370 (7th Cir. 1991) (citation omitted); see, e.g., Presbyterian & Reformed
Publ’g Co. v. Commissioner, 743 F.2d 148, 156 (3d Cir.
1984) (“[T]he inquiry must remain that of determining
the purpose to which the increased business activity is
directed.”); Dumaine Farms v. Commissioner, 73 T.C.
650, 663-668 (1980) (similar); Golden Rule Church Ass’n
v. Commissioner, 41 T.C. 719, 728 (1964) (similar);
IRS, Publication 5859: Exempt Organizations Technical Guide 19-20 (Feb. 1, 2024), https://www.irs.gov/
pub/irs-pdf/p5859.pdf.
The phrase “organized and operated exclusively” under Section
501(c)(3) has long been understood to include organizations “engage[d] primarily in activities which accomplish one or more of such
exempt purposes.” 26 C.F.R. 1.501(c)(3)-1(c)(1) (emphasis added);
see, e.g., Mayo Clinic v. United States, 997 F.3d 789, 800 (8th Cir.
2021).
2
18
The decisions in Living Faith, Dumaine Farms, and
Golden Rule Church are instructive. In each instance,
the organizations seeking Section 501(c)(3) exemptions
engaged in activity that could be thought commercial in
nature (and thus non-exempt). Living Faith, 950 F.2d
at 367 (restaurants and stores); Dumaine Farms, 73
T.C. at 651 (farming); Golden Rule Church, 41 T.C. at
723-724 (laundry, livestock, lodging, and lumber operations). But the nature of the activities was not dispositive: Instead, the inquiry focused on the purpose for
which seemingly commercial activities were performed.
In Living Faith, the court held that the organization did
not qualify for the exemption because it operated not
only for a religious purpose but for a “substantial commercial purpose as well,” such that the religious purpose did not predominate. 950 F.2d at 376. By contrast,
the organizations in Dumaine Farms and Golden Rule
Church qualified for Section 501(c)(3) status because
they engaged in ostensibly commercial activities for
tax-exempt reasons. Dumaine Farms, 73 T.C. at 663668 (scientific and educational purposes); Golden Rule
Church, 41 T.C. at 729-732 (religious purposes). Secular, for-profit organizations also engage in farming,
laundry, and other activities that might typically be
viewed as commercial—but that did not foreclose the
conclusion that the organizations in Dumaine Farms
and Golden Rule Church engaged in those activities primarily for exempt purposes.
Thus, the decision below erred in suggesting that
Section 501(c)(3) supports an inquiry into whether an
activity is inherently “religious in nature.” Pet. App.
29a; see id. at 26a-30a. The state supreme court’s principal citation, United States v. Dykema, 666 F.2d 1096
(7th Cir. 1981), cert. denied, 456 U.S. 983 (1982), does
19
not support that proposition. Although Dykema follows
a long line of cases correctly recognizing that courts
may assess whether a religious belief is sincerely held
or actually motivating a claimant (see pp. 19-21, infra),
that decision did not suggest that courts may deem certain actions inherently nonreligious, and it avoided “entering into any subjective inquiry with respect to religious truth.” 666 F.2d at 1100.
There is no sound reason to conclude that Congress
intended to require a different approach for FUTA’s
religious-employer exemption, or that the Wisconsin
Legislature intended to prescribe a different mode of
analysis when it amended state law “to conform” with
FUTA. Pet. App. 31a.
c. Although FUTA and Wisconsin’s parallel statute
focus on an organization’s subjective motivations, courts
have an important role to play in assessing whether the
exemption applies. Specifically, courts may assess the
sincerity and predominance of an organization’s asserted purposes.
First, courts may assess an organization’s sincerity.
This Court has repeatedly explained that a religious
motivation is to be credited when it is sincerely held and
authentic. See, e.g., Hernandez v. Commissioner, 490
U.S. 680, 693 (1989) (First Amendment); Burwell v.
Hobby Lobby Stores, Inc., 573 U.S. 682, 723-726 (2014)
(Religious Freedom Restoration Act of 1993, 42 U.S.C.
2000bb et seq.); Cutter v. Wilkinson, 544 U.S. 709, 725
n.13 (2005) (Religious Land Use and Institutionalized
Persons Act of 2000 (RLUIPA), 42 U.S.C. 2000cc et
seq.).
Second, courts may consider whether an organization was actually and principally motivated by its asserted purpose. That too is a familiar concept in the law.
20
In the First Amendment context, this Court has recognized that an actor’s choices may be “philosophical and
personal rather than religious,” and thus “not rise to the
demands of the Religion Clauses.” Wisconsin v. Yoder,
406 U.S. 205, 216 (1972). Similarly, in Ramirez v. Collier, 595 U.S. 411 (2022)—involving a death-row inmate’s
right under RLUIPA to pray with his pastor in the execution chamber—this Court considered whether the
plaintiff ’s conduct and his prior statements suggested a
motivation other than “sincere religious exercise.” Id.
at 426. And in Better Business Bureau, this Court affirmed the denial of a social-security-tax exemption for
an entity that claimed to have predominantly “scientific
or educational purposes.” 326 U.S. at 280. Rather than
take the organization’s assertions at face value, the
Court concluded that the entity was not truly “animated” by its professed motivation, and that its actual
aims were instead “directed fundamentally” to a nonexempt “commercial purpose.” Id. at 284.
In analyzing the sincerity and primacy of an organization’s stated purposes, “a variety of factors may be important.” Our Lady of Guadalupe Sch. v. MorrisseyBerru, 591 U.S. 732, 751 (2020) (addressing the applicability of the “ministerial exception” to employmentdiscrimination claims) (citation omitted). An organization’s founding documents, bylaws, and public statements may be relevant to assessing its true motivations.
See Better Business Bureau, 326 U.S. at 283-284 (examining “corporate title” and “charter provisions”);
Hobby Lobby, 573 U.S. at 702-703 (examining other corporate statements). An organization’s prior assertions
may also be relevant. See Ramirez, 595 U.S. at 426.
Likewise, a court could consider whether the organization “holds itself out to the public as a religious institu-
21
tion.” Duquesne Univ. of the Holy Spirit v. NLRB, 947
F.3d 824, 832 (D.C. Cir. 2020) (applying inferred religious exemption from the National Labor Relations
Act, 29 U.S.C. 151 et seq.). And in some circumstances,
the “particular manner in which an organization’s activities are conducted, the commercial hue of those activities, competition with commercial firms, and the existence and amount of annual or accumulated profits”
could be “relevant evidence.” Living Faith, 950 F.2d at
372 (addressing Section 501(c)(3)). Nevertheless, “[i]n
considering the circumstances of any given case, courts
must take care to avoid ‘resolving underlying controversies over religious doctrine.’ ” Our Lady, 591 U.S. at 751
n.10 (citation omitted).
3. The Wisconsin Supreme Court’s contrary reasoning
lacks merit
The state supreme court disregarded the exemption’s focus on subjective intent and instead analyzed
whether certain actions are, in its view, inherently religious or secular in nature. That interpretation has
scant basis in the statutory text.
a. The Wisconsin Supreme Court acknowledged
that a “ ‘purpose’ ” is ordinarily “ ‘the reason for which
something exists or is done,’ ” and it “implies ‘motivation.’ ” Pet. App. 21a (citations omitted). Yet the court
asserted that “[c]onsidering purposes, i.e., motivations,
alone would give short shrift to the word ‘operated’ ” in
the statute and would “essentially render an organization’s mere assertion of a religious motive dispositive.”
Id. at 21a, 23a. The court therefore took the view that
Wisconsin and federal law require assessing the nature
of an organization’s activities to determine whether
they are intrinsically religious or secular. Id. at 30a-
22
33a. Those conclusions disregard the statutory text in
two respects.
First, the decision below effectively excised the term
“purposes” from the statutory exemption. Courts should
“give effect to every clause and word of a statute.”
Polselli v. IRS, 598 U.S. 432, 441 (2023) (brackets and
citation omitted). Here, however, the state supreme
court focused on whether petitioners’ operations “would
be the same regardless of the motivation” behind them.
Pet. App. 31a (emphasis added). For example, the court
found that petitioners’ conduct is inherently nonreligious because one of the sub-entity petitioners provided
“exactly the same” services before and after it came under the “umbrella” of Catholic Charities Bureau and the
bishop of the Diocese of Superior. Id. at 30a. That
blinkered approach ignores the statutory focus on the
organization’s aims in operating its affairs.
The primary example provided in the decision below
underscores the errors in its analysis. According to the
state supreme court, “[t]he services provided by a religiously run orphanage and a secular one do not differ in
any meaningful sense.” Pet. App. 32a. But they differ
in a sense made meaningful by the statute. While it may
be true that certain activities associated with running
an orphanage could be the same notwithstanding a particular actor’s motives, that provides no basis to ignore
the statute’s focus on purposes (i.e., what would, in the
instance of an individual, be the mental state that accompanied the activities). Whether an action has religious meaning depends on the circumstances, especially
the actor’s intent. Some might grow their beards for
secular reasons, while others may do so “in accordance
with [their] religious beliefs.” Holt v. Hobbs, 574 U.S.
352, 355-356 (2015). Drinking tea may have no religious
23
significance for some, but be “a sincere exercise of religion” for others. Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 423 (2006). And
some may abstain from certain foods for reasons of
health or taste, while others do so on religious grounds.
The statutory reference to “religious purposes” captures
an analogous—and meaningful—difference. The decision below, by contrast, would treat certain conduct as
categorically secular and foreclose an organization from
claiming a religious basis for its activities, no matter
how sincere or profoundly religious its reasons may be.
Second, the Wisconsin Supreme Court failed to give
adequate effect to the term “primarily.” 26 U.S.C.
3309(b)(1)(B); Wis. Stat. § 108.02(15)(h)2. The court did
not separately analyze that term at all: In its view, the
“key words” were “ ‘operated’ and ‘purposes,’ ” Pet.
App. 20a, and on that understanding the court endeavored to avoid “render[ing] an organization’s mere assertion of religious motive dispositive,” id. at 23a. But the
statutory text makes clear that an asserted religious
motive must be the principal or fundamental purpose
behind an organization’s affairs. See pp. 14-16, supra.
Hewing to the plain meaning of “primarily” would
minimize the state supreme court’s concern that “any
religiously affiliated organization would always be exempt” based on the theory that “[a] church’s purpose is
religious by nature.” Pet. App. 18a; see id. at 21a-23a.
Assessing the motivations for an organization’s affairs
helps to ensure that the religious-employer exemption
does not extend to entities that are not actually operated primarily for religious purposes.
b. The Wisconsin Supreme Court advanced three
additional rationales for its unpersuasive interpretation
of the statutory text. None has merit.
24
First, the state supreme court reasoned that narrowly construing a tax exemption would serve the goal
of compensating the unemployed. Pet. App. 14a, 21a24a, 31a-32a. But “ ‘[n]o legislation pursues its purposes
at all costs,’ and ‘every statute purposes, not only to
achieve certain ends, but also to achieve them by particular means.’ ” Freeman v. Quicken Loans, Inc., 566
U.S. 624, 637 (2012) (brackets and citations omitted).
Although FUTA and related state laws seek to foster “a
cooperative federal-state program of benefits to unemployed workers,” Wimberly v. Labor & Indus. Relations Comm’n, 479 U.S. 511, 514 (1987), the decision below gave short shrift to the specific statutory goal of exempting certain organizations, including entities that
are “operated primarily for religious purposes and which
[are] operated, supervised, controlled, or principally
supported by a church or convention or association of
churches.” 26 U.S.C. 3309(b)(1)(B); see Pet. App. 31a
(observing Wisconsin legislature’s intent to “bring Wisconsin’s law in line with” federal exemption) (citation
omitted); see also BP p.l.c. v. Mayor & City Council of
Baltimore, 593 U.S. 230, 239 (2021) (“Exceptions and
exemptions are no less part of Congress’s work than its
rules and standards[.]”). In any event, “[v]ague notions
of statutory purpose provide no warrant” to ignore the
“unambiguous[]” statutory text. Freeman, 566 U.S. at
637; see St. Martin, 451 U.S. at 786 n.19 (“[G]eneral
statements of overall purpose * * * cannot defeat the
specific and clear wording of a statute.”).
Second, the decision below relied on a committee report in FUTA’s legislative history for the proposition
that certain church-related “charitable organization[s]
(such as an orphanage or a home for the aged) would not
be considered * * * to be operated primarily for reli-
25
gious purposes.” Pet. App. 32a (emphasis omitted)
(quoting H.R. Rep. No. 612, 91st Cong., 1st Sess. 44
(1969)). In finding that petitioners did not qualify for
an exemption, the state supreme court compared their
activities—e.g., providing “developmental services”—to
the “secular” examples in the committee report. Ibid.
That reasoning was flawed because, among other
things, “Congress’s ‘authoritative statement is the statutory text, not the legislative history.’ ” Chamber of
Commerce v. Whiting, 563 U.S. 582, 599 (2011) (citation
omitted). And even “[t]hose [Members of this Court]
who make use of legislative history” do so when “clear
evidence of congressional intent may illuminate ambiguous text.” Delaware v. Pennsylvania, 598 U.S. 115,
138-139 (2023) (citation omitted). Here, the committee
report does not constitute clear evidence, and the enacted text is not ambiguous, see pp. 14-19, supra. The
report’s drafters did not explain why the plain text
would not reach the parenthetical examples. Nor did
they have the benefit of the intervening half-century
of this Court’s jurisprudence concerning the Religion
Clauses.3
In a 1987 advisory letter, the Department of Labor took the view
that the religious-employer exemption would not cover “entities
with a religious orientation but which are not affiliated with a particular church, or convention or association of churches”—such as
“nondenominational college[s]”—because such “entities are not operated, supervised, controlled, or principally supported by a church
or convention or association of churches.” 52 Fed. Reg. 27,072 (July
17, 1987). That letter is inapplicable because it did not address the
relevant phrase (“operated primarily for religious purposes”) and it
is common ground that petitioners are “operated, supervised, controlled, or principally supported by a church,” Pet. App. 5a n.3, 218a219a.
3
26
Finally, the Wisconsin Supreme Court erred in invoking cases applying the “ ‘ministerial exception’ ” to
support its view that it is appropriate to analyze the inherent nature of a religious organization’s “actions” to
determine whether its “activities are primarily charitable and secular.” Pet. App. 24a-25a & n.14, 30a (citation
omitted). The ministerial exception “foreclose[s] certain employment discrimination claims brought against
religious organizations” based on the constitutionally
protected “principle of church autonomy * * * in matters of faith and doctrine and in closely linked matters
of internal government.” Our Lady, 591 U.S. at 747.
While this Court has taken care to explain that “a variety of factors may be important” in “determining
whether a particular position falls within the * * * exception,” id. at 751, the Court has likewise emphasized
that “[i]n a country with the religious diversity of the
United States, judges cannot be expected to have a complete understanding and appreciation of the role played
by every person who performs a particular role in every
religious tradition,” id. at 757; see id. at 771-772 (Sotomayor, J., dissenting) (noting that the “inquiry is holistic” and examines whether an organization acted “for
nonreligious reasons”) (emphasis added). In short, the
“ministerial exception” does not suggest that courts
may subordinate an organization’s sincerely held beliefs
and actual motivations to the conclusion that certain activities are categorically nonreligious.
B. The Decision Below Conflicts With The Free Exercise
And Establishment Clauses
Even if this Court concludes that there is statutory
ambiguity, it should still reverse the judgment of the
state supreme court, which construes the text in ways
that, as applied to petitioners, violate the First Amend-
27
ment. That court’s approach wrongly invites government officials to question whether a particular expression of faith is sufficiently “religious” and to discriminate among certain faiths. And it may require government officials to second-guess an entity’s religious mission or to analyze an organization’s adherence to religious tenets. Of course, this Court normally “will not
decide a constitutional question if there is some other
ground upon which to dispose of the case.” Bond v.
United States, 572 U.S. 844, 855 (2014) (citation omitted). Accordingly, the Court should adopt an interpretation that “avoid[s] serious constitutional doubts,” Iancu
v. Brunetti, 588 U.S. 388, 397 (2019) (citation omitted)—
just as it did the last time it construed FUTA’s religiousemployer exemption and its implementation by a parallel state statute. St. Martin, 451 U.S. at 780.
1. The First Amendment, which applies to the
States under the Fourteenth Amendment, provides that
“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.”
Those clauses guarantee to religious organizations the
right to “decide for themselves, free from state interference, matters of church government as well as those
of faith and doctrine.” Kedroff v. Saint Nicholas Cathedral of the Russian Orthodox Church in N. Am., 344
U.S. 94, 116 (1952); see Serbian E. Orthodox Diocese v.
Milivojevich, 426 U.S. 696, 724-725 (1976); see also
Hosanna-Tabor Evangelical Lutheran Church & Sch.
v. EEOC, 565 U.S. 171, 186-187 (2012). They also guard
against religious discrimination in the allocation of benefits or administration of government programs. Carson v. Makin, 596 U.S. 767, 778 (2022) (Free Exercise
Clause); Larson v. Valente, 456 U.S. 228, 246 (1982) (Establishment Clause).
28
a. The state supreme court’s decision flouts those
fundamental First Amendment principles in at least two
respects. First, the court’s reasoning invites judges to
inquire whether a sincerely held belief or expression of
faith is truly religious. The court reasoned that some
services are “secular by nature” because they “would
not differ in any sense,” whether they were “provided
by organizations of either religious or secular motivations.” Pet. App. 30a. But this Court has admonished
that “[i]t is not within the judicial ken to question the
centrality of particular beliefs or practices to a faith, or
the validity of particular litigants’ interpretations of
those creeds.” Hernandez, 490 U.S. at 699 (citation
omitted); see New York v. Cathedral Academy, 434 U.S.
125, 133 (1977). That is, courts should not decide “what
is a ‘religious’ belief or practice” based on “a judicial
perception of the particular belief or practice in question.” Thomas v. Review Bd. of the Ind. Emp’t Sec. Div.,
450 U.S. 707, 714 (1981). Rather, “religious beliefs need
not be acceptable, logical, consistent, or comprehensible
to others in order to merit First Amendment protection.” Fulton v. City of Philadelphia, 593 U.S. 522, 532
(2021) (quoting Thomas, 450 U.S. at 714). Indeed, “[r]eligion may have as much to do with why one takes an action as it does with what action one takes.” University
of Great Falls v. NLRB, 278 F.3d 1335, 1346 (D.C. Cir.
2002) (emphases added); see ibid. (“That a secular university might share some goals and practices with a
Catholic or other religious institution cannot render the
actions of the latter any less religious.”).
By treating certain actions as inherently secular, the
decision below also conflicts with this Court’s reasoning
in Corporation of the Presiding Bishop of the Church of
Jesus Christ of Latter-day Saints v. Amos, 483 U.S. 327
29
(1987). Amos held that Title VII’s exemption for certain
religious entities, 42 U.S.C. 2000e-1(a), comports with
the Establishment Clause because that exemption “alleviate[s] significant governmental interference with
the ability of religious organizations to define and carry
out their religious missions.” 483 U.S. at 335. The Court
emphasized that the broad exemption “avoids the kind
of intrusive inquiry into religious belief ” that the First
Amendment forbids. Id. at 339 (emphasis added). The
Court further observed that it would be “a significant
burden on a religious organization to require it, on pain
of substantial liability, to predict which of its activities
a secular court will consider religious,” particularly because a court might “not understand its religious tenets
and sense of mission.” Id. at 336. Justices Brennan and
Marshall concurred because, in their view, it would have
been “inappropriate” under the First Amendment to
conduct a “case-by-case determination whether [a nonprofit corporation’s] nature is religious or secular” when
applying Title VII’s religious-corporation exception.
Id. at 340 (Brennan, J., concurring in the judgment).
The decision below, however, would require courts to
engage in the same analysis that Amos considered to be
constitutionally infirm.
The decision below is likewise incompatible with
Hernandez v. Commissioner, supra, which construed
26 U.S.C. 170(c)(2)(B), a provision allowing deductions
for a “contribution or gift” for use by an organization
“organized and operated exclusively for religious * * *
purposes.” This Court rejected a taxpayer’s argument
that quid pro quo transactions could qualify for the exemption if the payer received “benefits of a religious nature” in exchange, Hernandez, 490 U.S. at 694, because
“under the First Amendment, the IRS can reject other-
30
wise valid claims of religious benefit only on the ground
that a taxpayers’ alleged beliefs are not sincerely held,
but not on the ground that such beliefs are inherently
irreligious,” id. at 693 (citing United States v. Ballard,
322 U.S. 78 (1944)). The Court made clear that such an
inquiry “might raise problems of entanglement between
church and state,” and that “ ‘pervasive monitoring’ for
‘the subtle or overt presence of religious matter’ is a
central danger against which we have held the Establishment Clause guards.” Id. at 694 (citation omitted).
Yet, the decision below would force officials and courts
into that constitutional thicket by requiring them to decide whether an activity is inherently “religious” or “secular” in “nature.” Pet. App. 29a, 32a.
Second, the Wisconsin Supreme Court’s construction
of Section 3309(b)(1)(B) and the parallel state statute
presents an impermissible danger that certain religions
—including minority faiths—would be treated unequally
in the granting and denying of tax exemptions. This
Court has made clear that the First Amendment forbids
governments to condition benefits on the degree of an
organization’s perceived religiosity. For example, in
Carson v. Makin, supra, the Court held that the Free
Exercise Clause precludes a State from excluding a
school from a tuition-assistance program on the ground
that the school “promotes a particular faith and presents academic material through the lens of that faith.”
596 U.S. at 787 (citation omitted). That distinction, the
Court observed, would “raise serious concerns about
state entanglement with religion and denominational favoritism” because such a test might favor religious
schools that do not evangelize or inject religious views
into secular instruction. Ibid.; see also Larson, 456 U.S.
at 245 (“This constitutional prohibition of denomina-
31
tional preferences is inextricably connected with the
continuing vitality of the Free Exercise Clause.”). The
Court has further explained that “[r]equiring” different
faiths to share certain characteristics—such as “use of
[a] title”—“would constitute impermissible discrimination” and “risk privileging religious traditions with”
certain tenets over others. Our Lady, 591 U.S. at 752753; see Yoder, 406 U.S. at 216-217.
The decision below privileges “only a small, and illdefined, subset of religious activities,” Pet. App. 104a
(Bradley, J., dissenting), as qualifying for the exemption under FUTA and Wisconsin law. The state supreme
court listed certain activities—e.g., “worship services,
religious outreach, ceremony, or religious education”—
that it viewed as enjoying “strong indications that the
activities are primarily religious in nature.” Id. at 29a.
But that approach exalts “largely Protestant[] religious
activities” and diminishes other actions that may have
profound importance in other faiths, such as “Catholicism, Judaism, Islam, Sikhism, Hinduism, Buddhism,
Hare Krishna, and the Church of Latter Day Saints,
among others.” Id. at 53a, 106a (Bradley, J., dissenting).
b. Even apart from those violations of First Amendment principles, the decision below raises additional
constitutional concerns. For example, the state supreme
court reasoned that petitioners are not “operated primarily for religious purposes,” 26 U.S.C. 3309(b)(1)(B);
Wis. Stat. § 108.02(15)(h)2, on the theory that they offer
“employment” and “services” to individuals “regardless
of religion,” Pet. App. 30a. But limiting the tax exemption to organizations that hire or serve only those who
share their faith—or to organizations that directly expose employees or program participants to religious
32
doctrine, materials, or ceremony, id. at 29a—presents a
significant risk that courts would second-guess the content of an entity’s religious mission in violation of the
First Amendment.
Similarly, this Court has cautioned that determining
who is a “member” of “the religion with which the employer is associated” may be a question that “would risk
judicial entanglement in religious issues.” Our Lady,
591 U.S. at 761. Indeed, when a religious group attests
to its “religious creeds,” a court’s “inquiry into the good
faith of the position asserted by the clergy-administrators and its relationship to the [group’s] religious mission” may itself “impinge on rights guaranteed by the
Religion Clauses.” NLRB v. Catholic Bishop, 440 U.S.
490, 502 (1979).
2. This Court, however, should “prudent[ly] exercise” its jurisdiction by avoiding the need to resolve the
weighty constitutional questions arising from the decision below. Bond, 572 U.S. at 855 (citation omitted).
Because the decision below misconstrued the plain language of FUTA and the conforming Wisconsin statute,
and because the statute’s meaning is “fairly include[d]”
in the question presented, FAIR, 547 U.S. at 56, the
judgment can and should be reversed on that straightforward ground.
Even if there were ambiguity in the text, the constitutional infirmities and concerns described above and in
petitioners’ brief (at 24-50) would provide powerful reasons to adopt our statutory interpretation as a matter
of constitutional avoidance. When faced with ambiguous language, this Court may “choose between competing plausible interpretations of a statutory text,” Jennings v. Rodriguez, 583 U.S. 281, 298 (2018) (brackets,
citation, and emphasis omitted), based “on the reasona-
33
ble presumption that Congress did not intend the alternative which raises serious constitutional doubts,” Clark
v. Martinez, 543 U.S. 371, 381 (2005). Our reading “is
at least ‘fairly possible,’ ” such that “the canon of constitutional avoidance would still counsel [the Court] to
adopt it.” United States v. Hansen, 599 U.S. 762, 781
(2023) (citation omitted).
This Court has previously explained that FUTA’s exemption should be construed to “avoid raising doubts of
its constitutionality.” St. Martin, 451 U.S. at 780. In
St. Martin, two church-run schools sought tax exemptions “on both statutory and First Amendment grounds.”
Id. at 774. The schools argued that they were exempt
because their employees performed services “in the employ of * * * a church or convention or association of
churches,” 26 U.S.C. 3309(b)(1)(A), and that “holding
them subject to [unemployment] taxes would violate
both the Free Exercise Clause and the Establishment
Clause.” St. Martin, 451 U.S. at 775-776. The Court
found it “unnecessary” to “consider the First Amendment issues,” id. at 788, because the statutory text could
be interpreted “to apply to schools, like petitioners’,
that have no separate legal existence from a church [or]
* * * a ‘convention or association of churches,’ ” id. at
784 (quoting 26 U.S.C. 3309(b)(1)(A)).
A parallel course is warranted here. Our interpretation is not only the best construction of the statute, but
it also avoids the need to decide whether the statute
would be constitutional as interpreted and applied by
the state supreme court.
C. Petitioners Qualify For The Exemption They Seek
Properly understood, FUTA and Wisconsin’s statute
make clear that petitioners are organizations “operated
34
primarily for religious purposes” and thus entitled to
the exemption.
First, it is undisputed that petitioners have sincerely
held “religious purposes,” 26 U.S.C. 3309(b)(1)(B); Wis.
Stat. § 108.02(15)(h)2, and that their assertions of “religiosity” are “authentic,” Cutter, 544 U.S. at 725 n.13.
The decision below “accept[ed]” that petitioners have a
“religious motivation” and emphasized that respondents “do[] not argue that [petitioners’] assertions of religious motivation are insincere, fraudulent, or otherwise not credible.” Pet. App. 29a.
Second, petitioners’ religious motivations predominate in their operations. See Pet. Br. 6-11. Petitioner
Catholic Charities Bureau, for example, holds itself and
its activities out as religiously motivated. Its president
is the diocesan bishop, who appoints the “membership”
that “ ‘provide[s] essential oversight to ensure the fulfillment of the mission of Catholic Charities Bureau in
compliance with the Principles of Catholic social teaching.’ ” Pet. App. 7a-8a. Its statement of philosophy “indicates” that “its ‘purpose . . . is to be an effective sign
of the charity of Christ’ ” by, among other things, “ ‘providing services to the poor and disadvantaged’ ” that are
“not duplicative of services provided by other agencies.”
Id. at 7a; see Duquesne Univ., 947 F.3d at 832 (considering whether an organization “holds itself out to the
public as a religious institution”). The entity’s code of
ethics likewise “sets forth the expectation that ‘Catholic
Charities will in its activities and actions reflect gospel
values and will be consistent with its mission and the
mission of the Diocese of Superior.’ ” Pet. App. 8a. And
there is no dispute that petitioners and their employees
are instructed to follow Catholic social teaching in providing services. Ibid.; see id. at 7a, 371a-385a, 469a-
35
475a. Nor is there any suggestion that petitioners’
“charter provisions,” bylaws, statements, or conduct betray a non-exempt motivation such as a “commercial
purpose.” Better Business Bureau, 326 U.S. at 283-284;
see, e.g., Living Faith, 950 F.2d at 372. In short, the
only barrier to petitioners’ entitlement to the exemption
they seek is the state court’s erroneous statutory interpretation.
CONCLUSION
For the foregoing reasons, the judgment of the Wisconsin Supreme Court should be reversed.
Respectfully submitted.
CURTIS E. GANNON
Deputy Solicitor General*
ERIC D. MCARTHUR
Deputy Assistant Attorney
General
NICHOLAS S. CROWN
Assistant to the Solicitor
General
MICHAEL S. RAAB
LOWELL V. STURGILL JR.
Attorneys
FEBRUARY 2025
* The Acting Solicitor General is recused in this case.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.