Appellants Brief — Lemon v. Kurtzman

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I. The Rule of Law Articulated by This Court in

Lemon v. Kurtzman Bars All Subsequent Payments

8 To Sectarian Schools Under Act 109 ........... 12

I. Further Payments to Sectarian Schools Under Act

109 Cannot Be Justified on the Grounds That the

Schools Signed “Contracts” or Rendered “Reim-

bursable Services” Prior to the Date When the Act

Was Declared Unconstitutional ................. 18

A. The Precedents of This Court Furnish No Basis

for According the Decision in Lemon a Limited

„66 „bbb „ „ „ 20

B. The Schools Have No Vested Contractual Right

%% „„ 27

C. The Schools Did Not Innocently Rely to Their

Detriment on the Constitutionality of Act 109.. 29

1 A Prospective Limitation on Lemon Will Have Poten-

q tially Profound Adverse Consequences in Future

TABLE OF CASES OITED.

Page

Box Office Pictures v. Board of Finance and Revenue, 402. Pa.

inp pe — o”';'Ü 12

. h ccs ccccas 2

Brinkerhoff-Faris Trust & Savings Co. v. Hill, 281 U. S. 673

—. . Fonei 2

Bruton v. United States, 391 U. S. 123 (1968) 23

Chicot County Drainage Dist. v. Baxter State Bank, 308 U. S.

J ban useaihevcsacncas . 21, 22, 23, 24, 33

Cipriano v. City of Houma, 395 U. S. 701 (1969) ........ 21, 33

Delli Paoli v. United States, 352 U. S. 232 (1957) ......... 23

Desist v. United States, 394 U. S. 244 (1969) ............ 23

Dicenso v. Robinson, 316 F. Supp. 112 (D. R. I. 1970) 17, 19, 23, 31

J. A. Dougherty’s Sons, Inc. v. Commissioner of Internal Rev-

%%% „„ 24

Douglass v. County of Pike, 101 U. S. 677 (1880) 21,33

Everson v. Board of Education, 330 U. S. 1 (1946) ........ 15, 18

Gelpcke v. Dubuque, 68 U. S. 175 (1864) ................ 21, 33

Great Northern R. Co. v. Sunburst Oil & Refining Co., 287

// ĩ ᷣ Gwenn wa tn basa eee vena eas 21,22

James v. United States, 366 U. S. 213 (1960) ............ 26

Jenkins v. Delaware, 395 U. S. 213 (1969) ............... 23

Johnson v. New Jersey, 384 U. S. 719 (1966) .............. 23

Lemon v. Kurtzman, 310 F. Supp. 35 (E. D. Pa. 1969) ..... 2, 28

Lemon v. Kurtzman, 403 U. S. 602 (197177777 2, et seq.

Lemon v. Sloan, E. D. Pa., Civ. Action No. 71-2223 ........ 8

Linkletter v. Walker, 381 U. S. 618 (1965) ........ 7, 23, 24, 25, 33

„„ , 23

Norton v. Shelby County, 118 U. S. 425 (1886) ......... 20, 21

Philadelphia v. Dupuy, 431 Pa. 276, 244 A. 2d 741 (1968) . 31

Phoenix v. Kolodziejski, 399 U. S. 204 (1970) ........... 21

Roberts v. Russell, 392 U. S. 293 (1968) ................. 23

Stovall v. Denno, 388 U. S. 293 (1957)ꝶ) )) 2³

Taylor v. Ypsilanti, 105 U. S. 60 (1882) )))) 2¹

TABLE OF CASES CITED (Continued).

Tehan v. Shott, 382 U. S. 406 (1966)

Thomas v. Collins, 323 U. S. 516 (1945)

Tidal Oil Co. v. Flanagan, 263 U. S. 444 (1924)

Tilton v. Richardson, 403 U. S. 672 (1971) 17

United States v. Estate of Donnelly, 397 U. S. 286 (1970) . .24, 33

Wolf v. Colorado, 338 U. S. 25 (1949)

STATUTES, CODES AND AUTHORITIES CITED.

Page

“Pennsylvania Nonpublic Elementary and Secondary Educa-

tion Act”, Act of June 19, 1968, P. L. —, No. 109, 24

n, at „ 2, et seq.

Act 92 of the Pennsylvania General Assembly, August 27, 1971 8

Freund, Comment, Public Aid to Parochial Schools, 82 Harv.

L. Rev. 1680 (1969)

Madison’s Memorial and Remonstrance Against Religious As-

Mishkin, The Supreme Court 1964 Term, Forward: The High

Court, The Great Writ and the Due Process of Time and

Law, 79 Harv. L. Rev. 56 (1965)

Prospective Overruling and Retroactive Application in the

Federal Courts, 71 Yale L. J. 907 (1962)

BU. S. C. 8 1253

BU. S. C. 8 1343

BU. S. C. 8 2281

United States Constitution:

First Amendment

OPINION BELOW.

The opinion of the three-judge District Court for the

Eastern District of Pennsylvania is not yet reported.

The Opinion and Orders of said court are set forth

at pages 1 app-11 app of the Appendix to the Jurisdic-

tional Statement.

JURISDICTION.

This action, to enjoin enforcement of a Pennsylvania

statute as unconstitutional, was brought under 28 U. S. C.

51343 and § 2281, and was heard by a three-judge District

Court of the Eastern District of Pennsylvania, pursuant

to 28 U. S. C. § 2284. A final decree of the three-judge

court granting defendants-appellees’ motion to dismiss for

failure to state a claim was entered on November 28, 1969,

and a timely appeal was * Ey. taken by plaintiffs-

appellants to the Supreme Court of the United States. On

June 28, 1971, this Court reversed the decision of the three-

judge court, and remanded the case for further proceedings

consistent with the opinion of this Court.

Appellants thereafter moved for summary judgment

and a permanent injunction. A final Order without opin-

ion was issued by the three-judge court on December 28,

1971, entering summary judgment for plaintiffs but grant-

ing only partial injunctive relief as set forth hereafter.

Notice of Appeal was filed in the District Court by appel-

lants on January 10, 1972, and amended on January 31,

1972. By Order dated February 17, 1972, Mr. Justice Bren-

nan granted appellants’ application for an extension of

time for docketing appeal, pursuant to Rule 13, until May

10, 1972. On February 22, 1972, an opinion was issued by

the three-judge District Court in support of the Order en-

2 Brief of Appellants

tered on December 28, 1971.! The appeal was docketed on

May 10, 1972, and this Court noted probable jurisdiction

on May 22, 1972.

The jurisdiction of the Supreme Court of the United

States to review the Order of December 28, 1971, by direct

appeal is conferred by 28 U. S. C. 5 1253. That jurisdic.

tion is sustained by the decision of this Court in Briggs v.

Elliott, 342 U. S. 350 (1952).

STATUTE AND CONSTITUTIONAL

AMENDMENT INVOLVED.

The statute of Pennsylvania which was held uncon-

stitutional by this Court in Lemon v. Kurteman, 403 U. 8.

602 (1971) (hereinafter cited as ‘‘Lemon’’), is entitled

„Pennsylvania Nonpublic Elementary and Secondary Edu-

cation Act’’, Act of June 19, 1968, P. L. — , No. 109, 24 P. 8.

(Purdon) 55601, et seq. (hereinafter called Act 109’’),

and is set forth in Appendix A to the majority opinion of

the three-judge court in Lemon v. Kurteman, 310 F. Supp.

35, 55-58 (E. D. Pa. 1969). it is also set forth at pages 12

app-19 app of the Appendix to the Jurisdictional State-

ment.

The statute provided that a portion of the proceeds

of a certain tax on horse racing should, under the direction

of the Superintendant of Public Instruction, be used for

‘‘reimbursement’’ fo nonpublic schools for the purchase

of certain defined ‘‘educational services’’, pursuant to

„contracts between the nonpublic schools and the state.

The payments in reimbursement for the cost of these serv-

ices were to be male after the close of the school year in

which the services were provided.

1. The Order entered on February 22, 1972 is erroneously dated

February 22, 1971.

Brief of Appellants 3

The First Amendment of the Constitution of the United

States, made applicable to the states through the Four-

teenth Amendment, provides as follows:

„Congress shall make no law respecting an estab-

lishment of religion, or prohibiting the free exercise

thereof; or abridging the freedom of speech, or of the

press ; or the right of the people peaceably to assemble,

and to petition the Government for a redress of griev-

ances, ”?

QUESTION PRESENTED.

The three-judge court has held that, although Act 109

was found unconstitutional on its face by this Court, none-

theless public funds held by the State of Pennsylvania under

Act 109 must now be paid out to reimburse nonpublic

schools for services performed or costs“ incurred

prior to June 28, 1971, when the Act was declared uncon-

stitutional.

A single question is presented:

Does the Supreme Court’s decision that Act 109

is unconstitutional on its face prohibit subsequent dis-

bursement of public funds under the Act to sectarian

schools for the costs of ‘‘secular educational services“

provided by those schools before the Act was held

unconstitutional :

Brief of Appellants

STATEMENT OF THE CASE.

This appeal results from the continuing efforts of the

supporters of state financial aid to religious or church-re-

lated schools to find some means of evading the constitu-

tional barriers to such aid imposed by the First Amend-

ment. On June 19, 1968, Act 109 of the Laws of

Pennsylvania became effective. Passage of the statute fol-

lowed a series of hearings before the Committee on Basic

Education of the House of Representatives of the Common-

wealth of Pennsylvania. The purpose of these hearings

was stated at the outset by the Chairman of the Committee:

to find out if state funds can be used for aid to nonpublic

schools’’ in view of the fact that ‘‘these school systems are

in serious financial difficulty.“ Within one month after

passage of Act 109, appellants publicly announced their in-

tention to challenge the constitutionality of this legislation,

and on July 3, 1969, a complaint was filed in this action.

The statutory scheme which was the target of this liti-

gation called for a financial subsidy to nonpublic schools

using public funds derived from a special tax. As stated

by this Court in Lemon:

The statute authorizes appellee state Superin-

tendent of Public Instruction to ‘purchase’ specified

‘secular educational services’ from nonpublic schools.

Under the ‘contracts’ authorized by the statute, the

State directly reimburses nonpublic schools solely for

their actual expenditures for teachers’ salaries, text-

books, and instructional materials. A school seeking

reimbursement must maintain prescribed accounting

7

1

Nee > es aman. ot aes

Fox, Committee on Basic Education, House of Representatives Hear- -

ing of April 3, 1968.

Brief of Appellants 5

procedures that identify the ‘separate’ cost of the ‘secu-

lar educational service’. These accounts are subject to

state audit. 403 U. S. at 609-10.

Reimbursement under the statute is limited solely“

to the „ secular' subjects of mathematics, modern foreign

languages, physical science and physical education. All

textbooks and instructional materials used in the program

have to be approved by the state. Payments for services“

rendered by nonpublic schools pursuant to the ‘contracts’?

authorized by the statute are not to be made until after

the school year in which the services were provided.

On November 28, 1969, the three-judge District Court

ruled, in a 2-1 decision (Hastie, Chief Circuit Judge, dis-

senting) that the Act was constitutional. Plaintiffs there-

after filed a Notice of Appeal to this Court on December

17, 1969. As appellees asserted in the court below, it was

not until January 15, 1970, following the filing of this No-

tice of Appeal from the decision of the three-judge court,

that the nonpublic schools renewed their „contracts“ for

reimbursement under the Act for . services“ to be rendered

during the 1970-71 school year. The Supreme Court noted

probable jurisdiction of the appeal on April 20, 1970, prior

to the commencement of the 1970-71 school year.

On June 28, 1971, this Court handed down its decision

“on the appeal, reversing the District Court and declaring

the Act unconstitutional on its face. The Court repeatedly

characterized the statutory scheme as providing a ‘‘direct

money subsidy’’, or continuing cash subsidy’’, or ‘‘gov-

ernment cash grants“ to nonpublic schools, and concluded

wat Act 109 contravened the First Amendment by neces-

@arily fostering excessive entanglement between church

and state and by providing state financial aid directly to

4

6 Brief of Appellants

church-related schools.“ The case was remanded for fur.

ther proceedings consistent with the opinion of this Court.

Appellants then moved for summary judgment and a

permanent injunction restraining any further expenditures

of funds under Act 109 (A6-A7). Appellees, after first

contending that further pleadings and evidence were re-

quired in order to determine whether the statute was un-

constitutional as applied (A8-A11), then insisted that even

if Act 109 was incapable of constitutional application, the

nonpublic schools were still entitled to reimbursement under

the unconstitutional Act for costs incurred in the 1970-71

school year, on the ground that the schools had acquired

vested ‘‘contractual’’ rights which should not be affected

by the decision of this Court (A12-A15). If appellees’ po-

sition is sustained, the State of Pennsylvania will now be

obliged to expend more than $23 million as a further sub-

sidy for the operation of nonpublic schools,“ although this

Court has already concluded that such payments would, on

their face, violate the First Amendment.

Appellants contended in the court below that the

normal effect given to judicial decisions should apply to

bar the payments here in question; that the rationale of

Lemon dictated such a result; that no prior decision of this

Court compelled or even suggested that Lemon should not

be applied to prohibit payments not yet made by the state;

and that extending the limited doctrine of prospectivity to

this situation would have potentially profound adverse

consequences in the broad area of constitutional adjudica-

tion involving expenditures of public funds.

3. 403 U. S. at 621. See also separate opinion of Justice Bren-

nan, 403 U. S. at 652 and concurri inion of Justices las and

Black, 403 U. S. at 637. eee : 885

4. According to appellees, the fund in question now approxi-

mates $24 million. Appellees Response to Appellants’ Application to

Mr. Justice Brennan for Extension of Injunction Pending A and

Motion for Expedited Consideration of the Appeal, para. .

Brief of Appellants 7

The three-judge court, by its Order of December 28,

1971, rejected appellants’ foregoing arguments and, sub

silentio, denied appellants’ motion for permanent injunction

insofar as it sought to restrain payments not yet made

under the Act for ‘‘services’’ performed or costs incurred

prior to June 28, 1971. In its Opinion issued on February

22, 1972, the lower court stated its conclusion that the old

“Blackstonian’’ view of absolute retroactivity of judicial

decisions ig no longer viable; that, as noted by this Court in

Linkletter v. Walker, 381 U. S. 618, 628 (1965), the current

view is that ‘‘in appropriate cases the Court may in the

interest of justice make the rule prospective’’; that the

standard for determining whether to allow retrospective

application is no different in the area of constitutional ad-

judication than in any other area of law; and that the de-

cision of this Court in Lemon must be examined to deter-

mine whether prospective application would in any way

undermine its underlying basis and its rationale and, if not,

then [the court must] balance the equities between the par-

ties. Appendix to Jurisdictional Statement, 7 app.

Applying the foregoing approach, the three-judge court

decided that ‘‘excessive entanglement’? was the exclusive

constitutional infirmity articulated by this Court in striking

down Act 109; that this doctrine was intended primarily to

avoid future entanglement and encroachment; and that

subsequent reimbursements for costs incurred by nonpublic

schools prior to the decision in Lemon would not offend the

rationale of that ruling. The lower court then turned to a

“balancing of the equities“ between the parties and deter-

mined that a greater hardship would result to appellants

if the funds were withheld, than would result to appellees

if the funds were expended. Thus, the lower court con-

‘tluded that the prior mandate of this Court should be

united so as to permit subsequent payments by the state in

8 Brief of Appellants

respect of sectarian school operations during the 1970-71

school year.

Meanwhile, the proponents of public aid to religious

and church-related schools in Pennsylvania have continued

to generate new legislation to subsidize those schools as fast

as earlier attempts have been invalidated by the courts.

Within two months after the decision of this Court in

Lemon, a new statute was enacted by the Pennsylvania

legislature calling for a direct state subsidy to all parents

whose children attend nonpublic schools. Act 92 of the

Pennsylvania General Assembly, August 27, 1971. A three-

judge court for the Eastern District of Pennsylvania con-

cluded, on April 6, 1972, that this statute was unconstitu-

tional on its face under the Establishment clause of the

First Amendment. Lemon v. Sloan, E. D. Pa., Civ. Action

No. 71-2223. This decision is being appealed to this Court,

but on May 31, 1972, the Pennsylvania House of Repre-

sentatives passed a package of legislation providing $48

million in aid to nonpublic schools, including two bills which

would grant to nonpublic schools, free of charge, certain

„auxiliary services“, ‘‘instryctional materials“, ‘‘equip-

ment and textbooks. House Bills Nos. 2151 and 2152,

Session of 1972. This legislation was approved by the

Pennsylvania Senate on July 1, 1972.

Brief of Appellants

SUMMARY OF ARGUMENT.

The court below has held that the ruling of this Court

in Lemon v. Kurtemanm, 403 U. S. 602 (1971), which declared

Pennsylvania Act 109 unconstitutional on its face under the

First Amendment, should not be applied so as to bar a

subsequent subsidy to religious or church-related schools in

respect of ‘‘services’’ provided by those schools prior to

this Court’s ruling in Lemon, supra. In so holding, the

lower court viewed the issue solely in terms of whether

Lemon was entitled to ‘‘prospective’’ or ‘‘retrospective’’

effect.

This ruling of the district court is erroneous and should

be reversed for the following reasons:

1. The rationale of this Court’s decision in Lemon re-

quires that all future payments under Act 109 be pro-

hibited. Such an application accords no more than normal

prospective effect to Lemon, without raising any questions

of ‘‘retroactivity’’. The State of Pennsylvania cannot pay

out any additional subsidies to sectarian schools under the

Act without either engaging in the very surveillance and

control which was explicitly found unconstitutional by this

Court in Lemon, or providing a direct cash subsidy to re-

ligious schools, without any controls to ensure its use for

secular purposes, all in violation of the Establishment

clause.

2. In according only limited prospective effect to the

ruling in- Lemon, the lower court made a radical and un-

warranted departure from the principles heretofore devel-

oped by this Court. Almost without exception, the only

circumstances where this Court has authorized limitations

on the usual retroactive effect of a judicial ruling are (a)

_where the rights of innocent bond-holders would be voided

“and public financing rendered chaotic by giving retroactive

10 Brief of Appellants N

effect to a decision invalidating the statute under which the

bonds were sold, or (b), where an overruling decision sub-

stantially alters the previously accepted rules for conduct-

ing criminal proceedings, thus raising the question whether

all previous convictions based on the former rule are to be

overturned. None of the considerations justifying these

narrow exceptions to the general rule of retroactivity are

present here; indeed, all of the relevant facts demonstrate

that the schools have no contractual or equitable rights to

the subsidy in question.

3. The entire statutory scheme of Act 109 is consistent

with a system of subsidies rather than contractual pay-

ments. There is no showing that the schools provided any

more services for which ‘‘reimbursement’’ was sought than

they would have provided without the Act. Accordingly,

appellees cannot establish any vested ‘‘contractual’’ rights

to further subsidies, assuming that such rights could over-

ride the mandate of Lemon under any circumstances.

4. Appellees have not demonstrated any justifiable re-

liance on the constitutionality of Act 109 which would war-

rant allowing further subsidies under the statute. On the

contrary, it was uniformly recognized from the beginning

that the constitutionality of the statute was, at the very

least, open to question, and an appeal was already filed in

this Court before any alleged acts of ‘‘reliance’’ occurred.

Under the circumstances, the posture of the schools is

scarcely that of innocent reliance; rather it can best be

characterized as a deliberate gamble to seek whatever funds

could be obtained from the state while Act 109 was still on

the books. Having elected to take a chance on winning the

prior appeal in this action, appellees are now in the same

position as any litigant who chooses to take action on the

basis of legal advice that turns out to have been erroneous.

Such ‘‘reliance’’ has never been regarded as sufficient

Brief of Appellants 11

reason for limiting the usual effect of the judicial ruling on

the rights and obligations of the parties.

5. The rationale of the ruling below will lend inevitable

encouragement to legislative efforts (however well intended)

to disburse public funds for parochial school aid, even for a

limited time, under statutes of questionable constitution-

ality. The tendency of the law ought not and need not pro-

vide any impetus in this direction. Respect for the judicial

process, obedience to judicial decisions, and avoidance of

political strife over aid to religious schools will all be pro-

moted by adhéring to the mandate of Lemon, and denying

any further disbursements to sectarian schools under Act

109.

Brief of Appellants

ARGUMENT.

I. The Rule of Law Articulated by This Court in Lemon v.

Kurtzman Bars All Subsequent Payments to Sectarian

Schools Under Act 109.

Appellees and the court below have conceived the ques-

tion here presented solely in terms of whether a ‘‘retro-

active or ‘‘prospective’’ effect should be accorded to this

Court’s prior decision in Lemon v. Kurteman, 403 U. S. 602

(1971). The formulation is somewhat misleading, and for

this reason the specific question to be decided bears repeat-

ing at the outset: Does the ruling in Lemon, which struck

down Act 109 as unconstitutional on its face, bar subsequent

subsidy payments under the Act by the state of Pennsyl-

vania to religious and church-related schools, in an amount

exceeding $20,000,000? °

It is not particularly helpful to seek an answer to this

question by characterizing the relief sought by appellants

as ‘‘retroactive’’. Unless carefully qualified, the term is

more confusing than enlightening. Its use would have been

far more appropriate had appellants demanded a return to

the state of subsidies previously paid out under Act 109

to sectarian schools.“ But appellants have not taken that

position; they have urged only that subsequent payments

under the unconstitutional act are improper. In a real

sense, such an interpretation of this Court’s decision in

Lemon grants to it no more than the usual prospective ef-

5. The total fund collected by the state under the special tax

created by Act 109, but not yet paid out to nonpublic schools, ap-

proximates $24,000,000. Pupils in religious or church-related schools

account for more than 96% of the lvania nonpublic school

population. Lemon v. Kurtsman, supra, 403 U. S. at 610.

6. See Box Office Pictures v. Board of Finance and Revenue,

402 Pa. 511, 166 A. 2d 656 (1961), cited by the court below, Ap-

pendix to Jurisdictional Statement, at 5 app., fn. 4.

Brief of Appellants 13

fect to which all judicial determinations are customarily

entitled, particularly rulings such as this one which uphold

fundamental First Amendment rights occupying an ac-

knowledged preferred place’ in the hierarchy of constitu-

tional values.

The central point is that a prohibition of all subsequent

payments under Act 109 is totally harmonious with the

articulated basis of the decision in Lemon. This Court

there held that the scheme of governmental aid contem-

plated by the Act amounted to a direct cash ‘‘subsidy’’ or

„grant to church-related schools, with accompanying

means of state control and surveillance which, though de-

signed to avoid use of public funds for religious purposes,

necessarily entangled church and state in myriad ways for-

bidden by the First Amendment. 403 U. S. at 620-22. The

Court therefore concluded that the statute was beyond

salvage under any circumstances and that all payments

pursuant to the Act were unconstitutional. The case was

remanded for further proceedings consistent with the opin-

ion. Appellants accordingly moved for summary judgment

and a permanent injunction against all future disburse-

ments under the Act, and were surprised—to say the least—

at appellees’ contention that further aid to religious schools

could be provided under the stricken statute without in-

fringing upon the mandate of this Court.

Appellees’ position rests upon a fundamental misinter-

pretation of Lemon, which the lower court adopted in

justifying its denial of normal prospective effect to the

ruling. Appellees insist that the problem of ‘‘entangle-

ment’’ articulated in Lemon constitutes the only constitu-

tional infirmity of Act 109, that this doctrine is separate

and distinct from (if not in opposition to) the dictates of

_ the Establishment and Free Exercise clauses of the First

7. Thomas v. Collins, 323 U. S. 516, 530 (1945).

14 Brief of Appellants

Amendment,“ and that payment of the subsidy in question

would not offend the entanglement rationale. The lower

court found this view persuasive in concluding that:

„With the decision of the Supreme Court in this case

and this [lower] Court’s subsequent entry of summary

judgment in favor of plaintiffs and the issuance of a

permanent injunction, restraining any future payment

of state funds to non-public schools [sic—the lower

court did not permanently enjoin the future payment

here at issue, and the injunction in any event runs only

against sectarian schools], the statutory scheme which

fostered the excessive entanglement between the state

and religion has been dissolved. Appendix to Juris-

dictional Statement, at 8 app.

The approach taken by appellees and the lower court

is defective in several respects. First, appellees have

missed the central thrust of the ‘‘entanglement’’ notion by

treating it as a standard imported into the First Amend-

ment without relation to the Establishment or Free Exer-

cise clauses. In fact, the concept is rooted in both clauses.

It neatly focuses on the virtually insoluble problems raised

by attempts to provide substantial financial aid to religious

schools without running afoul of the Establishment clause.

The very controls which are necessary to preclude use of a

governmental subsidy in support of religious objectives only

inject the state farther into the affairs of religious institu-

tions at the ultimate risk of interfering with rights under

the Free Exercise clause.“ Thus the concept of ‘‘entangle-

8. See Petition of Appellees for and Supplemental

„ garaged Kurtzman, 8 970, No. 89, at pp.

9. A distinguished commentator has adverted to the sometimes

conflicting demands of the First Amendment impinging on parochial

school aid legislation :

Brief of Appellants 15

ment’’ supports the protection of rights guaranteed by

both clauses of the First Amendment. As Justice Rutledge

observed in his eloquent dissent in Everson v. Board of

Education, 330 U. S. 1, 53 (1946) : The great condition of

religious liberty is that it be maintained free from sus-

tenance, as also from ‘interferences by the state.

The assertion that the state of Pennsylvania can dis-

pense another $24 million as a subsidy to nonpublic schools

under Act, 109, without plunging farther into the thicket of

forbidden entanglement, is therefore patently wrong. In

fact, this position only impales appellees more securely on

the horns of the dilemma that Act 109 was unsuccessfully

designed to avoid in the first place. The state is now con-

fronted with requests for subsidy from 1,181 nonpublic

schools, in reimbursement' of costs incurred in providing

certain ‘‘secular educational services“ during the 1970-71

school year. If any intelligent appraisal of these requests

is to be made, the state must look into them with some care.

Indeed, appellees themselves have previously emphasized to

this Court and the court below that, in Pennsylvania’s

diverse religious community, each sectarian school must be

scrutinized separately to determine the exact degree of re-

ligious involvement in the administration, curriculum and

operation of each institution.

9. (Cont'd.)

In a large sense, both of the guarantees of the first amend-

ment—the free exercise and the non-establishment clauses—are

directed harmoniously toward these purposes [voluntarism in

religious matters, mutual abstention -of political and religious

institutions, and governmental neutrality between religion and

nonreligion], though in the context of specific governmental

measures the two guarantees may point in different directions

and the purposes themselves may be discordant.” Freund, Com-

ment, Public Aid to Parochial Schools, 82 Harv. L. Rev. 1680,

1684 (1969).

10. Petition of Appellees for Rehearing and Supplemental Opin-

Lemon v. Kurtzman, October Term, 1970, No. 89, at pp. 10-12;

Defendants’ Motion for Denial of Plaintiffs’ Motion for Summary

5

“hele aner

16 Brief of Appellants

If the funds now sought by appellees are to be dis-

bursed, the state is presented with a Hobson’s choice.

Either the state must, in an effort to insure proper use of

the subsidy, examine into each school’s curriculum content,

methods of teaching, and segregation of expenses between

‘*secular’’ and ‘‘religious’’ activities—thereby engaging in

precisely the kind of entangling inquiry and surveillance

that was explicitly forbidden by this Court—or else the

state must simply turn the funds over blindly to the re-

ligious and church-related schools, thus providing a subsidy

which may directly support religious practices and teach-

ing, in flagrant contravention of the Establishment clause.

As this Court concluded in Lemon: ‘‘A comprehensive, dis-

criminating, and continuing state surveillance will inev-

itably be required to ensure that these restrictions are

obeyed and the First Amendment otherwise respected.”

403 U. S. at 619. Payment of the subsidy in question would

therefore be equally offensive to the Constitution in either

case.

If it be urged that no inquiry or control can now be

effectively undertaken by the state because the ‘‘costs’’ in

question have already been incurred, the answer is that

such inquiry is no less required because it may be more

difficult to accomplish. Moreover, this Court has specif-

ically pointed out that, ‘‘in particular, the [Pennsylvania]

government’s post-audit power to inspect and evaluate a

church-related school’s financial records and to determine

which expenditures are religious and which are secular

creates an intimate and continuing relationship between

church and state. 403 U. S. at 621-22. This power is ex-

ercisable only after the ‘‘costs’’ involved have been in-

curred. On the other hand, to the extent that appellees

contend that the funds can now be paid over without any

scrutiny by the state, they only undercut the very safe-

Brief of Appellants 17

guards which are necessary to ensure that public moneys

are utilized only for secular purposes.

Finally, neither appellees nor the court below have ac-

knowledged that Act 109, in providing a direct subsidy to

church-related schools, contravenes the Establishment

clause without regard to the additional problems raised by

the entangling control provisions of the statute. This Court

has already so held, in finding that ‘‘the Pennsylvania stat-

ute, moreover, has the further defect of providing state

fmancial aid directly to church-related schools.’’ 403 U. S.

at 621 (emphasis added). Justice Brennan was most spe-

cific on this point in his separate opinion in the Lemon and

Dicenso cases and Tilton v. Richardson, 403 U. S. 672

(1971): ‘‘I do not believe that elimination of these aspects

of ‘too close a proximity’ [i.e., measures of surveillance and

control] would save these three statutes. 403 U.S. at 652."

The payment of an additional direct subsidy under the

Act is therefore unconstitutional in and of itself without

regard to whether the machinery of state controls has been

dismantled by this Court’s prior ruling. The only possible

justification that could be offered for such a payment is that

it will be the last one under Act 109. But the First Amend-

ment’s prohibitions apply as much to one subsidy as they

do to many. From the days of Madison’s Memorial and

Remonstrance Against Religious Assessments, it has al-

11. Act 109 has the additional defect, noted by Justice Brennan,

that (unlike the Rhode Island statute in the Dicenso case) it does

not limit the subsidy to sectarian schools whose average per-pupil

expenditure on secular education was less than the state’s average:

“Thus the statute on its face permits use of the state subsidy

for the purpose of maintaining or attracting an audience for reli-

gious education, and also permits sectarian schools not needing

the aid to apply it to exceed the quality of secular education

provided in public schools. These features of the Pennsylvania

scheme seem to me to invalidate it under the Establishment

ager oe preferences to sectarian schools.” 403 U. S.

at „ m. II.

18 Brief of Appellants

ways been a question of principle, not of amount. See

Everson v. Board of Education, supra, at 40-41 (Rutledge,

J., dissenting).

The ultimate conclusion is inescapable: any further

payments of subsidies to church-related schools pursuant

to Act 109 will necessarily conflict with both the rationale

and specific holding of this Court in the prior appeal. If

this proposition is correct, the proposed payments should

be denied, without further reference to the abstract concept

of retroactivity which appellees have injected into the

case.

II. Further Payments to Sectarian Schools Under Act 109

Cannot Be Justified on the Grounds That the Schools

Signed “Contracts” or Rendered “Reimbursable Serv-

ices” Prior to the Date When the Act Was Declared

Unconstitutional.

Appellees and the lower court have sought to legitimize

additional payments to church-related schools under Act

109 on the theory that certain events which occurred prior

to June 28, 1971—the date of this Court’s ruling of uncon-

stitutionality—now require disbursement of the funds in

question. The sequence of events should be recalled:

— on November 28, 1969, the lower court ruled 2-1

(over the dissent of Judge Hastie, Chief Circuit

Judge) that Act 109 was constitutional;

— on December 17, 1969, appellants filed an appeal to

this Court;

E on January 15, 1970, the nonpublic schools executed

‘*contracts’’ (in the terminology of the Act) calling

for reimbursement of ‘‘secular educational ex-

penses to be incurred in the school year commenc-

ing in September, 1970;

Brief of Appellants 19

— on April 20, 1970, this Court noted probable juris-

diction of the appeal;

— on June 15, 1970, a three-judge court of the District

of Rhode Island unanimously held that the Rhode

Island Salary Supplement Act (providing a system

of state aid to parochial schools raising constitu-

tional questions similar to those posed by Act 109)

violated the First Amendment, Dicenso v. Robinson,

316 F. Supp. 112 (D. R. I. 1970);

in September, 1970, the nonpublic schools began per-

forming the ‘‘secular educational services’’ to be

subsidized under Act 109;

on June 28, 1971, this Court ruled that Act 109 (and

the Rhode Island statute) were unconstitutional;

on September 1, 1971, there came due under the

terms of Act 109 the first of four quarterly install-

ments of payments in respect of ‘‘services’’ pro-

vided in the preceding school year.

Given this sequence, appellees and the lower court in-

sist that the ruling in Lemon would have to be applied retro-

actively to prohibit the payment now of a subsidy in respect

of the 1970-71 school year. This approach diverts attention

away from the focal point of Lemon—payment by the state

of an unconstitutional subsidy to religious schools—and

concentrates instead upon the statutory procedures by

which the schools applied for the subsidy. Only in this

manner is it possible to speak of a ‘‘retroactive’’ applica-

tion of Lemon invalidating pre-existing arrangements. Ap-

pellants have indicated in the preceding section of this brief

why this is a distortion of the meaning of Lemon. But even

if it be assumed that events occurring prior to the decision

in Lemon might have some bearing on whether additional

20 Brief of Appellants

funds can be disbursed under Act 109, it is abundantly clear

that such a result cannot be justified by the precedents of

this Court, or the specific facts of this case.

A. The Precedents of This Oourt Furnish No Basis

for According the Decision in Lemon a Limited

Prospective Effect.

The lower court purported to base its limitation of

the mandate in Lemon on the prior decisions of this Court.

Appellants contend that those cases, dealing with the issue

of when normal retrospective effect should be denied to a

judicial ruling, do not support the decision below. On the

contrary, the lower court’s opinion represents a radical

and unwarranted departure from existing precedent.

The normal rule, recognized by the District Court, is

that judicial decisions operate retrospectively ; that is, they

determine legal rights and obligations with respect to

events that have already transpired. It could hardly be

otherwise, since it is the basic role of courts to decide

disputes after they have arisen. Any losing litigant who

elected to act on the basis of legal advice that turned out

to be erroneous, may claim that the right or status which

he unsuccessfully sought to vindicate before the court

should be upheld because of his ‘‘reliance’’. It has never

been thought that this circumstance—an inevitable conse-

quence of having courts decide specific cases or controver-

sies—justifies a limitation on the usual impact of a judicial

ruling.

The classic articulation of the rule of retroactivity, as

applied to judicial decisions which declare a statute uncon-

stitutional, was given by this Court in Norton v. Shelby

County, 118 U. S. 425 at 442 (1886), where Justice Field

stated :

Brief of Appellants 21

„An unconstitutional act is not a law; it confers no

rights; it imposes no duties; it affords no protection;

it creates no office; it is, in legal contemplation, as in-

operative as though it had never been passed.“

According to the lower court, the rule expressed in Nor-

ton ‘‘underwent a gradual erosion, culminating in the 1930's

with Great Northern R. Co. v. Sunburst Oil & Refining Co.,

287 U. S. 358 (1932) and Chicot County Drainage Dist. v.

Baater State Bank, 308 U. S. 371 (1940). Appendix to Ju-

risdictional Statement, at 5 app. But this assertion is true

only in a very limited sense. While the rigid language of

19th century Blackstonian jurisprudence exemplified in

Norton did give way to the more pragmatic formulations of

positivism, the result enunciated in Norton was not signifi-

cantly impaired: retroactivity continued to be accorded to

judicial decisions almost without exception.

Of course appellants recognize that absolute retro-

spectivity was never applied with total inflexibility, either

before or after Norton. In a narrow line of cases where

legislation authorizing the issuance of municipal bonds had

been declared invalid, it was held that bonds previously is-

sued under the statutes would not be rendered void. Gel-

poke v. Dubuque, 68 U. S. 175 (1864); Douglass v. County

of Pike, 101 U. S. 677 (1880) ; Taylor v. Ypsilanti, 105 U. S.

60 (1882) ; Cipriano v. City of Houma, 395 U. S. 701 (1969);

Phoenia v. Kolodeiejski, 399 U. S. 204 (1970). However,

the intimation contained in some of the earlier cases, to the

effect that a judicial decision could not constitutionally in-

validate prior contracts, was definitively rejected in Tidal

Oil Co. v. Flanagan, 263 U. S. 444 (1924).

Outside this line of authority, the rule of retroactivity

was almost invariably honored. The cases cited by the

142. One limited exception was ized in Brinkerhoff-

‘aris Trust & Savings Co. v. Hill, 281 U. 8. 673 (1930), —

22 Brief of Appellants

lower court did not mark any significant retreat from the

rule. In Great Northern R. Co. v. Sunburst Oil & Refining

Co., supra, this Court merely concluded that the Constitu-

tion did not require a state court to give retroactive effect

to an overruling decision.“ Chicot County Drainage Dist,

v. Baxter State Bank, supra, was decided on the basis of

principles of res judicata. The dictum of Chief Justice

Hughes quoted by the Court below,“ was simply to the effect

that not every decision invalidating a statute should neces-

sarily have the effect of voiding all acts, rights and obliga-

tions to which the statute had previously given rise. Ap-

pellants do not quarrel with this general proposition.

12. (Cont’d.)

it was held that an overruling state decision could not be —

retroactively so as to deny a taxpayer any opportunity to challenge

the assessment of a state tax. Such a denial was found to be a viola-

tion of the Due Process clause of the Fourteenth Amendment.

13. Coupled with Tidal Oil Co., supra, this case made it clear

that the Constitution is neutral on the subject of retroactivity in the

abstract; that is, it neither forbids or e . it. But this not to

say that retroactivity has not continued as os doctrine for

reasons of sound judicial policy, or that the import of a particular

constitutional ruling cannot by its own logic require that retroactive

effect be given. See pp. 12-18, supra.

14. “The actual existence of a statute, prior to such a determina-

tion [of unconstitutionality], is an operative fact and may have con-

sequences which cannot j be ignored. The past cannot always

be erased by a new judicial declaration. The effect of the subsequent

ruling as to invalidity may have to be considered in various aspects,

—with respect to particular relations, individual and te, and

particular conduct, private and official. Questions of rights claimed

= ee of status, of Sag poe e deemed to

ve ity and acted upon accordingly, of public policy in the light

of the nature both of the statute and of its previous application, de-

mand examination, These questions are among the most difficult of

those which have engaged the attention of courts, state and federal,

and it is manifest from the numerous decisions that an all-inclusive

eee

justified.” 308 U. S. at 374, quoted at 6 app., Appendix to Jurisdic-

tional Statement.

Brief of Appellants 23

The only other significant exception to the rule of retro- —

activity has been recognized in certain cases involving over-

ruling decisions with potential impact on thousands of prior

eriminal proceedings. Thus, in Linkletter v. Walker, 381

U. S. 618 (1965), relied upon heavily by the court below, it

was held that the exclusionary rule of Mapp v. Ohio, 367

U. S. 643 (1961), which overruled Wolf v. Colorado, 338

U. S. 25 (1949), should not be applied retroactively so as to

reopen every prior final criminal conviction in which the

Wolf rule had been followed. This approach has been

adopted with respect to certain other overruling decisions

affecting criminal proceedings, e.g., Tehan v. Shott, 382

U. S. 406 (1966); Johnson v. New Jersey, 384 U. S. 719

(1966) ; Stovall v. Denno, 388 U. S. 293 (1967); Desist v.

United States, 394 U. S. 244 (1969); Jenkins v. Delaware,

395 U. S. 213 (1969). But the practice has by no means been

uniform even in this specific field of constitutional adjudica-

tion. E. g., Roberts v. Russell, 392 U. S. 293 (1968), holding

that the rule of Bruton v. United States, 391 U. S. 123 (1968)

which overturned Delli Paoli v. United States, 352 U. S. 232

(1957) was entitled to retrospective effect. Significantly,

the Court indicated that reliance by law enforcement offi-

cials on the prior decision of this Court in Delli Paoli was

not a countervailing factor: The element of reliance is not

persuasive, for Delli Paoli has been under attack from its

inception and many courts have in fact rejected it.“ 392

U. S. at 295."

Thus, whatever can be said about the breadth of the

dietum in Chicot, or certain of the language in Linkletter,

15. Here, of course, there was no prior ruling of this Court

upholding the validity of Act 109. While the lower court had sus-

tained the statute in a 2-1 decision over Judge Hastie’s erful

dissent, a three-judge district court had on June 15, 1970 (prior to

the opening of the 1970-71 school year), unanimously down

the very similar Rhode Island statute in Dicenso v. Robinson, 316 F.

_ Supp. 112 (D. R. I. 1970), a decision that was upheld by this

Court in the companion case to Lemon.

24 Brief of Appellants

the fact is that this Court has exercised extreme caution in

extending the limitations of prospectivity to cases in areas

other than municipal bond litigation and criminal pro-

cedure. The language in Linkletter has been consistently

interpreted and applied by this Court only in other instances

of overruling decisions in criminal law. It has never been

thought to mean that every civil decision must be scrutinized

on a case by case basis to decide which rulings should be

prospective.

On the other hand, this Court has recently indicated

that the Chicot dictum should be limited to the particular

facts of that case. In United States v. Estate of Donnelly,

397 U. S. 286 (1970), it was held that a judicial decision

giving a new interpretation of a section of the Internal

Revenue Code of 1939, concerning the place to file a tax lien,

was entitled to retrospective effect even though the result

was to give priority to a lien on land against the claim of a

bona fide purchaser who had acquired the property after

checking for tax liens filed elsewhere in conformity with the

earlier prevailing judicial interpretation of the statute. The

lower court had relied largely on Chicot in giving only

prospective effect to the later interpretation of the revenue

code. This Court reversed, distinguishing Chicot and, ac-

cording to the dissent, narrowly confining the dictum of

Chief Justice Hughes to the particular facts involved in

Chicot. 397 U. S. at 300 (Douglas, J., dissenting).

16. One other circumstance that might justify a rule of prospec-

tivity is when there is intense statutory compulsion to obey and

conform to ordained practice under legislation which is later held

invalid. Thus, where a federal taxpayer properly accrues and de-

ducts a state tax on his federal income tax return, the subsequent

— of the state tax should not retroactively invalidate the tax -

return. J. A. Dougherty’s Sons, Inc. v. Commissioner

onal Reve, 1 F200 (3 ‘erred

y no was upon nonpublic

achouls So tock eubeldion wer, Act 10D

Brief of Appellants 25

In his concurring opinion, Justice Harlan rationalized

the appropriate exceptions to retroactivity in very narrow

terms :

“The critical factor in determining when a new deci-

sional rule should be applied to a transaction consum-

mated prior to the decision’s announcement is, in my

view, the point at which the transaction has~Acquired

such a degree of finality that the rights of the parties

have become frozen. . . . [I]n the civil area that

moment should be when the transaction is beyond chal-

lenge either because the statute of limitations has run

or the rights of the parties have been fixed by litigation

and have become res judicata. Any uncertainty en-

gendered by this approach should, I think, be deemed

part of the risks of life.“ 397 U. S. at 296.

The reluctance of this Court to broaden the carefully

circumscribed range of exceptions to retrospectivity is

understandable. As noted above, one unavoidable conse-

quence of having courts decide specific disputes is that the

losing party is often in the position of having acted in

reliance, to some degree, on a mistaken understanding of his

legal position. The fact of such honest reliance—later dis-

appointed in court—does not mean that judicial decisions

are given prospective effect only; any resulting loss is

simply regarded as part of the uncertainties of life, and a

necessary correlative of the judicial process.

This common sense notion rests on sound institutional

values. In the words of one perceptive commentator who

has expressed reservations about some of the language (if

not the result) in Linkletter, the doctrine of absolute retro-

activity is despite some real shortcomings, a valuable

judicial asset“. Mishkin, The Supreme Court 1964 Term,

Forward: The High Court, The Great Writ and the Due

Process of Time and Law, 79 Harv. L. Rev. 56, 57 (1965).

26 Brief of Appellants

The effectiveness of the judicial process ultimately depends

upon public acceptance. That acceptance, in turn, is

fostered by public confidence that judicial rulings proceed

from a rational development of precedent, and not indi-

vidual predilection." Such confidence is not promoted by

the widespread practice of applying judicial rulings pro-

spectively because such an approach to rule making is gen-

erally equated with legislation.

Justice Black highlighted this concern with his state-

ment in James v. United States, 366 U. S. 213 (1960) that

the normal rule of retroactivity constitutes ‘‘one of the

great inherent restraints upon this Court’s departure from

the field of interpretation to enter that of lawmaking.. .”’

Id., at 225 (dissenting opinion).

These considerations go to the core of the integrity of

the judicial process, and they are not to be dismissed lightly.

Nor have they been. Only the most compelling circum-

stances have been found appropriate by this Court to limit

a judicial ruling to a prospective application. Thus, in the

field of municipal bond litigation a rule of prospectivity is

justified because public bond financing would become pro-

hibitively expensive, if not impossible, if bond purchasers

had to assume the full risk of any future ruling that in-

validated the statute or procedure under which the bonds

were sold. In the area of criminal procedure, it is hardly

necessary to elaborate on the special factors that may miti-

gate in favor of prospective applications of rulings which

overturn previously accepted procedures. Suffice it to point

out that these considerations do not remotely apply to the

case at bar. Accordingly, there is no reason to refuse giv-

Be ey ee

generally. But the fact remains that symbols constitute an impor-

tant element in any societal structure—and that this symbolic view

of courts is a major factor in securing respect for, and obedience to,

judicial decisions.” Id., at 62 (footnote omitted).

Brief of Appellants 27

ing normal effect to the ruling in Lemon to prohibit further

subsidy payments.

B. The Schools Have No Vested Contractual Right to

the Subsidy.

The schools insist that the subsidy applications signed

on January 15, 1970, are binding ‘‘eontracts’’, executed in

reliance on the constitutionality of Act 109; that they have

rendered full performance under these ‘‘eontracts’’; and

that it would be improper to ignore their alleged rights by

refusing to allow reimbursement for the ‘‘services’’ ren-

dered. Althongh the lower court found it unnecessary to

decide this contention (relying instead on a general ‘‘bal-

ancing of the equities approach), appellees have continued

to press the argument in the apparent belief that their

claims are significantly strengthened by calling them ‘‘con-

tractual’’ rather than merely ‘‘equitable’’.”® Appellants

will therefore respond to the contention.

Appellees’ position rests upon a false premise: that the

entire linguistic scheme of Act 109 (envisoning ‘‘contracts’’

for the purchase of services) must be accepted at

face value as a description of reality which the courts can-

not look behind. This Court obviously, and quite properly,

did not regard itself as so bound in Lemon. Throughout

the majority, concurring and even dissenting opinions, the

statute is described as conferring a subsidy“, ‘“cash

grant, ‘‘aid’’ or support“ to the nonpublic schools.“

These terms do not connote a contractual relationship; they

signify a gift, the gratuitous bestowal of a benefit. Con-

18. Appellees concede that there is no constitutional impediment

applying Lemon to void pre-existing contractual rights. Tidal Oil

o. v. Flanagan, supra. Appellants have argued at pe. 12-18, supra,

urther payments

and the nonpublic schools is deemed contractual.

19. E.g., 403 U. S. at 610, 620, 621, 624, 652, 653, 654, 665.

28 Brief of Appellants

sistent with this approach, the Court placed quotation

marks around the term ‘‘contract’’ in referring to the statu-

tory vehicle used for providing the subsidy.”

It is therefore evident that this Court has already re-

jected, sub silentio, the proposition that the true relation-

ship between the state and each school was that of contract-

ing parties, with each receiving a quid pro quo. This

rejection was plainly correct. As Judge Hastie pointed out

in dissenting from the original lower court decision uphold-

ing the constitutionality of Act 109, the nonpublic schools

merely submitted, on a form prescribed by the state, an

application designating the portions of their curricula for

which subsidy was sought. The state then ‘‘agreed’’ to do

what the statute already required—that is, to pay the sums

mandated by Act 109. The schools did not have to increase

their enrollment or change their curricula, or do anything

else of benefit to the state. They just applied for aid. One

can hardly quarrel with Judge Hastie’s conclusion that it

is an ‘‘artificial characterization’’ to describe the statutory

procedure as contracting for services. Lemon v. Kurte-

man, 310 F. Supp. 35, 50 (E. D. Pa. 1969) (dissenting

opinion). ‘

20. 403 U. S. at 609. Intervening defendants-appellees insisted

below that this Court, in accepting Act 109’s stated purpose of aiding

education rather than a religion, necessarily also accepted

the entire linguistic scheme of statute, including the term “con-

tract”. This is an obvious non-sequitur. The purpose of aiding

education is equally served by a system of subsidies or contracts. If

the substance of the legislative plan is subsidy, it can be recognized

as such without denying the secular purpose of the Act.

21. Appellees nevertheless urge that the Pennsylvania courts

would regard these subsidy arrangements as “contracts”. But the

technical notions of “consideration” that might be deemed adequate

to support contracts between private parties are scarcely dispositive

of whether the legislature, simply by using some magic words in a

statute, can transform one kind of legal relationship into another and

thereby cloak it from judicial scrutiny. Were it otherwise, the re-

peated efforts of some legislatures to evade the desegregation man-

Brief of Appellants 29

In sum, appellees’ alleged ‘‘contractual rights’’ are

illusory; they do not afford any justification for allowing

further payments under Act 109. Without more, this con-

clusion requires a reversal of the decision below. If the

payments are not genuinely contractual, they are manifestly

a subsidy, and as argued at pp. 12-18, infra, this Court has

already ruled in Lemon that such a subsidy is, on its face,

unconstitutional.

©. The Schools Did Not Innocently Rely to Their

Detriment on the Constitutionality of Act 109.

As previously noted, the lower court did not base its

decision on a finding that appellees were vested with any

contractual rights.“ Instead, the court baldly asserted—

without support of any evidence in the record—that the

nonpublic schools had, in reliance on the expected reim-

bursements, ‘‘adjusted their budgets accordingly and per-

21. (Cont'd.)

dates of this Court by use of subsidized “private” school schemes

would have succeeded at least for a time, rather than meeting sum-

mary reversal in case after case.

22. Intervenor defendants-appellees insisted below that appel-

lants lacked standing to challenge the validity of the “contracts”, as

if appellants were seeking to transform this litigation into a contract

action. The lower court found it unnecessary to decide this claim

since it did not base its decision on a finding of contractual rights,

but it suffices to point out that appellants have challenged the con-

stitutionality of Act 109, and as part of that challenge they also

have standing to urge an interpretation of the statute and its opera-

tive

23. Said the lower court:

“[W]hether the reimbursements constituted payments under

the contracts or a subsidy makes no difference in our decision.

Nor does it lessen the reliance of the non-public schools on

the payments or the subsequent hardship upon them if the pay-

ments are not made.” Appendix to Jurisdictional Statement,

at 9 app-10 app, fn. 6.

30 Brief of Appellants

formed the services required by them.’’ Noting that a

denial of the funds would impose a ‘‘substantial burden

which would be difficult for them to meet’’, the court allowed

the payments to avoid this ‘‘hardship’’. Appendix to Juris-

dictional Statement, at 9 app-10 app.

Appellants have previously argued that this amorphous

‘*balancing of the equities’’ approach goes far beyond the

appropriate boundaries of prospective limitation drawn by

this Court, and ignores the common understanding of the

risks attendant to any litigation. But not only is the Dis-

trict Court’s conclusion unprecedented, it is implicitly based

on a proposition already rejected out of hand by this Court

in Lemon; i.e., that state aid to parochial schools can be

justified because their financial situation is desperate.

Surely it is beyond argument that fiscal need (even assum-

ing the dubious proposition that nonpublic schols are finan-

cially worse off than the public schools) is not a factor

entitled to any weight whatsoever in evaluating appellees’

claim.

Moreover, the lower court has failed to demonstrate

that any assumed ‘‘reliancé’’ by the nonpublic schools was

justified. Apart from the total lack of evidence establish-

ing that the schools provided any ‘‘services’’ during the

1970-71 school year which they would not have furnished

anyway without Act 109, it is abundantly clear that the non-

public schools simply took a chance on obtaining reimburse-

ments for 1970-71 in full awareness that the validity of Act

109 was, at the very least, open to serious question.

Thus, the schools did not even sign reimbursement

‘‘contracts’’ for the 1970-71 school year until a month after

an appeal had been filed with this Court from the initial 2-1

decision by the District Court. ‘‘Services’’ were not pro-

vided by the schools until several months after this Court

had noted probable jurisdiction of the appeal, and well after

Brief of Appellants 31

Jane 15, 1970, when the Rhode Island parochial school

salary subsidy legislation had been unanimously struck

down by a three-judge court in Dicenso v. Robinson, 316

F. Supp. 112 (D. R. I. 1970).

_ In short, Act 109 from its very conception was under-

stood by all interested parties—particularly the parochial

schools—as a calculatéd effort to skirt the shoals of the

First Amendment. Appellants do not suggest that the

effort to obtain public aid through Act 109 was legally

reprehensible in any sense; but no one seeking aid under the

statute had any illusions about the inevitability of a legal

challenge and the certainty that this Court would ultimately

have to decide the issue.

The lower court found that appellees’ ‘‘reliance’’ was

warranted by the presumption of constitutionality which

the Pennsylvania Supreme Court has said attaches to any

legislation.* But this proposition proves too much. Could

& segregated school legitimately ‘‘rely’’ on a statute pro-

viding it with state aid! Manifestly, the right to further

subsidies under facially unconstitutional legislation cannot

rest on such a slender reed.

24. The case cited by the lower court is Philadelphia v. Dupuy,

431 Pa. 276, 244 A. 2d 741 Sie where a = ision of the state

receipts tax statute was upheld against a chall of unconsti-

— The court’s opinion is full of such — “oe i

to show a statute unconstitutional must carry a very heavy burden”,

and “all doubt is to be resolved in favor of sustaining the legislation”,

and “the taxpayer’s burden will be deemed met only if the chall

statute clearly, palpably and plainly violates the Constitution.” 436

Pa. at 279, 244 A. 2d at 743. (emphasis in original).

Whatever the validity of such standards as applied to a challenge

of tax legislation, they clearly have no place in litigation seeking

to uphold fundamental First Amendment rights. Contrast the lan.

guage of this Court in Lemon:

32 Brief of Appellants

Nor could the schools legitimately rely on the initial

District Court ruling which upheld, by a 2-1 —— the

constitutionality of Act 109.

If the precedent [relied upon] was made in a lower

court and has never been passed upon by the highest

court of the jurisdiction, reliance upon it is generally

held to be similar to reliance upon an uninterpreted

statute—the party relying does so at his peril.“ Pro-

spective Overruling and Retroactive Application in the

Federal Courts, 71 Yale L. J. 907, 947 (1962).

A fortiori, the schools could not rely with impunity on a

lower court ruling which was already on appeal to this

Court before any alleged acts of ‘‘reliance’’ occurred, and

which (in the face of this Court’s prior decisions) was of

doubtful merit.

It can be plausibly argued that the power of prospective

limitation should be confined to cases involving overruling

of precedent—and, indeed, this is by far the most common

circumstance in which this Court has applied or even con-

sidered the doctrine.“ But even assuming that the logic

of the position cannot be confined quite so narrowly, it

surely extends no farther than situations in which a new

decision has substantially altered what was previously

assumed to have been the law.“ Notwithstanding the initial

ruling of the lower court as to Act 109, no one could, in all

candor, regard Lemon as fundamentally altering the land-

scape of the First Amendment as applied to church-state

relations. Appellees may have been disappointed at the

outcome of Lemon, but they can scarcely claim surprise.

In the words of Justice Harlan, the schools simply

assumed one of the risks of life in seeking a subsidy for

25. E.g., Gelpcke v. Dubuque, 68 U. S. 175 (1864) ; Douglass

v. Nee Pike, 101 U. S. 677 (1879); Chicot County Drainage

axter State Bank, supra; Linkletter v. Walker, supra.

en 5 Cipriano v. City of Houma, 395 U. S. 701 (1969).

Brief of Appellants 33

the 1970-71 school year. United States v. Estate of Don-

nelly, supra, at 296 (concurring opinion). They cannot now

make the state underwrite that risk in contravention of this

Court’s mandate in Lemon.

_ Appellants have argued that the rule of law adopted by

the District Court represents a profound expansion of the

doctrine of prospective limitation. Neither the precedents

of this Court, nor the equities of this case favor the outcome

reached below. But there is a larger dimension to the ruling

of the lower court which may have impact on a broad class

of constitutional adjudication concerning expenditures of

public funds. Just as the ultimate reach of the Religion

clauses of the First Amendment may be only dimly per-

teived, so the precise ultimate impact of the ruling below

may be difficult to measure in this respect. It is not too

much to say, however, that the rationale has potentially

ominous consequences extending far beyond the particular

ircumstances of the case at bar.

The logical import of the opinion below is that when-

ever a legislative scheme of public expenditures is adopted,

Private parties can, by undefined acts of „ reliance com-

mit the state to expending public funds, even after a judicial

determination that the statute is unconstitutional on its

ace. However unintentially, this rule of law will inevitably

*eourage legislative efforts to obligate public funds for

popular, if probably unconstitutional, purposes.

This could have unfortunate ramifications, particularly

in the area of parochial school aid legislation. It is a proper

subject for judicial notice that such legislation has been

34 Brief of Appellants

passed in many jurisdictions, and that, particularly in

Pennsylvania, new statutes have been adopted as soon as

prior ones have been struck down. One pernicious result

of the ruling below is that it may encourage legislatures to

continue seeking ways to get public funds into the religious

schools through constitutionally dubious means, in the be-

lief that some subsidy is better than none, and in reliance

on the lower court’s notion that ‘‘contractual’’ subsidy ar-

rangements entered into before a statute is declared void

will safeguard subsequent payment of the subsidy even if

only on a temporary basis.

Consider the opportunities that such an approach would

have presented to certain legislatures during the days of

„massive resistance to this Court’s rulings on school de-

segregation. One can hardly doubt that various private“

school subsidies would have been enacted with full legisla-

tive trappings to emphasize ‘‘vested contractual rights“.

Any rule of law which encourages, however indirectly, such

a course of conduct should be avoided. It contributes to

the undermining of public confidence in the judicial proc-

esses, and tends to set courts and legislatures unnecessarily

in stances of opposition to each other.

The potential for political discord and strife which can

arise under such circumstances is particularly evident in

the area of aid to religious schools. Perhaps the ultimate

significance of the ruling in Lemon is that it marks a major

effort by this Court to withdraw the issue of parochial

school aid from the political arena. By drawing definitive

limits around permissible uses of public funds in this sensi-

tive area, this Court has sought to avoid political division

on religious lines which, as this Court held in Lemon, was

one of the principal evils against which the First Amend-

ment was intended to protect.

Weighed against these broad considerations of consti-

tutional and judicial policy, there are no countervailing —

Brief of Appellants 35

interests which require permitting the disbursement of fur-

ther funds under Act 109 as authorized by the court below.

The doctrine of prospective limitation is appropriate in

certain very limited situations. The case at bar presents

no circumstances to warrant its application here.

IV. CONCLUSION.

For all the foregoing reasons, the Order of the lower

court dated December 28, 1871 should be reversed insofar as

it permits the further disbursement of any funds, under and

pursuant to Act 109, to any religious or church-related

school.

Respectfully submitted,

Davm P. Bnurox,

1100 Philadelphia National Bank Bldg.,

Philadelphia, Pennsylvania. 19107

Attorney for Appellants.

Of Counsel:

Damxer Bora & Reata,

1100 Philadelphia National Bank Building,

Philadelphia, Pa.

| Mervin L. Wutr,

Sanrorp J. Rosen,

American Civil Liberties Union Foundation,

156 Fifth Avenue,

New York, N. V.

Frankuin C. Saissury,

Americans United for Separation of

Church and State,

8120 Fenton Avenue,

Silver Spring, Md.