New York v. Cathedral Academy

• Decision Date: 06 December 1977
• Docket Number: No. 76-616,76-616
• Citation: 434 U.S. 125,54 L.Ed.2d 346,98 S.Ct. 340
• Parties: State of NEW YORK, Appellant, v. CATHEDRAL ACADEMY
• Court: U.S. Supreme Court

434 U.S. 125

98 S.Ct. 340

54 L.Ed.2d 346

State of NEW YORK, Appellant,

v CATHEDRAL ACADEMY.

No. 76-616.

Argued Oct. 3, 1977.

Decided Dec. 6, 1977.

Syllabus

A three-judge District Court issued a judgment (later affirmed by this Court) declaring unconstitutional a New York statute (1970 N.Y.Laws, ch. 138) that authorized reimbursement to nonpublic schools for state-mandated recordkeeping and testing services, and permanently enjoining any payments under the Act, including reimbursement for expenses that such schools had already incurred in the last half of the 1971-1972 school year. Thereafter the New York State Legislature enacted 1972 N.Y.Laws, ch. 996, authorizing reimbursement to sectarian schools for their expenses of performing the state-required services through the 1971-1972 school year. Appellee sectarian school brought this reimbursement action under ch. 996 in the New York Court of Claims, which held that the statute violated the First and Fourteenth Amendments. The New York Court of Appeals, being of the view that ch. 996 comported with this Court's decision in Lemon v. Kurtzman, 411 U.S. 192, 93 S.Ct. 1463, 36 L.Ed.2d 151 (Lemon II ), ultimately reversed, and remanded the case for a determination of the amount of appellee's claim. In that case, after a state statute authorizing payments to sectarian schools for specified secular services had been struck down (in Lemon v. Kurtzman, 403 U.S. 602, 91 S.Ct. 2105, 29 L.Ed.2d 745 (Lemon I )) and the trial court on remand had enjoined payments under the statute for any services performed after that decision but had not prohibited payments for services provided before that date, the Court approved such disposition on the ground that equitable flexibility permitted weighing the "remote possibility of constitutional harm from allowing the State to keep its bargain" against the substantial reliance of the schools that had incurred expenses at the State's express invitation. Held :

1. This Court has jurisdiction of this appeal as the Court of Appeals' decision was a final determination of the federal constitutional issue and is ripe for appellate review under 28 U.S.C. § 1257(2). P. 128.

2. Chapter 996 violates the First Amendment as made applicable to the States by the Fourteenth because it will necessarily have the primary effect of aiding religion, or will result in excessive state involvement in religious affairs. Lemon II distinguished. Pp. 128-133.

(a) Here (contrary to the situation in Lemon II ) the District Court had expressly enjoined payments for amounts "heretofore or hereafter expended." To approve enactment of ch. 996, which thus

was inconsistent with the District Court's order, would expand the reasoning of Lemon II to hold that a state legislature may effectively modify a federal court's injunction whenever a balancing of constitutional equities might conceivably have justified the court's granting similar relief in the first place. Pp. 128-130.

(b) If ch. 996 authorizes payments for the identical services that were to be reimbursed under ch. 138, it is for the identical reasons invalid. Pp. 130-131.

(c) Even if, as appellee contends, the Court of Claims was authorized to make an audit on the basis of which it would authorize reimbursement of sectarian schools only for clearly secular purposes, such a detailed inquiry would itself encroach upon the First and Fourteenth Amendments by making that court the arbiter of an essentially religious dispute. Pp. 131-133.

3. Contrary to Lemon II, the equities do not support what the state legislature has done in ch. 996, which constitutes a new and independently significant infringement of the First and Fourteenth Amendments. Moreover, appellee could have relied on ch. 138 only by spending its own funds for nonmandated, and perhaps sectarian, activities that it might otherwise not have been able to afford. Pp. 133-134.

39 N.Y.2d 1021, 387 N.Y.S.2d 246, 355 N.E.2d 300, reversed and remanded.

Jean M. Coon, Albany, N. Y., for appellant.

Richard E. Nolan, New York City, for appellee.

Mr. Justice STEWART delivered the opinion of the Court.

In April of 1972 a three-judge United States District Court for the Southern District of New York declared unconstitutional New York's Mandated Services Act, 1970 N.Y. Laws ch. 138, which authorized fixed payments to nonpublic schools as reimbursement for the cost of certain recordkeeping and testing services required by state law. Committee for Public Education & Religious Liberty v. Levitt, 342 F.Supp. 439. The court's order permanently enjoined any payments under the Act, including reimbursement for expenses that schools had already incurred in the last half of the 1971-1972 school year.¹ This Court subsequently affirmed that judgment. Levitt v. Committee for Public Education, 413 U.S. 472, 93 S.Ct. 2814, 37 L.Ed.2d 736.

In June 1972 the New York State Legislature responded to the District Court's order by enacting ch. 996 of the 1972 N.Y.Laws. The Act "recognize[d] a moral obligation to provide a remedy whereby . . . schools may recover the complete amount of expenses incurred by them prior to June thirteenth [, 1972,] in reliance on" the invalidated ch. 138, and conferred jurisdiction on the New York Court of Claims "to hear, audit and determine" the claims of nonprofit private schools for such expenses. Thus the Act explicitly authorized what the District Court's injunction had prohibited: reimbursement to sectarian schools for their expenses of performing state-mandated services through the 1971-1972 academic year.

The appellee, Cathedral Academy, sued under ch. 996 in the Court of Claims, and the State defended on the ground that the Act was unconstitutional.² The Court of Claims agreed that ch. 996 violated the First and Fourteenth Amendments, and dismissed Cathedral Academy's suit. 77 Misc.2d 977 354 N.Y.S.2d 370. The Appellate Division affirmed, 47 A.D.2d 390, 366 N.Y.S.2d 900, but the New York Court of Appeals, adopting a dissenting opinion in the Appellate Division, reversed and remanded the case to the Court of Claims for determination of the amount of the Academy's claim.³ 39 N.Y.2d 1021, 387 N.Y.S.2d 246, 355 N.E.2d 300. An appeal was taken to this Court, and we postponed further consideration of the question of our appellate jurisdiction until the hearing on the merits. 429 U.S. 1089, 97 S.Ct. 1097, 51 L.Ed.2d 534. We conclude that the Court of Appeals' decision finally determined the federal constitutional issue and is ripe for appellate review in this Court under 28 U.S.C. § 1257(2).⁴

I

The state courts and the parties have all considered this case to be controlled by the principles established in Lemon v. Kurtzman, 411 U.S. 192, 93 S.Ct. 1463, 36 L.Ed.2d 151 (Lemon II ), which concerned the permissible scope of a Federal District Court's injunction forbidding payments to sectarian schools under an unconstitutional state statute. Previously in that same litigation we had declared unconstitutional a Pennsylvania statute authorizing payments to sectarian schools for specific secular services provided under contract with the State, and remanded the case to the trial court for entry of an appropriate decree. Lemon v. Kurtzman, 403 U.S. 602, 91 S.Ct. 2105, 29 L.Ed.2d 745 (Lemon I ). On remand, the District Court enjoined payments under the statute for any services performed after the date of this Court's decision, but did not prohibit payments for services provided before that date. 348 F.Supp. 300, 301 n. 1 (E.D.Pa.). In Lemon II this Court affirmed the trial court's denial of retroactive injunctive relief against the State, noting that "in constitutional adjudication as elsewhere, equitable remedies are a special blend of what is necessary, what is fair, and what is workable." 411 U.S., at 200, 93 S.Ct., at 1469 (footnote omitted).

The primary constitutional evil that the Lemon II injunction was intended to rectify was the excessive governmental entanglement inherent in Pennsylvania's elaborate procedures for ensuring that "educational services to be reimbursed by the State were kept free of religious influences." Id., at 202, 93 S.Ct., at 1470. The payments themselves were assumed to be constitutionally permissible, since they were not to be directly supportive of any sectarian activities. Because the State's supervision had long since been completed with respect to expenses already incurred, the proposed payments were held to pose no continued threat of excessive entanglement. Two other problems having "constitutional overtones"—the impact of a final audit and the effect of funding even the entirely nonreligious activities of a sectarian school—threatened minimal harm "only once under special circumstances that will not recur." Ibid.

In this context this Court held that the unique flexibility of equity permitted the trial court to weigh the "remote possibility of constitutional harm from allowing the State to keep its bargain" against the substantial reliance of the schools that had incurred expenses at the express invitation of the State. The District Court, "applying familiar equitable principles," could properly decline to enter an injunction that would do little if anything to advance constitutional interests while working considerable hardship on the schools. Cf. Hecht Co. v. Bowles, 321 U.S. 321, 64 S.Ct. 587, 88 L.Ed. 754.

In the present case, however, the District Court did not limit its decree as the court had done in Lemon II, but instead expressly enjoined payments for amounts "heretofore or hereafter expended." See n. 1, supra (emphasis supplied). The state legislature thus took action inconsistent with the court's order when it passed ch. 996 upon its own determination that, because schools like the Academy had relied to their detriment on the State's promise of payment under ch. 138, the equities of the case demanded retroactive reimbursement. To approve the enactment of ch. 996 would thus expand the reasoning of ...