Duncan v. State

• Decision Date: 28 August 2014
• Docket Number: No. 2013–455,2013–455
• Citation: 166 N.H. 630,102 A.3d 913
• Parties: Bill DUNCAN & a. v. The STATE of New Hampshire & a.
• Court: New Hampshire Supreme Court

166 N.H. 630

102 A.3d 913

Bill DUNCAN & a.

v.The STATE of New Hampshire & a.

No. 2013–455

Supreme Court of New Hampshire.

Argued: April 16, 2014

Opinion Issued: August 28, 2014

ACLU Foundation Program on Freedom of Religion and Belief, of Washington, D.C. (Daniel Mach and Heather L. Weaver on the brief), Americans United for Separation of Church and State, of Washington, D.C. (Ayesha N. Khan and Alex J. Luchenitser on the brief, and Mr. Luchenitser orally), and New Hampshire Civil Liberties Union, of Concord (Gilles Bissonnette on the brief), for the petitioners.

Joseph A. Foster, attorney general (Richard W. Head, associate attorney general, and Frank C. Fredericks, attorney, on the brief, and Mr. Head orally), for the State.

Institute for Justice, of Arlington, Virginia (Richard D. Komer and Timothy D. Keller on the brief, and Mr. Komer orally), and Wadleigh, Starr & Peters, P.L.L.C., of Manchester (Michael J. Tierney on the brief), for the intervenors.

Gregory S. Baylor,of Washington, D.C., Heather Gebelin Hacker, of Folsom, California, and Michael J. Compitello, of Bedford, by brief, for Alliance Defending Freedom, Cornerstone Policy Research, and Liberty Institute, as amici curiae.

Channing M. Cooper, of Washington, D.C., on the joint brief, for American Federation of Teachers, AFL–CIO, and American Federation of Teachers–New Hampshire, as amici curiae.

James F. Allmendinger, of Concord, staff attorney, on the joint brief, for NEA–New Hampshire, as amicus curiae.

Wilmer Cutler Pickering Hale and Dorr LLP, of Boston, Massachusetts (Robert C. Kirsch, Mark C. Fleming, and Eric D. Wolkoff on the brief), for The Anti–Defamation League, as amicus curiae.

Simmons & Ortlieb, PLLC, of Hampton (John Anthony Simmons, Sr. on the brief), and Eric C. Rassbach and Asma T. Uddin, of Washington, D.C., by brief, for The Becket Fund for Religious Liberty, as amicus curiae.

Mosca Law Office, of Manchester (Edward C. Mosca on the brief), and Ilya Shapiro, of Washington, D.C., by brief, for The Cato Institute, Andrew J. Coulson, and Jason M. Bedrick, as amici curiae.

Cravath, Swaine & Moore LLP, of New York, New York (Roger G. Brooks and Benjamin H. Diessel on the brief), and McCandless & Nicholson, P.L.L.C., of Concord (Roy S. McCandless on the brief), for Concord Christian Academy, Grace Christian School, Concord Christian Academy Giving and Going Alliance, and Roman Catholic Bishop of Manchester, as amici curiae.

Lucy C. Hodder, of Concord, legal counsel to the Governor, by brief, and John M. Greabe, of Hopkinton, by brief, for the Honorable Margaret W. Hassan, as amicus curiae.

Bernstein, Shur, Sawyer & Nelson, P.A., of Manchester (Andru H. Volinsky and Christopher G. Aslin on the joint brief), for New Hampshire School Administrators Association, as amicus curiae.

Barrett M. Christina, of Concord, staff attorney, on the joint brief, for New Hampshire School Boards Association, as amicus curiae.

Joshua P. Thompson, of Sacramento, California, by brief, and William L. O'Brien, of Mont Vernon, by brief, for Pacific Legal Foundation, Greg Hill, Jim Forsythe, William O'Brien, Pamela Tucker, Michael Balboni, Fenton Groen, and Andrew Sanborn, as amici curiae.

DALIANIS, C.J.

This is an appeal and cross-appeal from an order of the Superior Court (Lewis, J.) ruling in favor of the petitioners, eight individual New Hampshire residents and taxpayers and LRS Technology Services, LLC (LRS), on their petition for a declaratory judgment that the Education Tax Credit program (the program), see RSA ch. 77–G (Supp. 2013), violates Part II, Article 83 of the State Constitution. Defending the program are the State and the intervenors. The intervenors are three New Hampshire citizens, who wish their children to receive scholarship funds under the program, and the Network for Educational Opportunity, a non-profit organization involved with the program. The trial court ruled that the petitioners had standing under RSA 491:22, I (Supp. 2013). We do not reach the merits of the petitioners' declaratory judgment petition because we conclude that: (1) the 2012 amendment to RSA 491:22, I, which allows taxpayers to establish standing without showing that their personal rights have been impaired or prejudiced, is unconstitutional; and (2) absent that amendment, the petitioners have no standing to bring their constitutional claim. Accordingly, we vacate and remand with instructions to dismiss the petition.

I. Background

The trial court found, or the record establishes, the following facts. The legislature enacted the program in June 2012, overriding a gubernatorial veto. The program creates a tax credit for business organizations and enterprises that contribute to scholarship organizations that have been approved by the New Hampshire Department of Revenue Administration (DRA) to award scholarships to eligible students under the program. See RSA 77–G:1, VIII, XVII, :2–:5. For each contribution made to a qualifying scholarship organization, "a business organization or business enterprise may claim a credit equal to 85 percent of the contribution against the business profits tax due ... or against the business enterprise tax due ... or apportioned against both [taxes]." RSA 77–G:3. The program caps "[t]he aggregate of tax credits" granted to all taxpayers at $3.4 million for the first program year, which began on January 1, 2013, see Laws 2012, 287:5, and at $5.1 million for the second program year. RSA 77–G:4, I. An eligible student may receive a scholarship through the program "to attend (1) a nonpublic school ... or (2) a public school located outside of the [student's] school district," or to defray homeschooling expenses. RSA 77–G:2, I(a). In the program's first year, "[t]he average value of all scholarships awarded by a scholarship organization," excluding scholarships to homeschooling students, "shall not exceed $2,500." RSA 77–G:2, I(b). In the first year of the program, homeschooled students are eligible to receive scholarships equal to twenty-five percent of $2,500, or $625. RSA 77–G:1, VI. The program requires DRA to adjust those amounts annually. RSA 77–G:2, I(b). The program requires the State Department of Education to issue "scholarship stabilization grant[s]" to school districts when "the combined amount of reductions in adequacy cost pursuant to RSA 77–G:7 from students receiving scholarships ... and who were in attendance in that district in the year prior to receiving the scholarships" is "greater than ¼ of one percent of a school district's total voted appropriations for the year prior to the scholarship year." RSA 77–G:8, I.

The trial court concluded that the program violates Part II, Article 83 of the State Constitution, which provides, in pertinent part, that "no money raised by taxation shall ever be granted or applied for the use of the schools or institutions of any religious sect or denomination." The court determined that the tax credits constitute "money raised by taxation" because they comprise "[m]oney that would otherwise be flowing to the government." The court ruled that the tax credits violate the prohibition against applying "money raised by taxation" for use by religious schools because they "inevitably go toward educational expenses at nonpublic ‘religious’ schools." After deeming the provisions in RSA chapter 77–G that violate Part II, Article 83 of the State Constitution to be severable from the remaining provisions, the court ordered that "the program may proceed, except that scholarship monies may not go to ‘schools or institutions of any religious sect or denomination’ within the meaning of ... Part II, Article 83, and the associated tax credits are likewise disallowed." This appeal by the State and the intervenors and cross-appeal by the petitioners followed.

II. Analysis

A. Constitutionality of 2012 Amendment to RSA 491:22, I

We begin by addressing the intervenors' assertion that the 2012 amendment to RSA 491:22, I, pursuant to which the trial court ruled that the petitioners had standing, is unconstitutional. We review the constitutionality of a statute de novo. Eby v. State of N.H., 166 N.H. 321, 327, 96 A.3d 942 (2014). "In reviewing a constitutional challenge to a legislative act, we presume the act to be constitutional and will not declare it invalid except on inescapable grounds; that is, unless a clear and substantial conflict exists between the act and the constitution." Id. (quotation omitted). We will not construe a statute "to be unconstitutional when it is susceptible to a construction rendering it constitutional." Huckins v. McSweeney , 166 N.H. 176, 90 A.3d 1236, 1239 (2014) (quotation omitted). "When doubts exist as to the constitutionality of a statute, those doubts must be resolved in favor of its constitutionality." Id. at 179, 90 A.3d at 1239 (quotation omitted).

Before the 2012 amendment, RSA 491:22, I (2010) provided:

Any person claiming a present legal or equitable right or title may maintain a petition against any person claiming adversely to such right or title to determine the question as between the parties, and the court's judgment or decree thereon shall be conclusive. The existence of an adequate remedy at law or in equity shall not preclude any person from obtaining such declaratory relief. However, the provisions of this paragraph shall not affect the burden of proof under RSA 491:22–a or permit awards of costs and attorney's fees under RSA 491:22–b in declaratory judgment actions that are not for the purpose of determining insurance coverage.

As amended in 2012, RSA 491:22, I, provides:

Any person claiming a present legal or equitable right or title may maintain a petition against any person claiming adversely to such right or title to determine the question as between the parties, and the court's judgment or decree thereon shall be conclusive. The taxpayers of a taxing district in this state shall be deemed to have an equitable right and interest in the preservation of an orderly and lawful

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