Lamont v. Schultz

• Decision Date: 02 October 1990
• Docket Number: No. 88 CIV 0684 (LBS).,88 CIV 0684 (LBS).
• Citation: 748 F. Supp. 1043
• Parties: Corliss LAMONT, et al., Plaintiffs, v. George P. SCHULTZ, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

748 F. Supp. 1043

Corliss LAMONT, et al., Plaintiffs, v. George P. SCHULTZ, et al., Defendants.

No. 88 CIV 0684 (LBS).

United States District Court, S.D. New York.

October 2, 1990.

C. Edwin Baker, American Civil Liberties Union Found., New York City (John A. Powell, of counsel), Herman Schwartz, American University, Washington, D.C., for plaintiffs.

Otto G. Obermaier, U.S. Atty., S.D.N.Y., New York City, Bernard W. Bell, Asst. U.S. Atty., for defendants.

OPINION

SAND, District Judge.

This is a federal taxpayers' suit in which plaintiffs challenge as a violation of the Establishment Clause of the First Amendment the appropriation and expenditure of public funds by the United States for the construction, maintenance and operation of religious schools abroad. Defendants claim that plaintiffs lack standing to bring this suit; that plaintiffs claims present non-justiciable political questions; and that the Establishment Clause does not apply to United States government funded programs overseas, or alternatively, if it applies, it does not bar the challenged grants. The case is before this Court on plaintiffs' motion for summary judgment and defendants' cross motion for summary judgment.

In February, 1988, plaintiffs brought an action for declaratory and injunctive relief on the above mentioned claim. Defendants made a motion to dismiss alleging plaintiffs lacked standing. On April 6, 1988, this Court issued a Memorandum Endorsement denying defendants' motion to dismiss, relying on Flast v. Cohen, 392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968) and Bowen v. Kendrick, 487 U.S. 589, 108 S.Ct. 2562, 101 L.Ed.2d 520 (1988). In light of recent case law this Court has agreed to reconsider the standing issue. The standing question as well as two other novel issues discussed below are controlling issues of law which may terminate this litigation. For the reasons discussed below, the Court will certify these questions to the Second Circuit before reaching a final judgment.

I. Background

The American Schools and Hospitals Abroad Program ("ASHA") was established under the Foreign Assistance Act of 1961 ("Act"). 22 U.S.C. §§ 2151-2429a (1988). ASHA is one of a number of programs developed under the Act to assist developing countries acquire "the knowledge and resources essential to development and to build the economic, political, and social institutions which will improve the quality of their lives." 22 U.S.C. § 2151(a). Specifically, ASHA's purpose is to provide funding for schools outside the United States that are founded or sponsored by United States citizens and that serve as "study and demonstration centers for ideas and practices of the United States." 22 U.S.C. § 2174(a).

The program is administered by the Agency for International Development ("AID"), which awards grants to institutions or individuals in the United States that sponsor foreign schools. All of the grant funds are transferred by the United States sponsor directly to the overseas schools. Administration and financial accounting of the grant is the responsibility of the United States sponsor. Likewise, AID communicates any concerns and information regarding the grant to the United States sponsor and has virtually no contact with the foreign affiliate.

The ASHA office solicits and reviews grant applications before making recommendations to the Administrator of AID who is responsible for all final decisions. To assist in making grant decisions AID has published criteria for selecting grantees in the Federal Register. See 44 Fed. Reg. No. 228 (Nov. 26, 1979) (not codified in C.F.R.). Most of the criteria request general information about the foreign institution and its ability to promote United States values. Only one of the eleven criteria discusses religion. Criterion eight provides that "the overseas institution must be open to all persons regardless of race, religion, sex, color or national origin ... and that assistance may not be used to train persons for religious pursuits or to construct buildings or other facilities intended for worship or religious instruction." 44 Fed.Reg. No. 228 (Nov. 26, 1979). None of the ASHA criteria bar religiously-affiliated schools or require a determination of whether the institution is pervasively sectarian.

II. Threshold Issues

Before this Court may apply any law relating to the application of the Establishment Clause a number of threshold issues must be resolved. The first question is whether the plaintiffs, as United States taxpayers, have standing to ask the Court to address the violations they allege. If plaintiffs succeed on the standing claim the next inquiry is whether the nature of the violation alleged is a political question beyond the competence of this Court. If there is no bar from the standing or political question doctrines, the Court must decide whether Establishment Clause principles and standards apply to overseas programs funded by the government that were founded by and continue to involve United States sectarian non-profit organizations.

A. Standing

A resolution of the standing issue in this action is determined primarily by reference to three taxpayer cases, all involving Establishment Clause challenges. The holdings of these cases are built on more general standing concepts developed by the Supreme Court over the period of a decade beginning with Allen v. Wright, 468 U.S. 737, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984). In Allen, the Supreme Court made it clear that the doctrine of standing is rooted in Article III of the United States Constitution, which limits federal courts to adjudicating actual "cases and controversies." Id. at 750, 104 S.Ct. at 3324. If a plaintiff fails to establish that an action presents an actual case or controversy capable of judicial resolution, a court lacks subject matter jurisdiction. See Valley Forge Christian College v. Americans United, 454 U.S. 464, 483, 102 S.Ct. 752, 764, 70 L.Ed.2d 700 (1982). The general rule is that in order to have standing a plaintiff must allege a personal injury that is reasonably traceable to the defendants' alleged unlawful conduct and which is likely to be redressed by the relief requested. Allen, 468 U.S. at 751, 104 S.Ct. at 3324.

Standing requirements for federal taxpayer suits are quite specific. Since the days of Frothingham v. Mellon, 262 U.S. 447, 43 S.Ct. 597, 67 L.Ed. 1078 (1923), the Supreme Court has consistently held that federal taxpayers do not have standing to challenge how the federal government uses tax revenues. See Ex parte Levitt, 302 U.S. 633, 58 S.Ct. 1, 82 L.Ed. 493 (1937); Schlesinger v. Reservists Committee to Stop the War, 418 U.S. 208, 94 S.Ct. 2925, 41 L.Ed.2d 706 (1974); United States v. SCRAP, 412 U.S. 669, 93 S.Ct. 2405, 37 L.Ed.2d 254 (1973). There is, however, a narrow exception. In Flast, the first of the three cases that are central to the standing issue in this action, the Court held that the Frothingham barrier should be lowered in one specific instance. 392 U.S. at 102-06, 88 S.Ct. at 1953-55. Standing should be present for taxpayer challenges to a federal statute on the ground that it violated the Establishment Clause of the First Amendment when the allegedly unconstitutional action was authorized by Congress under the Taxing and Spending Clause of Article I, § 8. Id.

In Flast, the Court outlined the standards plaintiffs must meet to satisfy the Article III case and controversy nexus requirements. First, the "taxpayer must establish a logical link between taxpayers status and the type of legislative enactment attacked." Second, the "taxpayer must establish a nexus between taxpayer status and the precise nature of the constitutional infringement alleged." 392 U.S. at 102, 88 S.Ct. at 1954. When both these requirements are met in an Establishment Clause violation claim, a federal taxpayer suit is properly before an Article III court.

Plaintiffs in the present case fit squarely within the Flast nexus requirements. First, they challenge expenditures made under a congressional appropriation pursuant to the Taxing and Spending Clause. Specifically, plaintiffs challenge expenditures under 22 U.S.C. § 2174(c). Plaintiffs meet the second test by challenging a congressional enactment that allegedly exceeds specific limits imposed on the Taxing and Spending Clause.

The Supreme Court affirmed Flast and expanded the analysis in Kendrick, 487 U.S. 589, 618, 108 S.Ct. 2562, 2579, 101 L.Ed.2d 520. The Court held that in Establishment Clause claims, taxpayer standing is available to challenge executive branch administration of a statute enacted pursuant to Taxing and Spending Clause authority. Id. at 618, 108 S.Ct. at 2579. In allowing a taxpayer standing to challenge a statute as applied as well as on its face, the Court stated "it is no less a challenge to Congress' taxing and spending power simply because the funding authorized by Congress has flowed through and been administered by the executive branch." Id. at 619, 108 S.Ct. at 2579. This is the second case of significance to this action since plaintiffs' challenge is based primarily on an "as applied" theory.

The third case that impacts significantly on plaintiffs' standing is In re United States Catholic Conference, 885 F.2d 1020 (2nd Cir.1989), cert. denied, ___ U.S. ___, 110 S.Ct. 1946, 109 L.Ed.2d 309 (1990). ("USCC"). In USCC, plaintiffs alleged that the Internal Revenue Service ("IRS"), the executive branch agency responsible for oversight under the Internal Revenue Code ("Code"), was not performing its job properly. Id. at 1028. Plaintiffs claimed that the IRS was not enforcing the Code's prohibition on lobbying by religious tax-exempt organizations. The allegation was that by not halting the lobbying practices of these organizations, the IRS was acting in contravention of the express terms of the statute and disregarding congressional intent. Id. at 1027-28. The Second Circuit held that plaintiffs were not challenging the...