The opinion of the court was delivered by: DEBEVOISE
This is an application by plaintiffs for a temporary restraining order and preliminary injunction.
An understanding of the procedural history of this case and its related state court case is necessary in order to address the merits of plaintiffs' application.
On November 15, 1979 the New Jersey State Board of Higher Education and T. Edward Hollander, Chancellor of the New Jersey Department of Higher Education, instituted an action in the Superior Court of New Jersey, Chancery Division, naming as defendants The Board of Directors of Shelton College and Glenn Rogers and Carl McIntire, two officers of the College. The complaint sought declaratory and injunctive relief, alleging that Shelton was offering courses of instruction for credit without the requisite licensing by the State Board. The Superior Court forthwith issued a temporary restraining order enjoining Shelton's educational and instructional activities.
On November 19, 1979 the plaintiffs in the present case filed in this Court an action under 42 U.S.C. § 1983 alleging, among other things, that the efforts of the State Board to prevent Shelton's educational and instructional activities unless it complied with New Jersey's licensing scheme violated their rights to the free exercise of religion and unduly entangled the State in the affairs of a religious institution. The plaintiffs in the federal court action are Shelton, the New Jersey-Philadelphia Presbytery of the Bible Presbyterian Church (the regional ruling body of the Bible Presbyterian Church), Bible Presbyterian Church of Collingswood, New Jersey, four full-time students at Shelton, two parents of students, and a professor of mathematics and chemistry at Shelton. The defendants in the federal court action are the State Board and several individual state officials charged with the enforcement of the licensing regulations.
The federal plaintiffs sought a preliminary injunction. After an evidentiary hearing I entered an order which, among other things, enjoined the federal defendants from taking or permitting the taking of any action having the effect of preventing Shelton from engaging in any religious, teaching or educational activities, or from publicizing or advertising such activities. I did not reach the principal issue, namely, whether the State Board's licensing procedures, if applicable to Shelton, would constitute a violation of the Religion Clauses of the First Amendment. I abstained as to that issue and stayed the federal proceedings until the state court had an opportunity to determine whether the licensing requirements applied to a religious institution such as Shelton. If they do not, there would be no need to reach the difficult constitutional issue posed in this case, Railroad Comm'n v. Pullman Co., 312 U.S. 496, 61 S. Ct. 643, 85 L. Ed. 971 (1941).
Thereafter, the litigation proceeded on two fronts. Both sides appealed this Court's interlocutory order, which both granted and denied injunctive relief, to the Court of Appeals for the Third Circuit. The state court action went to trial.
On November 7, 1980 the state court rendered its opinion. The opinion held: (i) subjecting Shelton to the New Jersey licensing and approval scheme is "not violative of the free exercise clause and provide(s) for minimal and non-excessive entanglement between church and state" and (ii) Shelton's rights of free speech, guaranteed under the First and Fourteenth Amendments of the Constitution, would be impaired if the court denied Shelton the right to call itself a "College", notwithstanding the prohibitory language of N.J.S.A. 18A:67-2.
The state court issued a permanent injunction on December 10, 1980. It prohibited Shelton from awarding a degree "for any coursework or course of instruction which has transpired in whole or in part at Shelton College in the State of New Jersey"; it declared that Shelton must obtain a license from the State Board before it awards any collegiate degrees in New Jersey; it required that Shelton delete all references in its publications which state that Shelton will award collegiate degrees until it is licensed by the State Board; and it ordered that Shelton "shall cause to be inserted in all applications for admission to Shelton College a statement that, pursuant to the order of this Court, said institution is prohibited from awarding baccalaureate or collegiate degrees for coursework which takes place in whole or in part in the State of New Jersey, unless or until a license is issued to defendants by the New Jersey State Board of Higher Education".
On January 16, 1981, Shelton and the other state court defendants noticed an appeal to the Appellate Division of the Superior Court of New Jersey. That appeal is pending.
On April 14, 1981 the Court of Appeals for the Third Circuit filed its opinion, Docket Nos. 80-1253, 80-1254 and 80-2703. The majority opinion held that Younger abstention, Younger v. Harris, 401 U.S. 37, 91 S. Ct. 746, 27 L. Ed. 2d 669 (1971), is inapplicable in this case by reason of the presence of plaintiffs in the federal action who were not parties to the state action. Thus, this Court's limited injunctive relief was proper. The Court of Appeals upheld a Pullman abstention on the constitutional issue and the entry of a Pullman -type stay "with a retention of jurisdiction to consider further injunctive relief when the state court construes the statute and regulations". Slip Op., 38. In affirming this Court's exercise of its discretion to abstain under the Pullman doctrine, the Court of Appeals noted, perhaps pointedly, that "the district court did not leave the plaintiffs entirely unprotected. It reserved jurisdiction to consider further applications for interim relief." Slip Op., 38-40.
The federal plaintiffs now seek such interim relief. It is their contention that the state court has interpreted New Jersey's college licensing statutes in a manner which violates their First Amendment religious rights, that the injunctive order implementing this determination of the state court will, unless set aside, cause the demise of Shelton College, a religious institution, and that if the federal plaintiffs are required to wait until the state action proceeds through the Appellate Division of the New Jersey Superior Court, the New Jersey Supreme Court and perhaps the United States Supreme Court, ultimate success would be hollow indeed, as the religious institution they sought to preserve would long have been interred.
The federal plaintiffs now seek a temporary restraint and a preliminary injunction restraining the federal defendants from enforcing or implementing the state court's order of December 10, 1980 until such time as the Supreme Court of New Jersey definitively construes the applicable New Jersey statutes and regulations.
I incorporate herein the findings of fact which are set forth in my original opinion, 482 F. Supp. 968 (D.N.J.1980). I do not believe that they are in dispute. It was established that Shelton is a religious institution and that its students, faculty and parents regard it as a vehicle to further their all-pervasive religious beliefs and practices.
Additional facts have been established by affidavits and testimony introduced in support of the federal plaintiffs' present application.
During the pendency of these actions in the state and federal courts Shelton has been unable to grant degrees to students who have completed the academic requirements of the College. The disclaimer which Shelton is required under the state court order to insert in all its publications and on all application forms sent to prospective students has a highly destructive impact upon everything else which appears in those publications. There is nothing to suggest that the publications do not truthfully describe the kind of education which Shelton offers and the religious orientation of every phase of its program. There is nothing to suggest that, absent the state mandated material, any prospective parent or student would be misled in any way about Shelton's educational program.
After attempting to operate in Florida for a period of approximately eight years, Shelton returned to its Cape May campus in the summer of 1979. During the 1979-80 school year it began operations with 28 students. This increased to only 41 to 35 students in the 1980-81 school year. Moreover, as of the present time it has only six applicants for its fall, 1981 freshman class, none of whom have yet been determined to be qualified for admission. It is reasonable to conclude that in part, at least, the College's enrollment has been adversely affected by the inhibitions imposed upon it by the State.
Shelton has experienced a steady drop in the amount of contributions it receives from the public since the time of the institution of the state court action. The pending state litigation, the inability of the College to grant its degrees, the disclaimer the College is required to issue and resulting adverse ...