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Wiley Mission, A Religious Corporation v. State of New Jersey

August 25, 2011

WILEY MISSION, A RELIGIOUS CORPORATION, PLAINTIFF,
v.
STATE OF NEW JERSEY, DEPARTMENT OF COMMUNITY AFFAIRS DEFENDANTS.



The opinion of the court was delivered by: Kugler, United States District Judge:

NOT FOR PUBLICATION (Doc. Nos. 14, 18)

OPINION

This case involves a conflict between a church's internal organizational structure and a neutral and generally applicable state law. Plaintiff Wiley Mission, Inc. (the "Church") operates a continuing care retirement center ("CCRC"). Because the CCRC is a ministry of the Church, it is not separately incorporated and the Church's spiritual leaders are the CCRC's governing body. The State of New Jersey regulates CCRCs in order to protect senior citizens. Pursuant to N.J. Stat. Ann. § 52:27D-345(e), every CCRC must include a CCRC resident as a full voting member of the CCRC's governing body. The statute effectively requires the Church to include a non-Church member in its governing body or lose its license to operate the CCRC.

The Church challenges N.J. Stat. Ann. § 52:27D-345(e) as violating its First-Amendment and Equal-Protection rights as well as analogous provisions in the New Jersey Constitution. The Church seeks a declaratory judgment that N.J. Stat. Ann. § 52:27D-345(e) is unconstitutional as applied to it and an injunction preventing the Department of Community Affairs (the "Department") from enforcing the provision against the Church. Both parties now move for summary judgment (Doc. Nos. 14, 18). As explained below, the Church's free-exercise and equal-protection claims fail because N.J. Stat. Ann. § 52:27D-345(e) is neutral, generally applicable, and rationally related to a legitimate government purpose. However, strict scrutiny applies regarding the Church's freedom-of-association claim because the Church is an "expressive association." Because the Department presents no evidence that N.J. Stat. Ann. § 52:27D-345(e) is narrowly tailored to protect senior citizens, the Court grants the Church summary judgment regarding its freedom-of-association claim, and permanently enjoins the State of New Jersey, its subdivisions, agents, servants and employees from enforcing N.J. Stat. Ann. § 52:27D-345(e) against the Church.

I.BACKGROUND*fn1

A.The Wiley Mission

The Church is a non-denominational religious corporation chartered pursuant to N.J. Stat. Ann. § 16:1-1. The Church has tax exempt status under § 501(c)(3) of the Internal Revenue Code.*fn2 "The goal of the Church is to carry out the Great Commission as given by Jesus Christ in Matthew 28:18-20" and "reveal[] Christ as the Answer to life." (Gilmore Aff. ¶¶ 4, 12). To that end, the Church engages in "worship, evangelization, religious education, and social ministries." (Gilmore Aff. ¶ 12).

In the early 1940s, to further its goals of realizing the "Great Commission" and "revealing Christ," the Church began to minister to the elderly.*fn3 (Id. ¶ 12). The Church eventually established a permanent CCRC in Marlton, New Jersey. (Id. ¶ 13). The CCRC "serves the physical and spiritual needs of aged and/or infirm persons." (Id. ¶ 12). The CCRC is "part of a 'life-cycle' ministry" that "strives to serve all ages and all areas of life, the spiritual as well as the physical." (Id.). It is a "core ministry" of the Church. (Id. ¶ 13).

The CCRC is not separately incorporated. It operates as part of the Church. The Church is governed by a Board of Trustees. Pursuant to the Church's Bylaws, the "Board of Trustees shall have entire charge and control of the Wiley Christian Retirement Community." (Compl. Ex. B, at 4). Thus, the Board governs the Church, the CCRC, and all other Church ministries.

The Board consists of at least seven but not more than eleven members who are elected for three-year staggered terms. The Bylaws provide that the "Trustees are the spiritual Elders of the Church." (Id.). The Bylaws impose the following qualifications for Trustees:

Each Trustee shall be a Believer in Jesus Christ and shall have been a member in good standing of [the Church] for a minimum of five (5) continuous years. In addition, the [Church] will be mindful of definite and specific Biblical standards when considering the qualifications of any person or persons to serve on the Board of Trustees. Turning to the Word of God, the admonitions of 1 Tim. 3:1-7 and Titus 1:5-9 shall be the guiding principles of this body. In furtherance of those principles, the following guidelines must be followed in choosing a member to serve on the Board of Trustees:

1. The candidate must be of good report, grave, sober, vigilant, of good behavior and not given to wine, strong drink or tobacco.

2. The candidate should be able to testify without qualification to a definite new birth and willing to live a Holy Life, "Be ye Holy as I am Holy. (Id. at 5). The Bylaws require that Board members retire at the age of 75. The Board of Trustees makes decisions by a majority vote of a quorum of its members. A quorum is six members, or, if the Board consists of less than eleven members, a quorum is one-half of the full membership of the Board. The Board is "responsible for guiding the Church according to God's will." (Gilmore Aff. ¶ 10).

The Church is significantly involved in the CCRC's management, operation, and programming. Regarding management, Gary F. Gilmore is the CCRC's President and Chief Executive Officer. Mr. Gilmore is a spiritual "elder" of the Church and a member of the Board. Victor A. Flamini is the CCRC's Chief Financial Officer. Mr. Flamini is also a spiritual "elder" of the Church and a member of the Board. Regarding operation, the Church runs the CCRC as a "Christian Retirement Community." (Gilmore Aff. Ex. 5, at WILEY007). One of the CCRC's brochures reads: "Since 1938 we have been providing for the physical and spiritual needs of our retired residents. Our purpose is, and has always been, to reveal Jesus Christ as the answer to life, now and forever." (Id.). Regarding programming, the Church is located on the CCRC premises and members of the church appear to be significantly involved in the CCRC's activities. For example, the Church operates what it calls the "Stephen Ministry," which trains "lay persons [to] provide one-to-one 'distinctively' Christian care to individuals facing life challenges." (Gilmore Aff. Ex. 4, at WM0086-87) (emphasis in original). The Church trained several of its members to work with CCRC residents. (Id.).

The CCRC is open to all who wish to become residents without regard to religious beliefs. Residents are not required to be members of the Church.*fn4 Residents are required to sign a contract with the Church and pay for certain services.*fn5 Currently, the CCRC consists of 137 independent-living residential units, 53 residential healthcare beds, and 67 skilled nursing beds. The Department does not argue that the Church fails to operate the CCRC in a satisfactory or safe manner. In fact, the evidence shows that CCRC residents and their families are exceptionally satisfied with and appreciative of the high quality of care that the Church provides through the CCRC. (See Gilmore Aff. Ex. 4, at WM0091-96) (providing results from the CCRC's 2009 "resident/family satisfaction survey.").

B.The Statutory Provision at Issue as Applied to the Church

Pursuant to the Continuing Care Retirement Community Regulation and Financial Disclosure Act, N.J. Stat. Ann § 52:27D-330 et seq. (the "Act"), the Department regulates all CCRCs within the State. In order to ensure compliance with state rules and regulations, all CCRCs must obtain and maintain a valid Certificate of Authority ("COA") from the Department. N.J. Stat. Ann. § 52:27D-333(a). In order to maintain a valid COA, a CCRC must file an annual disclosure statement that demonstrates compliance with applicable rules. In 2007, in response to lobbying efforts by the Resident Associations of New Jersey, the New Jersey State Legislature amended the Act to require:

The board of directors or other governing body of a facility shall include at least one resident as a full voting member of the board or body. Resident members shall be nominated by the elected representatives of the residents and selected by the board of directors or other governing body.

N.J. Stat. Ann. § 52:27D-345(e). The amendment took effect beginning with the 2009 annual disclosure statements.*fn6 (Cert. of Ronald F. Cavanaugh, ¶ 6). Beginning in 2009, the Department required all CCRCs to identify in their annual disclosure statement the resident representative who satisfies N.J. Stat. Ann. § 52:27D-345(e). (Id.).

The Church's CCRC was first certified by the Department in 1990. The Church submitted annual disclosure statements every year thereafter, and the Department issued the Church a COA each year without incident until 2009. (Id. ¶ 5).

There is a dispute regarding the Church's 2009 and 2010 disclosure statements. According to Ronald F. Cavanaugh, who works for the Department and is responsible for reviewing CCRC disclosure statements, the Church "listed the Reverend Cecil P. Gilmore, Jr., as the current resident trustee on the Board of Trustees of the CCRC on its annual recertification applications submitted to the Department for 2009 and 2010." *fn7 (Cavanaugh Cert. ¶ 10). Thus, Mr. Cavanaugh claims that "[i]t was not until the filing of this lawsuit that the Department began to suspect that Wiley Mission may not be in full compliance with the requirements of the Act." (Id. ¶ 11).

The Church disputes Mr. Cavanaugh's claims. According to Mr. Gilmore, the Church CEO, the Church did not identify a resident representative on its 2009 disclosure statement. (Supp. Gilmore Aff. ¶ 4, Ex. A). The Church submits an affidavit from Mr. Gilmore authenticating its 2009 disclosure statement, which does not identify a resident representative.

(Id. ¶ 4). Mr. Gilmore states that after he filed the 2009 disclosure statement in June 2009, "Mr. Cavanaugh contacted me in late July or early August of 2009 and informed me that I had to name a 'resident trustee' in accordance with the new law or Wiley would be 'shut down' for non-compliance." (Id. ¶ 5) (emphasis in original). Mr. Gilmore further states that during a subsequent conversation with Mr. Cavanaugh, he "specifically indicated to Mr. Cavanaugh that there was no Board member elected by the resident[s] and that while the Reverend Cecil P. Gilmore, Jr., a member of the Board of Trustees, did reside in the CCRC, he was not elected by the residents, and he did not have a life care contract."*fn8 (Id. ¶ 6). Mr. Gilmore claims that Mr. Cavanaugh told him in response that "he would reflect Rev. Gilmore as the resident trustee on Wiley's annual registration statement for 'this year' but . . . that Wiley had to add an elected resident Board member going forward." (Id. ¶ 7). The Department subsequently issued the Church a COA for 2009.

Mr. Gilmore states that he "did not fill in the blank requesting the name of the resident Board member" when completing the Church's 2010 disclosure statement. (Id. ¶ 8). In response to the Church's 2010 disclosure statement, Mr. Cavanaugh sent Mr. Gilmore two letters dated August 19, 2010. (Id. ¶ 8, Ex.'s B-1, B-2). The first letter identifies three unrelated deficiencies in the Church's disclosure statement. The second letter states:

Our records indicate that the current resident trustee for Wiley Christian Retirement Community is Cecil P. Gilmore, Jr. Unless the Department receives written confirmation to the contrary, within the next 10 business days, we will assume that there has been no change and Mr. Gilmore will continue to act as the resident trustee.

(Id. Ex. B-2). According to Mr. Gilmore, "[s]ince there was no change from what I had indicated to Mr. Cavanaugh the previous time, I personally wrote in Rev. Gilmore's name as the resident trustee, as instructed and returned the form on September 1, 2010 by fax." (Id. ¶ 9).

C.The Complaint and Summary Judgment Motions

The Church filed the Complaint on June 14, 2010. The Church seeks "declaratory and injunctive relief from" N.J. Stat. Ann. § 52:27D-345(e). (Compl. ¶ 1). The Church asserts claims under 42 U.S.C. § 1983 for violations of its First Amendment rights to freedom of religion and freedom of association as well as violations of the Fourteenth Amendment's Equal Protection Clause. The Church asserts claims under the New Jersey Constitution for violation of it free-exercise and associational rights.

In January 2011, the Church moved for summary judgment, seeking a permanent injunction prohibiting the Department from enforcing N.J. Stat. Ann. § 52:27D-345(e) against the Church. The Church argues that N.J. Stat. Ann. § 52:27D-345(e) is unconstitutional because it directly interferes with the Church's governance, which the First Amendment protects from state interference. The Department opposes the Church's motion and cross-moves for summary judgment. The Department argues that the Church's claims are not ripe. The Department also argues that the Church's First Amendment claims fail on the merits because N.J. Stat. Ann. § 52:27D-345(e) is a neutral law that is generally applicable and there is no evidence that the New Jersey State Legislature adopted the law for the purpose of interfering with church governance. According to the Department, because N.J. Stat. Ann. § 52:27D-345(e) is neutral and generally applicable, the Court must apply the rational basis standard of review. Under that standard, the Court must uphold the law, according to the Department, because it is rationally related to the legitimate government goal of protecting the elderly and disabled from exploitation and abuse by CCRCs. The Department argues that rational basis review also applies to the Church's freedom-of-association and equal-protection claims.

II.LEGAL STANDARD

Summary judgment is appropriate where the Court is satisfied that "there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986). A genuine issue of material fact exists only if the evidence is such that a reasonable jury could find for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). When the Court weighs the evidence presented by the parties, the Court is not to make credibility determinations regarding witness testimony. Sunoco, Inc. v. MX Wholesale Fuel Corp., 565 F. Supp. 2d 572, 575 (D.N.J. 2008). "The evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson, 477 U.S. at 255.

However, to defeat a motion for summary judgment, the nonmoving party must present competent evidence that would be admissible at trial. See Stelwagon Mfg. Co. v. Tarmac Roofing Sys., 63 F.3d 1267, 1275 n.17 (3d Cir. 1995). The nonmoving party "may not rest upon the mere allegations or denials of" its pleadings and must present more than just "bare assertions [or] conclusory allegations or suspicions" to establish the existence of a genuine issue of material fact. Fireman's Ins. Co. of Newark, N.J. v. DuFresne, 676 F.2d 965, 969 (3d Cir. 1982) (citation omitted); see Fed. R. Civ. P. 56(e). "A party's failure to make a showing that is 'sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial,' mandates the entry of summary judgment." Watson v. Eastman Kodak Co., 235 F.3d 851, 857-58 (3d Cir. 2000) (quoting Celotex Corp., 477 U.S. at 322).

III.DISCUSSION

A.Ripeness

The Department's ripeness argument is poorly framed. The Department argues that the Court should dismiss the Complaint because the dispute was not ripe "at the time the Complaint was filed" because, at that time, the Department believed that the Church was in full compliance with N.J. Stat. Ann. § 52:27D-345(e). (Defs.' Br. at 8-10). The Department asserts that it was not until the Church initiated this litigation that it learned that the Church may be in violation of N.J. Stat. Ann. § 52:27D-345(e). Thus, the Department concludes that the dispute is not ripe because "the Department has not been afforded the opportunity to review this matter, and conduct an investigation into this matter." (Defs.' Br. at 10). Stated more succinctly, the Department argues that the Church's claims are not ripe because the Department has not actually revoked the Church's COA for violating N.J. Stat. Ann. § 52:27D-345(e).*fn9

The Department's argument is misguided. "The Declaratory Judgment Act permits a federal court the discretion to 'declare the rights and other legal relations of any interested party seeking such declaration,' when there is a 'case of actual controversy.'" Abraham v. Del. Dep't of Corr., 331 F. App'x. 929, 931 (3d Cir. 2009) (quoting 28 U.S.C. ยง 2201). The Supreme Court has established a two-part test for determining whether a claim is ripe for adjudication: (1) courts must "evaluate both the fitness of the issues for judicial decision; and (2) the hardship to the parties of withholding court ...


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