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American Civil Liberties Union of New Jersey v. Hendricks

Supreme Court of New Jersey

May 2, 2018

AMERICAN CIVIL LIBERTIES UNION OF NEW JERSEY, UNITARIAN UNIVERSALIST LEGISLATIVE MINISTRY OF NEW JERSEY, GLORIA SCHOR ANDERSEN, PENNY POSTEL, and WILLIAM FLYNN, Appellants-Respondents,
v.
ROCHELLE HENDRICKS, Secretary of Higher Education for the State of New Jersey, in her official capacity; and ANDREW P. SIDAMON-ERISTOFF, State Treasurer, State of New Jersey, in his official capacity, Respondents-Appellants.

          Argued October 23, 2017

          On certification to the Superior Court, Appellate Division, whose opinion is reported at 445 N.J.Super. 452 (App. Div. 2016).

          Stuart M. Feinblatt, Assistant Attorney General, argued the cause for appellant (Christopher S. Porrino, Attorney General, attorney; Stuart M. Feinblatt, of counsel and on the briefs; Jennifer J. McGruther, on the briefs).

          Edward L. Barocas argued the cause for respondents (American Civil Liberties Union of New Jersey Foundation; Barry, Corrado & Grassi; American Civil Liberties Union Program on Freedom of Religion and Belief; Americans United for Separation of Church and State; and American Civil Liberties Union - Women's Rights Project, attorneys; Edward L. Barocas, Jeanne M. LoCicero, Frank L. Corrado, Lenora Lapidus, on the brief, and Galen Sherwin of the New York bar, admitted pro hac vice, Daniel Mach of the District of Columbia bar, admitted pro hac vice, Alex J. Luchenitser of the District of Columbia bar, admitted pro hac vice, on the brief).

          Ross A. Lewin argued the cause for amicus curiae Princeton Theological Seminary (Drinker Biddle & Reath, attorneys; Ross A. Lewin, of counsel and on the brief).

          Avi Schick (Dentons US) of the New York bar, admitted pro hac vice, argued the cause for amicus curiae Beth Medrash Govoha (Dentons US, attorneys; Avi Schick, of counsel and on the brief, and Joel N. Bock on the brief).

          Gedalia M. Stern submitted a brief on behalf of amicus curiae the National Jewish Commission on Law and Public Affairs (Hafetz & Necheles; Lewin & Lewin; and Dennis Rapps, attorneys; Gedalia M. Stern, on the brief, and Nathan Lewin of the District of Columbia bar, admitted pro hac vice, and Dennis Rapps of the New York bar, admitted pro hac vice, of counsel and on the brief).

         PER CURIAM

         In this appeal, the Court addresses a challenge to state action based on, among other grounds, the Religious Aid Clause of Article I, Paragraph 3 of the State Constitution, specifically its prohibition against the use of public funds "for the maintenance of any minister or ministry." The challenge arose following the Secretary of Higher Education's (Secretary) determination to award grant monies to a yeshiva and to a theological seminary as part of a state program to subsidize facility and infrastructure projects for higher education institutions.

         In 2012, the "Building Our Future Bond Act" authorized the State to effectuate the means to subsidize capital improvement projects for institutions of higher education. Secretary of Education Rochelle Hendricks submitted a list of 176 higher education capital construction projects for forty-six institutions of higher education, which included funding for research laboratories, computerized classrooms, and interconnected cyber networks. Of the forty-six higher education institutions, at least nine were religiously affiliated.

         Two of those institutions were the Beth Medrash Govoha (the Yeshiva) and the Princeton Theological Seminary (the Seminary). The Yeshiva received a grant award totaling $10, 635, 747, including $5, 118, 000 to fund construction of a new library and research center, and $5, 517, 747 to fund construction of a three-story academic center. The Seminary was awarded three grants totaling $645, 323. One grant, for $241, 722, was to enhance the library's information technology system. A second grant, for $113, 711, was to be applied toward construction of a software training room. The Seminary subsequently withdrew its application for a third grant, for $289, 889.

         The American Civil Liberties Union of New Jersey (ACLU-NJ), joined by several other parties, filed a complaint in the Superior Court, Chancery Division, against Secretary and State Treasurer in their official capacities (State or State defendants). The complaint asserted that the grants to the Yeshiva and the Seminary were improper because they were awarded to sectarian schools that "provide sectarian educations and ministerial training, " in violation of Article I, Paragraphs 3 (the Religious Aid Clause) and 4 (the Establishment Clause) and Article VIII, Section 3, Paragraph 3 (the Donation Clause) of the State Constitution. Plaintiffs also alleged that the grants to the Yeshiva violated the Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49. The ACLU-NJ sought to enjoin the State defendants from disbursing the grant funds to the Yeshiva and the Seminary.

         On July 15, 2013, the trial court entered a Consent Order under which plaintiffs agreed to withdraw their request for an injunction and the State defendants agreed to give plaintiffs notice before disbursing any of the contested funds. Determining that the lawsuit was an appeal from an agency action, the trial court transferred jurisdiction of the case to the Appellate Division pursuant to Rule 2:2-3(a)(2).

         The Appellate Division invalidated the grants to the Yeshiva and the Seminary, holding that the grants violated the Religious Aid Clause of the State Constitution. 445 N.J.Super. 452, 454-55 (App. Div. 2016). The panel did not address the arguments pertaining to the alleged Establishment Clause or Donation Clause violations, or the LAD claim, id. at 477-78, because it determined that prior case law concerning the Religious Aid Clause required invalidation of the grants, Id. at 454-55. The Court granted certification. 228 N.J. 440-41 (2016).

         HELD: Judicial review is premature because factual disputes require resolution before the Secretary can make a properly informed decision on the grant applications. Because an informed administrative decision could not have been made without the benefit of a proper record, the matter is remanded to the Secretary, in order that a contested case proceeding be conducted prior to the ultimate administrative decision of the Secretary concerning the challenged grants.

         1. The New Jersey State Constitution provides as follows: "No person shall be deprived of the inestimable privilege of worshipping Almighty God in a manner agreeable to the dictates of his own conscience; nor under any pretense whatever be compelled to attend any place of worship contrary to his faith and judgment; nor shall any person be obliged to pay tithes, taxes, or other rates for building or repairing any church or churches, place or places of worship, or for the maintenance of any minister or ministry, contrary to what he believes to be right or has deliberately and voluntarily engaged to perform." N.J. Const, art. I, ¶ 3. (p. 18)

         2. Until recently, this Court's most authoritative prior application of the Religious Aid Clause arose in Resnick v. East Brunswick Township Board of Education, 77 N.J. 88 (1978). Resnick involved a challenge to a rule whereby religious groups could rent school facility space for religious worship and instruction during non-school hours at the same rates as charged to other secular community groups. Id. at 93-95, 98. The Court invalidated the rule, holding that Article I, Paragraph 3 of the State Constitution "prohibits any lease arrangement between a school board and religious groups under which the out-of-pocket expenses of the board directly attributable to the use by the religious body are not fully reimbursed." Id. at 103. However, the Court stated that the "constitutional infirmity may be remedied by an upward adjustment of rentals to religious groups which would fully cover extra utility, heating, administrative and janitorial costs which result from the leasing by these groups." Ibid. In sum, religious organizations were not excluded from a public benefit under Resnick, but were required to pay the entire freight for using the public facility, (pp. 19-21)

         3. The issue decided in Resnick is not the same as the question presently before the Court. Here, the Court is not concerned with the Yeshiva's and the Seminary's use of public space for worship or religious instruction purposes. Rather, the Court confronts the direct disbursement of grant funds for the improvement of physical and technological infrastructure of higher education facilities, a general and statewide benevolent program to which two entities seek to gain access like other higher education institutions. Specifically at issue is whether the disbursement of funds for avowed secular purposes becomes violative of our Religious Aid Clause when granted to sectarian schools that offer curricula steeped in theological study, as plaintiffs say. (p. 21)

         4. The arguments of the parties reveal competing views of (1) the sectarian nature of these institutions of higher education; (2) whether, in the setting of the curriculum and training programs of these particular institutions, the grant funds will necessarily be used in the "maintenance of any minister or ministry"; and (3) the adequacy of promised restrictions or other curbs against sectarian use of the grant proceeds. In light of the contrary assertions by the parties and the state of this record, the Court can only conclude that the facts are murky on critical details that will affect the constitutional conclusions to be reached. The record simply does not equip the Court to answer whether the award of the challenged grant funds to these two institutions violates the Religious Aid Clause, (pp. 4, 22-23)

         5. In assessing the Religious Aid Clause issue that was reached by the Appellate Division, there is a corollary question concerning whether the denial of the requested funds would run afoul of the federal Free Exercise Clause. U.S. Const. amend. I. Upon close examination of two Supreme Court cases highly relevant to the argument involving the federal Free Exercise Clause, the Court again finds that the inadequacies and unresolved questions about the present record hobble any ability to address the question. Because resolution of factual matters is a necessary basis for the additional claims, this matter similarly requires factual development prior to undertaking any analysis of the state Establishment Clause, Donation Clause, and LAD claims raised in the complaint and which are, as yet, undecided, (pp. 24-27)

         6. With respect to the Religious Aid Clause issue-the only claim decided by the Appellate Division, whose judgment is under review-the Court remands the matter for an evidentiary hearing. Among the questions to be explored are those previously identified based on the contrary views of the parties. The record does not reveal enough about the nature of the educational training and curriculum offered by the Yeshiva and Seminary and how it is delivered, nor does the record present sufficient detail about how the grant fund projects will be put to use in the institutions' respective settings. It is imperative that those issues be more fully developed below, through the crucible of an adversarial process, before the constitutional questions raised in this matter are addressed, (pp. 27-29)

         The judgment of the Appellate Division is VACATED, and the matter is REMANDED to the Secretary of Higher Education for proceedings consistent with the opinion. The Court leaves in place the Consent Order entered by the trial court.

          PER CURIAM.

         This appeal involves a challenge to state action based on, among other grounds, the Religious Aid Clause of Article I, Paragraph 3 of the State Constitution, specifically its prohibition against the use of public funds "for the maintenance of any minister or ministry." The challenge arose following the State Secretary of Higher Education's (Secretary) determination to award grant monies to a yeshiva and to a theological seminary as part of a state program to subsidize facility and infrastructure projects for higher education institutions in New Jersey. The Appellate Division ended the challenge by focusing on the Article I, Paragraph 3 issue to the exclusion of all other state constitutional and statutory claims raised in the case. The appellate panel determined that prior case law concerning our Constitution's Religious Aid Clause required invalidation of the grants to the yeshiva and theological seminary. We granted the State's petition for certification seeking review of that determination.

         The State maintains that the proper constitutional analysis in this matter turns on the use to which these higher education institutions will put the monies, not the nature of the institutions themselves. While plaintiffs do not dispute that the use of funds must be addressed, they emphasize the pervasively sectarian nature of the institutions and the avowed, and practically implemented, purpose of each to train individuals in theological and religious study, which plaintiffs contend profoundly affects the analysis in this matter.

         This case comes before us as an appeal from final administrative action by the Secretary approving the grants. The present record is comprised essentially of the grant applications submitted by the institutions to the Secretary. The arguments of the parties reveal competing views of (1) the sectarian nature of these institutions of higher education; (2) whether, in the setting of the curriculum and training programs of these particular institutions, the grant funds will necessarily be used in the "maintenance of any minister or ministry"; and (3) the adequacy of promised restrictions or other curbs against sectarian use of the grant proceeds. Because those factual disputes require resolution before the Secretary can make a properly informed decision on the grant applications, we conclude that judicial review is premature.

         A remand is necessary to allow for the development of a proper record, with fact-finding. Adversarial testing of the evidence in support of the parties' presentations is required here. Only based on such a record can the courts appropriately review the Secretary's decision to award, or not, grants to these institutions, in light of the constitutional arguments raised by plaintiffs. Because we conclude that an informed administrative decision could not have been made without the benefit of such a record, we remand this matter to the Secretary, and not to the trial court, in order that a contested case proceeding be conducted prior to the ultimate administrative decision of the Secretary concerning the challenged grants.

         I.

...


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