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Freedom from Religion Foundation, Inc. v. Chao

January 13, 2006


Appeal from the United States District Court for the Western District of Wisconsin. No. 04 C 0381 S. John C. Shabaz, Judge.

The opinion of the court was delivered by: Posner, Circuit Judge.


Before POSNER, RIPPLE, and WOOD, Circuit Judges.

The question presented by this appeal is whether a taxpayer can ever have standing under Article III of the Constitution to litigate an alleged violation of the First Amendment's establishment clause unless Congress has earmarked money for the program or activity that is challenged. The district judge thought not, and would have been correct in his thinking under an earlier view of Article III's limitation of the federal judicial power to deciding "Cases" and "Controversies." It was once thought that these terms (which "are, for all intents and purposes, synonymous," Jones v. Griffith, 870 F.2d 1363, 1366 (7th Cir. 1989)) limited federal jurisdiction to cases in which the plaintiff alleged the kind of injury that would have supported a lawsuit in the eighteenth century. In the words of Justice Frankfurter, "Both by what they said and by what they implied, the framers of the Judiciary Article gave merely the outlines of what were to them the familiar operations of the English judicial system and its manifestations on this side of the ocean before the Union. Judicial power could come into play only in matters that were the traditional concern of the courts at Westminster and only if they arose in ways that to the expert feel of lawyers constituted 'Cases' or 'Controversies.' . . . Even as to the kinds of questions which were the staple of judicial business, it was not for courts to pass upon them as abstract, intellectual problems but only if a concrete, living contest between adversaries called for the arbitrament of law." Coleman v. Miller, 307 U.S. 433, 460 (1939) (concurring opinion).

In line with Justice Frankfurter's thinking, Doremus v. Board of Education, 342 U.S. 429, 433-34 (1952), rejected taxpayer standing as inconsistent with Article III, cf. Frothingham v. Mellon, 262 U.S. 447, 488 (1923), though a taxpayer could sue in state court to enforce his federal right if the state didn't impose as rigorous a standing requirement as Article III does. See, e.g., Appleton v. Menasha, 419 N.W.2d 249, 252-53 (Wis. 1988). The tangible harm to the taxpayer complaining of the expenditure was too attenuated to satisfy eighteenth-century notions of standing embodied in Article III. Indeed, the tangible harm would often be zero because if the complained-of expenditure was enjoined, the money would probably be used to defray some other public expense that would not benefit the taxpayer, rather than returned to him in the form of a lower tax rate.

Notions of standing have changed in ways to induce apoplexy in an eighteenth-century lawyer. For example, Department of Commerce v. U.S. House of Representatives, 525 U.S. 316, 331 (1999), upheld standing to challenge the use of statistical sampling for the decennial census; the mere "threat of vote dilution" as a result of the methodology was deemed sufficiently concrete, actual, and imminent to confer standing. Federal Election Commission v. Akins, 524 U.S. 11, 20-25 (1998), upheld standing to sue for lists of donors to political action committees, on the ground "that the information would help [the committees] (and others to whom they would communicate it) to evaluate candidates for public office." Bush v. Vera, 517 U.S. 952, 958 (1996) (plurality opinion), upheld the standing of voters who lived in newly created majority-minority congressional districts to challenge them as racially gerrymandered on the ground that such districting denied them equal treatment. U.S. Term Limits, Inc. v. Thornton, 514 U.S. 779 (1995), assumed (without discussion) that there was taxpayer and voter standing to challenge a state constitutional amendment that provided that no candidate could be on the ballot who had already served either three terms in the House of Representatives or two terms in the Senate.

And with specific reference to the establishment clause, consider our decision in American Civil Liberties Union v. City of St. Charles, 794 F.2d 265, 267-69 (7th Cir. 1986), where we considered how much (or rather how little) injury is required to establish conventional (not even taxpayer) standing in an establishment case. We thought it enough that the plaintiffs, who objected to the prominent display of a cross on public property at Christmas time, had "been led to alter their behavior-to detour, at some inconvenience to themselves, around the streets they ordinarily use," in order to avoid having to see the cross. Id. at 268. "The curtailment of their use of public rights of way" was injury enough to support their suit. Id. In reaching this conclusion we relied on Abington School District v. Schempp, 374 U.S. 203 (1963), where the Supreme Court had held that schoolchildren and their parents had standing to complain that the reading of the Bible and the recitation of the Lord's Prayer in the public school that the children attended violated the establishment clause. The specific injury to the plaintiffs could have been averted by the parents' taking their children out of the public school and putting them in a secular private school (or by moving to another public school district), but those options did not deprive the plaintiffs of standing because it was an injury to them to take their children out of the public school, just as it was an injury to the plaintiffs in the St. Charles case that they had to detour to avoid the direct effect on them of the alleged violation (in effect, to mitigate their damages). No such ground of standing is claimed here, however; it is taxpayer standing or nothing for these plaintiffs.

It was not long after Schempp that the Supreme Court decided Flast v. Cohen, 392 U.S. 83 (1968), in favor of a taxpayer challenge in federal court to an alleged violation of the establishment clause. Congress had appropriated money for grants of financial assistance to private as well as public schools, and the plaintiffs complained that insofar as some of the grants had been made to parochial schools, the statute violated the establishment clause. The Court interpreted Frothingham and Doremus as having rested not on Article III-not on the notion that the injury that a taxpayer sustains if his taxes are used for a purpose offensive to him is too slight (in the Frankfurterian originalist conception) to sustain a case or controversy in the Article III sense-but rather on what have come to be called the "prudential" principles of standing. These are judge-made principles illustrated by Warth v. Seldin, 422 U.S. 490, 509 (1975), that deny standing to someone who has been injured as a result of the defendant's conduct (the core standing requirement of Article III) but who is not the "right" person to bring suit, maybe because someone has been injured more and should be allowed to control the litigation.

An example of the prudential limitations on standing is the judge-made "indirect purchaser" doctrine of antitrust law that denies a right of action to a purchaser from a purchaser from a cartel. Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977). If as is highly likely a purchaser from the cartel (the "direct purchaser") passes on a portion of the cartel overcharge to his customers (the "indirect purchasers" from the cartel), the latter are injured and an award of damages would redress their injury. So there would be Article III standing. But to allow them to sue would greatly complicate litigation, first because the court would have to determine how much of the overcharge had been passed on, a difficult question of incidence analysis, and second because there would be tiers of plaintiffs complaining about the same violation of law.

But the prudential principles of standing, like other common law principles, are protean and mutable (the term "prudential" is the very antithesis of a definite rule or standard). The Court decided in Flast that they should not stand in the way of challenges to "exercises of congressional power under the taxing and spending clauses of Art. I, § 8, of the Constitution," provided that the expenditure complained of is not just "an incidental expenditure of tax funds in the administration of an essentially regulatory statute" and that "the challenged enactment exceeds specific constitutional limitations imposed upon the exercise of the congressional taxing and spending power and not simply that the enactment is generally beyond the powers delegated to Congress by Art. I, § 8." 392 U.S. at 102-03. The Court found that this two-part test was satisfied by a challenge to the use of "the taxing and spending power . . . to favor one religion over another or to support religion in general." Id. at 103.

The word "specific" in the passage we quoted from Flast turned out to be critical to the Court's later reasoning. By forbidding Congress to establish a national church, the establishment clause places a specific limitation on congressional appropriations, since the essence of an establishment of religion is government financial support. Walz v. Tax Commission of City of New York, 397 U.S. 664, 668 (1970) ("for the men who wrote the Religion Clauses of the First Amendment the 'establishment' of a religion connoted sponsorship, financial support, and active involvement of the sovereign in religious activity"); see also Engel v. Vitale, 370 U.S. 421, 430-31 (1962). In Valley Forge Christian College v. Americans United for Separation of Church & State, Inc., 454 U.S. 464 (1982), we learn that a taxpayer has standing to complain only about the violation of a limitation on Congress's power under Article I, section 8, of the Constitution to tax and (implicitly) to spend money to finance the exercise of the various powers granted to Congress by Article I. Taxpayers challenged the donation of a disused army hospital by a federal executive agency to a religious institution. The Court denied them standing because the transfer had not been made by Congress or pursuant to an exercise of Congress's taxing and spending powers; it had been made (by the agency) pursuant to Congress's power under Article IV, section 3, to dispose of U.S. property. Id. at 479-80.

To complete the edifice, Bowen v. Kendrick, 487 U.S. 589, 618-20 (1988), held that taxpayers had standing to challenge grants by a federal agency to religious institutions pursuant to a statute that authorized grants to public and private institutions for services related to adolescents' sexual problems, even though the grants had not been made by Congress itself. Kendrick was a replay of Flast, where the complaint had been not about the statute itself, which said nothing about religion (there was such a complaint in Kendrick but the part of the Court's opinion dealing with that complaint does not relate to our case), but about the fact that in administering the statute the executive branch had made grants to religious institutions. Consistent with Flast, Kendrick reads Valley Forge as not requiring taxpayers to show that a statute violated the establishment clause; all they had to show was that a statute enacted pursuant to Congress's taxing and spending powers under Article I, section 8 had been necessary for the violation to occur-it did not have to be sufficient. The violation was not completed until the executive branch acted, but the taxpayers still had standing to challenge it.

In Valley Forge the executive branch had simply given away surplus property, and while the property had probably been built or acquired with appropriated funds rather than donated to the government, the Court did not treat the transfer as an expenditure of appropriated funds. Similarly, in In re United States Catholic Conference, 885 F.2d 1020, 1027-28 (2d Cir. 1989), where standing to challenge the Internal Revenue Service's grant of a tax exemption to the Catholic Church was denied, there was no expenditure of appropriated funds and no challenge to the exercise of Congress's taxing and spending powers. Cf. Allen v. Wright, 468 U.S. 737 (1984); Simon v. Eastern Kentucky Welfare Rights Org., 426 U.S. 26 (1976); District of Columbia Common Cause v. District of Columbia, 858 F.2d 1, 3-4 (D.C. Cir. 1988).

The present case, however, is governed by Kendrick. The taxpayers here are complaining about the use of money appropriated by Congress under Article I, section 8, to fund conferences that various executive-branch agencies hold to promote President Bush's "Faith-Based and Community Initiatives." This is a program that the President has created by a series of executive orders. One order established an Office of Faith-Based and Community Initiatives in the ...

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