Supreme Court to Hear Argument on Relation Between States, Religious Entities

The court is taking on cases involving a potential religious charter school and Wisconsin’s denial of an unemployment tax exemption to Catholic Charities.

The U.S. Supreme Court in Washington on Aug. 14, 2024. Madalina Vasiliu/The Epoch Times

The Supreme Court is hearing two cases in the coming months that question whether the government can refuse to back religious entities or deny them exemptions under the First Amendment of the Constitution.

In one case, Oklahoma Statewide Charter School Board v. Drummond, the court is reviewing whether the state wrongly denied a Catholic school admission into its charter school program. Another, Catholic Charities Bureau v. Wisconsin Labor and Industry Review Commission, involves a charity’s challenge to the state’s decision to not exempt it from an unemployment benefits law.

Both cases touch on the establishment and free exercise clauses of the First Amendment, which together read: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.”

The Catholic Charities case, which is set for oral argument on March 31, questions whether the state of Wisconsin violated the First Amendment by refusing to grant the organization a tax exemption for unemployment benefits.

The dispute centers on the Constitution but also the Federal Unemployment Tax Act, which exempts organizations from paying unemployment tax if they are operated primarily for religious purposes. At the state level, Wisconsin enacted a similar law with a similarly worded exemption.

‘Entanglement’

Last year, the Wisconsin Supreme Court ruled against Catholic Charities, stating that it was not operated primarily for religious purposes and therefore didn’t qualify for the usual religious tax exemption under state law. It noted that the refusal of the tax exemption by the state did not violate the First Amendment.

According to Catholic Charities, the state supreme court’s decision violated the group’s First Amendment rights by entangling courts in religious questions, discriminating among religious groups, and intruding on church autonomy. It stated that the state was “second-guessing a church’s answers to religious questions—including what constitutes religious activity.” Its charitable activities are an extension of its Catholic beliefs, according to the group.

President Donald Trump’s administration backed Catholic Charities in February, stating that the state Supreme Court decision conflicted with the First Amendment. It similarly stated that the decision “wrongly invites government officials to question whether a particular expression of faith is sufficiently ‘religious.’”

In November 2024, the Wisconsin Department of Justice asked the Supreme Court to not take up the case and argued that the Wisconsin Supreme Court didn’t discriminate or intrude on church autonomy. It also stated that the state supreme court didn’t overstep its authority by inquiring about Catholic Charities’ beliefs.

The First Amendment, according to the state, does not bar all entanglements between church and state but states that those entanglements shouldn’t be “excessive”—specifically through continual surveillance of religious organizations.

“Wisconsin’s exemption complies with these principles,” the state said in a February brief. “It requires a one-time examination, not continuing surveillance, of [Catholic Charities’] activities to tailor the accommodation to its disentangling purpose: keeping the state out of employment decisions that turn on distinctively religious conduct.”

Religious Charter Schools

The other case—Oklahoma Statewide Charter School Board v. Drummond—is set for oral arguments on April 30 and could help set the course for the future of charter schools in the country.

St. Isidore of Seville Virtual School, an online Catholic school, applied to be the first religious charter school in the nation and was approved by the Charter School Board. However, a legal challenge arose from the state’s attorney general, Gentner Drummond, leading to an Oklahoma Supreme Court ruling against the school and an order that the board rescind its contract with St. Isidore.

In a June 2024 decision, the state supreme court held that the contract violated a section of the state constitution that reads, “No public money or property shall ever be appropriated, applied, donated, or used, directly or indirectly, for the use, benefit, or support of any sect, church, denomination, or system of religion, or for the use, benefit, or support of any priest, preacher, minister, or other religious teacher or dignitary, or sectarian institution as such.”

Oklahoma Attorney General Gentner Drummond during an interview in Oklahoma City on Feb. 1, 2023. Sue Ogrocki/AP Photo

Describing St. Isidore as an “instrument of the Catholic Church,” the court stated that “the expenditure of state funds for St. Isidore’s operations constitutes the use of state funds for the benefit and support of the Catholic church.”

St. Isidore and the Charter School Board are asking the U.S. Supreme Court to intervene. Drummond told the Supreme Court that the lower court decision correctly determined that charter schools are public schools and must provide a strictly secular education.

Alliance Defending Freedom attorney Jim Campbell, who is representing the organizations, told The Epoch Times, “What we’re hoping is they'll say that religious organizations can’t be treated worse than other groups just because they’re religious.”

Potential Supreme Court Rulings

In both cases, the Supreme Court is considering how religious organizations’ activities affect their relationship with the states. The eventual decisions come amid other religious cases that both Campbell and Becket Fund attorney Colten Stanberry, whose organization is representing Catholic Charities, say support their causes.

Stanberry said recent decisions had “kind of reiterated ... that when the government provides a general—generally available benefit—you can’t discriminate against religious comers who are asking for that benefit, based on their religious status.” He noted that the court seemed to be thinking that “religion doesn’t have to be in the background” of a pluralistic society and that religious people should be entitled to the same benefits as others.

Both he and Campbell pointed to the 2017 decision in Trinity Lutheran v. Comer, which held that the state of Missouri violated the free exercise clause of the First Amendment by denying a school “an otherwise available public benefit on account of its religious status.”

Two other cases in 2020 and 2022 similarly saw the court holding that state policies violated the First Amendment by discriminating against religious entities. Most recently, the court’s 2022 decision in Carson v. Makin held that Maine’s tuition “generally available” assistance program for secondary schools violated the First Amendment by including a requirement that recipients be “nonsectarian.”

Both Drummond and Wisconsin have disputed the idea that their actions were similar to the ones struck down in that case. That case and the 2020 case—Espinoza v. Montana Department of Revenue—“concerned state subsidization of tuition at existing private religious schools, not state establishment of new public religious schools,” Drummond said, noting that St. Isidore should be considered a public school.

Wisconsin also told the Supreme Court that its unemployment program didn’t favor secular entities like Maine’s program did in Carson v. Makin.

“It presents the opposite scenario from the secular-favoring treatment in Carson,” the state argued.

“Wisconsin offers organizations that operate for religious purposes an exemption that comparable secular organizations cannot obtain.”