Sunday, November 24, 2013

Federal District Judge Rules Exemption of Housing as Clergy Income Violates Establishment Clause

Judge_Barbara_CrabbJudge Barbara Crabb (pictured) of the Western District of Wisconsin concluded in her  opinion in Freedom from Religion Foundation v. Lew that 26 U.S.C. § 107(2) violates the establishment clause of the First Amendment to the United States Constitution.

The statute at issue provides that:

In the case of a minister of the gospel, gross income does not include—
 (1) the rental value of a home furnished to him as part of his compensation; or
(2) the rental allowance paid to him as part of his compensation, to the extent used by him to rent or provide a home and to the extent such allowance does not exceed the fair rental value of the home, including furnishings and appurtenances such as a garage, plus the cost of utilities.
 
Judge Crabb's opinion on the merits focuses on the issue of the exemption being granted solely to religious persons.  Following the parties' reliance on a "modified version" of the Lemon test, Lemon v. Kurtzman, 403 U.S. 602 (1971), she also gives great weight to Texas Monthly, Inc. v. Bullock, 489 U.S. 1 (1989), "the only case in which the Supreme Court has addressed the constitutionality of a tax exemption granted solely to religious persons."  The plurality in Texas Monthly  found that the statute exempting from the state sales tax “periodicals that are published or distributed by a religious faith and that consist wholly of writings promulgating the teaching of the faith and books that consist wholly of writings sacred to a religious faith” was unconstitutional under the Establishment Clause.  
 
Judge Crabb noted that the defendants did not distinguish Texas Monthly, but instead argued that other cases were controlling, such as the 1970 case of Walz v. Tax Commission of City of New York, although in Texas Monthly the plurality distinguished Walz as being permissible as a broad tax exemption that was not confined to religious institutions or persons.  Judge Crabb also rejected the tax exemption/ tax subsidy distinction argued by the defendants. 
 
Perhaps most interestingly, Judge Crabb rejected the argument by the defendants that §107 was not limited to religious persons.  She wrote:
 

I am not aware of any decision in which a majority of the Supreme Court considered whether a claim under the establishment clause would be defeated if the particular benefit at issue were granted to atheists, but still excluded secular groups. At least in the context of this case, there is a plausible argument that the claim would survive. . . .

Regardless, to the extent defendants mean to argue that § 107(2) is constitutional because of an abstract possibility that an atheist could qualify as a minister of the gospel, I disagree. . . .

In this case, no reasonable construction of § 107 would include atheists. In the concurring opinion in Texas Monthly that defendants cite, Justice Blackmun rejected as “facially implausible” an argument that atheistic literature could be included as part of “[p]eriodicals that are published or distributed by a religious faith and that consist wholly of writings promulgating the teaching of the faith and books that consist wholly of writings sacred to a religious faith.” Texas Monthly, 489 U.S. at 29 (Blackmun, J., concurring in the judgment). Defendants do not explain why they believe interpreting § 107 to include atheists is any more plausible. Hearings Before the H. Comm. on Ways & Means, 83rd Cong. at 1574-75 (sponsor of § 107(2) stating that purpose of law was to help ministers who are “fight[ing] against” a “godless and anti-religious world movement”).

The issue of whether §107 would plausibly cover atheists was also important to Judge Crabb's conclusion that the plaintiff organization and individual plaintiffs had standing.

800px-Archbishops_House_Chicago
Archbishop's House Chicago

Judge Crabb's opinion centers the exclusion of nonbelievers as well as the Lemon test in a way that some current Establishment Clause litigation fails to do, such as the recent oral argument in Town of Greece v. Galloway.  The constitutionality of government preference for religion over "irreligion" is an unsettled contention at the heart of Establishment Clause jurisprudence.  It ensures the decision will be appealed to the Seventh Circuit.

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