Title: American Civil Liberties Union of New Jersey v. Hendricks

State: new-jersey

Issuer: New Jersey Supreme Court

Document:

SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized.)

           American Civil Liberties Union of New Jersey v. Rochelle Hendricks (A-22-16) (077885)

Argued October 23, 2017 -- Decided May 2, 2018

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
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.

     JUSTICES LaVECCHIA, ALBIN, PATTERSON, FERNANDEZ-VINA, SOLOMON and
TIMPONE join in this opinion. CHIEF JUSTICE RABNER did not participate.
                                                            2
                                     SUPREME COURT OF NEW JERSEY
                                       A-
22 September Term 2016
                                                077885

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 – Decided May 2, 2018

         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;
                                1
         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

    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

                                2
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.

                                   3
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.

                                 4
                                  A.

       The background to this appeal is the “Building Our Future

Bond Act” (the Act), which was enacted into law on August 7,

2012.   L. 2012, c. 41.   The Act authorized the State to

effectuate the means to subsidize capital improvement projects

for institutions of higher education.    At the ensuing Election

Day in November 2012, New Jersey voters approved a referendum

authorizing the issuance of $750 million in general obligation

bonds, the proceeds of which were to support the purposes of the

Act.

       The State proceeded to issue bonds and secure funds to be

available to support higher education capital-improvement

projects; at about the same time, the State solicited

applications from higher education institutions interested in

receiving such funding.    Following the receipt and review of

submitted applications, on April 29, 2013, the Governor

announced that Secretary of Education Rochelle Hendricks had

submitted to the Legislature for approval a list of 176 higher

education capital construction projects to forty-six

institutions of higher education, which included funding for

research laboratories, computerized classrooms, and

interconnected cyber networks.    See L. 2012, c. 41, § 5(g);

N.J.A.C. 9A:18-1.7.    After sixty days elapsed, the grants were

deemed approved by the Legislature.     See N.J.A.C. 9A:18-1.7(d).

                                  5
    Of the forty-six higher education institutions that

received funding, at least nine were religiously affiliated.

Relevant for our purposes, two of those institutions were the

Beth Medrash Govoha (the Yeshiva) and the Princeton Theological

Seminary (the Seminary).

                                B.

    From the administrative record submitted to the Appellate

Division, we glean the following information.   Largely, except

where noted, the information comes from material gathered during

the application process conducted by the Secretary, either in

the form of representational responses to the State’s

application questions or in attachments submitted with the

application.

    The Yeshiva is located in Lakewood Township and serves more

than 6,000 students.   It is accredited by the Association of

Advanced Rabbinical and Talmudic Schools.   The Yeshiva describes

Talmudic Studies as “a broad compendium of scholarship that

draws on knowledge from a wide array of sources and disciplines,

among which are references to religious texts such as the

Bible.”   For purposes of elucidating the discussion, we add that

a commonly accepted definition describes the Talmud as

          the basic compendium of Jewish law and
          thought; its tractates mainly comprise the
          discussions collectively known as the Gemara,
          which elucidate the germinal statements of law
          (mishnayot) collectively known as the Mishnah;

                                 6
         when unspecified refers to the Talmud Bavli,
         the edition developed in Babylonia, and edited
         at the end of the fifth century C.E.; the
         Talmud Yerushalmi is the edition compiled in
         the Land of Israel at the end of the fourth
         century C.E.

         [Talmud, Chabad.org, https://www.chabad.
         org/search/keyword_cdo/kid/2700/jewish/
         Talmud-The.htm (last visited April 17,
         2018).]

Courts have employed similar descriptions.   See, e.g., State v.

Freedom From Religion Found.,