Court Opinion

ID: 2964955
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:33:25.352511+00
Date Added: 2024-06-11T15:01:55.665248
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

          No. 96-2328

                                   GUADALUPE ROJAS,

                                Plaintiff - Appellant,

                                          v.

                               LAWRENCE FITCH, ET AL.,

                               Defendants - Appellees.

                                 ____________________

          No. 97-1089

                                   GUADALUPE ROJAS,

                                Plaintiff - Appellee,

                                          v.

                              DR. LEE H. ARNOLD, ET AL.,

                               Defendants - Appellants.

                                 ____________________

                    APPEALS FROM THE UNITED STATES DISTRICT COURT

                           FOR THE DISTRICT OF RHODE ISLAND

                 [Hon. Francis J. Boyle, Senior U.S. District Judge]
                                         __________________________

                                 ____________________

                                        Before

                               Torruella, Chief Judge,
                                          ___________

                           Campbell, Senior Circuit Judge,
                                     ____________________

                              and Boudin, Circuit Judge.
                                          _____________

                                _____________________

               John W.  Dineen, with whom  Yesser, Glasson & Dineen  was on
               _______________             ________________________
          brief for appellant Guadalupe Rojas.
               Scott Glabman, Attorney, with whom J. Davitt McAteer, Acting
               _____________                      _________________
          Solicitor of Labor,  Charles D. Raymond, Associate  Solicitor for
                               __________________
          Employment  and Training, Legal Services, and Harry L. Sheinfeld,
                                                        __________________
          Counsel for Litigation,  U.S. Department of Labor,  Office of the
          Solicitor, were on brief for appellee Cynthia  A. Metzler, Acting
          Secretary of Labor.
               Rebecca Tedford Partington, Assistant Attorney General, for 
               __________________________
          appellee Dr.  Lee Arnold,  Director, Rhode  Island Department  of
          Labor and Training.
               Michael G. Dolan,  with whom Cadwalader, Wickersham  & Taft,
               ________________             ______________________________
          and Gerard P. Cobleigh were on brief for appellee Salvation Army.
              __________________

                                 ____________________

                                   October 9, 1997
                                 ____________________

                                         -2-

                    TORRUELLA, Chief Judge.   Plaintiff-Appellant Guadalupe
                    TORRUELLA, Chief Judge.  
                               ___________

          Rojas,  a  former  employee  of  the  Salvation  Army,  sought  a

          declaratory  judgment  that  exemptions  for religious  employers

          under  the Rhode Island  unemployment tax  statute and  under the

          Federal  Unemployment Tax Act  ("FUTA"), 26 U.S.C.     3301-3311,

          violate  the Establishment Clause and the Equal Protection Clause

          of  the federal Constitution,  as well as  Article I,    3 of the

          Rhode  Island  Constitution,  which   protects  the  Freedom   of

          Religion.   She  named as  defendants the  director of  the Rhode

          Island  Department of  Employment and  Training  ("DET") and  the

          Secretary of the federal Department of Labor.  The Salvation Army

          intervened as  a defendant.   The district court rejected  all of

          Rojas's substantive  arguments for declaratory  relief, see Rojas
                                                                  ___ _____

          v. Fitch, 928  F. Supp. 155,  162-67 (D.R.I. 1996),  and now,  on
             _____

          appeal,  she reasserts her federal Establishment Clause and Equal

          Protection claims.  We affirm.

                                      BACKGROUND
                                      BACKGROUND

                    The following facts are not disputed.  Rojas was a paid

          employee of the  Salvation Army, serving as a  social case worker

          from  1988 to 1994, except  for a short  interruption in 1990 and

          1991 when  she worked  for Catholic Social  Services.   Rojas was

          not, and  was not  required to  be, a  soldier or  member of  the

          Salvation Army  when employed  as a case  worker.   The Salvation

          Army   terminated  her  employment  on  March  18,  1994,  citing

          financial constraints.  

                                         -3-

                    Approximately  one month  after her  termination, Rojas

          applied for  unemployment insurance benefits  from the DET.   The

          DET found that  Rojas was ineligible because her former employer,

          the  Salvation  Army,  was  exempt  from  contributing  to  Rhode

          Island's unemployment insurance scheme under sections  28-42-8(4)

          and 28-44-11 of the Rhode Island General Laws.1  Pursuant to  the

          exemption  for religious  employers under section  28-42-8(4), no

          taxes were withheld from Rojas's wages by the Salvation Army, and

          her income was  not reported  to the  DET.  The  DET's denial  of

          benefits was upheld  by a DET referee after a  hearing, and later

          the referee's  determination  was  upheld  by the  DET  Board  of

          Review.

                    On  September 9,  1994, Rojas  initiated  an action  in

          federal district court against  the Director of the DET,  seeking

          declaratory  invalidation  of  the  exemption  under  either  the

          Establishment Clause,2  the Equal Protection Clause,3  or Article

          I,     3 of  the  Rhode  Island  Constitution.4   In  an  amended
                              
          ____________________

          1   In 1987,  the DET  determined that  the Salvation  Army is  a
          "church" and thus entitled to  an exemption pursuant to R.I. Gen.
          Laws   28-42-8(4).

          2  U.S. Const. amend. I  ("Congress shall make no law  respecting
          an  establishment of religion,  or prohibiting the  free exercise
          thereof . . . .").

          3  U.S. Const. amends. V, XIV.

          4   Article I,   3 provides, in pertinent part:

                    .  .  .  no  person  shall  be  compelled  to
                    frequent or to support any religious worship,
                    place,  or   ministry  whatever,   except  in
                    fulfillment   of   such   person's  voluntary
                    contract; nor enforced, restrained, molested,

                                         -4-

          complaint, Rojas added  the Secretary of the  Department of Labor

          as  a defendant,  on the  theory that  FUTA's allowance  of state

          exemptions   for   religious  employers   in   the  federal-state

          unemployment  insurance system  was an  underlying  cause of  the

          Rhode  Island exemption  she challenged.   See 26  U.S.C. 3309(b)
                                                     ___

          (FUTA   provision   listing  permissible   employer   exemptions,

          including exemption for religious employers).  The Salvation Army

          was allowed to intervene, without objection, as a defendant.

                    FUTA establishes  a federal-state  unemployment benefit

          scheme requiring  employers to pay  a federal excise tax,  see 26
                                                                     ___

          U.S.C.    3301 (computing the  tax as  a percentage  of wages  of

          covered employees),  but  encouraging the  development  of  state

          unemployment  insurance programs  in  the following  ways: first,

          employers  paying into a  qualifying state unemployment  fund are

          entitled to a  credit on the federal  tax, see 26 U.S.C.    3302,
                                                     ___

          and second,  a qualifying  state is entitled  to receive  federal

          grants  toward the cost of administering the state's unemployment

                              
          ____________________

                    or   burdened   in   body   or   goods;   nor
                    disqualified  from  holding any  office;  nor
                    otherwise suffer on  account of such person's
                    religious belief; and that every person shall
                    be  free  to  worship  God according  to  the
                    dictates of such person's  conscience, and to
                    profess  and  by  argument  to maintain  such
                    person's opinion in matters of religion;  and
                    that  the same  shall  in no  wise  diminish,
                    enlarge, or affect the  civil capacity of any
                    person.

          R.I. Const. art. I,   3.  Rojas also appealed the decision of the
          DET board in  state court, a suit  which has been  stayed pending
          resolution of her federal civil action. 

                                         -5-

          compensation  program,  see 42  U.S.C.     503.   Rhode  Island's
                                  ___

          unemployment fund qualified for participation in the FUTA system.

                    FUTA  exempts   certain  classes   of  employees   from

          mandatory  state coverage  by a  qualifying state  plan.   See 26
                                                                     ___

          U.S.C.    3309(b).    The current  scope  of  exemptions reflects

          amendments made to FUTA by Congress in 1976.  The 1976 Amendments

          narrowed  the set  of employees  who  were exempt  from mandatory

          state  coverage,  by  requiring,  for  example,  that  previously

          exempted school employees be covered.  In 1970 as well, the scope

          of FUTA exemptions was narrowed significantly by Congress when it

          repealed  a broad exemption previously available to all nonprofit

          organizations.    See  generally  California  v.  Grace  Brethren
                            ___  _________  __________      _______________

          Church, 457  U.S. 393, 397  (1982) (describing the 1970  and 1976
          ______

          FUTA Amendments).  

                    Currently, the  segments of  the labor  force that  the

          states are  not  required to  cover  under FUTA  section  3309(b)

          include persons "in  the employ of (A) a  church or convention or

          association of churches, or (B) an organization which is operated

          primarily   for  religious  purposes   and  which   is  operated,

          supervised, controlled, or  principally supported by a  church or

          convention or association  of churches."  26 U.S.C.   3309(b)(1).

          Also  exempt  are  employees  of  small  nonprofit  organizations

          (having  fewer than  four  regular  employees),  see     3309(c),
                                                           ___

          elected  state employees, see    3309(b)(3), employees at certain
                                    ___

          rehabilitation  facilities,  see     3309(4)(A), and  inmates  of
                                       ___

          custodial or penal institutions, see   3309(b)(6).
                                           ___

                                         -6-

                    The  Rhode Island  Employment  Security Act  ("RIESA"),

          R.I.G.L.     28-42-1  et  seq.,  exempts a  variety  of kinds  of
                                ________

          employment from coverage.   See R.I. Gen. Laws    28-42-8 (1995).
                                      ___

          Apparently tracking the  language of FUTA, Section  28-42-8(4)(i)

          exempts  service performed  "in the  employ of:  (A) A  church or

          convention or  association of  churches, or  (B) an  organization

          which  is   operated,  supervised,  controlled,   or  principally

          supported by a church or  convention or association of churches."

          Other exempted  employees under  RIESA include  certain insurance

          brokers, golf  caddies, certain rehabilitation  center employees,

          and  certain real estate brokers. R.I.  Gen. Laws    28-42-8(11),

          (9), (4)(B)(iii), (10).

                    The  defendants raised  a  number of  procedural claims

          below, all of  which were rejected  by the district court.   Upon

          reaching the merits of Rojas's suit,  the district court rejected

          all of her claims.  On appeal, Rojas argues that the Rhode Island

          and  FUTA  exemptions  for religions  violate  the  Establishment

          Clause  and   the  Equal   Protection  Clause   of  the   federal

          Constitution, while  the  appellees reassert  their  claims  that

          jurisdiction is  lacking because of  the Tax  Injunction Act,  28

          U.S.C.   1341 and that the appellant lacks standing.

                                      DISCUSSION
                                      DISCUSSION

                    Because we find that the appellant's claims fail on the

          merits, we  need not reach  either the  claim put forward  by the

          federal defendant-appellee that Rojas lacks standing to challenge

          FUTA or  the claim  put forward  by the  state defendant-appellee

                                         -7-

          that the  Tax Injunction Act  bars federal jurisdiction  over the

          suit.   See  Norton v.  Matthews,  427 U.S.  524, 530-31  (1976);
                  ___  ______     ________

          Hachikian v. FDIC, 96 F.3d 502, 506  n.4 (1st Cir. 1996) ("'It is
          _________    ____

          a  familiar tenet that  when an appeal  presents a jurisdictional

          quandary,  yet the  merits of  the underlying issue,  if reached,

          will in any  event be resolved in favor  of the party challenging

          the   court's  jurisdiction,  then  the  court  may  forsake  the

          jurisdictional riddle  and simply  dispose of  the appeal  on the

          merits.'")(quoting United  States v.  Stoller, 78  F.3d 710,  715
                             ______________     _______

          (1st Cir. 1996)).

          I.  The Establishment Clause Claim
          I.  The Establishment Clause Claim

                    At the  core of  the Establishment  Clause is the  idea

          that  government cannot  "favor  religion over  nonreligion,  nor

          sponsor a  particular sect, nor try to encourage participation in

          or abnegation of  religion."  Walz v.  Tax Comm'n, 397  U.S. 664,
                                        ____     __________

          694   (1970)  (Harlan,   J.,  concurring)   (noting  that   while

          disagreements  over  applications  of  Establishment  Clause  are

          common,  its  core ideal  is  well  established).   In  order  to

          vindicate this  constitutional  guarantee, two  tests  have  long

          guided  judicial review of any challenged legislation: first, the

          law  must  have  a  purpose  other than  to  advance  or  inhibit

          religion; second,  the primary effect  of the law must  not be to

          advance or inhibit religion.  See, e.g., Abington School District
                                        ___  ____  ________________________

          v. Shempp, 347 U.S.  203, 222 (1963) ("The test may  be stated as
             ______

          follows:    what  are  the  purpose and  primary  effect  of  the

          enactment? If either is the advancement or inhibition of religion

                                         -8-

          then  the enactment  exceeds the  scope of  legislative power  as

          circumscribed  by the Constitution.").  A third practical concern

          under  the  Establishment  Clause  is  that  the  net  effect  of

          governmental programs avoid  "excessive governmental entanglement

          with religion."  Walz, 397 U.S. at 674.
                           ____

                    These threads were united in the well-known  three-part

          test in Lemon  v. Kurtzman, 403 U.S. 602  (1971), which provides:
                  _____     ________

          "First,  the statute  must have  a  secular legislative  purpose;

          second, its principal or primary  effect must be one that neither

          advances  or inhibits  religion; finally,  the  statute must  not

          foster 'an excessive government entanglement with religion.'" Id.
                                                                        ___

          at 612-13 (quoting  Walz)(citation omitted).  The  district court
                              ____

          applied the Lemon test in the course of holding that FUTA and the
                      _____

          RIESA did not violate the Establishment Clause.  See 928 F. Supp.
                                                           ___

          at 163-66.  This approach was appropriate, for the Supreme Court,

          despite  criticisms of previous  applications of the  Lemon test,
                                                                _____

          essentially  confirmed in  Agostini v.  Felton, 117  S. Ct.  1997
                                     ________     ______

          (1997), that the Lemon  criteria still apply.  See 117  S. Ct. at
                           _____                         ___

          2010, 2015.

                    In Agostini,  the  Court  overruled  its  Establishment
                       ________

          Clause  decision in  Aguilar v.  Felton, 473  U.S. 402  (1985) --
                               _______     ______

          which  had barred  the  New  York City  Board  of Education  from

          sending  public school teachers into sectarian private schools to

          teach remedial classes  pursuant to Title  I -- but  nevertheless

          stated  that the  general  tests  used  in  analyzing  challenged

          legislation under the Establishment Clause  had not changed.  The
                                                          ___

                                         -9-

          Agostini decision reaffirmed the need to ascertain that laws have
          ________

          a  secular purpose  and  a primary  effect  other than  advancing

          religion, see 117 S. Ct. at 2010, and explicitly incorporated the
                    ___

          entanglement  prong into the effects calculus, thereby making the

          third prong of Lemon a part of the second prong, see id. at 2016.
                         _____                             ___ ___

          The Court in  Agostini noted that what has  changed since Aguilar
                        ________                                    _______

          are  certain presumptions regarding  the effects of  neutral laws

          that incidentally confer  benefits to religions.  See  117 S. Ct.
                                                            ___

          at  2010-13 (stating  that  the  Court  no longer  considers  the

          presence  of public school employees on parochial school property

          to  lead ineluctably to the impermissible  effect of advancing or

          endorsing  religion where  their  presence  is  part  of  neutral

          program).

                    The district  court properly  found that  the FUTA  and

          RIESA exemptions  had neither  an impermissible  purpose, nor  an

          impermissible effect on  religion.  First, both the  FUTA and the

          RIESA  exemption   provisions  serve   the  secular   purpose  of

          facilitating the administration of the federal-state unemployment

          insurance program by excluding from coverage a variety of workers

          whose employment  patterns are irregular  or whose wages  are not

          easily accountable.  With regard to FUTA, Rojas concedes that the

          original  purpose of  the  coverage  exemptions  was  to  address

          administrability  concerns.    She contends,  however,  that  the

          current 26 U.S.C.   3309, viewed in the wake of the 1970 and 1976

          Amendments, reflects the purpose of favoring religion rather than

          the secular purpose  of providing ease of  administration.  Rojas

                                         -10-

          is unable  to direct  our  attention to,  nor  can we  find,  any

          indications  in the  legislative  history of  the  1970 and  1976

          Amendments  that suggest  an impermissible  purpose of  advancing

          religion in  general  or any  particular  religion.   See,  e.g.,
                                                                ___   ____

          Wallace  v.  Jaffree,  472  U.S.  38,  56  (1985)  ("[T]he  First
          _______      _______

          Amendment requires  that a statute  must be invalidated if  it is

          entirely   motivated  by   a  purpose  to   advance  religion.").

          Moreover, the  current exemption  for religious employment,  even

          after the amendments, still rests within the context of a variety

          of  other exemptions,  all  of  which appear  to  share a  common

          secular purpose.   Efficient administration  of the  unemployment

          compensation  system   is  particularly   enhanced  through   the

          exemptions  for religion because  it eliminates the  need for the

          government to  review employment decisions  made on the  basis of

          religious rationales.  These considerations are  also true of the

          exemptions listed in R.I. Gen.  Laws   28-42-8(1).  The exemption

          for  religions  contained  therein, when  viewed  in  context, is

          innocuous.  It appears to  serve the interest in facilitating the

          administration  of   federal  and  state   unemployment  benefits

          programs,  and Rojas  can point  to  no other  evidence that  the

          "purpose   that  animated  adoption"  was  to  advance  religion.

          Edwards v.  Aguillard, 482 U.S.  578, 585 (1987).   In  Walz, the
          _______     _________                                   ____

          Supreme  Court  upheld  property  tax  exemptions  for  religious

          institutions, arguing that such exemptions, although not required

          by  the Free  Exercise Clause,  were  valid governmental  actions

          "productive   of  a  benevolent   neutrality  which  will  permit

                                         -11-

          religious  exercise to  exist  without  sponsorship  and  without

          interference."     397  U.S.   at  669.     Including   religious

          institutions  within   a  set   of  unemployment   tax  exemption

          recipients -- selected on the  basis of reducing difficulties  in

          administering an unemployment insurance program --  reflects less

          of  a desire  to sponsor  religion than  the direct  property tax

          exemptions upheld in Walz.
                               ____

                    Rojas's brief  on appeal  places much  weight on  Texas
                                                                      _____

          Monthly v. Bullock, 489 U.S. 1 (1989), which struck down a narrow
          _______    _______

          Texas  sales and  use tax  exemption for  "'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.'"   Id.  at 5  (quoting  Texas statute).   Although  Texas
                     ___                                              _____

          Monthly stands for the proposition that a subsidy that is granted
          _______

          only  to  religious   publications  and  not  to   other  similar

          publications "lacks sufficient breadth to pass scrutiny under the

          Establishment Clause," it also stated that "[i]nsofar as [a  tax]

          subsidy is conferred upon a wide array of non-sectarian groups as

          well as  religious organizations  in pursuit  of some  legitimate

          secular  end, the fact that religious groups benefit incidentally

          does not deprive  the subsidy of the secular  purpose and primary

          effect mandated by the Establishment Clause."  489 U.S. at 14-15.

          The exemption provisions at issue in the instant case fall within

          the latter category.  We decline Rojas's invitation to read Texas
                                                                      _____

          Monthly  as requiring that  a provision  incidentally benefitting
          _______

                                         -12-

          religion must grant a like benefit to every group that could also
                   ____

          conceivably fall within  the secular rationale for  the exemption

          provision.        Texas    Monthly    nowhere    requires    this
                            ________________

          underinclusiveness analysis, but  instead indicates  that when  a

          "wide array" of groups are benefitted by a provision that pursues

          a single, unifying,  secular end, one of these  groups may indeed

          be religious  institutions.   In Texas Monthly,  the other  Texas
                                           _____________

          sales tax exemptions did not serve the same purpose as the narrow

          exemption  for religious  periodicals, and  thus their  existence

          could  not rescue  the  challenged exemption.    By contrast,  an

          adequate array  of groups are  exempted under the FUTA  and RIESA

          provisions,  reinforcing  our   conclusion  that  the   religious

          exemptions  here   serve  the  legitimate   secular  purpose   of

          facilitating  the administration  of  the unemployment  insurance

          system.5

                    The second  basic Establishment Clause concern  is that

          of  avoiding the effective promotion or advancement of particular

          religions or of religion in  general by the government.  Although
                              
          ____________________

          5    We therefore  need not  address the  defendants' alternative
          legal argument  in defense of  the exemptions,  namely that  even
          were the  exemption provided  only to religions,  it would  still
                                        ____
          serve the legitimate  secular purpose of  decreasing governmental
          entanglement with religion.  It is well established that "it is a
          permissible   legislative   purpose  to   alleviate   significant
          governmental   interference   with  the   ability   of  religious
          organizations  to define and carry out their religious missions."
          Corporation of the Presiding Bishop of the Church of Jesus Christ
          _________________________________________________________________
          of  the Latter-Day  Saints  v.  Amos, 483  U.S.  327, 335  (1987)
          __________________________      ____
          (upholding  exemption for religious institutions from Title VII's
          prohibition  against religious  discrimination in  employment for
          secular activities of a nonprofit).  But again, we do not need to
          consider whether  the exemptions at  issue here are  supported on
          this accommodation rationale.

                                         -13-

          favoritism toward any  particular sect is not an  issue raised by

          this appeal, it is not  disputed that religious institutions as a

          whole  benefit  from the  FUTA  and  RIESA  tax exemptions.    An

          incidental  benefit to religion does not, however, render invalid

          a  statutory scheme  with a  valid secular  purpose.   See, e.g.,
                                                                 ___  ____

          Agostini, 117 S. Ct. at  2014; Zobrest v. Catalina Foothills Sch.
          ________                       _______    _______________________

          Dist., 509 U.S. 1 (1993);  Witters v. Washington Dept. of Servs.,
          _____                      _______    __________________________

          474 U.S. 481, 488-89 (1986); Walz,  397 U.S. at 664.  It  is also
                                       ____

          worth  noting that while  religious employers may  be benefitted,

          the  employees   of  exempted  religious  institutions,   as  the

          appellant   has  discovered,  may  be  ineligible  to  enjoy  the

          attendant  benefits  of  the  unemployment  compensation  scheme.

          Thus, the  primary effect of the  exemptions is not to  force the

          general  public to  subsidize  religion.    Rather,  the  primary

          practical  effect of the exemptions for religious institutions is

          to   exclude  former   employees   of   such  institutions   from

          participating in the Rhode Island unemployment insurance system.

                    Finally,  as  the  district  court correctly  reasoned,

          entanglement concerns are in fact reduced through the adoption of

          the exemptions in this case.  See 928 F. Supp. at 165.
                                        ___

          II.  Equal Protection
          II.  Equal Protection

                    With  regard to Rojas's  claim that the  FUTA and RIESA

          tax  exemptions for  religious  employers violate  constitutional

          equal protection  principles, we  affirm the  district court  for

          substantially the grounds given in its opinion.  See 928 F. Supp.
                                                           ___

          at  166.   Although  Rojas  recasts  her equal  protection  claim

                                         -14-

          slightly  on appeal,  arguing that  the district  court erred  by

          focusing on the difference in treatment of employers  rather than

          on the  difference in treatment  of employees of exempt  and non-

          exempt  entities,  the rationality  requirement  under  the equal

          protection clause  is equally lenient  from either vantage.   The

          same considerations that led the  district court to find no equal

          protection violation with  regard to the difference  in treatment

          of exempt  and non-exempt  employers applies  to exempt  and non-

          exempt employees as well.

                                      CONCLUSION
                                      CONCLUSION

                    For  the  reasons  stated above,  the  decision  of the

          district court is affirmed. 
                            affirmed
                            ________

                                         -15-