As we continue our journey as pilgrims of hope in this Jubilee Year, we have been recently celebrating the forty days of the Easter season in which we encounter the risen Lord. The Church gives us this gracefilled time in our liturgical year to be with the risen Lord so that our faith and hope in his Resurrection can be strengthened and that we can become more convincing witnesses to the fullness of life that Christ offers to all. We see this especially in the Gospel of Luke when Jesus appears to the apostles and disciples after his Resurrection where he not only reveals to them that his is truly risen but also opens the scriptures anew to them so that they can be “witnesses to these things.” (cf. Luke 24:36-48) Jesus continues to do the same for us today, and especially in this Jubilee Year of Hope Jesus fills us with the hope of the Resurrection and eternal life. As our new Holy Father Pope Leo XIV stated shortly after his election, “It is the Risen Lord, present among us, who protects and guides the Church, and continues to fill her with hope through the love ‘poured into our hearts through the Holy Spirit who has been given to us’” (Rom 5:5). (Address of the Holy Father to the College of Cardinals)
of God, let us hold fast to our confession. For we do not have a high priest who is unable to sympathize with our weaknesses, but one who has similarly been tested in every way, yet without sin. So let us confidently approach the throne of grace to receive mercy and to find grace for timely help.” (Hebrews 4:14-16)
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We have also just celebrated the great Solemnity of the Ascension where Jesus at the end of his earthy ministry ascends into heaven. The Ascension culminates the saving event of the Paschal Mystery and fills us with great hope, for we see Jesus our savior and great High Priest, going before us into the true sanctuary of heaven and preparing a place for those who love and believe in him. We also hope in the fact that Jesus, who was fully human and like us in all things except sin, is now interceding with great mercy for us at the right hand of the Father. The Book of Hebrews reveals that Jesus ascended so that he would become our compassionate High Priest in heaven: “Therefore, since we have a great high priest who has passed through the heavens, Jesus, the Son
The Ascension also fills us with hope in that, although Jesus has ascended into heaven, he promised to send the Counselor, the Holy Spirit, to live within us and strengthen us with his gifts through Baptism and Confirmation. Jesus says, “But now I am going to the one who sent me, and not one of you asks me, ‘Where are you going?’ But because I told you this, grief has filled your hearts. But I tell you the truth, it is better for you that I go. For if I do not go, the Advocate will not come to you. But if I go, I will send him to you.” (John 16:5-7) It is remarkable to understand that the presence and power of the Holy Spirit that descended on the Church at Pentecost is so significant and invaluable, that Jesus says that it is better for him to go! Here we see an intrinsic connection between the Ascension and Pentecost—Jesus our compassionate High Priest pierces the sanctuary of heaven so that the grace and power of the Holy Spirit can be sent upon the Church and dwell within each of us so that we become living temples and instruments of God’s grace. Just as the apostles were filled with the power of the Holy Spirit at Pentecost and sent forth to preach the Gospel to the ends of the earth, every Christian is a missionary disciple of Jesus called to proclaim Christ to the world. Therefore, these great Solemnities of the Ascension and Pentecost that we celebrate send us forth with the grace of Christ and the power of the Holy Spirit to be pilgrims of hope in our world today.
This is also my favorite time of the year as a bishop, because I am blessed to do so many confirmations across the diocese. Confirmation is the sacrament of evangelization, and to witness so many lives being filled with the power of the Holy Spirit fills me with great hope. As journey together in this Jubilee Year of Hope and continue the great work of the New Evangelization, may we renew with confidence our hope in the promise of Jesus: “But you will receive power when the holy Spirit comes upon you and you will be my witnesses in Jerusalem, throughout Judea and Samaria, and to the ends of the earth.” (Acts 1:8)
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Keith Parsons Vice President Archdiocese of Denver
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Most Rev. James R. Golka Episcopal Moderator Diocese of Colorado Springs
John Matthew Knowles Executive Director
Mac Bryant Diocese of Bridgeport
Carolyn Callahan Diocese of Jackson
Cecilia Colbert Diocese of Dallas
Marc Fisher
Archdiocese of Philadelphia
Michael McGee Diocese of Richmond
Carla Mills Archdiocese of Kansas City in Kansas
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Debbie Swisher Diocese of Lexington
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A Dream Job on the Great Plains
by Jeanette Fast Redmond
Diocesan CFO
“One day when I leave this earth, I want to hear, ‘Well done, good and faithful servant,’” says Theresa Tate of Dodge City in Kansas.
Theresa frequently mentions her reliance on the Holy Spirit in learning about and performing what she calls her “dream job” as Dodge City’s diocesan CFO.
“I lean on the Holy Spirit daily,” she says. “Without his guidance, I would not be where I am.”
Theresa grew up in a small town outside Wichita, Kansas, earned her accounting degree in Georgia, and then moved to New England, where she worked in a series of accounting jobs for small businesses. These positions included 15 years working for a civil engineer and land surveyor in Westport, Massachusetts, and another four years in Providence, Rhode Island, working for a car carrier company.
When Theresa moved back to Kansas, she worked at Dodge City Community College, initially as the accountant in the business office, before transitioning to become the Title V director who applied for and managed federal grants for the college (skills that she carried over to her diocesan work).
“I had to make sure all the [grant] money was spent appropriately,” she explains, “because the government is very conscientious and very tedious about making sure.”
In 2021, a close friend and colleague told her about a newspaper ad for the CFO position in the Dodge City diocese. At first she wasn’t convinced, because she had no experience as a CFO.
“We all know how the Evil One tells us we are not good enough, right?” Theresa recalls. But her friend persisted through several conversations and encouraged her to interview just for the experience. So she applied.
“Then a number of things transpired, and I call them ‘Holy Spirit moments’ where I’m getting this guidance: okay, here’s the stepping-stone. Take it, step on it, move forward,” Theresa says. “Within days I heard back from the person at the Chancery” to schedule her first interview with the then CFO and the controller.
“I walked through the front door, and it felt like home,” she recalls. “I chatted with them for an hour and a half, and they were comfortable enough with me—even though I had never been a CFO, but I had the credentials for education and all the work experience.” That interview was followed by a meeting with the diocesan finance council and ultimately an interview with Salina’s Bishop Gerald Vincke, who was also serving as Dodge City’s apostolic administrator.
“The last thing [Bishop Vincke] asked me was ‘So why do you think that you’re meant for this position?’” Theresa says. “And I said, ‘You know what? I feel like I’m being called to this position. I bring a lot to the table. Is there a lot to learn? Absolutely, but I’m
very capable. I learn very quickly. And I think with a lot of support and leaning on others, I think it’s very doable.’”
So Theresa was offered the position. When the CFO retired in 2022, she became CFO and hired more staff to take on the day-to-day accounting work she had been doing. Training staff is part of what makes this her dream job.
“I’d always wanted to either own a business or be a CFO-type person from being young,” she says. “I’d always wanted to be able to be the go-to person and have a lot of information and educate others to build and grow them as well. That’s been a really huge thing at this position.”
Working for the diocese became an important means for Theresa to grow in her faith, after growing up in a family that wasn’t demonstratively Catholic.
My family, she says, was “all about making sure you go to church, making sure you go to religious education. And you say prayer before meals,” she says. “But we had a beautiful gold-edged Bible that was 2-3 inches thick. It sat on the bookshelf and was never opened. We never read from it. We had a crucifix for Anointing of the Sick that sat on the wall—again, just sitting there, never touched.”
Coming to the diocese, then, “was a piece of what I’ve been missing my whole life,” she says. “I want to be one of these people to make sure that I include God more and more and more, especially as I age.”
To that end, Theresa just finished a theology degree through Wichita’s Newman University.
“It’s exciting because I feel like I can actually talk about God now,” she says. “I have a whole different comfort level of being able to include God and the Holy Spirit and Jesus and different stories of the Scriptures.”
This deeper connection to her faith informs her continued reliance on the Holy Spirit.
“I lean on the Holy Spirit, as I know I can’t do it myself,” she says. In her travels around Dodge City, she regularly passes the Coronado Cross, where Francisco Vasquez de Coronado held the first Mass when he crossed the Arkansas River in 1541. “That cross is just a place where I always do a sign of the cross and try to say a little prayer and remind myself to make sure I’m including the Holy Spirit as I make decisions.”
“If I’m having a tough day, it’s usually because I haven’t done a good job of including Him,” she explains. “You don’t realize how much can be made happen and how many mountains will move if you just call upon God and the Holy Spirit to help you.”
Over the years, Theresa also earned an MBA, became a certified fraud examiner, and last year earned the DFMC’s Certified Diocesan Fiscal Manager (CDFM) credential.
“It’s oriented to the Catholic faith, so it helps me with my job directly,” she says. She points to the CDFM section on building projects as an example. “The building projects—I’ve got two going on right now that are quite large. . . . One is here in Dodge City, where they’re building a brand-new school connected to our cathedral.”
Theresa highly recommends the CDFM to other members, even those with similarly established careers and credentials in secular finance and accounting.
“If they’re doing work for the Catholic faith, yes, it’s very beneficial,” she concludes.
THERESA TATE
Diocese of Dodge City
Navigating Diocese Finances: The Benefits of Client Accounting Services
By Kenneth Q. Tan, Partner and Church and Denomination Services Director, CapinCrouse
Attracting and retaining financial operations and accounting staff with the necessary skills and experience is more challenging now than ever. Has your diocese considered outsourcing some or all of its accounting services? Outsourced services can range from basic supplementary accounting tasks to complex support and can be a cost-effective way to add functionality, skills, and experience to your diocese’s financial operations or accounting team.
Below are answers to common questions we receive about the benefits and solutions outsourced client accounting services can provide for dioceses.
What types of outsourced client accounting functions do dioceses often use?
Client accounting services vary in complexity, longevity, and extent, depending on each diocese’s needs. There are services available to address a wide range of accounting functions, including:
• Outsourced daily accounting
• Bill pay
• Payroll
• Recommendations for internal controls design and improvement
• Best practices and assistance with creating efficient tech stacks
• Chart of accounts restructuring
• Controller and CFO role functions
At CapinCrouse, one of the most unique functions we help accounting services clients with is tracking restricted and board-designated funds for areas such as building campaigns, mission activities, benevolences, and tithes and offerings.
Some dioceses may benefit from completely outsourcing their accounting team, while others need a solution that can work alongside the diocese’s staff to fill skill or capacity gaps. Look for solutions that can be tailored to provide the specific skills, expertise, and insight your diocese requires.
What are some common accounting challenges that client accounting services can help dioceses with?
Examples of common accounting challenges and missed opportunities at dioceses include:
• Incorrectly setting up or tracking funds without donor restrictions, including board-designated funds, and funds with donor restrictions. Dioceses sometimes incorrectly classify funds that are donor-restricted for a building or capital campaign as contributions without donor restrictions. Incorrectly classifying those restricted funds as unrestricted could result in the restricted funds being used for unrestricted purposes.
• Not booking assets on the Statement of Financial Position. Assets such as beneficial interests in trusts and buildings are a crucial component of a diocese’s overall financial situation. Excluding them from your Statement of Financial Position (which is equivalent to a balance sheet at a for-profit company) paints an inaccurate picture of the diocese’s financial health.
• Waiting until year-end to review the list of vendors and contractors to determine which are required to receive IRS 1099 forms. This can result in a scramble to get these individuals to complete W-9 forms. Your accounting team should request W-9 forms at the beginning of the vendor or contractor relationship so it is clear who will qualify to receive a 1099 form.
• Having insufficient internal controls for ensuring the proper handling of funds. The person spending the money should not be the person approving the expenditure. Every diocese should have policies in place to enforce expense guidelines and clear approval procedures.
A client accounting services provider that is experienced in nonprofit accounting and financial best practices can help dioceses avoid these and other issues and streamline their processes.
When should a diocese consider outsourcing?
It is generally a good idea to evaluate your current accounting needs annually to determine if there are any gaps in the skills needed or the workflow.
KENNETH Q. TAN
In our experience, there are four criteria that may make a diocese a good candidate for outsourced accounting functions:
• Your current financial reporting doesn’t provide the information or insight you need
• One person on the accounting team has all the vital information and expertise, and there is no succession or contingency plan if that individual leaves the diocese or is no longer able to work
• You are struggling to fit an accounting position into your budget
• You need certain skills or capacities, but not on a full-time basis
What should dioceses look for in a client accounting services firm?
Dioceses face a range of unique accounting issues, budget considerations, tax regulations, and much more. It’s important to look for a client accounting services provider that is experienced at working with dioceses and other nonprofits and can provide the specialized insight, expertise, and best practices you need.
Dioceses often focus on treating a symptom, but an experienced client accounting services firm like CapinCrouse can help find the root of the problem and provide solutions they did not know they were looking for.
About the Author
Kenneth Q. Tan, Partner and Church and Denomination Services Director CapinCrouse ktan@capincrouse.com o 505.50.CAPIN ext. 1323
Valuable Insight to Help You Change Lives
Today, there are countless complex regulatory, accounting, and tax requirements — and they are constantly changing.
With over 50 years of serving religious and nonprofit organizations, we provide tailored strategies to help your diocese thrive in a changing world. Learn more at capincrouse.com
Ken Tan serves as Partner and Church and Denomination Services leader at CapinCrouse. He has more than 16 years of public accounting and large nonprofit experience, providing both advisory and assurance services to various nonprofit entities, churches, and mission organizations. In addition, Ken’s expertise also extends to serving nonprofit organizations through fraud prevention and forensic accounting. Prior to joining the firm, he managed the audits of public Fortune 100 and private multi-billion dollar companies for a Big 4 accounting firm, provided advisory and strategic planning for churches, nonprofits, and small to medium-sized businesses, and served as the controller and corporate officer for a large faith-based multi-national mission agency.
About CapinCrouse
As a national full-service accounting and advisory firm exclusively serving nonprofit organizations, CapinCrouse, a division of Carr, Riggs & Ingram, provides professional solutions to organizations whose outcomes are measured in lives changed. Discover more at capincrouse. com.
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At Lincoln Financial, we provide a wide range of employer-sponsored retirement plans for organizations of all sizes and sectors. But we don’t stop there. Our tools and services help simplify the entire benefits process for employees and plan sponsors. From personalized technology to one-on-one support, we make it easier to manage competing priorities, boost contributions and face retirement with confidence.
CDFM online prep courses are available for the 16 test areas! These are excellent courses that will help you succeed on the exam.
The deadline to register for the exam is October 1, 2025.
The CDFM Exam is a challenging, thorough test of knowledge across sixteen core competencies. Those who attain the CDFM distinguish themselves as extremely well qualified within the profession, and enjoy commiserate peer recognition as a result.
DFMC and Villanova Center for Church Management have invested in these preparation courses to ensure that you have all you need to prepare for and pass the CDFM Exam.
Below is a sampling of the 16 prep courses.
Join those DFMC colleagues who have successfully achieved this professional certification by submitting your application to sit for the CDFM examination to the DFMC National Office by October 1, 2025.
The Certified Diocesan Fiscal Manager credential represents the pinnacle qualification for a diocesan financial executive.
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ANNUAL PRESENTATION
SUNDAY, SEPTEMBER 28 TH , 2025
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Federal Litigation
Update: Preliminary Injunction entered
against OMB’s Memorandum in Nonprofit Litigation
On February 25, 2025, a preliminary injunction was entered against the Office of Management and Budget regarding the OMB M-25-13 memorandum. This memorandum purportedly put a payment freeze on all federal domestic outflows of funding while the federal government reviewed all contracts. A group representing nongovernmental nonprofit entities that receive federal funding sued in the District Court for the District of Columbia (“DDC”) in order to stop the freeze and avoid layoffs.
Originally, the group received an administrative stay for the judge to rule on a temporary restraining order (TRO), with the administrative stay expiring by February 3. Nat'l Council of Nonprofits v. Office of Mgmt. & Budget, CV 25-239 (LLA), 2025 WL 314433 (D.D.C. Jan. 28, 2025). On February 3, plaintiffs received a TRO in its favor Nat'l Council of Nonprofits v. Office of Mgmt. & Budget, 25-239 (LLA), 2025 WL 368852 (D.D.C. Feb. 3, 2025). Now, the DDC found that the Court had jurisdiction, that the complaint was not moot with the rescission of MS-25-13 by MS-25-14 due to the administration’s talking points that the freeze continues, plaintiffs had standing to sue, that the OMB memorandum was arbitrary and capricious final agency action rather than “guidance” as OMB argued.
The court found that the organizations will suffer irreparable injury because, while some organizations have been able to draw down funds in the immediate aftermath of the court's TRO, this would mean nothing if the spigot was shut off again. “The injunctive relief that Defendants fought so hard to deny is the only thing in this case holding potentially catastrophic harm at bay.” –C.C.V.
See: Nat'l Council of Nonprofits v. Office of Mgmt. & Budget, CV 25-239 (LLA), 2025 WL 597959 (D.D.C. Feb. 25, 2025).
Update: Preliminary Injunction entered against OMB’s Memorandum in Nonprofit Litigation
On January 30, the U.S. Department of Homeland Security (DHS) rescinded a longstanding policy that limited immigration enforcement actions at houses of worship and other sensitive areas, most recently updated in 2021 (the “2021 memo”). DHS’s new policy leaves discretion to take such actions to immigration officers’ discretion. Numerous Quaker congregations, along with a Sikh gurdwara and a Baptist church, sued in federal district court in Maryland, alleging the rescission and replacement violate the First Amendment’s right of expressive association, the Religious Freedom Restoration Act (RFRA), and the Administrative Procedure Act. On a motion for preliminary injunction, the court enjoined the enforcement of the new policy against the plaintiff organizations, ordering that any enforcement actions at their houses of worship comply with the 2021 memo.
The crux of the case was whether the plaintiffs alleged sufficient harm to establish standing and to make a prima facie case under the First Amendment and RFRA. The court relied heavily on representations from the plaintiffs that attendance at worship services had dropped among immigrant or minority parishioners since the rescission of the 2021 memo. Key to its analysis was that Quaker services are perhaps uniquely communal in nature. Congregants, when they feel called to share a message from God, stand and speak to the congregation, so a reduction of the number and nature of congregants alters the services themselves. However, the court also credited other asserted harms, such as the Baptists’ diminished ability to reach immigrants through its charitable ministries.
These were sufficient to establish standing and to sustain a claim of burden of expressive association and religious exercise. DHS failed to allege a compelling government interest in application of the new policy to the plaintiffs, arguing that it was premature to require such a showing. The court did not reach the APA claim.
Noting that its ruling on likelihood of success on the merits depended on the “specific religious beliefs, religious practices, and composition of Plaintiffs’ congregations,” the court declined to enter a nationwide injunction, instead limiting relief to the plaintiffs. It observed that the plaintiffs could facilitate DHS’s observance of the injunction by providing a list of the locations of their houses of worship to DHS. –D.B.
Practice Point: Although the court did not address the relevance of Lyng v. Northwest Indian Cemetery Protective Association, 485 U.S. 439 (1988), that case may loom as a challenge for the plaintiffs in further proceedings. In Lyng, the Supreme Court held that the government’s plan to build a road and harvest timber on land sacred to several Native American tribes did not violate the Free Exercise Clause even though it would “interfere significantly with private persons' ability to pursue spiritual fulfillment according to their own religious beliefs.” A case currently pending cert at the Supreme Court, Apache Stronghold v. United States, asks the Court to revisit Lyng
Zinski v. Liberty University: Title VII Applies to Firing Transgender Employee
The Western District of Virginia denied Liberty University’s motion to dismiss a case in which a former employee was terminated because she underwent male to female sex transition. The former employee, who was an IT Apprentice, sued the university upon termination. Liberty University alleged defenses under §§702 and 703 of the 1964 Civil Rights Act, RFRA, the ministerial exception, and the ecclesiastical abstention doctrine. The court rejected all these defenses.
Under §§702 and 703, a religious employer can discriminate “with respect to the employment of individuals of a particular religion.” The court held that these sections must be narrowly construed, only permitting discrimination on the basis of an employee’s religion and not any other protected class. The court reasoned, “[w]here a religious employer discriminates on the basis of any other protected class in a but-for fashion, a statutory violation occurs, even if the decision was religiously motivated.”
Next, the court rejected the RFRA defense, concluding RFRA only applies in suits where the government is a party. Further, the court added that even if it was entitled to a RFRA defense, requiring Liberty to maintain an employee who has not followed the university’s Doctrinal Statement to the letter, does not require Liberty to change its beliefs. At the stage in the litigation, the argument is insufficient as to substantial burden.
The court also rejected the ministerial exception defense because nothing in the record demonstrated that Zinski was a minister. It also rejected the ecclesiastical abstention defense because the “complaint asks the Court to determine whether Title VII prohibits a religious institution from firing a transgender person, not whether a religious institution, like Liberty, has properly interpreted its religious doctrine when determining that a transgender person violates religious law and must be fired.” –S.E.
See: Zinski v. Liberty University, Inc., Dkt. 37 (W.D. VA, Feb. 21, 2025).
Seventh Circuit Revives APA Claim, Dismisses Religious Freedom Claims Against Nonconcurrent Filing Rule for Special Immigrant Religious Workers
Of the five categories of employment-based visas established in the Immigration and Nationality Act, special immigrant religious workers fall into the fourth, called EB-4. The application process for extension or change of status, via Form I-485, is not as streamlined for EB-4 workers as it is for workers in the first three EB categories. Whereas the first three can file their applications for change of status concurrently with their immigrant petitions, EB-4 workers must wait until their special immigrant petitions (Form I-360) are approved before they can file an adjustment of status application. This creates additional logistical difficulties that can have the effect of limiting the pool of ministers available to religious employers.
An interfaith coalition of religious organizations challenged the noncurrent filing rule under various causes of action. An Illinois federal district court ruled that the plaintiffs’ claim under the Administrative Procedure Act (APA) was timebarred and entered summary judgment against them on all other counts. On appeal, the Seventh Circuit considered their claims under the APA, the First Amendment, and the Religious Freedom Restoration Act (RFRA).
After the district court’s ruling, the Supreme Court held in Corner Post, Inc. v. Board of Governors of the Federal Reserve System, 603 U.S. 799 (2024), that a plaintiff’s challenge to a final
agency action does not accrue under the APA until the plaintiff is injured by the action. Because the harm alleged by the plaintiffs is ongoing, the Seventh Circuit concluded that the claim falls within the statutory accrual period defined in Corner Post and remanded the APA claim to the district court.
Addressing the RFRA claim, the Seventh Circuit found that the nonconcurrent filing rule does not constitute a substantial burden on the plaintiffs’ religious exercise because it does not compelled them to perform acts undeniably at odds with fundamental tenets of their religious beliefs, put substantial pressure on them to modify their behavior and to violate their beliefs, or bears direct, primary, and fundamental responsibility for rendering their religious exercise effectively impracticable.
Based on its holding on the RFRA claim, the court dismissed the plaintiffs’ claims under the Free Exercise Clause and Establishment Clause of the First Amendment because the plaintiffs articulated both in terms of how the concurrent filing rule substantially burdens their exercise of religion. “Since a finding of substantial burden is not needed, an Establishment Clause claim is not always governed by the RFRA…analysis,” the court explained. “But here it is.” –D.B.
See: Society of the Divine Word v. USCIS, No. 23-2787, 2025 WL 586490 (7th Cir. 2025).
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Washington Court Upholds Permit for Homeless Encampment on Church Property
The Federal District Court of Washington dismissed a challenge to the city’s requirement for churches to apply for permits before hosting homeless on its property. Burien Free Methodist Church, known as Oasis Home Church, challenged the permit requirement under Religious Land Use and Institutionalized Persons Act (RLUIPA) and the First Amendment (Free Exercise and Free Speech). The case was not a denial of application case, and the church did not apply for a permit.
While the parties agreed that caring for the homeless constituted an “exercise of religion” for the purposes of RLUIPA, they disputed whether requiring a permit imposed a “substantial burden” on religious exercise under the statute. The court held that requiring the church to fill out a simple two-page application was a minimum inconvenience that did not constitute a substantial burden on the church under RLUIPA.
Further, the church failed to allege the required permit impacted speech and failed to “plausibly allege that the challenged regulatory scheme was not neutral and not generally applicable, it has failed to state a free exercise claim under the First Amendment.” Thus, the court dismissed the suit. –S.E.
See: Miller v. City of Burien, 2025 WL 371874 (W.D. Wash., Feb. 3, 2025).
The State of Employee Retention Credit (ERC) Program Claims Backlog
Currently, there are more than 1 million outstanding claims for Employee Retention Credit (ERC). The ERC is a refundable tax credit for certain eligible businesses and tax-exempt organizations that had employees and were affected during the COVID-19 pandemic. Last year, the IRS publicly mentioned publicly they were looking to process 500,000 to 600,000 claims during 2025. Claims are being processed by software that flags suspicious claims.
However, in the Federal District Court of Arizona, plaintiffs Stenson Tamaddon LLC and ERC Today LLC, allege the IRS has implemented an “arbitrary and capricious system” because the program is disallowing claims that are legitimate. Plaintiffs asked the court to issue a preliminary injunction to block the IRS from using the software.
Plaintiffs further allege the IRS changed its procedures without notice because it instructed taxpayers to file minimal documentation but then later denying claims based on a lack of information. They also claim the IRS is jeopardizing the twoyear statute of limitations for administrative appeals by "hijacking taxpayer administrative rights by diverting appeals to revenue agents for examination rather than into the IRS Office of Independent Appeal."
The IRS argues in its opposition that plaintiffs "injuries are traceable to their business model, not the IRS’s claim review procedures," because of their choice of a “contingency-based business model.” The IRS states the use of this software is reasonable and necessary for efficient resource management and maintains that the agency is committed to ensuring all legitimate ERC claims are allowed.
The IRS denies its actions are arbitrary or capricious because it "has developed criteria to determine how to process ERC claims, including which to select for audit." It argued that "[w] hether and how to examine and process returns, including those making ERC claims, is committed to agency discretion and thus unreviewable." Even still, taxpayers have the option to appeal: "[i]f a taxpayer requests Appeals consideration, the taxpayer should send the request to the IRS. The IRS will consider the taxpayer’s explanation and documentation before sending the request to Appeals."
Should plaintiffs prevail and the court issue a preliminary injunction, such an order would further slow claims being processed and increase costs for the IRS, but it would open a possibility for those taxpayers which saw their claims denied as suspicious. –M.L.V.
See: ERC Today, LLC, et al. v. John McInelly, et al., 2:24cv-03178, (D. AZ, Feb. 28, 2025).
Ninth Circuit Holds Church Has No Standing to Challenge State Law Mandating Abortion Coverage
When Cedar Park Assembly of God first brought suit to challenge Washington State’s law requiring coverage of abortion in their employee health plan, the Ninth Circuit reversed the district court’s ruling, at the pleadings stage, that Cedar Park lacked standing. After the district court ruled against Cedar Park on the merits on remand, the Ninth Circuit held that the church lacks standing. The ruling relied on recent Supreme Court rulings in Murthy v. Missouri, 144 S.Ct. 1972 (2024) and Food and Drug Administration v. Alliance for Hippocratic Medicine, 602 U.S. 367 (2024), as well as a heap of apparent errors.
The suit challenged Washington’s Reproductive Parity Act, which requires insurance carriers to provide health coverage for all federally approved contraceptives and, if maternity care is covered, for abortions. A separate, preexisting conscienceprotection statute provides that no organization in Washington with a religious objection to a specific service shall be required to purchase coverage for that service, but also that enrollees in insurance plans must be able to access services to which their plan’s provider objects. The result is akin to the Affordable Care Act’s accommodation for contraceptive coverage at issue in Zubik v. Burwell, 578 U.S. 403 (2016) – the insurer “independently” contacts the employees to notify them of availability of coverage for those services.
The Ninth Circuit held that neither a requirement for abortion to be included within Cedar Park’s plan nor a requirement for Cedar Park to contract with an insurer who will provide abortion coverage under the accommodation mechanism established standing. The touchstone of its reasoning was that Cedar Park’s claim depended on the decisions or actions of third parties, not on the Reproductive Parity Act. “Nothing in the challenged law,” the court wrote, “prevents any insurance company…from offering [Cedar Park] a health plan that excludes direct coverage for abortion services.”
The court cited both Murthy and Alliance for Hippocratic Medicine as applications of this principle by the Supreme Court. In Murthy, which alleged that the federal government had pressured social media companies to censor private speech, the Court held that the plaintiffs failed to trace the social media companies’ behavior to actions of the federal government. In Alliance for Hippocratic Medicine, the Court relied on the protections provided by federal conscience-protection statutes in holding that the FDA’s loosening of restrictions on abortion drugs would not force the plaintiffs to participate in abortions in a manner contrary to their religious beliefs.
The court also trotted out a particularly maddening argument that figured in the Zubik litigation: that covering employees’ use of contraception (or, here, abortion) is no different than paying an employee a salary that the employee subsequently uses to pay for contraception or abortion. “The general disapproval of actions that others might decide to take does not create standing,” the court said, “even when some tenuous connection may
exist between the disapproving plaintiff and the offense-causing action.” And the court characterized Cedar Park’s concern as speculative, citing the church’s own employee conduct policy prohibiting abortions as evidence that the church has no reason to worry.
In dissent, Judge Callahan vigorously disputed virtually every turn of the majority’s opinion. Despite the majority’s sunny take on the magnanimity of the Reproductive Parity Act, she noted that the Ninth Circuit had earlier held that Cedar Park’s insurer had “reasonably understood the plain language of the Parity Act as precluding” the provision of a plan excluding abortion. “The best the majority can do is express disbelief as to why [Cedar Park’s insurer] does not provide Cedar Park a health plan excluding abortion.”
Judge Callahan also observed that Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682 (2014), forecloses two of the court’s arguments. First, Hobby Lobby’s deferential treatment of religious objections to cooperation in evil demonstrates that the court cannot wave away Cedar Park’s objection as simply that it “makes an employee’s hypothetical abortion more affordable.” Second, the Court in Hobby Lobby took note of the business’s employee conduct pledge, but “was not concerned with what the employees would actually do if given contraceptive coverage; what mattered was what the plaintiff employers were required to do.” –D.B.
Practice Point: The Ninth Circuit’s opinion seems so vulnerable on multiple fronts that it is reasonable to hope for relief from a possible en banc hearing or from the Supreme Court. Nonetheless, this ruling does illustrate the double-edged nature of FDA v. Alliance for Hippocratic Medicine’s recognition of the existence of the various federal conscience protection statutes – salutary (if perhaps not quite accurate) in its description of their breadth, but portending difficulties for facial challenges to statutes mandating coverage or performance of morally illicit procedures.
Copyright Does Not Extend to Fully Artificially Generated Images
Plaintiff Thaler filed suit against the United States Copyright Office and Director Perlmutter, seeking reversal of the Copyright Office’s decision not to register Thaler’s artwork. The artwork was claimed in the registration application as having been created entirely by artificial intelligence. As previously reported, the United States District Court for the District of Columbia found for the Copyright Office; Thaler appealed. On appeal, the court discussed the human authorship requirement under the Copyright Act of 1976, as administered by the U.S. Copyright Office, noting that “Copyright Office regulations have long required that any registered work be authored by a human.” *2. However, since “[t]he Copyright Act does not define the world ‘author,’” the court used tools of statutory construction to understand “authors” as human beings as opposed to machines, finding that many of the Act’s provisions “make sense only if an author is a human being.” *4. For example, it found that The Copyright Act’s ownership provision is “premised on the author’s legal capacity to hold property.” *4. A machine cannot claim property and ownership rights and therefore cannot be an author under the statute. Also, where The Copyright Act limits the duration of a copyright to the author’s lifespan or a period of time “that approximates how long a human might live,” *4, no such “lives” can be attributed to machines. The Copyright Act further has an inheritance provision that assumes the existence of heirs, an impossibility with a machine.
In combination with other provisions, the court thus found that statutes alone require an “author” to be a human being. It was therefore unnecessary to reach any of the Copyright Office’s Constitutional arguments, and the court declined to do so, affirming the case on the basis of the 1976 Act. –M.A.N.
Medical Marijuana v. Horn: US Supreme Court Extends RICO to Personal Injuries
The US Supreme Court ruled on April 2, 2025, that under the Racketeer Influenced and Corrupt Organizations (RICO) Act, “a plaintiff may seek treble damages for business or property loss even if they loss resulted from personal injury.”
Plaintiff (Respondent) Douglas Horn, who suffered from chronic pain, purchased and consumed a product he believed to have CBD (a legal ingredient), which was marketed and sold as not containing THC (an illegal ingredient). Horn subsequently failed a random drug test for his job as a commercial truck driver because he tested positive for THC.
Medical Marijuana v. Horn: continued
Horn filed a suit in the Western District of New York against the company of the product under RICO, Section 1964(c), alleging the marketing, distribution, and sale of the product was a pattern of racketeering activity. The district court ruled that Horn was unable to recover under RICO because Section 1964(c) only redresses injuries to “business or property,” reasoning that it thus does not extend to injuries derived from a personal injury. Horn appealed to the Second Circuit, which reversed the district court, holding that civil RICO permits recovery for injuries even if they flow from a personal injury. The Second Circuit sided with a Ninth Circuit opinion, while there were still decisions from the Sixth, Seventh, and Eleventh Circuits denying recovery flowing from personal injuries. Because of this circuit split, the US Supreme Court granted certiorari.
The US Supreme Court affirmed and remanded in a 5-4 decision. Justice Barrett authored the majority, with Jackson concurring and Thomas dissenting and Kavanaugh, Roberts and Alito dissenting. Justice Barrett’s opinion rests on the reasoning that the requirement in RICO “operates with respect to the kinds of harm for which the plaintiff can recover, not the cause of the harm for which [it] seeks relief.” Thus, “a plaintiff can seek damages for business or property loss regardless of whether the loss resulted from a personal injury.” However, the opinion comes with caution to Horn, as Justice Barrett notes that RICO requires a “direct” relation between the injury and the racketeering conduct. It also requires a pattern of racketeering activity instead of a single wrongful act, Barrett writing “harm resulting from a single tort is not a ticket to federal court for treble damages.”
Justice Thomas dissented, arguing the Court should have dismissed as improvidently granted. Justice Kavanaugh, with Chief Justice Roberts and Alito, dissented and concluded that RICO does not authorize recovery derived from personal injury for three reasons: “(1) the text of RICO excludes personal-injury suits and incorporates traditional tort law principles about what injury means; (2) this Court’s antitrust precedents, which interpret the same ‘injured in his business or property’ language on which RICO was deliberately modeled, confirm that RICO excludes all losses resulting solely from personal injuries; and (3) the federalism canon counsels against federalizing large swaths of ordinary state court tort cases absent clear direction from Congress.”
Notably, the majority opinion and the dissents reflect differing opinions in whether the ruling is poised to create a surge of civil RICO claims related to personal injuries resulting in economic losses (lost wages). –S.E.
See: Med. Marijuana, Inc. v. Horn, __ S. Ct. __, (2025).
LAW BRIEFS
Update: Sensitive Locations Policy Litigation
On January 20, 2025, the U.S. Department of Homeland Security (DHS) rescinded its “sensitive locations” policy, which previously directed immigration officers to avoid enforcement actions in or near places of worship. Plaintiffs allege that the rescission violates the Religious Freedom Restoration Act (RFRA), the First Amendment, and the notice and comment provisions of the Administrative Procedure Act.
For over three decades, DHS and its predecessors have limited enforcement actions in or near “sensitive locations,” including places of worship, religious schools, and other religious institutions or activities. In 2021, then-Secretary of DHS Mayorkas issued updated guidance on the sensitive locations policy (the “Mayorkas Memorandum”), further limiting immigration enforcement activities at or near sensitive locations.
Shortly after the Trump administration took office this year, the Acting DHS Secretary issued a memorandum rescinding the Mayorkas Memorandum. This new directive instructs officers to apply “discretion along with a healthy dose of common sense” to make enforcement determinations, including in or near sensitive locations.
On February 11, 2025, Mennonite Church USA filed suit in federal district court, District of Columbia, against DHS, the Secretary of DHS, U.S. Customs and Border Protection (CBP), the Commissioner of CBP, ICE, and the Director of ICE, challenging the recission of the sensitive locations policy. Judge Friedrich denied plaintiffs’ motion for a preliminary injunction. The court determined that plaintiffs lacked standing necessary to bring forth this challenge. Plaintiffs presented four theories of standing: imminence of immigration enforcement actions, declining attendance at places of worship, conscience injury, and the cost of increased security measures. However, the court found none of these harms sufficient to support a pre-enforcement challenge, as plaintiffs failed to show that places of worship were either in immediate danger of enforcement actions or a direct connection between declining attendance and the rescission of the Mayorkas Memorandum.
Following this ruling, the parties jointly requested a stay as plaintiffs evaluate their next steps, including potentially providing additional evidence to establish standing. The Court granted the stay and ordered a status report by May 12, 2025.
Other related cases challenging the rescission of the Mayorkas Memorandum are ongoing. In Philadelphia Yearly Meeting of the Religious Society of Friends v. U.S. Department of Homeland Security, No. 8:25-cv-00243 (D. Md., Jan. 27, 2025), plaintiffs successfully obtained a preliminary injunction that reinstating the sensitive locations guidance for their members. The government has filed a notice of appeal in that case.
Additionally, a third lawsuit was recently filed in the District of Oregon. In Pineros y Campesinos Unidos del Noroeste (PCUM), et al. v. Noem, et al., plaintiffs are seeking to have the court invalidate the memorandum rescinding the Mayorkas Memorandum, effectively restoring the Mayorkas Memorandum by declaring recission memorandum unlawful. We will keep you updated as all three cases progress. –C.C.V.
DC Circuit Dismisses USCCB’s Interlocutory Appeal on Church Autonomy Grounds in Peter’s Pence Case
A contributor to Peter’s Pence, David O’Connell, sued the USCCB in federal court for fraud, unjust enrichment, and breach of fiduciary duty after press reports alleged that Peter’s Pence donations were funneled into Vatican investments rather than the charitable relief described in the Holy See’s promotional materials, which are distributed to dioceses by the USCCB. The district court found that, at the pleadings stage of the litigation, O’Connell’s claims raised a “purely secular” dispute that could be resolved according to neutral principles of law. The court observed that it could not address “purely religious” questions, should they arise during litigation. USCCB filed an interlocutory appeal, asserting that the church-autonomy doctrine barred further proceedings.
The D.C. Circuit held that “[p]leading-stage denials of a church autonomy defense, such as the contested motion to dismiss in this case, do not satisfy the strict requirements of the collateral order doctrine.” Following the test in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541 (1949), the court determined that “[t]hey are neither conclusive nor separate from the merits and, most importantly, they can be reviewed upon post-judgment appeal.”
The court explained: “First, an order is effectively unreviewable where the legal and practical value of the asserted right would be destroyed if it were not vindicated before trial...[T]he fact that a ruling may burden litigants in ways that are only imperfectly reparable by appellate reversal of a final district court judgment is not sufficient... Second, a conclusive determination is required. An order is conclusive when it is the complete, formal, and, in the trial court, final rejection of the issue. The decision must not constitute merely a step toward final disposition of the merits of the case... Finally, the order must involve a claim of right separable from, and collateral to,
rights asserted in the action. Orders are entwined with the merits when courts of appeals will often have to review the nature and content of the merits to determine the issue on appeal” (cleaned up).
The effective unreviewability prong carried the greatest weight with the court: “The most obvious impediment to USCCB’s action is that it can get effective review under 28 U.S.C. § 1291 if the District Court issues a final decision against it. USCCB seeks to protect the right of the church to manage its own nonsecular affairs free from governmental interference. This is not a right that will be destroyed if not vindicated before trial.”
The court identified other rights that precedent has held cannot be protected through collateral orders, such as the attorney-client privilege and Sixth Amendment rights to a speedy trial and effective assistance of counsel.
On this point, the USCCB argued that adjudicating O’Connell’s claims would necessarily intrude upon religious questions, constituting irreparable harm to the USCCB’s First Amendment rights. However, the court held that collateral orders protecting church autonomy are available only in “extreme circumstances,” such as where a district court planned to instruct the jury to determine whether the defendant was a nun in good standing with the Catholic Church. Otherwise, the court concluded, “if a plaintiff can plausibly assert a secular claim capable of resolution according to neutral principles of law, the First Amendment does not bar judicial examination of that claim. The church autonomy doctrine protects against judicial interference in ecclesiastical matters; it does not provide religious organizations with a blanket immunity from suit, discovery, or trial.” –D.B.
See: O’Connell v. United States Conf. of Cath. Bishops, No. 23-7173 (D.C. Cir. Apr. 25, 2025).
Complaint Filed Regarding Recent Amendment to the Illinois Human Rights Act
In a complaint filed on March 20, 2025, the Diocese of Springfield and the Pregnancy Care Center of Rockford filed suit against Illinois officials related to the implementation of a 2024 amendment to the Illinois Human Rights Act. The 2024 amendment, which become effective in 2025, requires employers, even religious employers, to ignore a potential employee’s voluntary reproductive decisions, like abortion, or be subject to penalty.
The Plaintiffs charge that each violates at least the Employment Clause of the amended Act because they will only recruit applicants who have not—and will not—make “an unrepentant decision to obtain or facilitate an abortion.” Plaintiffs therefore allege, among other things, that their speech in advertising for open positions is chilled.
“Because they wish to carry out their respective missions and spread their pro-life messages successfully, Plaintiffs hire and retain employees who avoid reproductive decisions that undermine their identity, mission, and message. For Plaintiffs, the credibility of their messengers is as important as the message.” Complaint, ¶198. –M.A.N.
See: The Pregnancy Care Center of Rockford et al v. Bennett et al, No. 3:25-cv-50127 (N.D. Ill. Mar. 20, 2025).
Catholic Benefits Association v. Lucas: Permanent Injunction Granted
On April 25, 2025, the United States District Court for the District of North Dakota converted a preliminary injunction, granted September 2024, into a permanent injunction in favor of the Catholic Benefits Association (CBA) and the Catholic Diocese of Bismark. The permanent injunction provides relief from the Biden Administration’s final rule, under the Pregnant Workers’ Fairness Act (PWFA), requiring CBA and the Diocese of Bismark to accommodate abortion and infertility treatments (such as in vitro fertilization). CBA and the Diocese of Bismark succeeded on the merits that the PWFA Final Rule was a substantial burden on religion, and the ruling prohibits the Equal Employment Opportunity Commission (EEOC) from enforcing the Final Rule and also elements of harassment guidance related to gender identity, gender transition, and abortion.
The EEOC’s Final Rule interpreting the PWFA went into effect June 2024, and in July 2024, CBA and Diocese of Bismark sued the EEOC challenging a Biden era final rule and harassment guidance under the PWFA. CBA and the Diocese brought claims under the Religious Freedom Restoration Act (RFRA), the Administrative Procedure Act (APA), the First Amendment, and Title VII of the Civil Rights Act. The permanent injunction provides relief from the EEOC enforcing both the PWFA and Title VII against CBA and the Diocese of Bismark in a manner that would require them to accommodate, speak, or communicate contrary to the Catholic faith.
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Prior to CBA and Diocese of Bismark’s challenge, the United States Conference of Catholic Bishops (USCCB), Catholic University of America, and the Dioceses of Lake Charles and Lafayette Louisiana brought a similar challenge to the Final Rule in the Western District of Louisiana. That case was consolidated with challenges from the State of Louisiana and Mississippi and is still awaiting a decision on the merits. –S.E.
Catholic Charities Bureau v. Wisconsin: Supreme Court Oral Argument Recap
The country’s religious 501(c)(3) organizations differ in the faith that they profess and activities they perform; regardless, they stand united in awaiting a decision with the potential to impact far more than just Catholic Charities in the state of Wisconsin.
On March 31, the U.S. Supreme Court heard oral arguments in Catholic Charities Bureau, Inc. v. State of Wisconsin Labor and Industry Review Commission. Many reports indicated that the Supreme Court appeared receptive to the arguments presented by the petitioners’ counsel, Mr. Eric Rassbach of the Becket Fund.
Like most of the entities within the USCCB’s Group Ruling, Catholic Charities Bureau Inc. (“CCB”) is a separately incorporated entity of the Diocese of Superior, Wisconsin, directly controlled by the Bishop of Superior. Its tax exemption as a 501(c)(3) organization is tied to the 0928-group exemption.
In 2016, Wisconsin denied Catholic Charities Bureau’s request of an exemption from the state’s unemployment insurance program. CCB sought the exemption, not to leave employees without support, but rather to join the Wisconsin Bishops’ Church Unemployment Pay Program, a more efficient program providing equivalent benefits to their employees. CCB requested that the Wisconsin Supreme Court review a lower court ruling denying the exemption on January 12, 2023. Last year, however, the state’s highest court affirmed the denial, ruling that CCB was not entitled to the religious exemption because its services to the poor and needy were not considered “typical” religious activities.
According to the petitioners, the Religion Clauses of the First Amendment work together to protect religious independence from government control and to prevent discrimination against religious exercise. They argue Wisconsin’s decision is unconstitutional because:
1.) It violates church autonomy by penalizing CCB based on its organizational structure, specifically its separate incorporation from the Diocese of Superior. If allowed to stand, the decision would penalize CCB for adhering to Catholic social teachings and would result in the State improperly interfering with matters of internal church governance (Kedroff v. Saint Nicholas Cathedral of Russian Orthodox Church in N. Am., 344 U.S. 94, 116 (1952), Serbian E. Orthodox Diocese for U.S. of Am. & Can. v. Milivojevich, 426 U.S. 696, 725 (1976)).
2.) It violates the Religion Clauses’ prohibition on impermissible entanglement of church and state. The Religion Clauses forbid “active involvement of the sovereign in religious activity” (Walz v. Tax Comm’n of N.Y., 397 U.S. 664, 668 (1970)) and judgments about religious correctness or doctrine (Thomas v. Review Board, 450 U.S. 707, 716 (1981); (Our Lady of Guadalupe School v. Morrissey-Berru, 591 U.S. 732, 751 (2020)).
3.) By denying CCB the religious exemption, Wisconsin is discriminating among religions, favoring religious groups with simpler structures or those serving exclusively members of their own faith or engaging in active proselytization, thus unfairly granting exemptions (Larson v. Valente, 456 U.S. 228 (1982) and Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520, 532 (1993)).
Wisconsin counters that there is no violation of church autonomy, as the decision does not impact matters of faith or doctrine warranting protection from government intervention. The state further argues it does not affect CCB’s corporate structuring decisions or create entanglement risks, as agency decisions on employee disputes do not require interpreting religious doctrine. During the oral arguments, it was stated, “It’s an anti-entanglement statute precisely because when the state has to resolve misconduct disputes over benefit eligibility, we don’t want our . . . hardworking public servants to have to answer questions of religious doctrine.” Lastly, Wisconsin argues that no discriminatory action has occurred solely because its activities are not distinctly religious.
A decision is expected in June. You can read the argument transcripts here –M.L.V.
State Litigation
Artificial Intelligence Training Data
Violates Copyright Law
Well-known to legal professionals, Westlaw, a research platform, utilizes headnotes that summarize key points and caselaw holdings. Westlaw is owned by Plaintiff Thomson Reuters. Defendant Ross is a newer, competitor research platform, and needs a database of legal questions and answers on which to train its AI system. It reached out to Westlaw for a license but was not granted one. Ross then acquired its training data in the form of “Bulk Memos” from a third party which, the court noted, “were built from Westlaw headnotes.” Thomson Reuters sued Ross for direct copyright infringement.
Ross asserted that the Bulk Memo questions were not “virtually identical” to Westlaw’s headnotes. However, Judge Bibas explained that “substantial similarity” was all that was required and found for Thomson Reuters on that point.
Ross also put forth the affirmative defense that it used the materials under the fair use doctrine. In a change of heart from the court’s 2023 decision in this same case, in which it denied summary judgment on fair use, the court applied the requisite fair use factors and found for Thomson Reuters. Specifically, citing the Supreme Court’s decision in Warhol v. Goldsmith, 598 U.S. 508, 529-31 (2023), the court determined that Ross’s use was not transformative, having no different purpose or character than the Westlaw product. Finally, the court lent significant weight to the fourth factor, finding that the likely effect of Ross’s copying on the market for Westlaw’s product would be dramatic, seeing as it is a direct competitor.
See: Thomson Reuters Enter. Ctr. GMBH v. Ross Intel. Inc., No. 1:20-CV-613-SB, 2025 WL 458520 (D. Del. Feb. 11, 2025).
North Carolina Supreme Court Upholds 2019 SAFE Child Act’s Extension of Statute of Limitations and Lookback Window
In light of North Carolina’s 2019 SAFE Child Act, the state Supreme Court recently decided four cases that raised constitutional issues related to the legislation. The 2019 SAFE Child Act revamped old protections for survivors of childhood sexual abuse. It extended the statute of limitations and included a lookback window in which survivors could bring claims. The statute of limitations previously expired when the survivor turned 21 years old and was changed to 28 years old. The lookback window ended December 31, 2021, but the Gaston County Board of Education challenged its constitutionality in McKinney v. Goins, 911 S.E.2d 1 (NC Sup. Ct., Jan. 31, 2025).
In McKinney v. Goins, the court upheld the constitutionality of the law’s lookback window. Chief Justice Paul Newby wrote the opinion, holding there is no “constitutionally protected vested right” in the running of a tort claim’s statute of limitations that would prevent the legislature from reviving an otherwise time barred claim. The court held that neither the "Law of the Land" Clause nor the Ex Post Facto Clause of the North Carolina Constitution bar the challenged provision.
The decision allowed three other cases to move forward. Two of the cases were consolidated into John Doe 1K v. Roman Catholic Diocese of Charlotte, 911 S.E.2d 38 (NC Sup. Ct., Jan. 31, 2025).
In the consolidated case, the court held that the SAFE Child Act would have revived plaintiffs’ claims, but here plaintiffs already brought those claims over a decade ago and courts already entered final judgments dismissing the claims with prejudice because they were time barred.
Finally, Cohane v. Home Missioners of America, touched on the issue of whether the SAFE Child Act intended to distinguish between abusers and the organizations, institutions, and parties that employed or supervised the abuser or otherwise condoned, ratified, or facilitated the abuse. The court held that no such distinction was made, and that it authorized potential defendants in line with tort law principles, which include abusers and enablers. –S.E.
See: McKinney v. Goins, 911 S.E.2d 1 (NC Sup. Ct., Jan. 31, 2025); John Doe 1K v. Roman Catholic Diocese of Charlotte, 911 S.E.2d 38 (NC Sup. Ct., Jan. 31, 2025); Cohane v. Home Missioners of America, 911 S.E.2d 43 (NC Sup. Ct., Jan. 31, 2025).
Connecticut Court of Appeals Allows Secular Courts to Decide Dispute over Catholic Organization’s Bylaws
The Connecticut Court of Appeals reversed and remanded a superior court’s dismissal of complaint for lack of subject matter jurisdiction, based upon religious entanglement and church autonomy.
A nonprofit group and some members of the board of trustees sued the archbishop and diocesan representatives seeking declaratory judgment on the interpretation of the corporation’s bylaws. The superior court, sua sponte, raised the issue of subject matter jurisdiction on defendants’ motion to dismiss. When their complaint was dismissed, the nonprofit and board members appealed. The state court of appeals decided that interpreting the bylaws could be determined by applying neutral principles of law, permitting judicial resolution under the First Amendment. Further, the court of appeals remanded back to the superior court for resolving fact issues.
The state court of appeals reasoned that it need not decide whether the Foundation for the Advancement of Catholic Schools (FACS) was religious or not because the court can resolve claims by applying neutral principles of law. The court relied on the recent clarification from the Connecticut Supreme Court, that the neutral principles doctrine “permits civil courts to decide disputes arising in religious contexts, so long as they may be resolved solely by a secular legal analysis that does not implicate or [is] not informed by religious doctrine or practice.”
The court determined, by reviewing the requested relief and the language of the bylaws, that resolving the dispute was not an inquiry into ecclesiastical questions of religious doctrine, but instead a question of corporate governance on whether the archbishop was authorized under the bylaws to appoint individuals who had not been nominated by the committee of FACS. It concluded that it was possible to resolve the plaintiffs’ claims by conducting an exclusively secular legal analysis.
The court rejected defendants’ argument that because of the archbishop's status in the Archdiocese of Hartford, he exercises his “religious discretion” when making decisions as to board appointments, which constitutes a matter of church governance and the governance of a presumably religious organization that a civil court cannot review. The court again emphasized the question was not why the archbishop selected certain individuals for the board but whether the bylaws authorize the board to limit the individuals who may be appointed to the board by the archbishop. –S.E.
See: Found. for the Advancement of Cath. Sch., Inc. v. Blair, 230 Conn. App. 793 (Conn. Ct. App. 2025).
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TCJA: Is Your Organization Ready for Tax Changes?
Concerns are growing regarding the future of the Tax Cuts and Jobs Act (“TCJA”), which is set to expire at the end of the year. TCJA represented the most significant tax reform in decades, affecting deductions, depreciation, expenses and tax credits, among other things, and affected both individual taxpayers and business.
Currently, a cause for alarm is the possibility of extending the TCJA through the reconciliation act. Lawmakers anticipate important guidance in early April from the Senate parliamentarian, which will clarify whether the reconciliation process can be used to push through the extensions.
This uncertainty adds to the complexity for tax practitioners in terms of implementation. The rapid approval of the TCJA in 2017 led to time-consuming and stressful implementation efforts. As Bloomberg Tax reported in “2025 Tax Changes Readiness Survey: Insights for Tax Department Optimization,” among those who participated, 88% were working on tax related issues when TCJA was approved in 2017, and 92% of that group reported having very or moderate disruptions during the implementation period. Furthermore, 62% of respondents said that it took a full year to implement the TCJA fully.
If you have been worried, you are not alone. The survey revealed that 81% of respondents are moderately to very worried or stressed about the possibility of changes to the TCJA. However, only 52% indicated that they are currently doing scenario modeling to map the potential options. Most of the tax process for the TCJA provisions rely on manual processes, which is one of the most common problems when modeling and adjusting to changes, especially if, as happened in 2017, changes pass at the last minute. Most practitioners mention that they start to get ready for tax law changes at least six months in advance. Last-minute approved bills make this preparation challenging.
Taxpayers and nonprofits should also be aware that even if the answer of the Senate parliamentarian does not allow the TCJA to pass through reconciliation, achieving a simple majority to make these cuts permanent is possible, though more challenging.
Unexpected challenges require new solutions
Now more than ever, we’re here for you. We continue to provide critical insurance services on behalf of Catholic Dioceses, and have been since 1928.
If your organization has not yet started to prepare for the potential changes, the survey and upcoming news from the Senate should serve as your motivation to begin promptly. You can access the survey here. –M.L.V. GOLD SPONSOR
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