Herald Newsletter Vol 34-4 Fall by dfmc_brochure

Herald www.dfmconf.org

Volume XXXIV Number 4• Fall 2023

Homily from DFMC 2023 Mass at Cathedral Basilica of the Immaculate Conception, Denver

INSIDE Board of Directors.............................. 2 in memoriam: Bryan Coulter............... 2 Welcome New DFMC Members............ 2 Saint Matthew Medal Winner............. 3 DFMC Member Profile: Jo Willhite.... 4-5 CDFM Completion Congratulations..... 5 Raffle Vendor List from Denver........... 6 Law Briefs: Federal Litigation........ 8-20 Law Briefs: State Litigation......... 21-23 Law Briefs: Regulatory Issues...... 24-26 Future Association Meetings............ 28

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DIOCESAN FISCAL MANAGEMENT CONFERENCE OFFICE: 625 W. Deer Valley Rd., Ste. 103-410 Phoenix, AZ 85027 602-992-2900 Email: dfmc@dfmconf.org

Bishop Jorge Rodríguez, Ph.D, Auxiliary Bishop for the Archdiocese of Denver Dear brothers and sisters, It has been a spiritually charged evening, and I am sure you have experienced that kind of peace and sweetness that God’s presence raises in the soul when He is particularly close. And today he has been remarkably close to us while walking our streets with us. That is the amazing gift of the Eucharist, that places God’s love amid our cities and lives. When we hear God’s word, we know that they channel God’s message for us today. Ezra narrates that King Darius ordered: “Let the governor and the elders of the Jews continue the work on the house of God; they are to rebuild it on its former site.” And he gave some criteria “for the rebuilding of the House of God.” The House of God was devastated and abandoned by tragic events. It is time to rebuild. It is where we are at now today: Our Church, the House of God was devastated, deprived, impoverished and badly off. It is time to hear God’s mandate: rebuild! Bring the House of God to its formal site! Darius said that the rebuilding will be paid “From the royal revenue, the taxes of Westof-Euphrates” (Cathedraticum!) and mentions those people working in the construction to rebuild the House of God.

The third one: they work to rebuild the House of God for the glory of God. In the church we do have finance, administration, investments, resources, properties, and human resources too. They are nothing else than material means for a purpose. And you represent, in Pope Francis’ words, “the Church's awareness of its responsibility in protecting and managing its assets carefully in view of its mission to evangelize and particularly to help the needy.". The archdiocese of Denver, under the leadership of the Archbishop, Keith Parsons (COO) and Brenda Cannella (CFO) is making a fantastic work in giving to every single department in the Curia, -including accounting, finance, risk management, etc. a missionary soul, making sure that people do their work with great professional quality, but with a missionary soul: “in view of its mission to evangelize and particularly to help the needy.” You work for the mission of the Church, you work for the glory of God, you work according to God’s word and God’s commandment of love, as in the reading today.

You came to my mind when I read this text: you are the ones taking care of the resources, administration, workers’ compensation, human resources, and efficient use of them. Your mission today is to help rebuild the church in America, with your talent, profession, experience, and skills. But the Scripture today offers you some advice. The first one is: “The elders of the Jews continued to make progress in the building, supported by the message of the prophets.” The second one is: “according to the command of the God of Israel”.

I think God is reminding you that with your professional experience, preparation, and talent, you are rebuilding the Church in the United States because God’s considers you not only skilled masons in the rebuilding of the House of God, but true evangelizers and loving caretakers of the poor.

BOA RD O F DIREC TORS Debbie Swisher President Diocese of Lexington Jo Willhite Vice President Archdiocese of Portland in Oregon Keith Parsons Treasurer Archdiocese of Denver Shirley Pajanor Secretary Diocese of San Diego Most Rev. Barry C. Knestout Episcopal Moderator Diocese of Richmond John Matthew Knowles Executive Director Mac Bryant Diocese of Manchester Cecilia Colbert Diocese of Dallas Tammy DiLorenzo Diocese of Biloxi Michael McGee Diocese of Richmond Sheila R. Murray Diocese of Greensburg Carla Mills Archdiocese of Kansas City in Kansas Jorge Montenegro Diocese of San Bernardino Dn. Eric Simontis Diocese of San Jose

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Please pray for the repose of the soul of Bryan Coulter, Director of Finance and Administrative Services for the Catholic Diocese of Wichita, who died on Sunday, Dec. 3. He was 62 years old. Bryan was Diocesan Fiscal Officer in Wichita and a longtime, respected member of the Diocesan Fiscal Management Conference. Bryan attended nineteen DFMC Conference events, including Denver 2023. Bryan married Jodi Ostmeyer in 1987. They were blessed with six children, all of whom survive him, along with five grandchildren. Bryan's family recalled: “Every Sunday was a celebration of family with all gathered around the dinner table to pray together, share a meal, swap life’s stories, and fill the room with laughter and love. Bryan’s quick wit and humor were legendary and created memories and stories that will be shared around the family table for years to come. Each child was blessed to share in their own treasured relationship with their dad, who always seemed to have the answer to any problem and celebrated their every joy.” After almost every Sunday dinner, Bryan and his son, Diocese of Wichita priest Father Isaac Coulter, would retreat to the back deck. While looking at the stars they would talk about the resurrection of the body into the New Earth and what it would be like. He looked forward to being with everyone forever in all of the beauty he’d already experienced.”

Welcome to the DFMC!

Please give a warm welcome to recent members to the DFMC. You can send them a welcome note on the DFMC Member Portal. • Mr. Mark Beno, CENGI Accounting Manager, Atlanta • Mr. Patrick Carr, Vicar of Finance, New Orleans • Ms. Teresa Coburn, Controller, Nashville • Ms. Melissa Cumming, Exec. Assistant-Finance, Buffalo • Very Rev. Jamin David, Vicar General, Baton Rouge • Very Rev. William Dhein, Vicar General, La Crosse • Mr. Mike Gillis, Controller, Harrisburg • Mr. Thomas Guarino, Accounting Manager, Santa Fe • Mr. Ron Hamilton, Parish Fin. Srvcs. Coor., Sacramento • Ms. Julie Heftka, Controller, Buffalo • Mr. Ken Kolarik, Finance Coordinator, Green Bay • Ms. Kelly Kuras, Director of Human Resources, Detroit • Ms. Jennifer Mallette, Dir. of Accounting, Springfield in MA • Ms. Laura McCaffrey, Exec. Parish-School Srvcs., Hartford • Mr. Jerry McElhone, Director of Technology, Detroit • Ms. Monique Morris, Sr. Accounting.& Bus. Mgr., Nassau • Ms. Annette Morrison, Senior Accountant, Joliet in Illinois • Ma. Vic Nuguid, Human Resources Director, San Jose

• Ms. Beth Pericozzi, Internal Audit Manager, Buffalo • Mr. Keith Roberts, Dir., Risk & Property Mgmt., Nassau • Mr. Derrick Rosenstein, Dir. Parish-Sch Srvcs., Harrisburg • Ms. Karen Rottier, Accounting Manager, Green Bay • Mr. Joel Ruiz, Accountant, Brownsville • Ms. Vanessa Sanchez, Accounting Coordinator, Las Vegas • Ms. Pamela Scales, Asst., Parish & School Srvcs., Detroit • Ms. Virginia Scherpereel, Executive Assistant, Lubbock • Ms. Annette Siegel, Exec. Asst. to the CFO, Philadelphia • Ms. Lisa Slattery, Dir., of Parish Finance, Joliet in Illinois • Ms. Pauline Starling, Parish Accountant, Peoria • Ms. Christine Sullivan, Accounting Mgr., Fall River • Ms. Michelle Tanely, Actg. Mgr., St. Paul-Minneapolis • Ms. Michelle Truesdale, Finance Manager, Jefferson City • Mr. Michael Waddell, Parish Fin. Consultant, Milwaukee • Mr. Brandon Walsh, Controller, Scranton • Dcn. Gregg Wilbur, Chief Financial Officer, Albany New Member Update as of 12/7/23

DFMC Saint Matthew Medal Acceptance Speech: Tony Salgado Tony Salgado, CFO of the Archdiocese of Santa Fe It’s a pleasure to be here in Denver Colorado! I want to express my gratitude to the Archdiocese of Denver for hosting the DFMC this year, a heartfelt ‘Thank you’. Thank you, Your Excellency Samuel J. Aquila, Barry C. Knestout, Keith Parsons, COO for the Archdiocese of Denver. To DFMC Board members especially the Executive Committee who form the St. Matthew Medal Committee. And Deacon Aruna Silva who nominated me and my long-time friend Jennifer Cantrell who provided a writeup to Deacon Aruna. Even though Jan Smith who is not here and first recipient of the St. Matthew Medal award, congratulations. And to the DFMC attendees, I am honored to be this year’s recipient. Although I have told a few people that I know of a few others that are more worthy than me. I will always remember and cherish this moment. My journey with the church has been a long one and challenging, it has been rewarding in so many ways.

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I know there must be a lot of criteria the board considered in making their decision like years of service, qualifications, skills, character etc. I am sure one criteria has to be age related. I can just hear the discussion by the Executive Committee when they considered me. Probably went something like this. Yes, he looks old enough. He fits that shoe. Oh yes, it’s a given. I like to put a positive twist like: Maturity and seasoned. Well some people might say WELL SEASONED!

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The Saint Matthew Medal Honoring Zeal for Catholic Evangelization, Leadership in the Profession, and Giving Back to Others

But really this award, even though I am the recipient, is for all of us, diocesan CFOs and other staff attendees. We all share similar skills, dedication, and love of the church. The award represents common traits that you and I have. Many of us have also had a common journey. What are these traits?

Maybe part of the answer is how Apostle Matthew is depicted in the series The Chosen. I trust many of you have seen the episodes. Matthew comes across as OCD. I can relate to that. If debits don’t equal credits, we spend hours until they do. If that bank reconciliation doesn’t balance, we spend hours trying to balance it. If that number on the financial statements doesn’t look right, we dig into the detail. A N N U A L P R E S E N TAT I O N

S U N D AY, S E P T E M B E R 2 4 , 2 0 2 3 TH

DENVER, COLORADO

Apostle Matthew comes across as unsure of himself. Sometimes afraid. I can tell you over the years I relate to this especially with all the challenges the church has faced, whether it be fraud, helping a failing school, dealing with litigation or even bankruptcy. He is also depicted as not very well liked. Have you felt that way sometimes dealing with a hostile finance council or with a pastor where you are trying to collect parish assessments.

You might have been in a position where you have told (I qualify the word told) the vicar general or even your bishop “You cannot do this”. We sometimes have to say “no” even at the risk of losing your job. But when you do say no make sure you convey the facts and reasons why. Always stick to your convictions. Whether the vicar general or bishop follow your advice you have done your duty. In most cases, I have found that such advice is followed. Apostle Matthew was a steward just like you and I. He took meticulous notes on the small treasury of coins. He did so to be transparent and to protect himself. We must always strive for this. You are good at it and the church needs you, your bishop needs you. Most of all, Matthew trusted in Jesus Christ. He was a follower. He had faith and that is the answer to helping us meet these heavy challenges we face. My journey over almost 40 years with the church has been with rocky roads and cliffs. We all have had to deal with those. How do we deal with these challenges defines you. Not only at work but concerns in your own personal life. How did I deal with roadblocks and quicksand… Truly, only by believing and following in Christ. One’s faith, at least in my journey, did not happen overnight. Definitely, a rough trail can drive you toward Jesus Christ more closely. What are some of the things one can do to further your faith. Morning prayer and evening prayer. Or maybe someone like a spiritual director or a mentor can be instrumental. Bishop Robert Barron is a recent sermon said “a good spiritual director sheds light in a dark situation”. Find a faithful mentor and spiritual director. Over the years, Jennifer Cantrell has been one of my mentors, a Finance Council Chair was a mentor of mine. Many of you know Jennifer Cantrell, she is steadfast and very faithful to the Lord. In my life, my beloved wife was my inspiration, she led me to Jesus Christ by her own example of constant prayer, visits to adoration, daily communicant, and she relied on the Holy Spirit for everything. So, I encourage you to take the time and do morning and evening prayer, go to adoration, attend Mass daily, receive the Holy Eucharist as often as you are able… Rely on the Holy Spirit, OH so powerful! Again, thank you so much and God Bless. FALL 2023

DFMC DFMC MEMBER PROFILE: Jo Willhite

Thriving on Variety in Portland, Oregon by Jeanette Fast Redmond “When I first started this job, I thought I would give it 10 years. And then after eight, I said, ‘Oh, maybe I’ll give it 12.’ And now I’m saying, ‘Maybe I’ll give it 15,’” says Jo Willhite, chief administrative officer for the Archdiocese of Portland in Oregon. Jo started as the chief financial officer for the archdiocese in 2011 JO WILLHITE before being promoted to CAO in Chief Administrative Officer 2014. This Church position came Archdiocese of Portland on the heels of Jo’s substantial in Oregon corporate experience as a finance officer and business executive for, variously, a multinational electronic parts manufacturer, a multimedia publisher, an industrial motor startup, and a major automaker’s grand touring racing division. Understandably, she calls working for the Church “a curious change.” In 2011 she and her husband had relocated from San Diego to Portland, and she was looking for a new job when two opportunities arose at the same time. “One was to be the CFO for a local company here in Portland,” Jo recalls, doing “the things that I knew how to do and had done for 30 years.” The other position was the archdiocesan CFO job. At first, she wasn’t sure about moving into the nonprofit sector, until she remembered that her most fulfilling experiences came from outside her corporate career. “One of those was my duration on the board and as board chair for the Boys & Girls Club,” she explains. “It’s not a religious organization, but it’s a nonprofit, mission driven. And that to me was very rewarding.” “So I was really torn,” she says. The archdiocesan job intrigued her. “By definition, I love the mission, being Catholic.” Jo consulted two trusted advisors. Each said essentially the same thing. “My last boss in San Diego, who I had great regard for, was just one of the most down-to-earth, reasonable men,” she says. “After I explained to him what my two opportunities were, he said, ‘You know, you really don’t need to have this conversation with me. It’s obvious what you’re going to do.’” The second person, a dear friend, similarly asked, “Why are you tearing yourself apart about this?” So Jo took the archdiocesan job. “I’ve never regretted it. This is by far the best career move I’ve ever made,” she says. This transition makes even more sense considering Jo’s love for variety, as demonstrated by her career trajectory. She came to appreciate variety as a child observing her father’s accomplishments during his 35 years working for Blue Cross in Pittsburgh, Pennsylvania. “He always seemed to have interesting responsibilities,” she remembers. “I just liked his temperament and the things that he seemed to accomplish.” “He relocated the Blue Cross building in Pittsburgh from one building to another,” she mentions as one example. “He was 4 FALL 2023

responsible for the construction of the building, all the interior furnishings. It was like what you today you would call a project manager for a building.” “He also totally revamped their employee manual with his HR department,” she says, “and he also brought what was then a true switchboard into the 20th century.” Her father suggested she could become an actuary. She was good at math, and he thought she’d enjoy the analytical work. But it didn’t sound interesting enough for her. “At that point the only actuaries I’d ever met were pretty boring,” she laughs. “Since then I’ve known a few actuaries who are really a hoot, and I like them a lot. So maybe I’ve changed my mind over the years, but that’s sort of what started it. I just knew I wanted to be in business.” Her current portfolio as the archdiocesan CAO continues to feed her appetite for variety while building on her corporate experience. “I’m responsible for most of the functions administratively here at the Pastoral Center, with the exception of legal counsel,” she says. “I have financial services, I have human resources, risk management, property management, resource development (which we call stewardship and development). And I have the cemeteries and funeral homes report to me as well.” But working for the Church has added new variety to responsibilities she long ago mastered: namely, learning more about Catholicism, continuing to grow spiritually, and witnessing to the Gospel. “There’s still a lot about Catholicism that I don’t know,” she says. “So I would go into [then vicar for clergy] Monsignor Don Buxman’s office once in a while and say, ‘I need a Catholicism 101 fix,’ because of something I’d come across that I had no idea about.” Her work allows her to continue growing spiritually through frequent daily Mass attendance, either at the Pastoral Center or at a nearby parish. She adds, “I’ve become pretty good friends with a number of the priests and some of the retired priests. It feels really good to go to our priest retirement facility where there’s 14 priests. I stop with about half of them and take them a little gift and have tea. We just enjoy part of an afternoon together once in a while. So I think having that regular contact with quite a number of pastors is really good for me.” Just last year she had an unprecedented opportunity to witness to the Gospel at an all-building, off-site meeting intended to bring all staff closer together in support for the mission of the archbishop and the Pastoral Center. “We had come up with four different questions that we could answer with our eyes closed,” she recalls. One of the ordained members of the leadership team was assigned to discuss each question from his or her own perspective, and the archbishop was asked to address the last question: How will we succeed? “He looked at me,” Jo explains, “And he said, ‘I’m not going to do that. You’re going to do that.’” “I was just panicked,” she says. “I don’t panic talking in front of people, but there was something about that depth of vulnerability, I think.” CONTINUED ON NEXT PAGE

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Federal Litigation Fourth Circuit Judges Disagree on Whether Ministerial Exception Applies to Art Teacher at Religious College Liberty University, a Christian college in Lynchburg, Virginia, employed Eva Palmer as an art teacher. After her termination at age 79, Palmer sued for age discrimination under the Age Discrimination in Employment Act. The district court concluded that the ministerial exception did not apply but granted summary judgment in favor of the university on the merits. The Fourth Circuit affirmed but vacated that portion of the lower court’s judgment addressing the ministerial exception. Writing for the court, Judge Robert King agreed with the lower court that Palmer failed to make out a prima facie case of age discrimination and that the university was entitled to summary judgment on that basis. Judge King concluded that it was unnecessary to reach the ministerial exception, and that the lower court therefore should not have addressed that question, because the case could be resolved entirely on statutory grounds. Judges Julius Richardson and Diana Gribbon Motz wrote separate concurring opinions in which they discuss the ministerial exception and come to opposite conclusions as to whether the exception applies in this case. Judge Richardson concluded that it does; Judge Motz concluded that it doesn’t.

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Judge Richardson noted that Palmer was required to be a model of a Biblical lifestyle and character and to integrate a Biblical worldview into her courses. These duties are set out in her contract and the faculty handbook, and she was evaluated on these criteria. In addition, Palmer regularly began her classes with prayer. Based on these facts, Palmer helped spread the university’s religious message. She was therefore a minister for First Amendment purposes, and the ministerial exception applied. Judge Motz disagreed. Nothing in Palmer’s job description referred to ministerial duties, and the mere fact that she was expected to be a model of a Biblical lifestyle or to integrate a Biblical wordview into her teaching was insufficient to turn her into a minister. She prayed with students but was not required to teach religion or engage in any specifically religious conduct. “[T]he conception of the ministerial exception advanced by my colleague,” Judge Motz warned, “is no mere application of existing precedent. It is a dramatic broadening of the ministerial exception that would swallow the rule.” –M.M.

See: Palmer v. Liberty Univ., 72 F.4th 52 (4th Cir. 2023).

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Sixth Circuit Allows Tennessee Law Forbidding Transgender Treatments for Minors to Go into Effect Tennessee passed a law prohibiting health care providers from performing gender-related surgeries on minors or administering hormones or puberty blockers to them. Three minors, their parents, and a doctor sued state officials, claiming that the Act violated their due process and equal protection rights. The district court concluded that the plaintiffs lacked standing to contest the ban on surgeries, but had standing to challenge the ban on hormones and puberty blockers. On June 28, the court issued a statewide preliminary injunction, finding that the ban on hormones and puberty blockers infringes parents’ due process right to direct the medical care of their children and discriminated on the basis of sex in violation of equal protection. On July 8, the Sixth Circuit granted the defendants’ motion for an emergency stay of the district court’s order, allowing the challenged law to go into effect. Chief Judge Jeffrey Sutton wrote the opinion. The first set of problems with the lower court order, Judge Sutton found, lies with its scope. The plaintiffs claim that the Act is unconstitutional on its face, but such a challenge requires that no set of circumstances exists under which the statute would be valid. The lower court declined to engage with Tennessee’s arguments that it could lawfully apply the Act in some settings. In addition, the district court should not have issued more relief than was necessary to remedy the plaintiffs’ injury: The court’s injunction prohibits Tennessee from enforcing the law against the nine challengers in this case and against the other seven million residents of the Volunteer State. But absent a properly certified class action, why would nine residents represent seven million? Does the nature of the federal judicial power or for that matter Article III permit such sweeping relief ? A “rising chorus” suggests not. [Citing cases.] A court order that goes beyond a plaintiff ’s own injuries by enjoining government action against nonparties “exceeds the norms of judicial power.” A second set of problems with the lower court’s order is that the plaintiffs are unlikely to succeed on the merits of their due process and equal protection claims. As to both claims, the plaintiffs fail to grapple with the original meaning of the due process and equal protection clauses. [Failure to deal with the original meaning of those provisions] prompts the question whether the people of this country ever agreed to remove debates of this sort—about the use of new drug treatments on minors—from the conventional place for dealing with new norms, new drugs, and new technologies: the democratic process. Life-tenured federal judges should be wary of removing a vexing and novel topic of medical debate from the ebbs and flows of democracy by construing a largely unamendable federal constitution to occupy the field. Law Briefs is published by the USCCB Office of the General Counsel. Copyright © 2022 United States Conference of Catholic Bishops. All rights reserved.

The lower court’s injunction extends due process and equal protection “to new territory” at a time when there is a proliferation of legislative activity on this issue across the county: Leaving the preliminary injunction in place starts to grind these all-over-the-map gears to a halt. Given the high stakes of these nascent policy deliberations—the long-term health of children facing gender dysphoria—sound government usually benefits from more rather than less debate, more rather than less input, more rather than less consideration of fair-minded policy approaches. To permit legislatures on one side of the debate to have their say while silencing legislatures on the other side of the debate under the U.S. Constitution does not further these goals. [Citations omitted.] Medical opinion is surely relevant, but not dispositive, for the same reason that courts do not defer to a consensus among economists in interpreting the impairment-of-contracts or takings clauses. In any event, the medical community is not of one mind about the use of hormone therapy to treat gender dysphoria. Even the FDA has not approved the use of these drugs. The fact that it has not done so “giv[es] us considerable pause about constitutionalizing an answer they have not given or, best we can tell, even finally studied.” Viewed separately, neither the due process nor equal protection guarantees likely supports the district court’s order. It is true that parents have a fundamental due process right to make decisions about their children, but that right has thus far been cabined to such issues as education and visitation rights. “No Supreme Court case extends [substantive due process] to a general right to receive new medical or experimental drug treatments,” and the plaintiffs have not shown that a right to such treatments is deeply rooted in our history and traditions as they must to demonstrate due process protection. In addition, state legislatures play a critical role in regulating health and welfare, and such efforts are usually entitled to a strong presumption of validity. Judicial deference to legislative judgments on such matters is especially appropriate where, as here, there is medical and scientific uncertainty. The lower court’s equal protection analysis also rests on dubious grounds. It applied heightened scrutiny on the assumption that the Act discriminates on the basis of sex. But the Act applies to all minors, regardless of their biological sex. Furthermore, neither the Supreme Court nor the Sixth Circuit has recognized transgender status as a quasi-suspect class. Until that changes, rational basis review applies. Bostock v. Clayton County, 140 S. Ct. 1731 (2020), does not change the analysis. That decision and its reasoning “applies only to Title VII,” as Bostock itself makes clear. Id. at 1753. The court indicated that it would expedite the appeal with the goal of resolving it no later than September 30. –M.M.

See: L.W. v. Skrmetti, 73 F.4th 408 (6th Cir. 2023).

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Federal Litigation District Court Allows Challenge to HHS Abortion Guidance to Pharmacies to Proceed Smurfing is a money laundering technique in which a large transaction is broken down into smaller transactions to shield the overall scheme from government detection. A district court in Texas recently warns of the increasing use by the federal government of “agency smurfing”—breaking executive branch actions into discrete, separate steps to avoid judicial review of moves that, if taken at once, would more clearly be subject to judicial review. The warning comes in a case involving abortion. Last year, the Supreme Court handed down its decision in Dobbs v. Jackson Women’s Health Org., reversing Roe v. Wade. The same day, the Secretary of Health and Human Services issued a statement: Today’s decision is unconscionable. Abortion is a basic and essential part of health care—and patients must have the right to make decisions about their health care and auton my over their own bodies…. At the Department of Health and Human Services, we stand unwavering in our commitment to ensure every American has access to health care and the ability to make decisions about health care—including the right to safe and legal abortion, such as medication abortion that has been approved by the FDA for over 20 years. I have directed every part of my Department to do any and everything we can here. As I have said before, we will double down and use every lever we have to protect access to abortion care. To everyone in this fight: we are with you. Two weeks after Dobbs, the President issued an executive order (EO) directing HHS to “protect and expand access to abortion care, including medication abortion….” Three days after the EO, HHS issued, without notice or comment rulemaking, its “Guidance to Nation’s Retail Pharmacies: Obligations Under Federal Civil Rights Laws to Ensure Access to Comprehensive Reproductive Health Services” (Guidance). The Guidance states that “[p]harmacies … may not discriminate against pharmacy customers … including with regard to supplying medications; making determinations regarding the suitability of a prescribed medication for a patient; or advising patients about medications and how to take them.” The Guidance invites anyone to submit a complaint of a violation with the Department’s Office for Civil Rights. An accompanying press release stated that the Guidance comes “following President Biden’s Executive Order on ensuring access to reproductive health care.” HHS has already received and begun investigating some complaints under the Guidance. The State of Texas and a private North-Dakota-based pharmacy with religious objections to abortion, Mayo Pharmacy, sued HHS, alleging that the clear import of these actions is to threaten pharmacies in Texas with enforcement action if, in accord with Texas law, they refuse to dispense abortion drugs. Mayo Pharmacy also brought a claim under the Religious Freedom Restoration Act (RFRA). The plaintiffs asked the court to invalidate and enjoin the Guidance. HHS moved to dismiss on grounds of standing and ripeness. Notwithstanding the temporal and subject matter links between Dobbs, the Secretary’s statement, the EO, the Guidance, and the 10 FALL 2023

accompanying press release, HHS argued that the Guidance “addresses situations in which a pharmacy would fail to fill a prescription for non-abortion purposes.” The court disagreed and denied the motion; Defendants illogically expect the Court, like the Sergeant Schultz character of Hogan’s Heroes television fame, to see nothing, hear nothing and know nothing, even with it happening right before its very eyes. This is a transparently shameless, and not very clever, effort by the executive branch at death by a thousand cuts to the Dobbs ruling. Death by a thousand cuts is death nonetheless. The court concluded: [W]hat is most troubling is the trending technique federal agencies are using as standard strategy in implementing the executive branch’s policy goals in contravention of the rule of law. This technique … is laundering, or smurfing, an executive policy goal into “unreviewable” and “unchallengeable” pieces while reinforcing the whole with an implicit enforcement threat. What’s more, this compartmentalization of executive policy in an effort to avoid legal consequence is done in the open for all to see, though no one is supposed to notice. Those days are gone; the Court notices. This administration has, before and since Dobbs, openly stated its intention to operate by fiat to find non-legislative workarounds to Supreme Court dictates. This Court will not play along with such a breach of constitutional constraints. The ruling allows the case to proceed, but the court transferred Mayo Pharmacy’s RFRA claim to the District of North Dakota. –M.M.

See: Texas v. HHS, No. MO:23-CV-00022-DC, 2023 WL 4629168 (W.D. Tex. July 12, 2023).

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District Court Rejects Religious Employers’ Challenge to Government’s Refusal to Accept Joint Filings of Immigration Petitions Religious organizations that employ noncitizen religious workers sued the Department of Homeland Security (DHS) and United States Citizenship and Immigration Services (USCIS) to challenge their refusal to allow the joint or concurrent filing of forms I-360 (Special Immigrant Petition) and I-485 (Application to Register Permanent Residence or Adjust Status). The plaintiffs desired to submit joint filings in order to expedite religious workers’ permanent residence applications. The complaint raised six counts: the Free Exercise and Establishment Clauses (Counts 1 and 2, respectively); RFRA (Count 3); the Immigration and Nationality Act (Count 4); and the Due Process and Equal Protection Clauses (Count 6). The court previously dismissed Count 5, alleging violation of the Administrative Procedure Act. It has now granted summary judgment in favor of the defendants on all remaining counts. The court rejected counts 1 through 3 because “[t]o the extent that plaintiffs can petition USCIS to allow them to hire foreignborn religious workers, § 245.2(a)(2)(i)(B)’s prohibition on concurrent filing is not based on plaintiffs’ religious identity.” Citing Ruiz-Diaz v. United States, 703 F.3d 483, 487 (9th Cir. 2012), the court concluded that “even if the regulation treated the plaintiffs differently than other employment-based visa applicants, the difference required only a rational basis to survive an equal protection challenge, due to Congress’s broad power over the naturalization and immigration processes.” The court found that the prohibition was rationally based “on a demonstrated risk

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of fraud in the special immigrant category, and in particular, the religious worker program.” Count 4 was time-barred for the same reason as plaintiffs’ challenge under the APA. Last year, the court addressed the APA time bar (2022 WL 17820973, at *5), writing: [E]very civil action commenced against the United States shall be barred unless the complaint is filed within six years after the right of action first accrues. Because the USCIS promulgated § 245.2(a)(2)(i)(B) in 2002, defendants argue that the statute of limitations expired in 2008.… The court agrees with defendants that plaintiffs cannot argue that 8 C.F.R. § 245.2(a)(2)(i)(B) was “enforced” or “applied” against them, so the six-year statute of limitations applies and bars the court from hearing plaintiffs’ claims regarding 8 C.F.R. § 245.2(a)(2)(i)(B). In the instant case, plaintiffs have alleged no adverse action against them under the regulation because they did not attempt to file their paperwork concurrently and because USCIS approved their petitions. As to Count 6, the plaintiffs failed to properly allege that the employers were similarly situated to secular employers or to address whether “the overall regulatory scheme might … be advantageous for special immigrant religious workers in either wait times or application difficulty.” Plaintiffs provided no evidence showing that EB-4 petitions take more or less time than other employer-based petitions, or whether EB-4 applications cost more or less than petitions in other employment-based categories. Lastly, the plaintiffs failed to address whether special immigrant religious worker petitioners are similarly situated with other secular immigrant employment petitioners. Had the plaintiffs prevailed, they would have been able to concurrently file applications if visa availability allowed for it and to cut time out of the lengthy petition process. –C.C.V.

See: Soc'y of Divine Word v. U.S. Citizenship & Immigration Servs., No. 21 CV 3650, 2023 WL 4665116 (N.D. Ill. July 20, 2023).

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Federal Litigation District Court Decision Provides Helpful Guidance on Application of Ministerial Exception and Church Autonomy Doctrine to Employment Discrimination Claims St. Stanislaus, a Catholic school, hired Cody Butler as an English, Language Arts, and Social Studies teacher but terminated his employment after he informed the principal in an email that he intended to enter into a same-sex marriage. Butler sued for sex discrimination under Title VII and analogous state law. The court held that the ministerial exception barred his claims but that, even if the exception did not apply, the claims were barred under the church autonomy doctrine. Here are the key takeaways: • The job posting, employment contract, personnel handbook, and teacher orientation program were replete with statements requiring teachers to teach, convey, and act according to the Catholic faith and to incorporate that faith into their instruction. Therefore, the ministerial exception applied, even though Butler did not teach religion as a freestanding subject.

• The church autonomy doctrine, when applicable, protects church institutions from the very process of judicial inquiry, including the time and expense of the legal process. • The McDonnell Douglas framework applies, but the church autonomy doctrine constrains its application. “[T]he principle of church autonomy precludes a jury—and at the summary-judgment stage, the Court—from treating as broadly up-for-debate the Church’s assessment” that the employee’s conduct “violated an important religious tenet.” Thus, while Butler carries the burden of demonstrating that St. Stanislaus’ asserted non-discriminatory reason for his termination was a pretext for sex discrimination, he cannot carry that burden “by instigating a debate over whether the Church really believes its position on marriage, or what the precise contours of that position are, or the extent to which his email statement really was in tension with that position or not.” –M.M.

See: Butler v. St. Stanislaus Kostka Catholic Academy, 609 F.Supp.3d 184 (E.D. N.Y. 2022).

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USCCB Participates as Amicus in Bankruptcy Case On October 27, the USCCB filed an amicus brief in the United States Supreme Court in a case that presents the following question: Whether the Bankruptcy Code authorizes a court to approve, as part of a plan of reorganization under Chapter 11 of the Bankruptcy Code, a release that extinguishes claims held by nondebtors against nondebtor third parties without the claimants’ consent. The brief ’s summary of argument states as follows: In recent years, the Catholic Church and other religious and charitable organizations have faced a flood of litigation related to allegations of sexual abuse, the vast majority of which is claimed to have occurred many decades in the past. The challenge has become more daunting as more and more states have passed laws retroactively reviving claims that became time-barred long ago under previous statutes of limitations. Most of the people accused in these allegations have been long retired or deceased, and reliable evidence on the claims is difficult if not impossible to obtain. In many cases, Catholic dioceses have proven unable to separate the true allegations from the false ones, and equally unable to bear the burden of defending against all of them in court. As a result, dozens of dioceses have been driven into Chapter 11 recently, and many more may soon follow. As diocesan bankruptcies have unfolded, nonconsensual thirdparty releases (generally in the form of channeling injunctions) have proven critical to successful reorganizations. In exchange for a release from liability on claims of alleged abuse, Catholic parishes, schools, and other diocesan entities contribute significant sums to a common fund, maximizing the recovery for abuse claimants and relieving them of the struggle to recover in piecemeal litigation. The judicially supervised releases that these entities receive in exchange—almost always with the overwhelming support of abuse claimants—provide the only viable means for the Catholic infrastructure in many communities to survive what has become decades of mission-crippling litigation. I. As most courts have recognized, the use of nonconsensual third-party releases in appropriate circumstances is authorized by the plain text of the Bankruptcy Code. The Code expressly grants the court the authority to “issue any order, process, or judgment that is necessary or appropriate,” 11 U.S.C. § 105(a), and to confirm a reorganization plan containing “any . . . appropriate provision not inconsistent with” applicable portions of the Code, id. § 1123(b)(6). This broad language easily encompasses the careful use of third-party releases in narrowly defined circumstances as they have evolved over time in bankruptcy. When limited to appropriate cases, third-party releases do not conflict with any Code provision and serve as an essential tool for courts resolving bankruptcies. If this Court were to categorically disallow them, it would carve out an essential component of the bankruptcy regime that Congress established to enable successful reorganizations in varied and difficult circumstances.

II. The Catholic Church illustrates well the importance of thirdparty releases. If third-party releases were not allowed, everyone involved in diocesan bankruptcies would be worse off. Claimant recoveries would suffer, and third-party parishes, schools, and charities would be driven into separate individual bankruptcies. While third parties in some other cases may have the option of their own successful individual bankruptcy reorganizations, that is not a practical option for third-party Catholic entities. Satellite Catholic entities often do not have the assets or resources available to hire their own competent individual bankruptcy counsel. And even if they did, the enormous waste and expense of separate and duplicative bankruptcy proceedings for each entity would prove extraordinarily destructive—not only to the Catholic entities themselves, but to the overall availability of assets for claimants. This explains why claimants overwhelmingly support the use of nonconsensual third-party releases in diocesan bankruptcies. In addition, third-party Catholic entities and dioceses are often co-insureds on the same insurance policy, which is often their greatest asset. If a diocese and its dozens or hundreds of parishes and affiliates filed separately for bankruptcy, then the insurance asset would be the property of competing bankruptcy estates, creating a jumble of logistical difficulties. Rather than attempting to untangle this problem through resource-draining duplicative bankruptcies, the only effective solution is a single diocesan bankruptcy that resolves all related claims and liabilities together in an efficient manner. This allows co-insureds like parishes and schools to jointly cede their shared insurance rights to a single trust for claimants—again, almost always with their overwhelming support—in exchange for third-party releases. Barring third-party releases would be especially inequitable in the context of diocesan bankruptcies stemming from the tidal wave of decades-old claims of abuse. In these cases, the faithful parishioners and clergy who bear the brunt of financial liability today are entirely different from the accused wrongdoers who have receded into a dark chapter of the Church’s history. Although the Church deeply regrets abuse and acknowledges the need to compensate victims, the Bankruptcy Code has long been understood to give them a fair, orderly, and lawful pathway out of the thicket of mass tort liability that now envelops them so that they can carry on the Church’s mission. The Court should not close off that pathway in this case. The entire brief is available here.

See: Harrington v. Purdue Pharma, No. 23-124 (U.S.).

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Federal Litigation Ninth Circuit Upholds Free Exercise Right of Religious Club at Public High School Ruling en banc, the Ninth Circuit has held that a California public school district violated the free exercise rights of a student group, Fellowship of Christian Athletes (FCA), by withdrawing recognition of an FCA chapter at Pioneer High School. FCA is a national ministry group with chapters in various middle schools, high schools, and colleges around the country. An FCA student leader is required to affirm certain core beliefs identified in FCA’s Statement of Faith, including the belief that “sexual intimacy is to be expressed only within the context of marriage … between one man and one woman.” An FCA student leader must also affirm its Sexual Purity Statement. For 20 years, FCA’s Pioneer chapter enjoyed participation and benefits as an official organization recognized as part of the District’s Associated Student Body (ASB) program. However, this changed in 2019 when a teacher was informed of FCA’s statement and its requisite affirmation of belief. After some deliberation with the school’s Climate Committee, the principal of Pioneer High School reported the group to the District, which concluded that FCA should be derecognized because it discriminated on the basis of sexual orientation in violation of the District’s Non-Discrimination Policy. After its derecognition and the resulting loss of its ASB benefits, FCA’s Pioneer chapter was permitted to remain on campus as an “unaffiliated student interest group.”

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In April 2020, FCA and two student members sued the District, seeking a preliminary injunction to restore the organization’s recognition as an official student group. In response, the District instituted an All-Comers Policy for 2021-2022. That policy required groups on campus to permit any student to become a member or leader of an organization “regardless of his or her status or beliefs.” The district court denied the request for a preliminary injunction. A three-judge panel of the Ninth Circuit reversed, but that decision was later vacated and the case heard en banc. The en banc court, comprised of eleven judges, has now reversed the judgment of the district court. Judge Consuelo M. Callahan wrote the majority opinion. The court concluded that the district court erred in its reliance on Christian Legal Soc. v. Martinez, 561 U.S. 661 (2010), and Alpha Delta Chi-Delta Chapter v. Reed, 648 F.3d 790 (9th Cir. 2011). In its analysis, the en banc court applied three “bedrock requirements of the Free Exercise Clause,” citing Fulton v. City of Philadelphia, 141 S. Ct. 1868 (2021); Tandon v. Newsom, 141 S. Ct. 1294 (2021); and Masterpiece Cakeshop v. Colo. Civ. Rts. Comm’n, 138 S. Ct. 1719 (2018). For the government to avoid strict scrutiny: (1) a “neutral ‘generally applicable’ policy may not have ‘a mechanism for individualized exemptions,’” Fulton, 141 S. Ct. at 1877; (2) the “government may not ‘treat … comparable secular activity more favorably than religious exercise,’” Tandon, 141 S. Ct. at 1296; and (3) the “government may not act in a manner ‘hostile to … religious beliefs’ or inconsistent with the Free Exercise Clause’s bar on even ‘subtle departures from neutrality.’” Masterpiece Cakeshop, 138 S. Ct. at 1731. For the first requirement, the en banc court reasoned that the exemptions the District granted based on sex and national heritage, among others, render its non-discrimination policy not generally applicable. Because the District “retains discretion to grant individualized exemptions for its own programs and student programs alike,” denial of ASB recognition to FCA was subject to strict scrutiny. In addition, the District’s policy was not neutral because the District engaged in selective enforcement of its policy as evidenced by other clubs allowed to discriminate among their members. Tandon stipulates that when there are two comparable activities, they “must be judged against the asserted government interest that justifies the regulation at issue.” Here too, the District failed neutrality because, while its asserted interest was “ensuring equal access for all students to all programs,” it enforced this policy against FCA but not comparable secular organizations. Lastly, the events leading up to the District’s decision and the history of the policy demonstrated hostility toward FCA, making this case analogous to Masterpiece Cakeshop. The court particularly focused on the words and actions of the Climate Committee, which had encouraged derecognition of FCA. The animus displayed, including antireligious statements, pro-

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tests permitted against the student group, and outright mocking of FCA, called for strict scrutiny. The District did not satisfy strict scrutiny because it “failed to offer any showing that it has even considered less restrictive measures than those implemented here.” Thus, plaintiffs met the first prong of the test for a preliminary injunction. Their loss of First Amendment freedoms constituted an irreparable injury, and it is “always in the public interest to prevent the violation of a party’s constitutional rights.” Melendres v. Arpaio, 695 F.3d 990, 1002 (9th Cir. 2012). By contrast, “the harm to the District by the grant of injunctive relief is minimal as prior to the events giving rise to this action, FCA existed as a recognized club for nearly two decades without any objection.” The court reversed and remanded with directions to the district court to enter an order reinstating FCA’s ASB recognition. The court concluded: Anti-discrimination laws and policies serve undeniably admirable goals, but when those goals collide with the protections of the Constitution, they must yield—no matter how well-intentioned.... Even if the views held by FCA may be considered to be out-of-date by many, the First Amendment “counsel[s] mutual respect and tolerance ... for religious and non-religious views alike.” [Quoting Kennedy v. Bremerton Sch. Dist., 142 S. Ct. 2407, 2416 (2022).] We do not in any way minimize the ostracism that LGBTQ+ students may face because of certain religious views, but the First Amendment’s Free Exercise

Clause guarantees protection of those religious viewpoints even if they may not be found by many to “be acceptable, logical, consistent, or comprehensible.” Fulton, 141 S. Ct. at 1876 [quoting Thomas v. Review Bd., 450 U.S. 707, 714 (1981)]. Concurring/Dissenting Opinions Judge Danielle Jo Forrest filed an opinion concurring in portions of the majority opinion and concurring in the judgment. In her view, this was more of a free-speech than free-exercise case. Judge Milan D. Smith, Jr., filed an opinion concurring in part and dissenting in part. He agreed that the plaintiffs were entitled to a preliminary injunction, but criticized the scope of the majority’s analysis, saying it went beyond what was necessary to decide the case. Judge Jennifer Sung filed an opinion concurring in part and dissenting in part. She concluded that while FCA’s Pioneer chapter had standing, FCA National did not have direct organizational standing. On the merits, she would have upheld the district court’s denial of an injunction. Chief Judge Mary H. Murguia filed a dissenting opinion. She concluded that neither FCA’s Pioneer Chapter nor FCA National had standing. On the merits, she believed that the majority’s free exercise analysis was faulty and inappropriately expanded and misapplied precedent. –J.G. See: Fellowship of Christian Athletes v. San Jose Unified Sch. Dist. Bd. of Educ., 82 F.4th 664 (9th Cir. 2023)

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Federal Litigation Copyright Does Not Extend to Fully Artificially Generated Images Plaintiff sought registration of copyright for an image created solely by AI. In his registration application, he listed the computer as the author and himself as the claimant by way of his ownership of the computer. The Copyright Office refused to grant a registration based on these facts, finding that no copyright existed because the work lacked human authorship. From that decision, the plaintiff sought review in district court. Under the Administrative Procedure Act, the court could review only information that was before the agency when it made its decision. As such, the registration application and requests for reconsideration, which consistently confirmed that the work was “autonomously generated by a computer,” presented only the question of whether copyright law is limited to human creation. Stating that “[h]uman authorship is a bedrock requirement of copyright,” the court discussed the plain text of the Copyright Act, which requires “authorship” to claim copyright protection. The issue of whether a non-human being may be considered an author under the Copyright Act was dismissed in a footnote as “only ‘fun conjecture for academics.’” As a result, the court found that the Copyright Office acted properly in denying registration for the work, which was purportedly created without any human involvement. –M.A.N. See: Thaler v. Perlmutter, No. 22-1564, 2023 WL 5333236 (D. D.C. Aug. 18, 2023).

Class Action Filed Asserting Copyright Infringement Claims Opposing AI Language Models In a class action complaint against media giant Meta Platforms, owner of Facebook and Instagram, plaintiffs comprise three authors filing on their own behalf and on behalf of the class of relevant authors. They allege direct and vicarious copyright infringement, false assertion of copyright, unfair competition, and two counts under California common law, stating that Meta has copied their texts in its AI training dataset “without consent, without credit, and without compensation.” Complaint, p. 4, ¶ 19. With regard to the copyright claims, plaintiffs allege that the AI language models being employed and distributed by Meta “cannot function without the expressive information extracted from Plaintiff ’s Infringed Works” and are thus infringing derivative works. Complaint, p. 6, ¶ 41. Meta, however, claims that the AI software program is not itself a derivative work because the software is not substantially similar to Plaintiff ’s books. Mot. to Dismiss, p. 2. Further, Meta asserts that the outputs from Meta’s AI software do not produce works substantially similar to plaintiffs’ books. Mot. to Dismiss, pp. 2-3. –M.A.N. Practice Point: This case (Kadrey) is related to two other “copyright” class action suits—one filed simultaneously with Kadrey (Silverman v. OpenAI, No. 23-CV-03416 (N.D. Cal., San Francisco Div., filed July 7, 2023)), the other filed more recently (Chabon v. Meta Platforms, No. 23-CV-04663 (N.D. Cal., San Francisco Div., filed Sept. 12, 2023)). See: Kadrey v. Meta Platforms, No. 23-CV-03417 (N.D. Cal., San Francisco Div., filed July 7, 2023).

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Ninth Circuit En Banc to Take Up Question Whether EMTALA Preempts Idaho Law Banning Abortion The United States sued Idaho state officials, claiming that the state’s ban on abortion violates the federal Emergency Medical Treatment and Labor Act (EMTALA). The district court granted the federal government’s request for injunctive relief. On September 28, a three-judge panel of the Ninth Circuit, siding with Idaho, granted a stay of the injunction pending appeal. On October 10, the Ninth Circuit vacated the September 28 order and granted rehearing en banc. The Idaho law prohibits abortion except when necessary to prevent the mother’s death. EMTALA was enacted to prevent hospitals that receive Medicare reimbursement from refusing to provide emergency care to the indigent because of their inability to pay. EMTALA contains an express provision stating that “[t]he provisions of this section do not preempt any State or local law requirement, except to the extent that the requirement directly conflicts with a requirement of this section.” 42 U.S.C. § 1395dd(f) (panel’s emphasis). In its September 28 decision, the panel concluded that Idaho officials made a strong showing that there is no conflict between

EMTALA and the Idaho abortion ban. The text of EMTALA shows that “it does not require hospitals to perform abortions.” Indeed, by its express terms EMTALA requires that a doctor stabilize both the pregnant woman and her unborn child in an emergency. To read EMTALA to require an abortion, the panel wrote, “pushes the statute far beyond its original purpose, and therefore is not a ground to disrupt Idaho’s historic police powers” in regulating the medical profession. Even if EMTALA required an abortion, there would be no conflict with Idaho’s law, as the latter permits an abortion to prevent the mother’s death. The October 10 order vacates the panel opinion and grants rehearing en banc to reconsider the motion for stay pending appeal. –M.M. See: United States v. Idaho, Nos. 23-35440 & 23-35450, 2023 WL 6308107 (9th Cir. Sept. 28, 2023), vacated and reh’g en banc granted, 82 F.4th 1296 (9th Cir. 2023).

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Federal Litigation District Court Rejects Constitutional Challenge to South Carolina’s Accommodation of Religious Foster Care Agency Miracle Hill Ministries is one of 18 child-placing agencies (CPAs) in Upstate (northwestern) South Carolina. Under agreement with the state, CPAs provide services to prospective and current foster care parents. Believing that its foster care ministry is an exercise of its religious beliefs, Miracle Hill works only with Christian foster parents who affirm its statement of faith. Although state law generally forbids discrimination on the basis of religion in the foster care system, the state, as a religious accommodation, allows Miracle Hill to provide foster care services only to its co-religionists. After Miracle Hill declined to work with a married couple that did not share its faith, the couple sued state officials, claiming that Miracle Hill’s refusal to provide them with foster care services violated the Equal Protection and Establishment Clauses. The district court has now rejected the plaintiffs’ claims and granted the defendants’ motion for summary judgment. A state may be responsible for a private actor’s actions when they flow from some delegation of government functions, or when the government’s engagement with, or encouragement of, the private actor is so significant that the latter’s actions must be deemed in law to be that of the state. Miracle Hill’s actions were those of a private entity serving the public. South Carolina did not direct, coerce, or encourage its actions. Nor did the state delegate government functions. Care of foster

children is not traditionally the exclusive prerogative of the state, and indeed CPAs are not required under their state contract to recruit, screen, or assist prospective foster parents seeking licensure from the state. Plaintiffs also failed to demonstrate an Establishment Clause violation. Establishment Clause concerns may be triggered when the government gives a church a monopoly to carry out civil functions, but the state did not give Miracle Hill exclusive authority over foster care services, nor did Miracle Hill have the authority to issue licenses to prospective foster parents. Plaintiffs claimed third-party injury as a result of the state’s accommodation of Miracle Hill, but Fulton v. City of Philadelphia, 141 S. Ct. 1868 (2021), mandating a similar religious accommodation for a religious foster care agency, foreclosed that argument. –M.M. Practice Point: In a companion case brought by a different plaintiff, the same judge rejected a similar Establishment Clause challenge to the state’s religious accommodation of Miracle Hill. Maddonna v. Dep’t of Health and Human Servs., No. 6:19-cv-3551-JD (D. S.C. Sept. 28, 2023). See: Rogers v. Dep’t of Health and Human Servs., No. 6:19-cv-01567-JD (D. S.C. Sept. 28, 2023).

Sixth Circuit Upholds Amendment to Michigan Constitution Barring Government Funds for Non-Public Schools In 1970, Michigan voters approved an amendment to the state constitution that prohibits payment of “public monies” to “any private, denominational or other nonpublic” school. Mich. Const. Art. VIII, § 2. Certain individuals and an organization, Parent Advocates for Choice in Education Foundation, sued state officials to challenge the amendment. The plaintiffs claim that the amendment had anti-religious origins and violates the Equal Protection Clause. The district court upheld the amendment: It does not by its terms single out any religious minority for unequal treatment; rather, it draws the line between public education, on the one hand, and all forms of private education on the other hand. That means the parents of children at non-sectarian private schools … are on exactly the same footing as the parents of children at [religious schools] … when it comes to use of public funds. By a 2-1 vote, the Sixth Circuit has now affirmed. The dissent does not reach the merits but would have dismissed the case for lack of standing. The majority concluded that the 1970 amendment lawfully prohibited public funding of all private schools, whether religious or secular. 18 FALL 2023

Under the Free Exercise Clause, a state may not disqualify private schools from a public benefit solely because they are religious. But the challenged amendment “draws a distinction only between public and private schools, not between secular and religious schools.” This represents a “legitimate choice of Michigan’s electorate to dedicate public funds to public schools.” Plaintiffs claim that the Michigan Supreme Court has determined that the amendment was motivated by anti-religious bias, but this claim is based on a misreading of the case law. Plaintiffs’ claim that the 1970 amendment is a “Blaine amendment” is unsupported by the historical record. Speaker Blaine’s proposed amendment would have precluded use of public funds or lands by “any religious sect.” The Michigan amendment, which was adopted nearly a century after Blaine’s 1875 proposal, does not do that, but instead draws a line between public and private schools. Michigan voters had the opportunity, but declined, to repeal the 1970 amendment in the 2000 election. So even if the original amendment was tainted by anti-religious bias, the 2000 vote reauthorizing it would have purged it of any taint of animus. –M.M. See: Hile v. State of Michigan, 86 F.4th 269 (6th Cir. 2023).

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Faith-Based School Participating in Government Pre-School Program Entitled to Exemption from Program’s Nondiscrimination Requirements Colorado adopted a program that allows preschoolers with disabilities or from low-income families to attend the preschool of their choice at government expense. The program forbids participating schools to discriminate on the basis of religion, sexual orientation, gender identity, and other specified categories. Darren Patterson Christian Academy (the Academy) is a private faith-based school that wishes to participate in the program. The Academy only hires employees who share its faith. Employees must adhere to faith-based lifestyle requirements, including abstinence from sexual activity outside of marriage, understood as the union of one man and one woman. The school’s religious beliefs inform its other policies as well. For instance, the Academy mandates sex-separated bathrooms and dress codes based on the biological difference between boys and girls. The Academy also forbids use of pronouns that do not correspond to a student’s or employee’s biological sex. After it sought, but was denied, an exemption from the program’s nondiscrimination requirements, the Academy sued state officials, claiming an infringement of its First Amendment rights of religious liberty, expressive association, and free speech. The district court granted the Academy’s request for a preliminary injunction. The defendants contested standing but made no argument on the merits. In any event, the court concluded that the Academy had met its burden of demonstrating a likelihood of success.

The state’s refusal to grant the Academy an exemption does not survive strict scrutiny. The state asserted an interest in eliminating discrimination, but that interest is too general to satisfy strict scrutiny. The Academy was therefore entitled to a preliminary injunction on its free exercise claims. The Academy was also entitled to a preliminary injunction on its free speech claim, allowing it, among other things, to use pronouns that refer to sex rather than gender identity. The court relied on three cases: 303 Creative v. Elenis, 600 U.S. 570 (2023) (website designer has free speech right not to create websites for same-sex couple); Green v. Miss United States of Am., 52 F.4th 773 (9th Cir. 2022) (beauty pageant has free speech right not to admit transgender contestant); and Meriwether v. Hartop, 992 F.3d 492 (6th Cir. 2021) (professor at public university has free speech right not to use student’s preferred pronouns). –M.M. Practice Point: Professor Eugene Volokh of UCLA Law School suggests that “the precedential force of this case is likely to be lessened in some measure by the state’s not raising any substantive First Amendment arguments.” See https:// reason.com/volokh/2023/10/23/religious-schools-likelyhave-a-right-to-exemption-from-states-pronoun-policies/. See: Darren Patterson Christian Academy v. Roy, No. 1:23-cv-01557-DDD-STV, 2023 WL 7270874 (D. Colo. Oct. 20, 2023).

First, the program’s nondiscrimination requirements likely interfere with the Academy’s right under the ministerial exception to select key employees. The Supreme Court has twice applied the ministerial exception to teachers at religious schools. In those cases, the Court held that educating young people in their faith and training them to practice their faith are responsibilities that lie at the very core of a religious school’s mission. Those responsibilities tend to render a teacher at a religious school a minister for purposes of the exception. Second, the Academy has a right of expressive association. That includes the right not to associate with those whose views would compromise the expression of the school’s own religious beliefs. Third, a state may not exclude a religious school from receiving otherwise available educational benefits because of its religious status or practice. Fourth, the program is not generally applicable. It allows exceptions for schools that reserve admission to co-religionists, and it grants exemption from quality standards if necessary to ensure the availability of a “mixed delivery system” within a community. Law Briefs is published by the USCCB Office of the General Counsel. Copyright © 2022 United States Conference of Catholic Bishops. All rights reserved. FALL 2023

DFMC Federal Litigation Colorado Law Banning Use of Abortion Reversal Drug Violates Free Exercise Clause Colorado passed a law forbidding health care facilities and professionals from prescribing or dispensing progesterone for purposes of reversing an abortion. The drug is provided after a woman who has taken mifepristone (an anti-progesterone), the first of a two-drug abortion protocol, changes her mind about having an abortion and decides to carry to term. Bella Health and Wellness Center (Bella), an independent Catholic medical center in Colorado, challenged the law on free exercise and free speech grounds. The district court granted Bella’s motion for a preliminary injunction on free exercise grounds. The court concluded that the challenged law was subject to strict scrutiny for three reasons. First, the law “treats comparable secular activity more favorably than Bella Health’s religious activity.” The law was “vastly underinclusive as to comparable secular activities.” The State “has provided little, if any, evidence that the legislature has regulated the off-label use of hormones or any other drugs prophylactically in the way it has done here.” Even as to progesterone, the law was underinclusive. The defendants argued that usage of progesterone to reverse an abortion is unsupported by scientific evidence, but there is scientific uncertainty as to other uses of progesterone, such as to treat threatened miscarriage. Yet such uses are not banned.

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Second, the law includes “mechanisms for exemptions that undercut the State’s expressed interests.” Other drugs used for purposes of abortion reversal are subject to a case-by-case review, not a ban. Third, the law’s object and effect “is to burden religious conduct in a way that is not neutral.” The statutory text and legislative history include statements suggesting that religion was targeted or at least that the law was passed with knowledge that its burdens would fall primarily on faith-based adherents. A bill sponsor noted, for example, that the term “anti-abortion center,” as used in the bill, referred to “faith-based organizations.” Another legislator said that “many of these crisis pregnancy centers are religiously-affiliated.” Colorado’s asserted interest in regulating the medical profession is too broad to satisfy strict scrutiny. The state’s more specific interest in protecting the public from off-label uses of progesterone that lack evidence of efficacy and safety is “undermined by the disparate treatment of comparable secular activity, and the case-by-case possibility of individualized exemptions.” –M.M. See: Bella Health and Wellness v. Weiser, No. 1:23-cv00939-DDD-SKC, 2023 WL 6996860 (D. Colo. Oct. 21, 2023).

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State Litigation South Carolina Doctrine of Charitable Immunity Bars Decades-Old Abuse Claim John Doe sued the Diocese of Charleston, claiming sexual abuse by two teachers at a Catholic school during the time period 1969 to 1971. Doe asserted claims of sexual abuse, outrage, negligence/gross negligence, breach of fiduciary duty, intentional infliction of emotional distress, fraudulent concealment, civil conspiracy, negligent retention or supervision, breach of contract, and breach of contract accompanied by a fraudulent act. The trial court granted the Diocese’s motion for summary judgment under the doctrine of charitable immunity. On August 2, the South Carolina Court of Appeals affirmed. The South Carolina Supreme Court first announced the doctrine of charitable immunity in 1914. Since that time, and until 1973, case law established that charitable immunity barred all tort claims against charitable organizations. In 1973, in Jeffcoat v. Caine, 198 S.E.2d 258, the South Carolina Supreme Court declined to extend charitable immunity to a religious hospital in a case involving an intentional tort. The court refused to overrule earlier cases, however, noting that those cases had involved negligence claims. The Court of Appeals in the present case held that precedent in 1969-70, when the abuse is alleged to have occurred, supported complete immunity. Because the abrogation of immunities defenses is to be applied prospectively only, Jeffcoat did not apply. Charitable immunity therefore barred all of Doe’s claims. –M.M.

See: Doe v. Bishop of Charleston, No. 2020-00084, 2023 WL 4919592 (S.C. App. Aug. 2, 2023).

Ministerial Exception Bars Minister’s Tort Claims Against Church But Does Not Bar His Contract Claims The Southern New England Conference of the United Church of Christ (SNE) employed Rev. Ryan Gackenheimer to oversee the operation of camps and retreats at one of its conference centers. After SNE terminated Gackenheimer’s employment, he sued the church and church officials, asserting claims of defamation, slander, intentional and negligent infliction of emotional distress, breach of contract, promissory estoppel, statutory violations regarding retirement benefits, blacklisting, and tortious interference with contractual relations. The defendants moved to strike all claims under the ministerial exception. Because Gackenheimer is a minister, the defendants argued that adjudication of the case would result in interference with “the internal governance of the church” as set forth in Hosanna-Tabor Evangelical Lutheran Church & School v. EEOC, 565 U.S. 171 (2012). Gackenheimer did not dispute that he was a minister, but he argued that the ministerial exception did not apply because his claims could be decided using neutral principles of law. The court granted the motion in part and denied it in part. The court struck the tort claims alleging slander, slander per se, infliction of emotional distress, tortious interference, and blacklisting, because those claims arose “directly from, and in

furtherance of, the defendants’ decision to terminate the employment of the plaintiff,” and were therefore barred by the ministerial exception. Adjudicating these torts-based issues, the court concluded, would require it to “determine whether any proffered religious reasons are a pretext for unlawful action,” which “would amount to judging the employment decisions of the church.” The court, however, refused to strike Gackenheimer’s claims for breach of contract, promissory estoppel, and nonpayment of retirement and other benefits. Citing Bigelow v. Sassafras Grove Baptist Church, N.C. App. 401, 786 S.E.2d 358 (2016), the court concluded that the ministerial exception did not bar these claims because they concerned matters outside of the church’s decision to terminate the plaintiff ’s employment. Indeed, these claims related to retirement and other benefits that Gackenheimer allegedly earned years before he was fired. Thus, in adjudicating enforcement of the church’s contractual obligations, “the court will not be excessively entangled in SNE’s decision about whether to retain the plaintiff as its minister.” –J.G. Practice Point: As this case illustrates, a minister’s claims against a church arising from its explanation of disciplinary actions taken against him or her, as well as the disciplinary actions themselves, are covered by the ministerial exception. But a minister’s claims relating to promised (but unpaid) retirement and other benefits are not.

See: Gackenheimer v. Southern New England Conference of United Church of Christ, No. X06-UWY-CV-226070183-S, 2023 WL 4322814 (Conn. Super. Ct. June 29, 2023).

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State Litigation Court Lacks Subject Matter Jurisdiction to Hear Case Involving Congregation’s Attempt to Disaffiliate from Denomination Church of the Servant, a church in Colorado, is affiliated with the United Methodist Church (UMC). UMC’s Book of Discipline permits a local congregation to disaffiliate from UMC. When this happens, UMC ordinarily retains the congregation’s property. In 2019, however, UMC amended the Book of Discipline to permit a disaffiliating congregation to retain its property if it meets each of three conditions: (a) the congregation disagrees with UMC’s teaching on homosexual practices or the ordination of homosexual persons, (b) a motion to disaffiliate passes by a two-thirds vote of the congregation by September 6, 2023, and (c) disaffiliation is completed by the end of 2023. A vote may be taken only once a year, but the superintendent of the relevant UMC district has the discretion to permit additional voting. Church of the Servant conducted a vote on whether to disaffiliate from UMC, but the vote in favor of disaffiliation fell short of the requisite two-thirds majority. After UMC’s district

superintendent denied the congregation’s request to permit another round of voting, Church of the Servant sued UMC, seeking injunctive relief to permit another vote. The trial court agreed with the congregation and issued the requested injunction. UMC then filed a petition for writs of mandamus and prohibition in the Supreme Court of Oklahoma. UMC argued that the trial court violated the church autonomy doctrine by intervening in an ecclesiastical dispute. The Supreme Court agreed, granted the petition, and ordered the lower court to dismiss the case for lack of subject matter jurisdiction. The church autonomy doctrine, the Supreme Court held, precluded the trial court from hearing any claim that, like this one, would require it to interpret the Book of Discipline or otherwise step into the shoes of church authorities. –M.M. See: Oklahoma Annual Conference of United Methodist Church v. Timmons, No. 121538, 2023 WL 6984960 (Okla. Oct. 24, 2023). Law Briefs is published by the USCCB Office of the General Counsel. Copyright © 2022 United States Conference of Catholic Bishops. All rights reserved.

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Ecclesiastical Abstention Doctrine Bars Lutheran Pastor’s Contract Claim The Texas Court of Appeals in San Antonio held for Faith Lutheran Church in a lawsuit by a former pastor who alleged fraudulent inducement and breach of contract, affirming the trial court’s dismissal based on the ecclesiastical abstention doctrine and ministerial exception. James Craver served as a pastor at Faith Lutheran from 2017 to 2020. After the church council received complaints from congregants alleging misconduct and inappropriate behavior by Craver, the council provided Craver with two options based on the church’s process of termination in its constitution and bylaws. He could either sign a severance agreement, which ensured that the church would not “disclose, publicize, or pursue the alleged complaints,” or he could reject the severance agreement and the church would “conduct an investigation of all the alleged complaints.” After Craver signed the severance agreement, the council published “vague references to Craver’s alleged misconduct” in the church’s newsletter. Additionally, in a congregational meeting, council members made statements specifically regarding the congregant complaints, which Craver claimed were harmful to his reputation. Craver filed suit alleging that the church fraudulently induced him to sign the severance agreement by ensuring that the “meritless allegations would not be disclosed publicly”— a promise that the church then allegedly breached.

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The appellate court, in a de novo review, applied the ecclesiastical abstention doctrine to determine “whether a particular dispute is ecclesiastical or merely a civil-law controversy.” In re Lubbock, 624 S.W.3d 506, 514 (Tex. 2021). Because the circumstances of Craver’s fraudulent inducement claim were so “inextricably intertwined” with the council’s legitimate recommendations concerning Craver’s role as pastor, close scrutiny of the statements would interfere in matters of church governance. Even if neutral laws could be applied, the claims would require interpretation of the church’s constitution, by-laws, and governing documents. Cf. Shannon v. Memorial Drive Presbyterian Church, 476 S.W.3d 612, 619 (Tex. App. 2015) (permitting employee’s claim alleging violation of a non-disparagement clause, which could be “analyzed under a neutral definition in purely secular terms.”). Quoting the Texas Supreme Court, the court explained, “although wrongs may exist in the ecclesiastical setting ... the free exercise of religion is deemed so important a principle it overshadows the inequities that may result from its liberal application.” With this acknowledgment, the court held that Craver’s claims were “barred by the ecclesiastical abstention doctrine because the substance and nature of the claims are inextricably intertwined with matters of church governance.” –J.G. Craver v. Faith Lutheran Church, No. 04-22-00235-CV, 2023 WL 7365302 (Tex. App. Nov. 8, 2023).

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Regulatory Issues USCCB, NCBC File Joint Comments on Proposed Revisions to Uniform Determination of Death Act On July 12, the USCCB and National Catholic Bioethics Center (NCBC) filed joint comments on proposed revisions to the Uniform Determination of Death Act with the Uniform Determination of Death Committee of the Uniform Law Commission. One of the proposed revisions would replace the standard of whole brain death with one of partial brain death. The USCCB and NCBC urged the Commission to retain the current standard of “irreversible cessation of all functions of the entire brain, including the brain stem” as the standard for determining death. The basis for the objection is that the proposed revision would allow patients who exhibit partial brain function to be declared “legally dead” when they are not biologically dead. The comments are available here. See: Proposed Revisions to Uniform Determination of Death Act (2023).

USCCB Files Joint Comments on Anticipated Regulations on Pregnant Workers Fairness Act The Equal Employment Opportunity Commission (EEOC) sent the Office of Management and Budget (OMB) the EEOC’s proposed regulations interpreting and enforcing the Pregnant Workers Fairness Act. Some advocacy groups argued that the Act, enacted by Congress as part of the Consolidated Appropriations Act, 2023, requires workplace accommodations for abortion. In anticipation of the release and publication of the proposed regulations, the USCCB filed comments on July 14 with OMB explaining why the Act requires no such accommodation. Among other things, the text and legislative history of the Act foreclose an interpretation of the Act that would require accommodations for abortion, and the principle of constitutional avoidance counsels against such an interpretation. The comments are available here. Subsequently the EEOC published the proposed regulations. 88 Fed. Reg. 54714 (Aug. 11, 2023). The USCCB again plans to file comments, this time with the EEOC. See: Consolidated Appropriations Act, 2023, Pub. 117328, Div. II (Pregnant Workers Fairness Act).

USCCB Files Comments on Proposed HHS Regulations Applying Nondiscrimination Requirements to Grants

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LAW BRIEFS USCCB, Catholic University File Joint Comments on Proposed EEOC Regulations on Pregnant Workers Fairness Act

USCCB Files Comments on Proposed Disability Regulations

On September 27, the USCCB and Catholic University filed joint comments on proposed regulations issued by the Equal Employment Opportunity Commission (EEOC) to implement the Pregnant Workers Fairness Act (PWFA).

On November 13, the USCCB filed comments on proposed regulations issued by the Department of Health and Human Services’ Office for Civil Rights to carry out the disability nondiscrimination requirements of Section 504 of the Rehabilitation Act of 1973. The Christian Legal Society and National Association of Evangelicals co-signed the comments.

The joint comments argue that the final regulations (a) should not require an accommodation for abortion, (b) should state that, under the PWFA’s religious exemption, religious employers are not required to provide accommodations that conflict with their religious beliefs, and (c) should further state that any employer, whether secular or religious, is not required to provide an accommodation that infringes upon its right to religious liberty, speech, or expressive association, and that such an accommodation would impose an undue hardship on the employer, thereby excusing it from having to make that accommodation.

The joint comments commend the Department for the substantial steps the proposed rule would take toward ensuring the just and equal treatment of persons with disabilities. The comments encourage the Department to extend the protections of Section 504 to suicide prevention services, where persons with disabilities are especially vulnerable. Lastly, the commenters urge the Department to reconsider its interpretation of Section 504 to include gender dysphoria as a disability—an erroneous reading of the statute that will burden religious liberty and ensnare what is an otherwise laudable rulemaking in litigation. The comments in their entirety are available here.

The comments are available at https://www.usccb.org/sites/ default/files/about/general-counsel/rulemaking/ upload/2023.USCCB_.CUA_.comments.PWFA_.regulations. pdf

See: 88 Fed. Reg. 63392 (Sept. 14, 2023).

See: 88 Fed. Reg. 54714 (Aug. 11, 2023).

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Regulatory Issues USCCB Files Comments on Proposed Foster Care Regulations On November 13, the USCCB filed comments on proposed foster care regulations issued by the Department of Health and Human Services’ Administration for Children and Families (ACF). In its comments, the USCCB makes four points: • The Conference endorses many of the general requirements described in the proposed regulations but urges ACF to make these requirements applicable to all minors rather than limit them to a subset of minors or to sexual orientation/gender identity issues. • The Conference cites evidence adduced by experts that gender dysphoria in minors is satisfactorily resolved in the vast majority of cases without gender affirmance. We discuss the demonstrated harm of a gender-affirming approach to gender dysphoria, which the proposed regulations would require, and we discuss the successful outcomes of alternative approaches. We also highlight the personal accounts of individuals (now plaintiffs in lawsuits) who say that they were injured by the gender-affirming interventions they received as minors. • The Conference discusses problems with the proposal to require an orientation-affirming approach to same-sex attractions in minors. • The Conference discusses the need to protect the conscience rights of private providers, protection that the preamble acknowledges is necessary and appropriate but that the proposed regulatory text does not address. The comments in their entirety are available here. See: 88 Fed. Reg. 66752 (Sept. 28, 2023).

USCCB Files Comments on EEOC’s Proposed Harassment Guidance On October 27, the USCCB filed comments with the Equal Employment Opportunity Commission on its proposed harassment guidance. The comments, among other things, urge the Commission to revise portions of the guidance that would chill or prohibit the expression in the workplace of moral opposition to abortion, contraceptives, and same-sex marriage; forbid “misgendering” (e.g., use of pronouns that do not correspond to an individual’s gender identity); and prohibit separate male and female restrooms and dressing areas with respect to all employees. The comments in their entirety are available here. See: 88 Fed. Reg. 67750 (Oct. 2, 2023).

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USCCB Files Comments on Proposed Foreign Seasonal Agricultural Worker (H-2A) Regulations On November 14, the USCCB filed joint comments with Catholic Charities-USA on proposed regulations issued by the Department of Labor’s Wage and Hour Division to modernize the H-2A agricultural worker program. The joint comments commended the Department for the substantial steps the proposed rule would take toward ensuring a just treatment of people participating in the H-2A program and minimizing worker exploitation. The comments supported the Department’s move for tighter protections for foreign agricultural workers, especially since these moves should help prevent instances of human trafficking. The comments in their entirety are available here. See: 88 Fed. Reg. 63750 (Sept. 15, 2023).

USCCB Files Comments on Proposed Modernizing H-2 Program Requirements, Oversight, and Worker Protections On November 20, the USCCB filed comments on proposed regulations issued by the Department of Homeland Security’s U.S. Citizenship and Immigration Services (USCIS) to modernize the H-2A and H-2B seasonal worker programs (the H-2 Programs). The comments commended the Department for the substantial steps the proposed rule would take toward ensuring that the foreign workers participating in seasonal employment would not be victims of human trafficking. The USCCB supports USCIS’s move to provide similar benefits to participants of the H-2 program that are similar to those in the H-1B program. In addition, the USCCB commended the Department on its efforts to debar employers who violate program requirements, and USCCB invited the Department to consider how it could cross-reference grants of U and T visas (victims of crime and trafficking respectively) when debarring employers. The comments in their entirety are available here. See: 88 Fed. Reg. 65040 (Sept. 20, 2023).

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F U T U R E A S S O C I AT I O N M E E T I N G S Diocesan Fiscal Management Conference (DFMC)

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The Herald Publication Schedule:

The Herald will accept notices and articles for future issues according to the following schedule: Deadline Date Publication Date April 30.....................Spring Issue............................. May 31 July 30..................... Summer Issue........................ August 30 October 31.................. Fall Issue...................... November 30 January 31.................Winter Issue......................February 28

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We would appreciate your comments and input on items for future issues.