Nearly two years after it last heard a religious freedom case, the Supreme Court on Monday will turn its attention to the First Amendment’s religion clauses as it considers a case about tax exemptions.
The justices are weighing whether Wisconsin officials violated the Constitution when they denied a religious exemption to a Catholic nonprofit and several of its subentities in 2016.
Catholic Charities Bureau and the associated groups cite their faith as inspiration for their efforts to feed the hungry, house homeless people and serve people with disabilities, but state officials determined their programs are not religious enough to qualify for the faith-based exemption to Wisconsin’s unemployment tax.
State leaders say their actions are in line with national norms, while the Catholic groups say Wisconsin is improperly drawing lines between different types of religious practice.
The Supreme Court’s decision in the case could reshape religious exemptions nationwide.
How does unemployment tax work in Wisconsin?
Wisconsin, like other states, requires most employers to pay into its unemployment tax system. But some exemptions are available, including for certain religious organizations.
To qualify for the faith-based exemption, you must show that you operate “primarily for religious purposes,” according to Wisconsin’s initial Supreme Court brief.
Faith groups that are eligible for a religious exemption often create or join a faith-based unemployment system.
Several Catholic groups in Wisconsin use a program called CUPP, the Church Unemployment Pay Program, which was created by church bishops in 1986.
What happened in the lower courts?
The Supreme Court case, called Catholic Charities Bureau v. Wisconsin Labor and Industry Review Commission, originated in 2016, when Catholic Charities and some of its subentities asked Wisconsin state officials for the religious exemption that would make it possible for them to use the Catholic Church’s unemployment program instead of the state’s.
When the Department of Workforce Development determined they didn’t qualify, the Catholic organizations filed a religious freedom lawsuit.
Over the past nine years, the case has worked its way through Wisconsin’s judicial system, and each side has claimed a few temporary victories.
“It’s been a long process and, at every stage, the outcome has flipped. We won, then they won, then we won, then they won,” said Nick Reaves, senior counsel for Becket, the law firm representing Catholic Charities and its subentities.
The last ruling, which came from the Wisconsin Supreme Court, was in favor of Wisconsin officials.
While the court acknowledged that Catholic Charities draws inspiration from Catholic teachings, it ruled that the group’s activities do not serve primarily religious purposes, in part because there’s no proselytizing.
“The Wisconsin Supreme Court said Catholic Charities is not religious enough,” Reaves said.
What question is before the Supreme Court?
After losing in front of the top court in Wisconsin, Catholic Charities appealed to the U.S. Supreme Court.
It asked the justices to take up its case and answer two key questions:
- Does Wisconsin’s criteria for religious behavior violate the First Amendment’s religious freedom protections?
- Did state courts in Wisconsin handle the federal constitutional challenges appropriately?
The Supreme Court took up the case in mid-December, but announced that it would consider only the first of the two questions.
The justices are expected to clarify what states can and can’t do when they’re assessing requests for faith-based exemptions.
What’s at stake?
The Supreme Court’s eventual ruling will affect not just Catholic Charities’ future in Wisconsin, but also the future of religious exemptions nationwide.
While the court has weighed in on several memorable cases about whether government officials need to create faith-based exemptions, including recent battles over religious adoption agencies and a Christian baker, it’s more rare for the justices to discuss the criteria controlling existing religious exemptions and how those criteria should be applied.
Reaves said he’s hoping the justices will agree that Wisconsin’s approach to its religious exemption is leading officials to draw unlawful distinctions between religious groups.
“The problem is they’re drawing distinctions along religious lines,” he said. “It’s like they’re saying churches that operate on Saturdays can have the exemption, but churches that operate on Sundays can’t.”
Reaves added that you don’t have to be Catholic to have a stake in the case, since his clients are essentially fighting for their right to serve non-Catholics and still be seen as religious.
“The state has adopted a very cramped view of what religion and charity are,” he said.
For their part, Wisconsin officials reject the notion that their process for assessing faith-related activities is controversial.
It’s normal for government officials to dig deeper into a group’s activities when it claims a religious exemption and that digging doesn’t violate the First Amendment, they argued in their initial Supreme Court brief.
“The Wisconsin Supreme Court got it right. Courts routinely deny religious tax exemptions to entities that assert religious motivations without overly entangling themselves in religious matters. That effort does not violate the church autonomy principle because it does not regulate internal church governance or compel any activity,” the brief said.
Who supports Wisconsin’s position?
Among the organizations that filed Supreme Court briefs in favor of Wisconsin officials are faith-related groups that generally oppose government entanglement with religion, like the Freedom From Religion Foundation and American Atheists.
The groups argue that officials need to be able to assess an organization’s purpose and activities to ensure that religious exemptions are not too broad.
“The First Amendment’s no-preference, entanglement, and church-autonomy doctrines do not prohibit states from offering limited, categorical religious exemptions or from distinguishing between religious and nonreligious entities and activities in assessing the applicability of exemptions, as Wisconsin has done here. In suggesting that governments and courts may ask only whether an entity has a sincere religious motive for its conduct, Petitioners seek to twist the First Amendment beyond recognition,” argued a brief from a variety of civil rights organizations, including the ACLU and Interfaith Alliance.
Who supports Catholic Charities?
Several prominent religious organizations and religious freedom scholars, as well as the Trump administration, filed Supreme Court briefs in favor of the Catholic groups.
The briefs generally argue that government officials should not be allowed to second-guess whether a religious organization’s activities are actually religiously motivated.
“This case is about who decides whether an organization’s faith-based practices are ‘religious’ — the organization itself or the courts? Since the Founding and across decades of precedent, the answer has been (and still is) straightforward: religious organizations have an inalienable right to determine their own beliefs and practices, and those beliefs and practices are entitled to constitutional protection. The role of courts has been equally clear and especially narrow: avoid judicial entanglement and faith-based discrimination by assessing only whether an organization’s religious beliefs or practices are sincere, not whether they are ‘religious’ enough," said a brief from religiously affiliated schools, including Baylor and BYU.
A brief from several major groups, including the U.S. Conference of Catholic Bishops, the United Methodist Church and The Church of Jesus Christ of Latter-day Saints, said that the Wisconsin Supreme Court ruling threatens church autonomy nationwide.
“Autonomy would be severely undermined if the First Amendment allowed the government to second-guess (faith groups’) decisions on matters of church government such as a religion’s organizational structure or employment or service decisions,” the brief said.
What will happen next?
Oral arguments in the Catholic Charities case will begin at 8 a.m. MDT on Monday. You can access the live audio on CSPAN or the Supreme Court’s website.
In addition to the attorneys for Catholic Charities and Wisconsin state officials, the deputy solicitor general will offer arguments.
The Supreme Court’s decision is expected by early July.