Posted by Timothy Sandefur on June 25, 2007 01:07 PM

The Supreme Court today issued an important decision addressing when taxpayers may sue government for spending taxpayer money in ways that support religious groups. The Justices had been urged to overrule a long-standing case that gave taxpayers unique power to sue the government in such cases, and they did not; but they did sharply restrict the ability to challenge such expenditures in ways that may have a major impact in future cases addressing the conflict between creationism and evolution education. The case is Hein v. Freedom From Religion Foundation Inc., and you can read it online here.

First the background:

Article III of the Constitution limits the sorts of things federal courts may consider. They may not consider a case unless there is an “actual case or controversy.” This means that they may not issue so-called “advisory” opinions (opinions that merely discuss hypothetical legal issues). And this means that they may not address issues where none of the parties has a genuine injury, or where the injury that the plaintiff complains of is not the sort of injury courts are allowed to consider. This last one is important because a taxpayer whose money is taken from him and spent on something that is beyond government’s legitimate powers is unquestionably injured—but the Supreme Court held in the famous cases of Massachusetts v. Mellon, 262 U.S. 447 (1923), and Frothingham v. Mellon, 262 U.S. 447 (1923), that that is not the kind of injury that the courts can address. Personally, I think Mellon was wrongly decided and that, as Richard A. Epstein has argued, taxpayers ought to be allowed to sue the government under such circumstances. Nevertheless, in Mellon, the Court held that allowing such cases to proceed would open the door to too many lawsuits, since, after all, government so often spends money on things it’s not supposed to be doing.

There’s a major exception to Mellon, however, and that is when the government spends taxpayer money in ways that support religious institutions. In such circumstances, taxpayers do have standing, according to another important case, Flast v. Cohen, 392 U.S. 83 (1968). In Flast, the Court held that the Establishment Clause has a special relationship to the taxing power that justifies allowing taxpayers to sue over expenditures that benefit religious groups:

First, the taxpayer must establish a logical link between that status and the type of legislative enactment attacked. Thus, a taxpayer will be a proper party to allege the unconstitutionality only of exercises of congressional power under the taxing and spending clause of Art. I, s 8, of the Constitution. It will not be sufficient to allege an incidental expenditure of tax funds in the administration of an essentially regulatory statute…. Secondly, the taxpayer must establish a nexus between that status and the precise nature of the constitutional infringement alleged. Under this requirement, the taxpayer must show that the challenged enactment exceeds specific constitutional limitations imposed upon the exercise of the congressional taxing and spending power and not simply that the enactment is generally beyond the powers delegated to Congress by Art. I, s 8.

392 U.S. at 102-03.

“Establishment,” after all, means government supporting religion in an official way, and for government to take money and transfer it to a religious group is therefore to officially support that religious group. Unlike other contexts, the injury itself is completed upon the transfer. In other cases, say, where the government is spending taxpayer money on unauthorized military projects, there are really two kinds of injury involved: the ultra vires action of spending on military action and the ultra vires action of taxing. Again, I think this distinction is unwarranted, but the Court in Flast explained that other kinds of ultra vires action are more general injuries, while spending to support a religious group is more specific: “one of the specific evils feared by those who drafted the Establishment Clause and fought for its adoption was that the taxing and spending power would be used to favor one religion over another or to support religion in general.” Id. at 103. The framers were particularly concerned “that religious liberty ultimately would be the victim if government could employ its taxing and spending powers to aid one religion over another or to aid religion in general,” and therefore they drafted the Establishment Clause to act “as a specific bulwark against such potential abuses of governmental power, and that clause of the First Amendment operates as a specific constitutional limitation upon the exercise by Congress of the taxing and spending power conferred by Art. I, s 8.” Id. at 103-04.

Today’s decision in Hein, however, sharply limits the Flast exception. In Hein, an atheist group sued the government for diverting money to certain “faith-based” charitable institutions. They complained that their tax money was going to support religious groups, in violation of the Establishment Clause. The Court, however, found that they did not have standing. The decision is one of those complicated plurality decisions, so the breakdown is as follows: Justice Alito, Chief Justice Roberts, and Justice Kennedy wrote a plurality decision; Kennedy also wrote a decision of his own. Justice Scalia wrote another decision which disagreed with their theory but came to the same conclusion—and Justice Thomas joined in that. Justice Souter, Stevens, Ginsburg, and Breyer all dissented. Thus none of these decisions has binding precedential value, but of course lower courts will consider them in the future.

The Alito/Roberts/Kennedy opinion holds that the Flast exception does not apply because Flast only applies to specific actions by Congress to tax, for the benefit of a religious organization. The Flast case only addressed “a specific congressional appropriation…undertaken pursuant to an express congressional mandate.” (Slip op. at 13). This established the link between the funding decision and the taxpayer’s Establishment Clause injury. But in this case, the funding directed to “faith-based organizations” was made out of the Executive’s discretionary budget: that is, Congress didn’t specifically choose this benefit; instead it transferred money to the President who chose whom to distribute it to, in lump-sum payments. Thus there is no direct link between Congress’ funding decision and the Establishment Clause injury. Now, this is an important point: Alito and his colleagues are not saying that the funding doesn’t violate the Establishment Clause; they’re merely saying that, because the money comes from discretionary Executive funding, rather than from a direct congressional appropriation, such establishment does not injure the taxpayer in a specific enough way to authorize the taxpayer to bring a lawsuit.

This distinction seems awfully arbitrary, but the plurality “reject[s] the view that taxpayer standing ‘extends to “the government as a whole, regardless of which branch is at work.”’” (Slip op at 18-19, quoting Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U. S. 464, 484 n. 20 (1982)). To allow taxpayers to invoke the Flast exception with regard to discretionary Executive branch spending as well as to Congressional spending would “effectively subject every federal action—be it a conference, proclamation or speech—to Establishment Clause challenge by any taxpayer in federal court. To see the wide swathe of activity that [this] proposed rule would cover, one need look no further than the amended complaint in this action, which focuses largely on speeches and presentations by Executive Branch officials.” (Slip op. at 20). The Congress ultimately controls all federal funding, so to allow suits over any federal dollars spent in ways that support religion would mean that even the most minor references to religion, such as in the State of the Union Address, might be challenged in court. “Suppose that it is alleged that a speech writer or other staff member spent extra time doing research for the purpose of including ‘religious imagery’ in a speech.” (Slip op at 22.) Alito, Kennedy, and Roberts then go on to reject the argument made by some that Flast itself should be overruled.

This argument is made by Justices Scalia and Thomas. They divide the kinds of taxpayer injuries into two kinds: “wallet injury,” which is when the taxpayer suffers a tangible injury, such as losing more money to taxation than he otherwise would, and “psychic injury,” which occurs when a person suffers “mental displeasure that money extracted from him is being spent in an unlawful manner.” (Slip op. at 2.) Federal courts have rejected “wallet injury” cases because they have held that plaintiffs “cannot satisfy the traceability and redressability prongs of standing.” (Id.) Psychic injury, however, has been recognized in cases such as Flast. “Wallet Injury could not possibly have been the basis for [Flast], since the taxpayers in Flast were no more able to prove that success on the merits would reduce their tax burden than was the taxpayer in Frothingham. Thus, Flast relied on Psychic Injury.” (Slip op. at 6). But the problem with psychic injury is that just as some people are offended by seeing their money support religion, so others are offended by seeing their money support military spending, or welfare spending. As to the argument that the Establishment Clause has some unique relationship to the taxing power—so that the injury from unconstitutional expenditure is more direct than from other kinds of ultra vires spending—Justices Scalia and Thomas respond that “[i]t is impossible to maintain that the Establishment Clause is a more direct limitation on the taxing and spending power than the [non-Establishment] constitutional limitation invoked in Frothingham, which is contained within the very provision creating the power to tax and spend.” If the Establishment Clause limits the use of taxpayer money in a way that allows taxpayers to sue, so do such limitations as the General Welfare Clause—which prohibits government from spending money in ways that confer special and unique, as opposed to general and public, benefits. Yet in Frothingham the latter category was ruled off limits and in Flast the former was considered fair game. Scalia and Thomas find that this was a violation of “[c]oherence and candor.” (Slip op. at 8).

They go on to detail at length the many cases in which courts have tried to dodge between the kinds of psychic injuries that do, and that do not, confer standing. These cases are unconvincing because “there are only two logical routes available to this Court. We must initially decide whether Psychic Injury is consistent with Article III”—that is, whether it’s the kind of injury courts can consider. “If it is, we should apply Flast to all challenges to government expenditures in violation of constitutional provisions that specifically limit the taxing and spending power; if it is not, we should overturn Flast..” (Slip op. at 11) Scalia and Thomas then complain that the plurality decision’s distinction between direct congressional spending and discretionary Executive spending is untenable because where the money comes from “has absolutely no relevance to the Article III criteria” for establishing whether the injury is the kind that courts can take into consideration. (Slip op. at 12).

In his separate opinion, Justice Kennedy says that “Flast is correct and should not be called into question,” (Slip op. at 1)—but he does not actually make any argument in support of the case, and does not respond to any of Scalia and Thomas’ points. Instead, the dissenting opinion by Justices Souter, Stevens, Ginsburg and Breyer argues that Flast was right—and that the distinction between specific congressional spending decisions and discretionary Executive spending is untenable.

The kernel of the dissent is that spending which supports religion is different than any other kind of unauthorized government spending. The Establishment Clause was written specifically to prevent funding that would support religious institutions, because such spending “implicates the conscience, and the injury from Government expenditures on religion is not accurately classified with the ‘Psychic Injury’ that results whenever a congressional appropriation or executive expenditure raises hackles of disagreement with the policy supported.” Spending in support of religion is distinct “from one in which a taxpayer sought only to air a generalized grievance in federal court.” (Slip op. at 2-3).

Of course the nature of that funding—whether by specific Congressional authorization or discretionary Executive funds—makes no difference in this regard. One way or the other, taxpayer money is being spent to promote religion, and this causes taxpayers to suffer an injury. “[I]f the Executive could accomplish through the exercise of discretion exactly what Congress cannot do through legislation, Establishment Clause protection would melt away.” (Slip op. at 4).

What does this mean? The only clear holdings are (1) that there is no standing in this case for the Freedom from Religion Foundation, and (2) that Flast will remain on the books. But how will the distinction between specific appropriations and discretionary Executive spending fare? Justices Scalia and Thomas and the dissenters all reject the tenability of this distinction, so I don’t think it will survive. What we have now is essentially a 3-2-4 case which sets no clear precedent except that the Freedom from Religion Foundation has not stated a clear and direct injury.

This is important in the creationism context because many suits against creationist government schools are brought on the grounds set out in Flast. If the distinction between discretionary spending and specific appropriations lasts—and if it is extended down to the local level—it could be more difficult to bring such lawsuits. Now, parents will continue to have strong grounds for challenging the education of their children. But the situation of taxpayers will be different. Funding for the purchase of school textbooks, or field trips, or whathaveyou is generally taken from a state’s funding provisions for schools, which is spent then at the discretion of various agents down the line: the school board, the agent in charge of class materials, and so forth. If the plurality’s theory prevails, it’s hard to see how a taxpayer could challenge the choice of a school board agent to purchase Of Pandas And People or other creationist tracts.