Supreme Court unanimously backs Catholic nonprofit

In a win for religious freedom, the Supreme Court ruled Thursday that Wisconsin discriminated against a Catholic nonprofit by prohibiting it from receiving a tax exemption normally provided for religious organizations. The court’s unanimous decision found that the government can’t prefer one religion or denomination over another.

“It is fundamental to our constitutional order that the government maintain ‘neutrality between religion and religion,’” Justice Sonia Sotomayor wrote in the opinion. “There may be hard calls to make in policing that rule, but this is not one. When the government distinguishes among religions based on theological differences in their provision of services, it imposes a denominational preference that must satisfy the highest level of judicial scrutiny.”

In 2016, the Catholic Charities Bureau in northern Wisconsin asked for an exemption from a tax assessed to support the state’s unemployment compensation system so the ministry could instead join the Wisconsin Catholic bishops’ similar system. Wisconsin typically exempts religious organizations that are “operated primarily for religious purposes” from paying the tax. The state denied the request, arguing that the nonprofit doesn’t qualify because its day-to-day work doesn’t involve religious teachings.

Catholic Charities sued the state, contesting that officials violated the ministry’s religious freedom rights. Last year, the Wisconsin Supreme Court ruled against Catholic Charities, concluding that the ministry isn’t engaged in “typical religious activities” because it serves people from multiple faith backgrounds. The state court also said that Catholic Charities doesn’t “attempt to imbue program participants with the Catholic faith.”

The Supreme Court’s ruling Thursday reversed the lower court’s decision.

“Much like a law exempting only those religious organizations that perform baptisms or worship on Sundays, an exemption that requires proselytization or exclusive service of co-religionists establishes a preference for certain religions based on the commands of their religious doctrine,” Sotomayor wrote. “[This] imposes a denominational preference by differentiating between religions based on theological choices.”

Sotomayor pointed out that Catholic theology instructs Catholic Charities not to proselytize those they serve. She added that the government failed to clear the First Amendment’s “high bar” when it denied Catholic Charities’ exemption request. The government’s decision must pass strict scrutiny by being narrowly tailored and having a compelling governmental interest.

In a concurring opinion, Justice Clarence Thomas said Wisconsin’s court also violated church autonomy guaranteed by the First Amendment by failing to recognize how Catholic Charities is “an arm” of the Diocese.

“The church autonomy doctrine forbids treating religious institutions as nothing more than the corporate entities they have formed,” wrote Thomas. “This structure of the Church is a matter of faith, not mere administrative convenience.”

The Supreme Court’s decision shows that government discrimination between religions because of the way they exercise their faith is a violation of the free exercise clause, said Nick Reaves, an attorney at Becket Fund for Religious Liberty, which represented Catholic Charities.

“When every justice agrees and says ‘Yes, this is foundational to our understanding of religious freedom, that you can’t discriminate among religions,’ that's really exciting for us,” Reaves said. “It’s always great when you get a 9-0 ruling.”

James Powers, bishop of the Diocese of Superior, said that the high court’s ruling allows Catholic Charities to continue its mission to serve those in need.

“At the heart of Catholic Charities’ ministry is Christ’s call to care for the least of our brothers and sisters, without condition and without exception,” Powers said in a statement. “We’re grateful the Court unanimously recognized that improving the human condition by serving the poor is part of our religious exercise.”

Reaves said this ruling affects religious organizations nationwide. During the briefing stage of the case, he said that Jewish and Hindu organizations filed briefs expressing their concern that they may also be labeled not religious enough because they don’t proselytize.

Tiffany Dunkin, a legal fellow at First Liberty Institute, said Wisconsin’s denial of the tax exemption is “really indicative of something that’s going on across the country.”

She pointed to the case of a pastor in Bryan, Ohio, who kept his church open 24/7 to house and minister to the homeless. In January, a local court convicted Chris Avell of violating a fire code. Avell asked Ohio’s 6th District Court of Appeals in May to protect his church’s ability to conduct religious activities.

“We are going to … be able to use what the Supreme Court said here, this unanimous decision, to fight those cases,” Dunkin said. “We are hoping that the broader implications of this will really remind state and local governments that they don’t get to decide what religious activity is.”