New York Law Review

Tag: Religious Exemption

  • Catholic Charities of Albany v. Serio, 7 N.Y.3d 510 (2006): Free Exercise Clause and Contraceptive Coverage Mandates

    Catholic Charities of Albany v. Serio, 7 N.Y.3d 510 (2006)

    When a state law imposes an incidental burden on the right to free exercise of religion, the courts must balance the interests advanced by the legislation against the burden on religious freedom, with substantial deference given to the legislature, and the party claiming an exemption bears the burden of showing that the law, as applied to them, is an unreasonable interference with religious freedom.

    Summary

    Ten faith-based social service organizations challenged New York’s Women’s Health and Wellness Act (WHWA), which requires health insurance policies covering prescription drugs to also cover contraception. The organizations argued that the law violated their religious freedom by compelling them to finance conduct (contraception) that they condemn. The New York Court of Appeals upheld the law, finding that it was a neutral law of general applicability with a valid secular purpose. The court held that while the law did burden the plaintiffs’ religious practices, the burden was not unreasonable, especially when weighed against the state’s interest in gender equality and women’s health. The court emphasized that the plaintiffs could choose not to offer prescription drug coverage at all and that many of their employees did not share their religious beliefs.

    Facts

    Ten faith-based social service organizations, including eight affiliated with the Roman Catholic Church and two with the Baptist Bible Fellowship International, brought suit against the Superintendent of Insurance, challenging provisions of the Women’s Health and Wellness Act (WHWA). These organizations object to the WHWA’s requirement that health insurance policies providing prescription drug coverage must also include coverage for contraception. The organizations believe contraception is sinful and that the law compels them to violate their religious tenets. None of the plaintiffs qualify as “religious employers” under the WHWA’s narrow exemption, which requires that the inculcation of religious values be the primary purpose of the entity, that the entity primarily employ and serve persons who share its religious tenets, and that the entity be a non-profit organization falling under specific sections of the Internal Revenue Code.

    Procedural History

    The plaintiffs filed suit in Supreme Court, seeking a declaration that the challenged provisions of the WHWA were invalid and an injunction against their enforcement. The Supreme Court rejected the challenge and granted summary judgment dismissing the complaint and declaring the legislation valid. The Appellate Division affirmed. The New York Court of Appeals affirmed the Appellate Division’s order.

    Issue(s)

    Whether the provisions of the Women’s Health and Wellness Act (WHWA) requiring coverage of contraception violate the Free Exercise clauses of the New York and United States Constitutions.

    Holding

    No, because the WHWA is a neutral law of general applicability that serves a legitimate secular purpose and does not impose an unreasonable burden on the plaintiffs’ religious freedom.

    Court’s Reasoning

    The Court of Appeals analyzed the plaintiffs’ claims under both the federal and state constitutions. Under the federal Free Exercise Clause, the court relied on Employment Div., Dept. of Human Resources of Ore. v Smith, 494 U.S. 872 (1990), which holds that a neutral law of general applicability does not violate the Free Exercise Clause, even if it incidentally burdens religious practice. The Court found the WHWA to be such a law, as its purpose was to promote women’s health and gender equality, not to target religious beliefs. As the court stated, “[t]he burden on plaintiffs’ religious exercise is the incidental result of a ‘neutral law of general applicability,’ one requiring health insurance policies that include coverage for prescription drugs to include coverage for contraception.”

    Under the New York Constitution’s Free Exercise Clause, the court adopted a balancing test, weighing the state’s interests against the burden on religious freedom. The court held that substantial deference is due the Legislature, and the party claiming an exemption bears the burden of showing that the challenged legislation, as applied to that party, is an unreasonable interference with religious freedom. The court acknowledged that the WHWA placed a serious burden on the plaintiffs’ religious practices but found that the burden was not an unreasonable interference. The court emphasized that the plaintiffs were not literally compelled to purchase contraceptive coverage, as they could choose not to offer prescription drug coverage at all. Additionally, the court noted that many of the plaintiffs’ employees did not share their religious beliefs. The court also weighed the State’s substantial interest in fostering equality between the sexes and in providing women with better health care, finding that the Legislature’s decision to prioritize these interests over a broader religious exemption was entitled to deference. The court stated that it could not say that “the choice the Legislature made has been shown to be an unreasonable interference with plaintiffs’ exercise of their religion.” The Court also dismissed the Establishment Clause claim, finding that the WHWA was not designed to favor or disfavor any particular religion but was a generally applicable and neutral law.

  • Colella v. Board of Assessors, 95 N.Y.2d 401 (2000): Taxpayer Standing to Challenge Property Tax Exemptions

    Colella v. Board of Assessors, 95 N.Y.2d 401 (2000)

    A taxpayer lacks standing to challenge a property tax exemption granted to another property owner based solely on the claim that the exemption increases the taxpayer’s own tax burden; an exception exists only when there is a systemic perversion of the exemption process.

    Summary

    Residents of a village brought an Article 78 proceeding challenging the local Board of Assessors’ grant of a real property tax exemption to a religious organization. The residents claimed that the exemption increased their own property tax burden and that the Temple failed to comply with zoning ordinances and state corporation laws. The Supreme Court dismissed the petition for lack of standing. The Appellate Division reversed. The New York Court of Appeals reversed the Appellate Division, holding that the residents lacked standing because they only alleged a legally erroneous determination regarding a single parcel of real estate, not a systemic abuse of the exemption process. To have standing, they needed to show special damages different from the community and that the issue was within the zone of interest of the statute under which the agency acted.

    Facts

    The Yun Lin Temple, a religious corporation dedicated to Black Sect Tibetan Tantric Buddhism, owned and occupied a property in the Village of Old Westbury. The Nassau County Board of Assessors granted the Temple a real property tax exemption under RPTL 420-a, which exempts property used exclusively for religious purposes. Residents of the Village, whose properties were adjacent to or near the Temple’s property, commenced an Article 78 proceeding. They argued that the exemption was wrongfully granted, resulting in higher property taxes for them. They did not contest the Temple’s religious use of the property. Instead, they argued the Temple failed to obtain a special permit under the Village’s zoning ordinance and lacked authorization to do business in New York State as a foreign religious corporation.

    Procedural History

    The Supreme Court dismissed the resident’s petition, finding that they lacked standing and that compliance with local zoning laws or state corporation laws was not a prerequisite for the RPTL 420-a exemption. The Appellate Division reversed. The Court of Appeals granted leave to appeal and reversed the Appellate Division’s order, dismissing the petition.

    Issue(s)

    Whether real property owners have standing to challenge the grant of a real property tax exemption to another property owner, based on the argument that the exemption increases their own real property taxes.

    Holding

    No, because the residents only alleged a legally erroneous determination regarding a single parcel of real estate, not a systemic abuse of the exemption process.

    Court’s Reasoning

    The Court of Appeals relied heavily on the precedent set in Van Deventer v. Long Is. City, 139 N.Y. 133 (1893), which held that a taxpayer cannot challenge an individual real property tax exemption solely because it adversely affects their own tax liability. The Court reasoned that allowing such challenges would lead to uncertainty and interminable litigation in the collection of revenues. The Court distinguished this case from Matter of Dudley v. Kerwick, 52 N.Y.2d 542 (1981), where standing was granted because the assessor had engaged in a “broad perversion of the entire process of granting exemptions.” Here, the residents only alleged an error in granting an exemption for a single parcel, which has an insignificant impact on the county’s tax base. The Court also noted that the residents failed to meet the two-part test for standing to challenge governmental action: (1) injury in fact that is different in kind and degree from the community generally, and (2) the injury falls within the “zone of interests” protected by the relevant statute. The Court found that the residents’ injury was indistinguishable from that of all other Nassau County property owners. Furthermore, the Court stated, “Compliance with such totally unrelated local and State legislation is not within the zone of interest of RPTL 420-a, and petitioners do not contest that the Temple otherwise fully qualifies for an exemption under the provision.” Finally, the Court found that “Common-Law Taxpayer Standing” did not apply because the determination of local governmental officials lacked appreciable public significance beyond the immediately affected parties.

  • Yeshivath Shearith Hapletah v. Assessor, 79 N.Y.2d 244 (1992): Defining ‘Exclusively’ for Religious Tax Exemptions

    Yeshivath Shearith Hapletah v. Assessor of the Town of Fallsburg, 79 N.Y.2d 244 (1992)

    The term “exclusively” in the context of religious tax exemptions under RPTL 420-a(1)(a) is broadly defined to mean “principal” or “primary,” such that uses merely auxiliary or incidental to the main and exempt purpose will not defeat the exemption.

    Summary

    Yeshivath Shearith Hapletah, a religious corporation, sought a full tax exemption for its Woodbourne facility, used for religious education programs. The assessor partially denied the exemption, deeming certain housing units and land taxable. The New York Court of Appeals held that the entire property was tax-exempt under RPTL 420-a(1)(a), because the housing and recreational areas were reasonably incidental to the primary religious purpose of the facility. The Court emphasized a broad interpretation of “exclusively” to encourage religious institutions.

    Facts

    Yeshivath Shearith Hapletah, a religious corporation, operates a school in Brooklyn and religious educational programs at a 31-acre facility in Fallsburg, NY, called Woodbourne. Woodbourne is primarily used during the summer. Approximately 450 students receive religious instruction daily. The facility includes a main building with a kitchen, dining room, bath, recreational facilities, classrooms, synagogues, dormitories, 64 bungalows, and 6 trailers. These housing units are occupied by rabbis, teachers, staff, and their families, all participating in the religious programs. One trailer houses a caretaker who provides maintenance and security year-round. The religious instruction programs are exclusively for members of the yeshivah.

    Procedural History

    The property was initially tax-exempt after a 1982 declaratory judgment. In 1987 and 1988, the assessor returned portions of the property to the tax rolls. The Yeshivah applied for exemption under RPTL 420-a(1)(a), which the assessor partially granted. The Yeshivah commenced Article 7 proceedings challenging the partial denial. The Supreme Court dismissed the petitions. The Appellate Division reversed, granting the petitions and declaring the property fully exempt. The Assessor appealed to the New York Court of Appeals.

    Issue(s)

    Whether the housing facilities (bungalows, trailers) used by staff, teachers, rabbis, and families, and the ten acres of wooded land, at the Yeshivath Shearith Hapletah’s Woodbourne facility are used “exclusively” for religious purposes, thus entitling the entire property to a full tax exemption under Real Property Tax Law § 420-a(1)(a).

    Holding

    Yes, because the housing and recreational facilities are necessary and reasonably incidental to the primary purpose of providing rigorous religious and educational instruction at the Yeshivah. The caretaker’s residence is also tax exempt because the caretaker’s presence ensures the maintenance and security of the facility which serves the religious purposes of the organization.

    Court’s Reasoning

    The Court emphasized that RPTL 420-a(1)(a) exempts property owned by a religious organization and used exclusively for religious purposes. The term “exclusively” is interpreted broadly to mean “principal” or “primary.” Uses merely auxiliary or incidental to the main purpose will not defeat the exemption. The test for tax exemption is whether the particular use is reasonably incidental to the primary purpose of the facility. Supplying living accommodations for hospital personnel and their immediate families is a hospital purpose (Matter of St. Luke’s Hosp. v Boyland, 12 NY2d 135, 141). The uncontradicted evidence demonstrated that the housing facilities are occupied by staff, teachers, rabbis, and families, members of which are either students at the yeshivah or parents of students too young to attend without supervision. The Court distinguished Matter of St. Agnes Church v Daby (148 AD2d 31), because that case involved RPTL 462, concerning residences for clergy. The Court found that the recreational use of the wooded area by the students was incidental to the primary religious purpose.

  • Matter of Klein, 78 N.Y.2d 662 (1991): Constitutionality of Religious Organization Unemployment Insurance Exemption

    Matter of Klein, 78 N.Y.2d 662 (1991)

    A state law exempting religious organizations from unemployment insurance contributions for employees performing religious duties does not violate the Establishment Clause or the Equal Protection Clause of the U.S. Constitution.

    Summary

    Shirley Klein, an English teacher at Beth Jacob High School, a religious institution, was denied unemployment benefits because her employment was exempt from unemployment insurance coverage under New York Labor Law § 563(2)(c). Klein challenged the exemption as a violation of the Establishment and Equal Protection Clauses. The court held that the exemption served a secular purpose by extending unemployment coverage to nonprofit employees while maintaining exemptions for groups with stable employment or those not truly part of the labor force. The incidental benefit to religious organizations does not render the exemption unconstitutional, and the minimal inquiry required to determine religious status avoids excessive entanglement.

    Facts

    Shirley Klein was employed as an English teacher at Beth Jacob High School, operated by a religious organization. Her employment was terminated, and she applied for unemployment insurance benefits. The Unemployment Insurance Division determined she was ineligible because her employment was exempt under Labor Law § 563(2), as it was with a religious organization. She was required to repay $4,140 in benefits she had received.

    Procedural History

    The local office of the Unemployment Insurance Division initially determined Klein was ineligible for benefits. An Administrative Law Judge (ALJ) sustained this determination, which was affirmed by the Unemployment Insurance Appeal Board. The Appellate Division affirmed the Board’s ruling, addressing and rejecting Klein’s constitutional challenges to Labor Law § 563(2)(c).

    Issue(s)

    1. Whether Labor Law § 563(2)(c) violates the Establishment Clause of the First Amendment by exempting religious organizations from unemployment insurance contributions.
    2. Whether Labor Law § 563(2)(c) violates the Equal Protection Clause of the Fourteenth Amendment by favoring nonprofit religious schools over nonprofit secular schools.

    Holding

    1. No, because the statute has a secular legislative purpose, its primary effect neither advances nor inhibits religion, and it does not foster excessive government entanglement with religion.
    2. No, because the statutory classification is rationally related to legitimate state interests, including extending unemployment coverage while maintaining exemptions for organizations with stable employment and avoiding undue government involvement in religious employment matters.

    Court’s Reasoning

    The court began by noting the presumption of a statute’s constitutionality. The court applied the Lemon test, evaluating whether the statute had a secular legislative purpose, whether its primary effect advanced or inhibited religion, and whether it fostered excessive government entanglement with religion. The court found the statute’s purpose was to extend unemployment insurance coverage to employees of nonprofit organizations while retaining exemptions for groups with stable employment, such as religious organizations. The court reasoned that the exemption was not exclusively for religious organizations but also applied to other nonreligious entities. The court likened the exemption to the property tax exemption upheld in Walz v. Tax Commission, where the Court found that exempting religious and charitable organizations from property taxes did not advance religion. The court stated, “[I]t is a permissible legislative purpose to alleviate significant governmental interference with the ability of religious organizations to define and carry out their religious missions.” Regarding entanglement, the court noted that the inquiry to determine religious status is minimal and that without the exemption, there would be greater “official and continuing surveillance.” The court also rejected the equal protection claim, finding a rational relationship between the classification and legitimate state interests. The Court stated, “As noted above, the original purpose of the exclusions of Labor Law § 563 (2) was to extend unemployment insurance coverage to employees of certain nonprofit organizations while retaining the exemption for some organizations, including religious organizations, in accordance with the ‘time-honored’ tradition of sparing certain tax-exempt, nonprofit organizations from the burden of general taxation.”

  • Holy Spirit Assn. for Unification of World Christianity v. Tax Com’n of City of New York, 55 N.Y.2d 512 (1982): Religious Purpose and Tax Exemption

    Holy Spirit Assn. for Unification of World Christianity v. Tax Com’n of City of New York, 55 N.Y.2d 512 (1982)

    Civil authorities cannot inquire into or classify the content of the doctrine of an ecclesiastical body to determine if it’s organized and conducted exclusively for religious purposes, but must accept the body’s characterization of its beliefs and activities as long as the characterization is made in good faith and is not a sham.

    Summary

    The Holy Spirit Association for the Unification of World Christianity (Unification Church) applied for a real property tax exemption in New York City. The Tax Commission denied the application, arguing the Church was “threaded with political motives.” The Church initiated an Article 78 proceeding. The Court of Appeals reversed the lower court’s decision upholding the Tax Commission’s denial, holding that civil authorities cannot delve into the content of religious beliefs to determine whether they are religious. As long as the Church asserts that its activities are religious and does so in good faith, the courts must accept that characterization for purposes of tax exemption eligibility. However, the case was remitted to determine if the properties were used exclusively for religious purposes.

    Facts

    The Unification Church applied for a real property tax exemption for three properties in New York City: its headquarters, a missionary residence, and a maintenance/storage facility. The Tax Commission denied the exemption, concluding that the Church was too involved in political activities. The Church’s doctrine, based on the teachings of Reverend Sun Myung Moon, includes the belief that every temporal sphere (political, cultural, and economic) is a battleground between God and Satan. The Church asserts that its political and economic activities are integral to its religious mission.

    Procedural History

    The Church initiated an Article 78 proceeding to annul the Tax Commission’s determination. The Supreme Court, New York County, transferred the proceeding to the Appellate Division. The Appellate Division remanded the matter for a hearing by a Special Referee. The Special Referee concluded the Church’s primary purpose is religious, but that the Commission had not acted arbitrarily. The Appellate Division confirmed the report of the Special Referee and the determination of the Commission. The New York Court of Appeals then heard the case.

    Issue(s)

    Whether the Unification Church, whose beliefs and activities are partly religious, is organized and conducted primarily for religious purposes, entitling it to a tax exemption under New York Real Property Tax Law § 421(1)(a), when its religious doctrine includes political and economic elements.

    Holding

    No, because civil authorities cannot inquire into or classify the content of the doctrine, dogmas, and teachings held by that body to be integral to its religion but must accept that body’s characterization of its own beliefs and activities and those of its adherents, so long as that characterization is made in good faith and is not sham.

    Court’s Reasoning

    The court reasoned that civil authorities are limited to two inquiries: (1) Does the religious organization assert that the challenged purposes and activities are religious? and (2) Is that assertion bona fide? Citing Watson v. Jones, the court stated that “[t]he law knows no heresy, and is committed to the support of no dogma, the establishment of no sect.” The court also referenced United States v. Ballard: “Men may believe what they cannot prove. They may not be put to the proof of their religious doctrines or beliefs”. The court found that the Church demonstrated that its political and economic beliefs are integral to its religious doctrine. The court emphasized it is “not the province of civil authorities to indulge in such distillation as to what is to be denominated religious and what political or economic.” The determination of what constitutes their religion belongs to the religious bodies themselves. The Court found the Tax Commission’s determination to be arbitrary and capricious. The case was remitted to determine if the properties were used exclusively for religious purposes.