Lemon v. Kurtzman 411 u.S. 192

Lemon v. Kurtzman 411 u.S. 192

Appeal from the United States District Court for the Eastern District of Pennsylvania

no. 71 - 1470. Argued november 8, 1972--decided april 2, 1973; , affirmed.

following this court's invalidation in lemon v. Kurtzman, 403

u. S. 602 (lemon i) of pennsylvania's statutory program to

reimburse nonpublic sectarian schools (hereafter schools) for

secular educational services, the district court on remand

enjoined any payments under the program for services rendered

after lemon i, but permitted pennsylvania to reimburse the

schools for services performed prior to that decision.

appellants challenge the scope of this decree. Held: the

judgment is affirmed.

the chief justice, in an opinion joined by mr. Justice mr. justice powell, and mr. Justice rehnquist concluded that the district court did not abuse its discretion in permitting

pennsylvania to reimburse the schools for services rendered and costs incurred in reliance on the statutory scheme prior to its invalidation in lemon i.

(a) an unconstitutional statute is not absolutely void, but is

a practical reality upon which people rely. Courts recognize

that reality. Pp. 197 - 199.

(b) a trial court has wide latitude in shaping an equitable

decree and reaching an accommodation between public and private

needs. Pp. 200 - 201.

(c) the contested reimbursement will not contravene the

constitutional principle of lemon i of avoiding the ongoing

Entanglement of church and state, since only a final, ministerial

post-audit is involved and no further detailed state surveillance

of the schools is required. At the same time, however,

supervision already conducted by pennsylvania officials insures

that the proposed reimbursement will not be used for sectarian

purposes. The proposed payment reflects only the schools'

expenses incurred in expectation of reimbursement. Pp. 201 -

202.

(d) the schools relied in good faith on the state statute,

Which invited the contracts and authorized reimbursement for past

services; and appellants, in self-styled "sensible recognition of

the practical realities of the situation," may well have

encouraged such reliance by the schools by not moving to have the

payments enjoined before the contract services had been

performed.

hc193'(original document page 193)'

pp. 203 - 205.

(e) the schools could not have anticipated the lemon i Holding,
Which involved resolution of an issue of first impression that

"was not clearly foreshadowed." Pp. 206 - 207.

(f) a state and those with whom it deals are not to be

Subjected to harsh, retrospective relief merely because they act

on the basis of presumptively valid legislation, in the absence

of contrary judicial direction. Pp. 207 - 209.

mr. Justice white concurred in the judgment. Burger, c.J.,

announced the judgement of the court and an opinion in which

blackmun, powell, and rehnquist, jj., Joined. White, j.,

concurred in the judgment. Douglas, j., Filed a dissenting

opinion, in which brennan and stewart, jj., Joined, post, p.

209. Marshall, j., Took no part in the consideration or decision

of the case.

Mr. Chief justice burger announced the judgment of the court and an Opinion in which mr. Justice blackmun, mr. Justice powell, and mr. Justice rehnquist join.

On june 28, 1971, we held that the pennsylvania statutory program to Reimburse nonpublic sectarian schools for certain secular educational Services violated the establishment clause of the first amendment. The Case was remanded to the three-judge district court for further Proceedings consistent with our opinion.

hc194'(original document page 194)' lemon v. Kurtzman, 403 u.S. 602 (1971) (lemon i). On remand, the district court entered summary Judgment in favor of appellants and enjoined payment, under act 109, of Any state funds to nonpublic sectarian schools for educational services Performed after june 28, 1971. The district court's order permitted The state to reimburse nonpublic sectarian schools for services Provided before our decision in lemon i. Appellants made no claim that Appellees refund all sums paid under the pennsylvania statute /1/ Struck down in lemon i.

Appellants, the successful plaintiffs of lemon i, now challenge the Limited scope of the district court's injunction. Specifically, they Assert that the district court erred in refusing to enjoin payment of Some $24 million set aside by pennsylvania to compensate nonpublic 1970 - 1971 school year. We noted probable jurisdiction, 406 u.S. 943 (1972), and we affirm the judgment of the district court.

(1)

The specifics of the pennsylvania statutory scheme held Unconstitutional in lemon i need be recalled only briefly. Under act

109, the participating nonpublic schools of pennsylvania were to be Reimbursed by the state for certain educational services provided by The schools pursuant to purchase-of-service contracts with the state. According to the terms of the contracts, the schools were to provide Teachers, textbooks, and instructional materials for mathematics, Modern foreign language, physical science, and physical education Courses--"secular" courses of instruction. The state was not only to Compensate the schools for the services provided, but also to undertake Continuing surveillance of the instructional programs to insure that The services purchased were not provided in connection with "any Subject matter expressing religious teaching, or the morals or forms of Worship of any sect."

hc195'(original document page 195)' see lemon i, supra, at 609 -

610.

Under ^ 5607 of the act, any nonpublic school seeking reimbursement Was to "maintain such accounting procedures, including maintenance of Separate funds and accounts pertaining to the cost of secular Educational service, as to establish that it actually expended in Support of such service an amount of money equal to the amount of money Sought in reimbursement." To this end, the school accounts were to be Subject to audit by the state auditor general. Actual payment was to Be made by the superintendent of public instruction "in four equal Installments payable on the first day of september, december, march and June of the school term following the school term in which the secular Educational service was rendered."

In lemon i, we held that, although act 109 had a secular legislative Purpose, the act fostered "excessive entanglement" of church schools And state through the requirement of ongoing state scrutiny of the Educational programs of sectarian schools, the statutory post-audit Procedures, and potential involvement in the political process. We Found it unnecessary to decide whether act 109 was constitutionally Infirm on the additional ground that the "primary effect" of any state Payments to church-related schools would be to promote the cause of Religion in contravention of the establishment clause of the first Amendment.

(2)

Against this backdrop, we turn to the events relevant to this Appeal. On june 19, 1968, act 109 became law. Approximately one month Later, appellants publicly declared their intention of challenging the Constitutionality of the new legislation.

hc196'(original document page 196)' during the following six Months, the state took steps to implement the act, promulgating Regulations and, in january 1969, entering for the first time into Service contracts for the 1968 - 1969 school year (then in progress) With approximately 1,181 nonpublic schools throughout pennsylvania. The schools submitted schedules in june 1969, at the conclusion of the 1968 - 1969 school year, specifying the precise items of expense during That year for which they would seek reimbursement, to be made during The 1969 - 1970 school year. On june 3, 1969, appellants filed their Complaint, asking that act 109 be declared unconstitutional and its Enforcement enjoined.

Simultaneously with their 1969 complaint, appellants filed a motion For a preliminary injunction to restrain the responsible state Officials from "paying or processing for paying any funds pursuant to (act 109)." However, appellants abandoned the request for preliminary Relief in a letter of august 28, 1969, from their counsel to judge Troutman. Appellants, describing their position as a "sensible Recognition of the practical realities of the situation, . . . Withdrew From any attempt to prevent initial payment to the nonpublic schools Scheduled for september 2 (1969)." In the same letter, appellants' Counsel mentioned the payments scheduled for december 2, 1969, but in Fact no attempt was ever made to enjoin those reimbursements.

On november 29, 1969, a divided district court granted appellees' Motion to dismiss appellants' complaint for failure to state a claim on Which relief could be granted. Appellants filed a notice of appeal to This court on december 17, 1969; at no time before or after probable Jurisdiction was noted on april 20, 1970, did appellants move for Interlocutory relief pending appeal, even though on january 15, 1970, The schools entered into service contracts with the state for the 1969 1970 school year. Consequently, the district court had no occasion to Consider the exercise of injunctive power pendente lite.

hc197'(original document page 197)'

In september 1970, the schools began performing services for the 1970 - 1971 school year, compensable under the terms of act 109; and on January 15, 1971, contracts were entered into for that school year. On June 28, 1971, we held act 109 unconstitutional and remanded the cause To the district court for further proceedings consistent with our Opinion. Not until appellants filed their motion for summary judgment, In august 1971, did they first indicate their intention to prevent Reimbursement under act 109 for the services already provided by the Schools during the 1970 - 1971 school year.

(3)

Claims that a particular holding of the court should be applied Retroactively have been pressed on us frequently in recent years. Most Often, we have been called upon to decide whether a decision defining New constitutional rights of a defendant in a criminal case should be Applied to convictions of others that predated the new constitutional Development. E. G., Robinson v. Neil, 409 u.S. 505 (1973); adams v. Illinois, 405 u.S. 278 (1972); desist v. United states, 394 u.S. 244 (1969); stovall v. Denno, 388 u.S. 293 (1967); johnson v. New jersey, 384 u.S. 719 (1966); tehan v. Shott, 382 u.S. 406 (1966); linkletter v. Walker, 381 u.S. 618 (1965). But "in the last few decades, we have Recognized the doctrine of nonretroactivity outside the criminal area Many times, in both constitutional and nonconstitutional cases." Chevron oil co. V. Huson, 404 u.S. 97, 106 (1971); hanover shoe v. United shoe machinery corp., 392 u.S. 481 (1968); simpson v. Union oil Co., 377 u.S. 13 (1964); england v. State board of medical examiners, 375 u.S. 411 (1964). We have approved nonretroactive relief in civil Litigation, relating, for example, to the validity of municipal Financing founded upon electoral procedures later declared Unconstitutional, cipriano v. City of houma, 395 u.S. 701 (1969), and City of phoenix v. Kolodziejski, 399 u.S. 204 (1970); or to the Validity of elections for local officials held under possibly Discriminatory voting laws, allen v. State board of elections, 393 u.S. 544 (1969).

hc198'(original document page 198)' in each of these cases, the Common request was that we should reach back to distrub or to attach Legal consequence to patterns of conduct premised either on unlawful Statutes or on a different understanding of the controlling judge-made Law from the rule that ultimately prevailed.

Appellants urge, as they did in the district court, a strange Amalgam of flexibility and absolutism. Appellants assure us that they Do not seek to require the schools to disgorge prior payments received Under act 109; in the same breath, appellants insist that the presently Disputed payment be enjoined because an unconstitutional statute "confers no rights; it imposes no duties; it affords no pretection; it Creates no office; it is, in legal contemplation, as inoperative as Though it had never been passed." Norton v. Shelby county, 118 u.S.

425, 442 (1886). Conceding that we have receded from norton in a host Of criminal decisions and in other recent constitutional decisions Relating to municipal bonds, appellants nevertheless view those Precedents as departures from the established norm of norton. We Disagree.

The process of reconciling the constitutional interests reflected in A new rule of law with reliance interests founded upon the old is "among the most difficult of those which have engaged the attention of Courts, state and federal . . . ." Chicot county drainage dist. V. Baxter state bank, 308 u.S. 371, 374 (1940). Consequently, our Holdings in recent years have emphasized that the effect of a given Constitutional ruling on prior conduct "is subject to no set 'principle Of absolute retroactive invalidity' but depends upon a consideration of 'particular relations . . . And particular conduct . . . Of rights Claimed to have become vested, of status, of prior determinations Deemed to have finality'; and 'of public policy in the light of the Nature both of the statute and of its previous application.'"

hc199'(original document page 199)' linkletter, supra, at 627, Quoting from chicot county drainage dist., Supra, at 374. However Appealing the logic of norton may have been in the abstract, its Abandonment reflected our recognition that statutory or even judge-made Rules of law are hard facts on which people must rely in making Decisions and in shaping their conduct. This fact of legal life Underpins our modern decisions recognizing a doctrine of Nonretroactivity. Appellants offer no persuasive reason for confining The modern approach to those constitutional cases involving criminal Procedure or municipal bonds, and we ourselves perceive none.

In linkletter, the court suggested a test, often repeated since, Embodying the recent balancing approach; we looked to "the prior History of the rule in question, its purpose and effect, and whether Retrospective operation will further or retard its operation." Id., At

629. Those guidelines are helpful, see infra, at 201 - 203, but the Problem of linkletter and its progeny is not precisely the same as that Now before us. Here, we are not considering whether we will apply a New constitutional rule of criminal law in reviewing judgments of Conviction obtained under a prior standard; the problem of the instant Case is essentially one relating to the appropriate scope of federal Equitable remedies, a problem arising from enforcement of a state Statute during the period before it had been declared Unconstitutional. True, the temporal scope of the injunction has Brought the parties back to this court, and their dispute calls into Play values not unlike those underlying linkletter and its progeny. But however we state the issue, the fact remains that we are asked to Reexamine the district court's evaluation of the proper means of Implementing an equitable decree.

hc200'(original document page 200)' c.F united states v. Estate Of donnelly, 397 u.S. 286, 295 (1970); id., At 296 - 297 (harlan, j., Concurring).

In shaping equity decrees, the trial court is vested with broad Discretionary power; appellate review is correspondingly narrow. Swann

V. Charlotte-mecklenburg board of education, 402 u.S. 1, 15, 27 n. 10 (1971). Moreover, in constitutional adjudication as elsewhere, Equitable remedies are a special blend of what is necessary, /2/ what Is fair, and what is workable. "traditionally, equity has been Characterized by a practical flexibility in shaping its remedies and by A facility for adjusting and reconciling public and private needs." Brown v. Board of education, 349 u.S. 294, 300 (1955). Mr. Justice Douglas, speaking for the court, has said, "the essence of equity Jurisdiction has been the power of the chancellor to do equity and to Mould each decree to the necessities of the particular case. Flexibility rather than rigidity has distinguished it. The qualities Of mercy and practicality have made equity the instrument for nice Adjustment and reconciliation between the public interest and private Needs as well as between competing private claims."

hc201'(original document page 201)'

hecht co. V. Bowles, 321 u.S. 321, 329 - 330 (1944).

See also holmberg v. Armbrecht, 327 u.S. 392, 396 (1946). In Equity, as nowhere else, courts eschew rigid absolutes and look to the Practical realities and necessities inescapably involved in reconciling Competing interests, notwithstanding that those interests have Constitutional roots.

(4)

The constitutional fulcrum of lemon i was the excessive entanglement Of church and state fostered by act 109. We found it unnecessary to Decide whether the "legislative precautions (of act 109) restrict the Principal or primary effect of the programs to the point where they do Not offend the religion clauses." 403 u.S., At 613 - 614. For, as we Said of both act 109 and the similar rhode island provision, "(a) Comprehensive, discriminating, and continuing state surveillance will Inevitably be required to ensure that these restrictions are obeyed . . . . These prophylactic contacts will involve excessive and enduring Entanglement between state and church." Id., At 619. We further Emphasized the reciprocal threat to first amendment interests from Enmeshing the divisive issue of direct aid to religious schools in the Traditional political processes. Id., At 622 - 624.

The sensitive values of the religion clauses do not readily lend Themselves to quantification but, despite the inescapable imprecision, We think it clear that the proposed distribution of state funds to Pennsylvania's nonpublic sectarian schools will not substantially Undermine the constitutional interests at stake in lemon i. Act 109 Required the superintendent of public instruction to ensure that Educational services to be reimbursed by the state were kept free of Religious influences.

hc202'(original document page 202)' under the act, the Superintendent's supervisory task was to have been completed long ago, During the 1970 - 1971 school year itself; nothing in the record Suggests that the superintendent did not faithfully execute his duties According to law. Hence, payment of the present disputed sums will Compel no further state oversight of the instructional processes of Act 109 is now settled, there is no further potential for divisive Political conflict among the citizens and legislators of pennsylvania Over the desirability or degree of direct state aid to sectarian Schools under act 109.

Two problems having constitutional overtones remain, but their Resolution requires no compromise of the basic principles of lemon i. There is, first, the impact of the single and final post-audit. The Record indicates that the post-audit process will involve only a Ministerial "cleanup" function, that of balancing expenditures and Receipts in the closing accounting--undertaken only once, and in that Setting a minimal contact of the state with the affairs of the Schools. Second, there is the question of impinging on the religion Clauses from the fact of any payment that provides any state assistance Or aid to sectarian schools--the issue we did not reach in lemon i. Yet Even assuming a cognizable constitutional interest in barring any state Payments, under the district court holding that interest is implicated Only once under special circumstances that will not recur. There is no Present risk of significant intrusive administrative entanglement, Since only a final post-audit remains and detailed state surveillance Of the schools is a thing of the past. At the same time, that very Process of oversight--now an accomplished fact--assures that state Funds will not be applied for any sectarian purposes. /3/

hc203'(original document page 203)' finally, as will appear, even This single proposed payment for services long since passing state Scrutiny reflects no more than the schools' reliance on promised Payment for expenses incurred by them prior to june 28, 1971.

Offsetting the remote possibility of constitutional harm from Allowing the state to keep its bargain are the expenses incurred by the Schools in reliance on the state statute inviting the contracts made And authorizing reimbursement for past services performed by the Schools. /4/ it is well established that reliance interests weigh Heavily in the shaping of an appropriate equitable remedy. City of Phenix v. Kolodziejski, 399 u.S. 204 (1970); cipriano v. City of houma, 395 u.S. 701 (1969); allen v. State board of elections, 393 u.S. 544 (1969). That there was such reliance by the schools is reflected by a Well-supported district court finding.

hc204'(original document page 204)' the district court found that There was no dispute "that to deny the church-related schools any Reimbursement for their services rendered would impose upon them a Substantial burden which would be difficult for them to meet." /5/ 348 f.Supp. 300, 304 - 305.

The significance of appellee schools' reliance is reinforced by the Fact that appellants' tactical choice not to press for interim Injunctive suspension of payments or contracts during the pendency of The lemon i litigation may well have encouraged the appellee schools to Incur detriments in reliance upon reimbursement by the state under act

109. In june 1969, appellants initiated the litigation that culminated In lemon i. Though initially appellants moved for a preliminary Injunction to block the september 1969 payment of funds for services Rendered during the 1968 - 1969 school year, for reasons of their own Appellants withdrew the request. Funds were paid in september and December 1969, and in march and june 1970. In 1970, the state entered Into new contracts with the nonpublic schools; appellants took no steps To block the making of these contracts or to prevent the state from Disbursing funds, in september and december 1970, or march and june

1971, for services rendered during the 1969 - 1970 school year.

hc205'(original document page 205)' appellants, meanwhile, had Filed a notice of appeal to this court by the time the distribution of Funds for the 1969 - 1970 school year began. It was only after our Decision in lemon i--six months after the contracts for the 1970 - 1971 School year were perfected and after all services under those contracts Had been performed--that appellants asserted their intention to block The payments due, beginning in the fall of 1971. Thus for nearly two Years, the state and the schools proceeded to act on the assumption That appellants would continue to adhere to a "sensible recognition of The practical realities of the situation."

There has been no demonstration by the appellee schools of the Precise amount of any detriment incurred by them during the 1970 - 1971 School year in the expectation of reimbursement by the state. The Complexity of such a determination for each of pennsylvania's 1,181 Nonpublic schools that contracted with the state under act 109 is Readily apparent. /6/ but we need not dwell on the matter of Uncertainty.

hc206'(original document page 206)' on this record the district Court could reasonably find reliance on the part of the appellee Schools and reasonably could conclude that no more was needed to Demonstrate retrospectively the degree of their reliance.