Litigation Update: Chen et al v. Hillsdale College & Buettner-Hartsoe v. Baltimore Lutheran

[Music]

 

Chayila Kleist:  Hello, and welcome to this “FedSoc Forum” webinar call. Today, February 1, 2024, we’re delighted to host a “Litigation Update” on two cases: Chen et al v. Hillsdale College and Buettner- Hartsoe v. Baltimore Lutheran High School Association—two cases concerning the reach and application of Title IX. My name is Chayila Kleist, and I’m an Assistant Director of Practice groups here at The Federalist Society. As always, please note that all expressions of opinion are those of the experts on today’s program, as The Federalist Society takes no position on particular legal or public policy issues. Now, in the interest of time, I’ll keep my introduction of our guests today quite brief, but if you’d like to know more about either of our esteemed speakers, you can access their impressive full bios at fedsoc.org.

 

      Today, we are fortunate to have with us Mary Margaret Beecher, who is Vice President and Executive Director at the Napa Legal Institute, which filed an amicus brief in the Buettner-Hartsoe case. Ms. Beecher joined Napa Legal in 2019, serving most recently as the organization’s Senior Counsel. Before working at Napa Legal, Ms. Beecher was an Associate Attorney with a Chicago-based law firm that specialized in non-profits and tax-exempt organizations. Before serving in the non-profit sector, Ms. Beecher focused her career in finance, working with the CME Group in dimensional fund advisors on financial compliance matters, implementation of U.S. sanctions programs, and cyber security risk management.

 

      Also joining us today, as our moderator for today’s conversation, is Ms. Amanda Salz, who is an Associate with Morgan, Lewis, and Bockius, LLP, where she represents clients in a variety of litigation matters. Before joining Morgan Lewis, she worked on civil and criminal trials and appeals as a law clerk for Judge Andrew Oldham on the U.S. Court of Appeals of the Fifth Circuit and Judge Reed O’Connor of the U.S. District Court of the Northern District of Texas. And I will leave it there.

 

      One last note, throughout the panel, if you have any questions, please submit them via the question-and-answer feature that’s found at the bottom of your Zoom screens, so they’ll be accessible when we get to that portion of today’s webinar. With that, thank you all for joining us today. Ms. Salz, the floor is yours.

 

Amanda Salz:  Thanks, Chayila, and thank you, Mary Margaret, for joining us again to talk about the latest updates in the Buettner-Hartsoe appeal, which is pending in the Fourth Circuit, as well as Chen v. Hillsdale—a similar case that was more recently filed in the Western District of Michigan—and plus just a little bit of an update on a related appeal pending in the Ninth Circuit, Hunter v. Department of Education. So we’ll obviously have a lot to cover today.

 

      I’ll briefly mention that you and I did a “Litigation Update” on Buettner-Hartsoe last July when the appeal was still being briefed. So for anybody who’s interested in more details on that case, the webinar from last July would be a great place to start. But today, I’m really looking forward to catching up on how Buettner-Hartsoe has progressed in the Fourth Circuit and especially what we might be able to glean from the oral argument, which the court heard last Thursday. Then, before getting into some listener questions, we’ll also discuss Chen and Hunter and just talk about how those cases have progressed so far. Before we get into the latest updates on Buettner-Hartsoe, I’d like to start at the beginning, just briefly. Would you mind giving us a brief recap, the factual background, and the district court proceedings?

 

Mary Margaret Beecher:  Thanks, Amanda. Yes. I’m excited to be here again. We’ve come very far in the last six months, and I think there’s a lot to talk about, especially with the Hillsdale case, as you mentioned, coming up in Michigan. We have some activity on the Ninth Circuit and then, even some action from Congress that’s responsive to both the Hillsdale and Baltimore Lutheran cases.

 

      So just to revisit the Buettner-Hartsoe case, this case arose through a question of whether some high schools had fulfilled their duty to prevent and investigate allegations of sexual assault. So there were several causes of action. The majority were under state law, but one novel issue of law also arose, and that was whether the schools in question—these were high schools -- whether they were subject to Title IX. And so, the district court in Buettner-Hartsoe certified for appeal -- interlocutory appeal the following question: “Whether 501(c)3 tax-exempt status constitutes federal financial assistance under Title IX.” And that’s Title IX of the Education Amendments of 1972, which is also codified as 20 U.S.C. §1681. So, on one hand, it's being characterized as a novel question of law, but part of why it’s novel is because I think many of the parties would take the position that it’s obvious, and so it’s not novel, and it’s not a question. But it’s being litigated, so I guess there is room for disagreement.

 

      And if I may, I’ll just briefly take a -- just briefly revisit the actual text of §1681—so Title IX. It’s a prohibition against sex discrimination, which states that, “No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity, receiving federal financial assistance.” And then that’s -- so that’s Section A, and then there are a number of carve-outs. There’s a religious carve-out. There’s a carve-out for beauty pageants. There’s a carve-out for Greek Life. There’s a carve-out for mother/daughter events, mother/son. So it’s a statute with a lot of -- with at least a reasonable number of exemptions, and I think we’ll talk about that a little bit more at the end of our conversation.

 

      So those are the basic facts, and that’s what the court was -- that specific issue is what the court was focusing on in oral arguments last week, as well as there were a few briefs filed after our conversation in July as well.

 

Amanda Salz:  Great. So in the district court, what did the district court hold on these issues?

 

Mary Margaret Beecher:  So this took place -- I’m not a litigator, but I want to say this all took place in the pretrial stage. So what’s going on was the school head filed for a motion for summary judgment because they were taking the position that they were not a federal financial aid recipient, so this is really, from their perspective, a non-issue. And so, the district court denied that motion, held the school was a federal financial aid recipient.

 

      And so, what does that mean? Well, it means the immediate impact would be that any school within that jurisdiction would conceivably be subject to Title IX if they have tax-exempt status. And it also could have even more broad-reaching implications because there are four other federal statutes that have civil-rights-related obligations on recipients of federal financial aid. And so, even though the term federal financial aid was only being discussed in the Title IX context, we know just from the way the law works a redefinition here would have that ripple effect or that domino effect for all of these other statutes and at least 20 federal regulations implementing them.

 

Amanda Salz:  Wow. Well, last time we spoke, as you said, this case was in the middle of briefing in the district court. So Baltimore Lutheran had already filed its opening brief and several amici, including your organization, Napa Legal, had also filed amicus briefs in support of Baltimore Lutheran. What were some of the key arguments that both Baltimore Lutheran and the amici raised in the district court?

 

Mary Margaret Beecher:  Sure. So there were really four to five core arguments that were raised in our brief, and they were pretty consistent with arguments in the other amici. The first is that the statute is unambiguous. So it says, “A recipient of federal financial assistance,” and then in Section -- I believe it’s 681 [sic] of the same act, it discusses a grant, loan, or contract. So any activity receiving federal financial assistance by way of a grant, loan, or contract has the ability to enforce §1681. So it’s pretty clear, just to be internally consistent, exactly what federal financial assistance means, and this is also interpreted in implementing regulations at 30 CFR 106(g), which just re-emphasizes grant, loan, contract. And then over 50 years of agency interpretation and litigation has all been consistent on this, so it’s unambiguous. Then there’s, relatedly, the textual argument that it says what it means, and it means what it says.

 

      And then the third is that this is spending clause legislation. And so, in addition to being unambiguous, it is also subject -- because it’s spending clause legislation, it’s subject to a higher—what I think we called in the last webinar—burden of clarity, which is basically based on the idea that receiving aid under spending clause legislation is analogous to common law contract. It’s an exchange of money. The government gives you money, and you agree to behave a certain way to give the government certain oversight power. And so, that trade-off is taking place, and there needs to be a meeting of the minds.

 

      And Baltimore Lutheran, in particular—and I think this would hold true as well in the Hillsdale case—received their tax exemption before Title IX was even enacted, and so when you look at what that agreement looked like at the moment that Baltimore Lutheran received its exempt status, they could not have been signing up for this, so to speak, because this wasn’t a condition. This didn’t even exist at that time. 

 

      And then there’s just the weight of precedent. This has never—and this comes up in oral argument as well -- this interpretation of exempt status as financial assistance is just -- it’s just never been -- it’s never been approached. Everything would look different. Litigation would look different, and regulations would look different if that were the case.

 

      And then, finally—and I’ll emphasize this a little bit more later—when you look at the text of 501(c)(3), it actually isn’t -- you don’t get granted 501(c)(3) status. You receive recognition of it. And so, the actual text says, “An organization described in Section D or C—C or D—shall be exempt. So really, exemption is basically a state of being, not something that’s granted, and this is further emphasized by the fact that many organizations like churches, religious -- often religious orders—many religious orders—can self-declare themselves as tax exempt. So they don’t even need to file the 1023, which is—I think we discussed in the last webinar -- it’s not even called an application for grant. It’s just an application for recognition, and so, there’s just -- there are so many distinctions. And so, we focused on all those in our briefs, and that’s pretty consistent with what was argued in our fellow amici.

 

Amanda Salz:  Great. Well, yeah. Thank you for that overview of -- that’s very helpful -- just context for the Fourth Circuit argument.  Obviously, a lot of those issues did come up last week. So a few weeks after our last litigation update, the former student appellees filed their response brief. What were their main arguments in defense of the district court’s holding?

 

Mary Margaret Beecher:  So the former student appellees -- it was kind of interesting. So they focused on contract theory and how, even if the organizations did not know at the time, their subjective knowledge isn’t the standard for determining whether a contract or a spending clause kind of agreement was in place. It kind of reminded me of first-year contracts in law school—that Lucy v. Zemmer case where the guy has had a little too much to drink, he signs away his farm on the back of a napkin, but he signed it.

 

      So they’re trying to make that argument, but it’s a harder sell because the objective meaning of the contract here and the subjective understanding of the schools would really be the same, given that every federal agency for the last 50 years has had the same understanding. So it’s not a question of the schools having a subjective but indefensible position on this. There’s reasonableness across the board, and so, I think that’s less compelling.

 

      And then there are also what I call colloquial arguments, which is just, colloquially, what would assistance mean? Well, assistance means help, help means benefit, and this is beneficial, and it’s an economic benefit, and that’s kind of like financial assistance. I think the distinction to make there is that federal financial assistance is a term of art. In its context, it’s not a colloquial term. You don’t really even need to go to Merriam-Webster because it’s defined both by implication but also expressly in the statute as well as the implementing regulations.

 

      And then, finally, there is an argument that I call, “What’s so bad about Title IX anyway,” where they say, “But Title IX’s a good statute, and everyone should want to be deregulated under it because it’s a good thing. So what are you trying to avoid here?” So that kind of policy argument comes up at the end.

 

Amanda Salz:  Great. Well, as we talked about last time, there were a number of amici in support of the appellants. There are also a number of amici in support of appellees. By my count, it’s, I think, 15 in support of Baltimore Lutheran and 8 in support of the former students. So there are a ton of briefs on the docket of this case. I don’t know if you read all of them, but to the extent that you’re familiar with the arguments raised by the amici in support of the former student appellees, what are they advocating for in respect to affirmance of the district court’s holding?

 

Mary Margaret Beecher:  I would say that the amici in support of the former students -- they’re really at their strongest when they’re making their policy arguments, which is saying, “This would be a good thing. This is a good idea. This would protect people.” But their arguments are a little bit less strong when they’re interpreting the actual statute and what the law requires. So the “this is a good idea” argument, they’re decently persuasive, but they’re -- when it comes to what does the law actually say and does Title IX actually cover these entities, the arguments are very similar to what the appellees claim in their own reply brief.

 

Amanda Salz:  Okay. Well, and then a few months later, Baltimore Lutheran filed its reply brief. Is there anything noteworthy about the reply that you’d like to highlight before we start getting into the oral argument itself?

 

Mary Margaret Beecher:  I think, in many ways, it was pretty consistent with the initial briefing, just emphasizing the grant, loan, or contract reference in §1682, as well as the overwhelming weight of precedent. And then we also -- I think that the schools went a little bit deeper in engaging in the contract theory and -- like, what did notice look like, what could the schools have been agreeing to at the time they were tax exempt? And they just further emphasized that for the last 50 years, the tax exemption regime and the Title IX regimes have been operating totally independently of one another.

 

      And there are -- and this comes up in oral arguments -- there are multiple cases where an exempt organization and a Title IX issue came up in the same case, and the courts, in their reasoning, never just relied on 501(c)(3) status to trigger whether it was Title VI of the Civil Rights Act or Title IX of the Education Amendments. The courts always looked to a grant, loan, or contract to be the initial threshold issue of whether the statute in question -- or the cause of action in question could be perceived.

 

Amanda Salz:  Yeah. That seems like that’s also something that the judges were interested in during the argument. So let’s turn now to the oral argument itself. So the panel included Judges Thacker, Harris, and Rushing, and this took place last Thursday in the Fourth Circuit. So in addition to the parties, there are two sets of amici that also participated in argument, with a group of seven independent school associations arguing in support of reversal, and the full group of the eight associations favoring the students, arguing in support of affirmance.

 

      So what was your overall impression of the argument?

 

Mary Margaret Beecher:  My overall impression was that the arguments were excellent. I always enjoy oral arguments, and I think that because this case was so well briefed and there were so many solid amici, the judges were very familiar with the issues. And so, they immediately get into the substance right out of the gate, and they really focus, I thought, very effectively on some very interesting questions. And all three of the judges were very familiar, I think, with the precedent, with the landscape, and so it was a very conversational, very energetic exchange. And I found it very pleasant, interesting to listen to, and I would highly recommend everyone, on your commute home, to queue up the Fourth Circuit. It was a great conversation and very thought-provoking.

 

Amanda Salz:  I agree. It was definitely a hot bench and seemed to get hotter as it went, too, just as the parties getting into the arguments. The judges were obviously very engaged and well-prepared. And hopefully, that’s a good sign. So right off the bat, Judge Harris asked Baltimore Lutheran’s attorney about whether the term federal financial assistance in Title IX is ambiguous. What is the significance of any potential statutory ambiguity?

 

Mary Margaret Beecher:  I thought that was really interesting that the judge led with that question, and it’s so important. And as you probably noticed listening, she did not let it go either. She really focused on the answer to that question, and I think the reason is that there are actually two tiers. So the first context, I think, in which ambiguity is relevant is just as a matter of the role of the judge. I think it showed a lot of wisdom that this was her first question because it’s -- as we know, it’s not the role of the judge to make the law; it’s the role of the judge to apply the law. And so, if the law is clear, then that’s determinative of the outcome of the whole case.

 

      And so, I think what -- what I think Judge Harris was getting at was, is there even room for further controversy here, or is the statute direct and clear on its face? Because if so, then all the policy arguments in the world won’t -- shouldn’t affect the outcome, and they should instead be directed through a lobbyist to Congress to state legislators. So I think that the first tier was really coming from the role of the judge and canons of construction.

 

      And then I think the second tier would just be that -- assuming that there was room for ambiguity, then it would be analyzed, I think, at the second level under the spending clause legislation issue. And as we talked about earlier, because it’s a contract, there needs to be clear notice. And so, I think ambiguity would then come into play because if it’s not clear that a recipient—I shouldn’t say recipient -- but if it’s not clear that a tax exempt organization is going to be subject to this, then it wouldn’t be a properly constitutionally enacted statute, or, at least, not as applied to this entity.

 

 

Amanda Salz:  Yeah. And so, to your point about not only starting with the ambiguity question but that did carry throughout; I think the judges may have asked every advocate about ambiguity, so --

 

[CROSSTALK]

 

Amanda Salz:  -- I think -- yeah. That definitely seemed like a good sign. So another topic of interest for the judges was about the potential differences between exemptions, deductions, and tax credits. And when --

questioning the former students’ attorney, Judge Rushing said that she and fellow panelists were “dumbfounded by the idea that an entity’s tax exemption could constitute federal financial assistance but that an individual’s tax deduction wouldn’t.” So what are the implications of that line that the former students are trying to draw between exemptions on one end and then deductions on another?

 

Mary Margaret Beecher:  Yeah. This was probably one of the most interesting moments in oral arguments, especially because -- I believe I read most, if not all, of the briefs, and I didn’t see this coming through very strongly in any of them. So I was very surprised to hear the judge raise it, but it’s -- I thought it was a great point.

 

      So, basically, what the judge is saying is that by the same token that 501(c)(3) status is federal financial assistance, then anyone who takes a standard deduction or who received a child tax credit or something like that is all conceivably subject to Title -- all of us would conceivably be subject to Title IX, which is kind of hilarious. And so, I thought that was a great point, and it goes to show that this isn’t really a -- that including tax exemption as a grant—trying to make that characterization just because it’s beneficial -- it goes to show that that’s not a persuasive line of argument, and that it would make the entire Title IX internally inconsistent.

 

      The counsel for the appellees, I thought, did a decent job responding to that. He said that he would make a distinction and say that deductions were not financial assistance because what deductions really are doing is just defining taxable income and that tax credits would be because a tax credit is more of a benefit. Initially, I thought that it sounded -- it gave me pause, initially, but the more I thought of it, the more it seemed less persuasive to me.  So anyway, I think it still would -- regardless of whether there’s a formalized distinction made between deductions and tax credits, the judge’s point, which is how far reaching this would be, would stand—that this would still encompass millions of Americans as well as institutions, and it’s just -- it couldn’t possibly be the meaning of the statute. 

 

Amanda Salz:  Exactly. And not even really being able to draw a clear line there, I think, is a problem for the appellees. Were there other -- any other questions from the judges or arguments that litigators raised that you found interesting?

 

Mary Margaret Beecher:  Yeah. So I thought that it was interesting that the Bob Jones case came up. The judges raised it initially, and it actually was in the appellees’ brief—the students’ brief—as well. I thought that that was interesting because I wouldn’t have thought that case would have come up as much as it did. And basically, in Bob Jones, there was a university that was violating, I believe it was Title VI of the Civil Rights Act because they were engaging in racial discrimination, and so, their 501(c)(3) status was revoked. And the analysis that the Supreme Court went through was that that organization—this university—was not an exempt organization, definitionally, because going back to the text of 501(c)(3), the organizations described that shall be exempt don’t include organizations that work against public policy.

 

      And so, that’s the reason that terrorist financing organizations cannot be exempt because terrorism is against public policy. And that’s coming up here and there right now, actually, because a lot of organizations will present as 501(c)(3)s, but they’re actually steering funds with organizations that are on the terrorist list. And so, the question of whether an organization is within the definition of a 501(c)(3) and the question of whether an organization is receiving federal financial assistance -- it’s an example of those being litigated separately.

 

      In Bob Jones -- and I think one of -- I think it may have been Judge Harris who pointed this out -- that the 501(c)(3) status could have been revoked on the basis of Title VI. But that argument -- that line of argument wasn’t brought up in Bob Jones because the whole debate was over whether that organization definitionally was a 501(c)(3), and it was concluded that it wasn’t. And so, I thought it was very thought-provoking—that line of questioning. And it did raise some good points, but ultimately, I think it more supported the school’s position than undermined it.

 

Amanda Salz:  That’s very helpful context -- a lot of new information that really sheds light, for me, on the Fourth Circuit’s -- just the colloquy going on there. So as Judge Thacker repeatedly mentioned, this is an issue of first impressions, so the litigants are asking the Fourth Circuit to be the first to resolve it. So after the argument, do you have any predictions about how the court might rule?

 

Mary Margaret Beecher:  I guess it’s -- I probably shouldn’t predict. Based on the arguments, I felt that the argument left some very key questions unanswered -- or I think it left some key questions that -- I guess, the court did not receive satisfactory answers that would allow them to rule in favor of the students. The deduction thing was an open question. The ambiguity question was never fully and conclusively answered, and the judges, I think, all were very concerned, as well, that there were 50 years of agency interpretation and very scant judicial precedent for their position.

 

      And I think one other thing that was a very important moment in the oral argument was when Judge Rushing noted that even Regan, which is one of the more -- one of the cases more favorable to the appellees’ students -- the line of dicta that’s been pulled to support the students’ position was actually contradicted in that same case—in another instance of dicta. And so, it really is kind of a net neutral, and I think that really leaves the students’ arguments in a much weaker position. So I think a favorable outcome would -- in favor of the schools would be the most likely based on argument.

 

Amanda Salz:  Well, great. I know, obviously, you don’t want to count your chickens before they hatch—that’s the saying—but I agree, and I think the argument went well, and it seemed like the judges were very engaged, and they understood what was going on. So it will be exciting to read the opinion when it comes out.

 

      So I will just briefly remind everyone that we will open the conversation up for some listener Q&A in a bit. So if you have any questions for Mary Margaret, please just type those into the Q&A chat function, and we’ll get to them soon. But for now, let’s turn to Chen v. Hillsdale, which is a pending case in the Western District of Michigan that was filed after our last Litigation Update, I believe, in October. So what are the underlying facts in Chen?

 

Mary Margaret Beecher:  Yeah. So this is a very similar fact pattern to the Baltimore Lutheran case. The question that precipitated the litigation is whether the college fulfilled its duty to prevent and investigate allegations of sexual assault. It was filed in the Western District of Michigan on October 25, and similar to Baltimore Lutheran, there were five causes of action. There are four state causes of action, including torts, as well as violations of the state Civil Rights Act and the state Consumer Protection Act, and then there’s one federal question, and that’s the Title IX question.

 

      And this comes into play because Hillsdale is one of a handful of institutions of higher education that does not accept federal funding. So the timing’s very interesting of this case—that this is coming up after a favorable district court decision -- or a district court decision that expanded the definition of federal financial assistance.

 

      So Hillsdale’s reply brief is actually due today. I was refreshing my docket all day to see if it was filed, but it has not been filed as of 11:38. And so, the briefs -- they follow very similar patterns to the Baltimore Lutheran briefs. Hillsdale denies that -- they moved to dismiss and deny that they are subject to Title IX because they do not accept federal funding. And so, I think the Fourth Circuit’s oral arguments will probably be influential to both parties as they prepare to litigate this case, both at the district court and potentially at the appellate level in the Sixth Circuit as well.

 

Amanda Salz:  Are the any differences in Chen from Buettner-Hartsoe that would affect the case going up on appeal, a potential circuit split? Are these cases very much aligned, or are there differences that can make a difference?

 

Mary Margaret Beecher:  I think that there’s a factual difference. Legally, it’s the same statute—a very similar legal situation—but I think that the factual difference is that most private high schools in this country are not subject -- and all around the world, but especially in this country, are not subject to Title IX, but most higher education institutions are. And so, I think that puts Hillsdale in a slightly different position because they are not subject to Title IX when the vast majority of their peers are. And so, I think just factually, it’s a different dynamic. And so, from a policy perspective, I think some of the arguments in favor of this being the type of institution that Title IX was intended to apply to—and that kind of dynamic -- I think that Hillsdale has a bit heavier burden than a private high school does because their peers are subject to Title IX, whereas Baltimore Lutheran’s peers are not.

 

Amanda Salz:  Yeah. That’s a good point. Well, let’s briefly touch on another case, Hunter v. Department of Education. As I understand it, that case, which is on appeal in the Ninth Circuit, is related to Buettner-Hartsoe and Chen but raises slightly different questions. So would you mind just telling us a bit about that case and the arguments that the parties are making?

 

Mary Margaret Beecher:  Yes. So this case did not receive that much attention at the district court level when it was taking place initially. But it’s become important, and I think it’s changed the character of both the Baltimore Lutheran case and the Hillsdale case. So whereas the Baltimore Lutheran and Hillsdale cases were really not religious liberty cases, they were more textual cases—and they still are -- but just from a practical standpoint, they now have more of a religious liberty implication because of this Hunter case.

 

      So Title IX has a religious exemption that would allow a faith-based institution to operate in accordance with its sincerely held religious beliefs, and if there’s a conflict between some requirement, whether it’s substantive or procedural, in Title IX, the school can operate -- can opt for its religious -- to operate in consistency with its religious beliefs. So you can see a seminary, schools of divinity/theology -- schools like this is going to come up.

 

      But in the Hunter case, the Title IX religious exemption is being challenged, and the timeline is kind of similar. So we have Baltimore Lutheran’s first, Hunter argument is calendared for probably April, and then we have the Hillsdale case coming along behind. And so, if they were taken together, this could be a one-two punch, where all non-profits were drawn under federal supervision, and then protections for religious freedom were removed. And so, that would give the federal government a level of supremacy over the internal operations of religious organizations of all sizes that would be very profound. So viewed together, it’s quite a combination.

 

      The basic facts of the Hunter case are -- it is challenging Christian colleges -- it’s challenging the Department of Education’s accommodation for Christian colleges that allows them to operate in accordance with their religious beliefs on matters of human sexuality. So to some extent, this deals with biological gender, facilities usage, code of conduct, even sometimes dress codes. So all of that -- certain schools that may be very traditional or more fundamentalist, very bible-based -- it’s really Christian schools, specifically, that are being targeted here. And I say targeted because the case is being funded by an organization called the Religious Exemption Accountability Project, which is, in turn, funded by a parent organization called Soul Force, and their mission statement is to target Christian entities in order to bring them around to this organization’s policy viewpoints, especially as it pertains to issues of human sexuality.

 

      And so, that case is now, I think -- yeah. I think argument is scheduled for April. And so, you can see how -- oh, and it’s attracting an interesting amount of amici. Several state’s attorneys general -- I don’t think it was in -- I can’t remember the exact number, but it was quite a few—like, maybe 15—from Illinois, New York, California, all filed amicus briefs in favor abridging or abrogating the Title IX religious exemption.

 

      So it’s just very interesting timing-wise, especially because I’m sure those attorneys generals are very familiar with the Baltimore Lutheran and Hillsdale litigation. And Michigan, actually, is one of the co-signers of the amici, so they’re certainly aware of the two cases and how they interplay there. It’s a very interesting landscape right now, I think.  

 

Amanda Salz:  Definitely. Well, we’ve got some listener questions coming in, so let’s go ahead and turn to those now. The first question is, “Did any school make a Pennhurst-based argument that the condition on federal assistance must be clear and it was not clear that your tax-exempt status would be sufficient?” I think you touched on that a bit, but if you could just return to it.

 

Mary Margaret Beecher:  Yes. So Pennhurst came up both in the—I actually flagged it here -- it came up both in the appellees’ students’ brief and in the school’s brief. Let me see if I can find where I tagged it. It came up in oral argument as well. Let me see if I have my notes because I believe that both sides claimed Pennhurst as their own, but I don’t remember exactly -- I don’t remember exactly where they landed on it. Maybe I’ll go to the next question and keep looking and see if I can find it.

 

Amanda Salz:  Yeah. No problem. So the next question is, “Since Title IX coverage is premised on federal financial assistance, could Congress simply write around any Fourth Circuit ruling that favored the school by amending the law to be based on something other than federal financial assistance? Or alternatively, is the whole Title IX regime completely dependent on the federal dollars connection because that’s the only hook Congress can use to regulate schools?”

 

Mary Margaret Beecher:  Yes. This is a great point, and it reminded me I had meant to mention this earlier. There is actually legislation before Congress right now called the Safeguarding Charities Act, and that would amend the first section of the U.S. Codes of the Definitions section to clarify that federal financial assistance does not include 501(c)(3) status. It would say—and let’s see. I have it right here—“For purposes of a new federal law, unless explicitly provided otherwise, federal financial assistance,” so not including any exemption from federal income tax. So that’s the text that’s before Congress. They definitely could do -- pull a RFRA and workaround court rulings here. I think right now, the majority of the support -- I think they’re still working on getting bipartisan support for that bill. I think, at this time, it’s not bipartisan yet, so I guess it’s sort of a race to the top to see whether Congress acts before the appellate courts do.

 

Amanda Salz:  Right. So the next question is, “During oral argument, was there any discussion about the distinct historical and legal bases for exemption versus deductibility of contributions?” The latter is a policy decision to promote charity. Charity doesn’t have a right to it. In contrast, exemption is the withholding of tax burdening—at least, as to churches. Exemption is driven by the First Amendment Religion Clause, though the Supreme Court has never so held. So was there any argument that deduction is a tax policy that does constitute a benefit from accounting -- from an accounting point of view, but that exemption’s not and is instead a constitutional restraint?” Now there’s a lot in that question but please --

 

[CROSSTALK]

 

Mary Margaret Beecher:  Yeah. That’s a wonderful question, and I think it raises a lot of issues that I was surprised did not come up at oral argument. So, as for the policy—the basis of deductibility and exemptions—that didn’t really come up. So the idea that exemption isn’t a grant of a benefit but rather the government restraining from an Establishment Clause violation -- so, for example, I think a lot of times in the property law context, the government will give tax exemption simply because assessing the religious uses of a property would require a lot of government decisions on church doctrine. And so, in some cases, the government will refrain from taxing just so that they are not improperly assessing religious use or religious character. That didn’t really come up, I guess, perhaps because these entities were not churches; they’re religious schools. And even though the analysis is the same, I think the intuition sometimes just steers the conversation in a different direction.

 

And I think the other area that didn’t come up that much at this level was church autonomy, which is related, which is -- it’s derived from the First Amendment—the principle that religious organizations have the right to oversee their own internal governance. Questions of church autonomy did not come up that much at this level, and maybe that’s because, at the moment, Title IX’s religious exemption stands. So maybe that’s why it didn’t come up. But, obviously, depending on how the Hunter case turns out, the church autonomy doctrines will become much more relevant as they try to put everything together from a religious liberty standpoint.

 

Amanda Salz:  Yeah. And so, relatedly, did church autonomy come up at all in the briefing? I know it didn’t come up in argument, but do you know if anybody even touched on it?

 

Mary Margaret Beecher:  I didn’t see it in any of the briefs.

 

Amanda Salz:  Okay. We have a couple questions specific to Chen v. Hillsdale. So one of the questions is hypothetical. If the rape victims in the Hillsdale College cases were raped or had alleged raped by faculty professors, would the legal analysis and arguments be different, and would the procedural internal investigatory mechanisms be heightened?

 

Mary Margaret Beecher:  That’s a good question. And I don’t know -- I think that would also be a question of state law, too. So I don’t know -- so the fact pattern in Hillsdale were assaults that were -- took place where the student -- where this perpetrator was a student and the victim was a student. I don’t know if that would be investigated differently under state law. I think under Title IX, it would be -- I think under Title IX it would be -- I’m not sure, actually, under Title IX whether that’s treated differently or not. I’m not sure.

 

Amanda Salz:  Okay. Well, I think -- and this may a related question. The listener asked if there’s anything that we can do to help Hillsdale’s side of the argument, whether filing an amicus brief would be helpful or anything else. And I don’t know -- I’m sure you’re not really involved in the case, but just from your perspective, if there’s anything that supporters can do to help?

 

Mary Margaret Beecher:  Yeah. I think it’s really important that whether -- regardless of your perspective, whether you think Hillsdale’s in the right or whether you disagree with their position, I think just the more amici, the better. And I think we really saw that with quality of the Fourth Circuit’s oral argument that these cases were very, very well briefed, and the judges were just in a great position to really get to the core of the dispute. And so, I think that would stay true both at the district court and appellate court level in the Hillsdale case. And that goes for -- regardless of your perspective on the case. I think just lending everyone’s expertise is very important to getting to a good outcome.

 

Amanda Salz:  Definitely. Well, staying on Hillsdale for just a bit, what remedy are the students there seeking?

 

Mary Margaret Beecher:  So, as I mentioned, there were five causes of action. There were common-law torts causes of action for negligence and intentional infliction of emotional distress. There was violations of Michigan’s Elliot-Larsen Civil Rights Act and then violations of Michigan’s Consumer Protections Act. So each of those, I think, have their own relief, so I think there would be monetary damages for the torts cases, and I don’t know the remedies offered by the Consumer Protection and the Civil Rights Act. And then under Title IX, if Title IX were applicable to Hillsdale and they had violated it -- I think -- I don’t know what the remedy would be. I guess -- I don’t know what the remedy would be if that would apply to Hillsdale.

 

Amanda Salz:  Yeah. I’m sure there’s at least some injunctive relief there that would impose costs like financial costs. And one of the advocates in the Fourth Circuit argument in Buettner-Hartsoe mentioned independence costs, so I think that would probably be at issue in Chen as well.

 

Mary Margaret Beecher:  Yes.

 

Amanda Salz:  So another question is, in the Obamacare case, the Supreme Court distinguished between Congress’s taxing power and its Commerce Clause power. Is that germane in any of the Title IX cases, and why or why not?

 

Mary Margaret Beecher:  That’s interesting. I think the Affordable Care Act did actually come up in oral argument in the context of tax credits because, I guess, under the Affordable Care Act, tax credits were characterized as financial assistance. I don’t think that that would come up. I’m trying to -- this is kind of a novel question. I don’t think that would come up in these cases because if the schools were accepting funding, then they would be, I guess -- they would be—under the terms of spending clause litigation—self-selecting as subjects of federal oversight.

 

      And so, there wouldn’t really be a question of the scope of federal authority to act here because it would be -- they would be acting -- they would be -- the federal government would be authorized to act under the spending clause and, I guess, so to speak, the recipients or at least the tax-exempt entities would be, sort of, waiving jurisdiction objections by accepting the funds. So I think it’s a -- I think it would not be an outcome-determinative question, but it’s definitely a relevant line of thinking.

 

Amanda Salz:  Right. Well, I don’t think we have any other listener Q&A questions to go through, but I’m just wondering if there’s anything that you would like to leave listeners with, just the importance of these cases -- yeah, just any concluding thoughts?

 

Mary Margaret Beecher:  Let me think. So I wanted to just mention that I think it’s important to look at the entire landscape of Title IX litigation right now: so looking at Hillsdale, looking at Baltimore Lutheran, as well as the Hunter case altogether. And I also think that, particularly as the litigation progresses on all of these, questions of administrate supremacy and the tension with church autonomy are going to become more and more important, as well as the tension between religious exemptions and equal protection claims. That was raised in Hunter, as well as in some state law litigation in Washington State. And I think those questions are kind of the next frontier for all of these organizations, for federal financial support or assistance or involvement or even exemptions with faith-based organizations.

 

      And then I think there’s also something of a pattern of attempts where the scope of administrative power is attempting to expand, whether that’s driven by agencies themselves or by organizations that would like to see that extend, and it’s usually being done at the expense of religious freedom. And so, I think just being aware that that pattern is taking place and thinking through what we -- what would be the appropriate kind of constitutional future for all of our protections is really important right now.

 

Amanda Salz:  Definitely. Well, thanks for those concluding thoughts, and thank you again, Mary Margaret, just for joining us today. This was a great discussion.

 

Mary Margaret Beecher:  Thank you.

 

Chayila Kleist:  Absolutely. I’ll chime in. Thank you, Ms. Salz, Ms. Beecher, for joining us today, and we really appreciate you taking the time and lending us a part of your afternoons. Thank you also to our audience for joining and participating. We welcome listener feedback by email at [email protected]. And as always, keep an eye on our website and your emails for announcements about other upcoming virtual events. With that, thank you all for joining us today. We are adjourned.