Bishop of Charleston v. Adams

538 F.Supp.3d 608

BISHOP OF CHARLESTON, a Corporation Sole d/b/a The Roman Catholic Diocese of Charleston; and South Carolina Independent Colleges and Universities, Inc., Plaintiffs,

v.Marcia ADAMS, in her official capacity as the Executive Director of the South Carolina Department of Administration; and Brian Gaines, in his official capacity as budget director, Department of Administration, State of South Carolina; and Henry McMaster, in his official capacity as Governor of South Carolina, Defendants.

Civil Action No. 2:21-1093-BHH

United States District Court, D. South Carolina, Charleston Division.

Signed May 11, 2021

Daniel Robert Suhr, Pro Hac Vice, Liberty Justice Center, Chicago, IL, Richard S. Dukes, Jr., Turner Padget Graham and Laney, Charleston, SC, for Plaintiffs.

Eugene H. Matthews, Richardson Plowden and Robinson, Columbia, SC, for Defendants Marcia Adams, Brian Gaines.

Anita Smith Fair, SC Governors Office, Thomas Ashley Limehouse, Jr., Office of the Governor State of South Carolina South Carolina State House, Vordman Carlisle Traywick, Robinson Gray Stepp and Laffitte LLC, William Grayson Lambert, Burr and Forman LLP, Columbia, SC, Christopher Ernest Mills, Spero Law LLC, Mt Pleasant, SC, for Defendant Henry McMaster.

OPINION AND ORDER

Bruce Howe Hendricks, United States District Judge This matter is before the Court on Plaintiffs Bishop of Charleston and South Carolina Independent Colleges and Universities, Inc.’s ("SCICU") (collectively "Plaintiffs") motion for a preliminary injunction (ECF No. 6 ). For the reasons set forth herein, the Court denies the motion.

BACKGROUND

Plaintiffs filed a Complaint on April 14, 2021 (ECF No. 1 ), and subsequently an Amended Complaint on April 27, 2021 (ECF No. 26 ), asking this Court to declare a provision of the South Carolina Constitution unconstitutional under the Equal Protection Clause of the Fourteenth Amendment to the U.S. Constitution, and/or the Free Exercise Clause of the First Amendment to the U.S. Constitution. Specifically, Plaintiffs argue that Article XI, Section 4 of the South Carolina Constitution violates the U.S. Constitution because it unlawfully discriminates on the basis of race and/or religion. The provision at issue, hereinafter referred to as South Carolina's "no-aid" provision, states as follows: "No money shall be paid from public funds nor shall the credit of the State or any of its political subdivisions be used for the direct benefit of any religious or other private educational institution." S.C. Const. art. XI, § 4.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by the U.S. Congress and signed into law on March 27, 2020, as Public Law 116-136. The massive act contained substantial funds to help states, schools, employers, and individuals deal with the crisis presented by the COVID-19 pandemic. Among its provisions, the Act included the Governor's Emergency Education Relief (GEER) Fund, a discretionary pot of federal money granted to states for governors to support students as they thought best.

Defendant Henry McMaster ("Governor") applied for and received South Carolina's full allocation from the original GEER fund. The Governor dedicated $32 million of the GEER funds to a new education initiative to provide Safe Access to Flexible Education (SAFE) Grants for South Carolina's K-12 students from low- and moderate-income families who needed support to stay in or move to an independent school. Plaintiff the Bishop of Charleston, a Corporation Sole, doing business as The Roman Catholic Diocese of Charleston ("Bishop"), on behalf of the thirty-three Catholic schools in the state that the Diocese administers, intended to receive students using SAFE Grants. (Ryan Aff. ¶¶ 7–8, ECF No. 6-2.) When the SAFE Grants program was announced, the Diocese developed resources for its schools to promote the SAFE Grants to current and potential students. (Id. )

The Governor dedicated another $2.4 million in GEER funds to support online education access and upgrades at South Carolina's eight historically black colleges and universities ("HBCUs"). Six of the eight HBCUs in South Carolina are independent, religiously affiliated institutions (five are members of the SCICU) that collectively stood to receive over $1.6 million from the Governor's plan, but for South Carolina's no-aid provision.

Litigation commenced in state court, wherein the state-court plaintiffs sued to prevent use of the GEER funds for the SAFE Grants program. The South Carolina Supreme Court exercised its original jurisdiction over the case, Adams v. McMaster , 432 S.C. 225, 851 S.E.2d 703 (2020). In Adams , the South Carolina Supreme Court issued a declaratory judgment holding: (1) that the GEER funds are converted into "public funds" within the meaning of the no-aid provision when they are received in the State Treasury and distributed through it; (2) that that the funds would provide a "direct benefit" to independent and religious schools; (3) that the SAFE Grants program violates the constitutional prohibition against direct aid to religious or other private educational institutions; and (4) that the CARES Act does not preempt South Carolina's constitutional mandate prohibiting the use of public funds in such a manner. Id. The Governor also suspended the $2.4 million for independent and religious HBCUs given the logic of the Adams opinion.

In addition to the federally appropriated GEER funds, the South Carolina General Assembly authorized $115 million to reimburse COVID-related expenses for state agencies, local governments, and institutions of higher education ("Act 154 funds"). The members of SCICU applied for those funds. (Perez Aff. ¶ 7, ECF No. 6-3.) Defendant Marcia Adams ("Commissioner Adams") sent a letter to SCICU informing it that, because of the Adams decision, the South Carolina Department of Administration would not permit Act 154 funds to flow to SCICU member institutions. (Id. ¶¶ 12–13; Ex. B, ECF No. 8-5.) Plaintiffs contend that although a portion of the Act 154 funds have been disbursed to nonprofit organizations, including religious institutions and entities, more than $80 million of the Act 154 funds for state agencies, local governments, and institutions of higher education remain in state accounts awaiting final review and dispersal. (Perez Aff. ¶ 10.)

Plaintiffs bring this case seeking to vindicate their claim to the GEER funds. The Governor announced his allocation of these funds to the SAFE Grants and HBCUs, but Defendants are prohibited from executing this allocation because of the no-aid provision, as interpreted by the South Carolina Supreme Court in Adams. Plaintiffs state that if the Governor does not reallocate these funds by May 11, 2021, then South Carolina stands to lose access to them entirely when the U.S. Department of Education redistributes them to other states.

Plaintiff SCICU is further concerned that Defendants may act soon to disburse the remaining $80 million in Act 154 funds, and that SCICU members will be denied access to those funds. According to the SCICU, Defendants are currently considering applications for Act 154 funds that are in excess of the amount available. (Perez Aff. ¶ 9–11; Ex. A, ECF No. 6-4.) If the entire corpus of Act 154 funds is disbursed to applicants who are not subject to the no-aid provision, the SCICU asserts, then any subsequent victory in this case would ring hollow.

Accordingly, Plaintiffs seek a preliminary injunction from this Court striking down the no-aid provision of the South Carolina State Constitution as unconstitutional under the Equal Protection and/or Free Exercise Clauses of the U.S. Constitution, in order to preserve their access to the GEER funds and Act 154 funds.

STANDARD OF REVIEW

The Supreme Court has stressed that "[a] preliminary injunction is an extraordinary remedy never awarded as of right." Winter v. Nat. Resources Def. Council, Inc. , 555 U.S. 7, 24, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008) ; see also Pashby v. Delia , 709 F.3d 307, 319 (4th Cir. 2013) ("Because preliminary injunctions are extraordinary remedies involving the exercise of very far-reaching power, this Court should be particularly exacting in its use of the abuse of discretion standard when it reviews an order granting a preliminary injunction." (quotation marks and citation omitted)). To obtain a preliminary injunction, the moving party must establish: "(1) that he is likely to succeed on the merits, (2) that he is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities tips in his favor, and (4) that an injunction is in the public interest." Id. at 20, 129 S.Ct. 365. The party seeking the injunction bears the burden to establish each of these elements by a "clear showing." Real Truth About Obama, Inc. v. Fed. Election Comm'n , 575 F.3d 342, 346 (4th Cir. 2009), cert. granted, judgment vacated on other grounds , 559 U.S. 1089, 130 S.Ct. 2371, 176 L.Ed.2d 764 (2010), and adhered to in part sub nom. The Real Truth About Obama, Inc. v. F.E.C. , 607 F.3d 355 (4th Cir. 2010). A court's issuance of mandatory injunctive relief, as opposed to prohibitory, should be especially sparing, because "[m]andatory preliminary injunctions do not preserve the status quo ...." Wetzel v. Edwards , 635 F.2d 283, 286 (4th Cir. 1980). The Fourth Circuit has stated, "Mandatory preliminary injunctive relief in any circumstance is disfavored, and warranted only in the most extraordinary circumstances." Taylor v. Freeman , 34 F.3d 266, 270 n.2 (4th Cir. 1994) (citations omitted); see also Pashby , 709 F.3d at 319 (stating that when the preliminary injunction at issue is mandatory rather than prohibitory in nature, the standard of review is "even more searching").

DISCUSSION

Plaintiffs’ motion for a preliminary injunction requests mandatory relief in the form of this Court striking down a provision of the South Carolina State Constitution. The Court cannot grant Plaintiffs’...